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					Shin Satellite Plc. (SATTEL) operates and provides satellite communications services
under a 30-year concession granted by Ministry of Transport and Communications.
SATTEL’s 3 Thaicom satellites in orbit offer a total of 47 C-Band transponders and 20
Ku-Band Transponders with footprints spanning over four continents : Asia, Europe,
Australia, and Africa. The Company is preparing to launch the region’s first true
broadband satellite, iPSTAR-1, which is expected to be fully operational in 2004.




                                                               Table of Contents
Financial Highlights ........................................................................................................................................... 2
Chairman’s Report ............................................................................................................................................. 3
10 Largest Shareholders ................................................................................................................................... 4
Major Events of 2002 ......................................................................................................................................... 4
Strategic Direction in 2003 ............................................................................................................................... 4
Shareholding Structure of the Group .............................................................................................................. 5
General Background ......................................................................................................................................... 6
iPSTAR: Laying the Foundation for Future Growth ....................................................................................... 9
Social Contribution .......................................................................................................................................... 12
Industry and Competition ............................................................................................................................... 14
Technological and Operational Risks ........................................................................................................... 17
Other Factors Affecting Investment ............................................................................................................... 19
Corporate Governance .................................................................................................................................... 20
Management and Directors’ Biodata ............................................................................................................. 27
Related Transactions ...................................................................................................................................... 30
Report of the Audit Committee ....................................................................................................................... 33
Board of Directors’ Responsibility for Financial Reporting ........................................................................ 34
Management Discussion and Analysis ......................................................................................................... 35
Auditor’s Report .............................................................................................................................................. 39
Balance Sheets ................................................................................................................................................ 40
Statements of Income ..................................................................................................................................... 43
Statements of Changes in Shareholders’ Equity ......................................................................................... 44
Statements of Cash Flows .............................................................................................................................. 45
Notes to the Consolidated and Company Financial Statements ................................................................ 47
Subsidiaries and Associated Companies ..................................................................................................... 78
Glossary ............................................................................................................................................................ 79
                                                                                        Financial Highlights

Consolidated Financial Statement                                                                                   In million Baht


                                                2002                        2001                      2000                     1999
Service and Sales Revenue                      4,997                        4,817                    4,016                     2,910
Gross Profit                                   2,112                        2,258                    1,946                     1,352
Operating Profit                               1,251                        1,688                    1,403                      989
Net Profit                                     1,411                        1,563                      711                      263
EBITDA                                         2,338                        2,737                    2,382                     1,876


Financial Position
Total Asset                                  20,307                    14,377                       11,832                    10,402
Total Liabilities                            13,103                         8,581                    7,594                     6,903
Shares’ holder equity                          7,204                        5,796                    4,238                     3,499


Financial Ratio
Current Ratio                                    0.43                        0.28                     0.35                     0.72
Debt to Equity Ratio                             1.50                        1.12                     1.34                      1.55
Gross Profit Margin                           42.3%                        46.9%                    48.4%                     46.5%
Operating Profit Margin                       25.0%                        35.0%                    34.9%                     34.0%
EBITDA Margin                                 46.8%                        56.8%                    59.3%                     64.5%
Net Profit Margin                           28.23%                    32.45%                        17.69%                    9.04%
Return on Asset                               6.16%                   11.74%                        11.86%                    9.51%
Return on Shareholders’ Equity              19.58%                    26.97%                        16.77%                    7.52%
Earning per share                                3.22                        3.57                     1.62                      0.71
Dividend per Share                                    -                         -                        -                         -
Book Value per Share                           16.43                        13.20                     9.69                      9.37


As of December 31, 2002




       EARNINGS PER SHARE                 SERVICE AND SALES REVENUE                                   NET PROFIT
       (Baht)                              (Millions of Baht)                                            (Millions of Baht)
                                                                                                                      1,563
                          3.57                                                                                                   1,411
                                                                                4,997
                                   3.22                            4,817

                                                          4,016


                                             2,910
                                                                                                          711
                1.62



    0.71                                                                                     263




    1999        2000      2001     2002        1999         2000     2001           2002     1999        2000         2001       2002



2
                                                            Chairman’s Report

Dear Shareholders,


The year 2002 was a year of renewal for Shin Satellite. Following many years of project development
and hard work, the company successfully gained financial backing for its iPSTAR project from the US
Export Import Bank that will allow it to push forward with the project under very favorable conditions.
This success signifies the progress the company has made in its efforts to revolutionize the satellite
market, and was doubly rewarded by winning an award for Asia Telecom Deal of Year 2002.


While the company was able to soft launch the sale of its first generation of iPSTAR ground equipment
within 2002, there were still research and development challenges to overcome. However, the product
is now being warmly received by the small to medium enterprise market at which it is aimed in this early
stage. We expect to achieve the strategic acquisition of regulatory permissions by countries within the
region in 2003 and rollout the terrestrial infrastructure required to operate the iPSTAR system in turn.


Conventional business in 2002 saw stable growth last year, with service income rising 4% throughout the
year, from 4,818 million Baht in 2001 to 4,996.98 million Baht in 2002, while total revenue gained 5%
over the previous year, to 5,429 million Baht. This resulted in a net profit decline of 9% from 1,563 million
Baht last year to 1,420 million Baht in 2002, due in part to a 13% increase in costs. Much of this can be
attributed to the cost of sales required to produce the first generation equipment for the iPSTAR project.


Utilization of C-band transponders softened from 93% in 2001 to 92% in 2002 as the company was
compelled to terminate some non-performing contracts. Ku-band transponders however did increase in
utilization, from 50% to 54%, due mainly to the introduction and sale of the first generation of iPSTAR
satellite modems. However, further expansion of Ku-band utilization in 2003 is likely to be limited due to
bandwidth constraints on Thaicom 3. However, the company has a strategy to continue the soft launch
of the product as a means of creating a market for iPSTAR over 2003 that includes the utilization of
foreign satellites in areas that Thaicom could not normally cover with its own footprint.


While the satellite transponder business is expected to continue to remain relatively stable over the
next year also, the company is fortunate in having invested in non-core businesses that are now
beginning to bear fruit and promising to play a stronger role in the company’s progress.


Cambodia Shinawatra introduced a vigorous network expansion plan in 2002 that resulted in revenue of
673.1 million Baht and almost a hundred thousand subscribers by year end. Lao Telecom again provided
SATTEL with a dividend of US$1.5 million while increasing its subscriber base to approximately 116,700.


The company was also successful in negotiating a merger of Thailand’s prime Internet service providers,
C. S. Communications (“CS Internet”) and Loxley Information (“Loxinfo”) that should see them commence
operations in 2003 as the largest ISP in Thailand under the new name CS Loxinfo. Economies of scale
are expected to reduce their combined costs and make the new company profitable in the near future.


Shin Satellite expects all its subsidiary and associate company businesses to continue to grow in 2003
and make up a larger proportion of consolidated net profit in the future.


Shareholders can expect the company to continue to seek ways to make its businesses more profitable.
However, we are in a period of high investment in a new generation of satellite technology. This will be the
basis for strengthening the company in the long term and creating healthy fundamental value.




Paron Israsena
Chairman of the Board of Directors




                                                                                                           3
                                                                               Strategic Direction in 2003
                                   The Company expects to lay the foundation for its new broadband satellite project, iPSTAR, in the Asia
                                   Pacific Region by building the infrastructure required to operate the system in 2004. This includes
                                   forming partnerships with local and regional communications companies, ensuring compliance with
                                   local laws and licensing regulations, and putting into place gateways and other critical technology.


                                   To ensure stable and strong corporate growth, the Company expects its subsidiaries and associate com-
                                   panies to play a greater role in its consolidated performance. In Cambodia and Lao PDR, the Company
                                   seeks to increase its subscriber base and offer more modern and efficient services to the public. In Thai-
                                   land, the Company will contribute its expertise and experience to the development of the Internet busi-
                                   ness, keep costs low and benefit from economies of scale through its partnership in CS Loxinfo.



                                                                                                      Major Events of 2002
           2002                •   Completed iPSTAR financing with Export-Import Bank of the United States and COFACE (Compagnie
                                   Francaise d’Assurance pour la Commerce Extrieur de France) with loan guarantee facilitiy of USD 265
                                   million. The Company also signed a syndicated commercial bank facility arranged jointly by BNP Paribas
                                   and Citibank/Salomon SmithBarney for another USD 125 million in November.
                               •   Announced France’s Arianespace to launch new broadband satellite, iPSTAR-1 in 2004.
                               •   Signed a Framework Agreement with Shanghai VSAT Network Systems Co., Ltd. (SVC) to be an iPSTAR
                                   National Service Provider (NSP) in China.
                               •   Signed agreements with SiamSat Network and Samart Telcom, VSAT providers, to provide services
                                   using iPSTAR terminals to SME customers.
                               •   Signed a Memorandum of Understanding with EdNet (National Education Network of Thailand) to pro-
                                   vide iPSTAR technology for school interconnection.
                               •   Signed an agreement with Videsh Sanchar Nigam Ltd (VSNL), India’s leading ISP, to provide teleport/
                                   uplink services including iPSTAR services to the Indian Market.
                               •   Signed Thaicom Satellite Service Contract and a Procurement Contract with Bagan Cybertech IDC
                                   &Teleport, Myanmar.
                               •   Introduced new features of iPSTAR technology:DLA (Dynamic Link Allocation) for a better Ku-band link
                                   performance to be tolerant to severe bad weather; DCA (Dynamic Coding Allocation) for efficient utiliza-
                                   tion of bandwidth; Nettgain (accelerated TCP/IP technology) for high throughput of Internet traffic over
                                   the satellite.
                               •   Demonstrated iPSTAR technology at ITU (International Communication Union) Conference 2002 in
                                   Hong Kong.
                               •   Completed a USD16.6 Million (697 Million Baht) deal with Nera ASA for 18 iPSTAR gateways to be
                                   installed in the Asia-Pacific region.
          2003                 •   Signed an agreement with the Communications Authority of Thailand (CAT) for the provision of
                                   iPSTAR broadband service to organizations, enterprises and individual users throughout Thailand.



                                                                     No. of Shares       Proportion of
     10 Largest Shareholders                                                              Holding (%)
1.  Shin Corporation Plc                                                225,435,467          51.53          Source: Thailand Securities Depositary

2.  HSBC (Singapore) Nominees Pte Ltd.                                   19,562,275           4.47          Co. Ltd., (TSD) 20 January 2003.

3.  Deutsche Bank AG, Singapore                                          19,099,975           4.37          Note: As of 20 January 2003, 3,978,284

4.  Boston Safe Deposit and trust Company                                 7,737,335           1.77          shares held by the TSD for depositors

5.  Thai NDVR Company Limited                                             7,353,825           1.68          (local) appeared on the share registration

6.  N.C.B. Trust Limited-Pensioenfonds PGGM (EMM)                         4,027,500           0.92          book. This was due to the fact that there

7.  Thailand Securities Depositary Co.,Ltd. for Depositors (Local)        3,978,284           0.91          were non-Thai shareholder and foreign

8.  Citybank Nominees Depository Singapore Pte Ltd-Taipei Bank                                              shareholdershaving shares that did not

    ABN AMRO Thailand Fund                                                3,455,350            0.79         comply with the rules and regulations of

9. Chase Manhattan (Singapore) Nominees Pte Limited 25                    3,211,500            0.73         the TSD.

10. National Finance Public Company Limited                               2,939,000            0.67
    Total                                                               296,800,511           67.84

4
                                                          Shareholding Structure of the Group



                             S hin Corporation Plc
W   ireless                  S   atellite                 E   -Business               M   edia                   O   ther
    Communications               & International                                          & Advertising              Business
    Business                     Business                                                 Business



    Advanced                     Shin Satellite Plc.          Teleinfo Media              ITV Plc.                   Merry International
    Info Service Plc                           51.53%         Co. Ltd.                                55.53%         Investment Corp.
                 43.06%                                                     38.25%                                                   100%




                                 Shin Broadband               I.T. Applications &          Artware Media
    Advanced
                                 Internet (Thailand)          Services Co. Ltd.            Co. Ltd.
    Wireless
    Marketing                    Co. Ltd.                                   99.99%                    99.93%
    Co. Ltd.                                   99.99%
                 99.99%



    Advanced                        C.S. Loxinfo                Shinawatra                SC Matchbox Co. Ltd.
    Contact Center                  Co. Ltd.                    Information                           99.96%
    Co. Ltd.                                   50.02%           Technology
                 99.99%                                         Co. Ltd.
                                                                            99.99%
    Advanced                        C.S. Satellite
    Data Network                    Phone Co. Ltd.
    Communications                                 80%
    Co. Ltd.
                 67.95%
                                    Loxley Information
                                    Service Co. Ltd.
                                                94.19%
    Data Network                                              AD Venture Co. Ltd.
    Solutions Co. Ltd.                                                      90.91%
                       49%
                                    Shenington
                                    Investments
                                    Pte. Ltd.
    Digital Phone                                  100%       Shineedotcom
    Co. Ltd.                                                  Co. Ltd.
                 98.55%                                                         60%
                                    Cambodia
                                    Shinawatra
                                    Co. Ltd.
                                                   100%       ArcCyber Co. Ltd.
                                                                            47.50%

                                    Lao Telecommuni-
                                    cations Co. Ltd.
                                                   49%


                                 iPSTAR Co. Ltd.
                                                   100%

As of 6 March 2003



                                                                                                                                           5
                                                                                                         General Background

Thailand’s Only Satellite                           Shin Satellite Plc. had been granted a 30-year concession from the Ministry of Transport and Commu-
Operator                                            nications (Currently, Ministry of Information Communication Technology) on 11th September, 1991 The
                                                    company transferred its assets after construction to the state, including satellites and related equip-
                                            1,411
                                                    ment, and received the sole right to operate them. His Majesty King Bhumiphol Adulyadej graciously
      2001        2002         1,563
                                                    provided a name for our satellite series, Thaicom, symbolizing the link between Thailand and modern
          599
                                                    communications technology. The Company registered as a listed company in 1994.
    501


                         31                         In 2000, the company began discussions with the Thai Government with the aim of converting the
Revenue Sharing   Income Tax           Net Income   concession to a license. This process seeks to achieve a level playing field for the company and future
Amount of revenue shared with                       competitors as envisioned under the Thai Constitution. The Thai Government intends to complete liber-
Thai Government in 2001 and                         alization within the timeframe agreed with the World Trade Organization (WTO) as part of the process
2002, in millions of Baht.                          of complete liberalization in 2006. The negotiations were continuing at end of 2002.


Satellite Fleet                                     SATTEL has three satellites in geostationary orbit over Asia: Thaicom 1A, launched in 1993; Thaicom 2,
                                                    launched in 1994 and Thaicom 3, launched in 1997. Thaicom 1A and Thaicom 2 have 28 satellite
                                                    transponders (22 C-band and 6 Ku-band) each. These have proven ideal for the domestic needs of the
                                                    Thai market and surrounding Indochina area where there has been high demand for satellite services.

                                                    With the success of its first two satellites, SATTEL management formed a strategy to expand the
                                                    company's business into the region. Thaicom 3, launched in 1997, was the first of SATTEL's satellites
                                                    to target an international market. The 25 C-band and 14 Ku-band transponders of Thaicom 3 cover
                                                    Europe, Africa, Asia and Australasia - almost a third of the Earth's surface.

                                                    SATTEL management strategy was to diversify the client base and product mix so as not to rely on the
                                                    domestic market only and to meet the growing demand from international markets. The economic slow-
                                                    down since 1997 has not seriously affected SATTEL; the company has continued to increase revenues
                                                    impressively while establishing a global client base.

                                                    Under the concession, SATTEL pays the Ministry of ICT an agreed percentage of the company's annual
                                                    gross revenue earned from the transponder business, or a minimum remuneration, whichever is higher.
                                                    The revenue share increases incrementally over the period of the concession. After September 11,
Subsidiaries and Associate                          2001, revenue sharing was at 15.5 per cent.
Companies:
 CS Loxinfo Co. Ltd.                                CS Loxinfo is a joint venture originally formed by SATTEL (51%) and the Communications Authority of
                                                    Thailand (49%) under the name C.S. Communications. In October 2001, Shin Broadband Internet,
                                                    another subsidiary of SATTEL, purchased outright the 49% of shares held by SATTEL and paid up the
                                                    total remaining capital to a total of 970 million baht and held 99.5% of the company.

                                                    In March 2003, the Company merged C.S. Communications with Loxley Information Services Co. Ltd.
                                                    (Loxinfo), to form Thailand’s largest Internet Service Provider (ISP), CS Loxinfo. The merger was achieved
                                                    on a noncash basis by means of an exchange of shares among the shareholders of C.S. Communica-
                                                    tions and Point Asia Dot Com (Thailand) Co. Ltd., the largest shareholder of Loxinfo. The shareholding
                                                    structure as of March 6, 2003 was:

                                                    Shin Broadband Internet (Thailand) Co. Ltd.                50.02%
                                                                                                     (99.99% owned by the Company)
                                                    Point Asia Group                                           49%, Divided into:
                                                            Point Asia Dot Com (Thailand) Co. Ltd.                    17.17%
                                                            Singapore Telecommunications Limited (SingTel)            16.81%
                                                            Zesiger Capital Group LLC                                 8.65%
                                                            Citicapital Limited (Citicapital)                         3.68%
                                                            Other minority shareholders                               2.69%
                                                    The Communications Authority of Thailand                   0.98%

                                                    The Company conducts two broad types of business. The first is the operation of a state-of-the-art
                                                    teleport in Pathum Thani Province and the second is an Internet Service Provider business under the
                                                    new brand name CS Loxinfo.
6
                                                At the end of 2002, CS Loxinfo (C. S. Communications, as it was then known) had a total of 199,698
                                                subscribers.


Teleport Services                               The teleport offers complete value-added services to broadcasting and telecommunications customers,
                                                with a license to provide international services. The teleport was one of the first in the world to offer
                                                MPEG2/DVB compression to customers, and has remained in the forefront of technical innovation,
                                                offering uplink services, satellite news gathering and automatic tape-play, among other services. The
                                                company also offers a turnaround service that arranges for broadcasts to transmit to other satellites
                                                around the globe. This enables coverage to the United States, Canada, Latin America or any other
                                                region not covered by Thaicom 3. Shin Satellite makes all arrangements as an end-to-end package for
                                                the customer.

Narrowband and Broadband                        CS Loxinfo is a licensed Internet Service Provider (ISP). It offers commercial Internet access through
Internet Service Provider                       ground and satellite networks. The new company is expected to be the largest ISP in Thailand and
                                                expects to benefit from the huge savings derived from economies of scale.

                                                CS Loxinfo is the official distributor of iPSTAR equipment in Thailand. Together with Shin Broadband
                                                Internet, it offers Thailand’s first true satellite broadband application, iPTV, for watching television, recall-
                                                ing programs and new movies on demand. The company commenced a hotspot wireless broadband
                                                service at ten locations in early 2003.

Shin Broadband Internet                         SATTEL owns 99.99% of Shin Broadband Internet. It was set up in 2000 with a registered and paid-up
(Thailand) Co., Ltd.                            capital of 947.29 million baht to provide services related to the Internet business, such as a website
                                                hosting service, server co-location, e-commerce, domain name registration and web development. One
                                                of its foremost successes was to develop Thailand’s first broadband Internet portal, www.ip-tv.tv, and
                                                iPTV (Internet Protocol TV), an application that allows customers to view television programs and
                                                movies on demand via satellite.


Shenington Investments Pte                      Shenington Investments Pte Ltd. was incorporated in Singapore in late 1997 with paid up capital of
Ltd. (Shenington).                              S$14.7 million. Its main objective is to invest in international telecommunications. The company
                                                acquired Lao Telecom and Cambodia Shinawatra in 1998. Shin Satellite acquired Shenington for 50
                                                million baht on September 27, 1999. The acquisition gives Shin Satellite a 49 per cent shareholding in
                                                Lao Telecom Co., Ltd., which operates fixed line, cellular, paging networks and Internet service in Laos,
                                                and 100 per cent in Cambodia Shinawatra Limited, which has fixed line wireless local loop and mobile
                                                phone service in Cambodia. Currently, Shenington has invested in two companies i.e., Cambodia
                                                Shinawatra Co., Ltd. and Laos Telecommunications Co., Ltd.


                                                Lao Telecommunications Company Limited (LTC) is a joint venture with the government of the Lao
                                                Peoples Democratic Republic for the portion of 49% and 51% respectively, having registered capital
                   $25.95                       of US$96.84 million. The company offers telecommunication services in Laos accordingly.
                                                •      Public Switched Telephone Network (PSTN)
  $15.98
                                                •      Digital Phone Service (GSM) 900
                                      $9.09
                                                •      Public Phone
                                                •      Paging
  PSTN             GSM Post           GSM Pre
    Lao Telecom’s Average Revenue Per User      •      Internet Service Provider (ISP)
  (ARPU) averages for PSTN, GSM 900 postpaid
      and prepaid Customers in US dollars       •      International Direct Dialling (IDD)

                                                At the end of 2002, LTC had 61,509 basic phone subscribers, 55,160 cellular phone subscribers, and
                                                2,466 Internet subscribers.

                                                The company has been a profitable investment, providing SATTEL with a dividend of 56 million baht in
                                                2002.

                                                Cambodia Shinawatra Company Limited (Camshin) was established on March 4, 1993 as a joint
                                                venture with 30% held by Ministry of Posts and Telecommunications of Cambodia, and 70% by

                                                                                                                                                               7
                                                    Shinawatra International Plc under a 15-year license. On March 4, 1997, the Government amended the
                                         $70.85
    $55.90
                                                    original Joint Venture Agreement to extend the scope of operations and expand the term of the license
                                                    period from 15 years to 35 years i.e. until March 4, 2028. The amendment extended the scope of operations
                                                    to cover transmission networks, other digital services and value added services, including permission to
                      $11.08                        distribute telecommunications equipment. The contractual modifications also allowed the transfer of all
                                                    shares from the government to the operator. Shin Satellite acquired 100% of shares in the holding company
  WLL 450             1800 Pre          1800 Post
   Cambodia Shinawatra’s Average Revenue per        of Camshin, Shenington Investments, in 1999. It has a registered capital of US$ 17 million.
    User for Fixed Line, 1800 Prepaid and 1800
  Postpaid Mobile Phone Businesses in 2002 in US
                      dollars

                                                    The company currently covers all major towns and cities, especially tourist sites and Cambodian-Thai
                                                    cross-border trade areas. In 2002, the Company expanded its network to cover 150,000 subscribers all
                                                    over the country. The services currently offered by the company in Cambodia are:


                                                    •          Fixed NMT 450 MHz telephone.
                                                    •          Fixed Digital 1800 MHz telephone.
                                                    •          Mobile GSM 1800 MHz.
                                                    •          Postpaid
                                                    •          Prepaid E-card
                                                    •          International Roaming
                                                    •          Phone Rent (available in Phnom Penh and Siem Reap Provinces)


                                                    At the end of 2002, the company had 96,790 mobile phone customers, and 1,689 fixed line customers.


                                                    C.S. Satellite Phone Co., Ltd. (CSP) is a joint venture held 80% by CS Loxinfo, 12% by Sahaviriya OA
C.S. Satellite Phone Co., Ltd.                      Plc., and Universal Communiications Systems Co. Ltd., with 8% ,to provide satellite telecom services via
                                                    the global ICO satellite system. CSP has paid up capital of 125 million baht. The ICO system has not yet
                                                    commenced service.


Income Structure                                    SATTEL’s core business is the leasing of satellite capacity to customers. This represents about 77 per
                                                    cent of the company’s total revenue. In 2002, of those leasing capacity, the customers can be classified
                                                    into two major groups as follows.


                                                Broadcasting customers accounts for 42.2 %, which would be break downed accordingly.
                                                                    •      21.1 % were analog television broadcasters
                   Income Structure of SATTEL in 2002
                                                                    •      8.8 % were Ku-band Direct-to-Home TV broadcasters
                                                                    •      6.9 % were Digital TV broadcasters
                                                  Transponder Lease
             13%
                                                  Internet          •      1.3 % were Quarter TV broadcasters
                                                  Telephone-related •      4.1 % were other types of broadcasters (including radio).

 10%
                                                                         Telecommunications customers leased 57.8 % of capacity over 2002. Of these:
                                                                         •       36.6 %were domestic VSAT customers
                                                                         •       6.2 % were rural telephony customers
                                                                         •       11 % were Internet customers
                                                                         •       3.8 % were cellular phone operators
                                                                         •       0.1 % were other telecommunications customers.

                                                           77%




                                                    Type of Business                Operating CompanyPortion of Revenue (%)
                                                    Transponder Leasing             Shin Satellite Plc., C.S. Communications Co., Ltd.                77%


                                                    Internet                        C.S. Communications Co., Ltd. &
                                                                                    Shin Broadband Internet (Thailand) Co., Ltd.                      10%


                                                    Telephone–related               Shenington Investments Pte. Ltd.                                  13%

8
                                    iPSTAR: Laying the Foundation for Future Growth

iPSTAR Co. Ltd.                     The iPSTAR project was conceived in 1997 as a new generation of satellites and ground systems that
                                    were designed specifically to handle broadband or high-speed Internet access. Management realized
                                    that conventional satellites and technologies were unable to compete effectively against the threat from
                                    terrestrial systems like cable modem and DSL (Digital Subscriber Line) in a very important sector of
                                    global communications, specifically in terms of cost and efficiency.


                                     Conventional satellites cover a vast area and are therefore suitable for transmitting signals to a mass
                                                      audience. This instant coverage to many customers at the same time made satellites
                                                               the obvious solution for television and radio broadcasts. However, two way
                                                                       communications were inherently expensive and limited satellites to
                                                                       the role of telecommunications backup systems or trunking, that is
                                                                       bulk delivery of telecommunications between countries or across
                                                              oceans. The only organizations that could afford to utilize them are govern-
                                              ments or telephone companies.


                                    Faced with the fact that while broadcasting is lucrative, growth from broadcasting is limited, the Company
Enterprise level iPSTAR satellite   forecast that communications using Internet Protocol would lower costs and make data communications
modem                               over great distances practical, making satellites a viable alternative to terrestrial systems. The company
                                    faced some major challenges. It wanted to use Ku-band frequencies as there is still a glut of bandwidth
                                    available and much of the technology to use this frequency had been tested in the field for some
                                    time; plus it wanted to put the bulk of the new technology on the ground so that it could be constantly
                                    developed throughout the life of the satellite. To do this, SATTEL decided that a geostationary satellite
                                    would be the most suitable - large enough to handle the increased bandwidth and able to cover a large
                                    area relatively inexpensively compared to alternative low and medium orbit concepts. The Company felt
                                    that for data communications, the delay time of the signal was within acceptable limits.


                                    The Company evolved a satellite cellular system, similar in concept to cellular telephone networks and
                                    utilized turbo coding, well-known in other applications but adapted to satellite use. The satellite now
                                    under construction by SS/Loral of the United States will also be able to dynamically change the power
                                    and bandwidth to its cellular beams in order to overcome one of the notable weaknesses of the Ku-band
                                    frequency, its tendency to be affected by rain. Adaptive power and bandwidth will mitigate this so that
                                    customers operations will rarely be affected by rainfall.


                                    Incorporating much of the technology in satellite modems and gateway switching on the ground made
                                    the system suitable for use with conventional satellites also, improving the efficiency of the Thaicom
Professional series                 fleet. The system is used today as a replacement for current VSAT technology, costing almost a third of
i P S TA R s a t e l l i t e        the price and making it attractive for VSAT customers. Current strategy is to complete the implementa-
modem                               tion of the ground network required by the iPSTAR-1 satellite and users. The Company expects to place
                                    gateways in 14 countries around the Asia Pacific Region before commercial use of the satellite begins
                                    in 2004 and is cooperating with interested parties to ensure future partners and the Company itself have
                                    the necessary licenses and permissions.


                                    Thus far, Company’s iPSTAR activities have been utilizing the Ku-band footprint of Thaicom 3 using
                                    first generation equipment. In order to offer services further afield, the company is starting to secure
                                    bandwidth on other satellites with which to serve its customers. At this time, the Company’s target is to
                                    promote brand recognition of the iPSTAR technology and build the infrastructure needed for its new
                                    satellite to operate regionally. SATTEL expects to be able to launch iPSTAR-1 in early 2004, after which
                                    some time will be used for testing and commissioning in orbit.


                                    The business plan for iPSTAR follows similar lines to earlier Thaicom satellites in that most revenue is
                                    expected to be derived from the bulk sale of bandwidth to large national or regional communications
                                    companies. This lessens the market risk to the Company itself. However, SATTEL expects that approxi-
                                    mately half of its bandwidth sales are likely to support consumers while the rest will be used by corpo-
                                    rate customers. Over time, the Company expects the cost of its satellite modems and dishes to come
                                    down to reasonable levels, while bandwidth prices on iPSTAR-1 are expected to be equal or better than
                                                                                                                                            9
                                those for competing terrestrial systems. The Company does not view current satellites as being
                                competitive with iPSTAR. Although there are several broadband satellite systems on the drawing
                                board, none have yet been able to complete financing like iPSTAR.


New Products and Services       IPSTAR can be viewed as an open application platform supporting IP-base applications eithor from in-
                                house development or from our content and application partners (CAP). This strategy is critical for the
                                expansion of satellite broadband service. Based on the open technology, IPSTAR Hotspots and IP2TV
                                are 2 of our application suite aimed to be launched this year.


IPSTAR Hotspot                  A “Hotspot” is a crowded public location where visitors can access Broadband Internet using their own
                                devices, notebooks or PDAs, via local Wireless LAN. The iPSTAR Hotspot service is a Common Public
                                High Speed Broadband Internet Access Service that allows clients to access the Internet with a typical
                                service rate of 512 Kbps, using the IEEE 802.11b standard with Wi-Fi. The iPSTAR Hotspot service was
                                launched in the first quarter of 2003 in Thailand. One of the iPSTAR hotspot’s main features is its
                                roaming service, which enables customers to access the iPSTAR Hotspot Service anywhere under a
                                satellite’s footprint with a single account; by doing so, the customer has mobility and convenience.


IP2TV                           With IP2TV, one of the iPSTAR applications’ suite, viewers will enjoy watching video streaming, Video-
                                on-Demand (VOD), and even using Internet Access, and E-mail directly from their TVs. For video
                                streaming, a live video signal is multicast and delivered to all subscribers under iPSTAR’s footprint
                                coverage. For VOD, video content is pushed into local servers nearest to end users. During low traffic
                                periods, iPSTAR’s gateway will keep pushing the new video content to the local server for effective
                                bandwidth utilization. IP2TV technology allows viewers to enjoy browsing on-demand streaming
                                content from any server via various last-inch solutions, e.g. Ethernet LAN, instead of requesting the
                                video content directly from web sites. IPSTAR IP2TV is the most suitable Internet solution for hotels,
                                serviced apartments and condominiums.


Challenges & Opportunities      The broadband market in the region is considered to be at an early stage, and broadband service models
                                are being explored to match the demand in potential markets. While there is much opportunity for market
                                growth, there is also a risk as the market is new and consumers may need to be more educated and
                                experienced about broadband services. To overcome the barriers, SATTEL sees the need to educate
                                both the consumer and its own partners so that the new service is fully understood and served.


Technology: Technical Hurdles   Some applications via satellite have technical hurdles that will need to be addressed. Firstly, there is a
                                need for high-speed spoofing to compensate for satellite latency, especially for video streaming and
                                video conferencing. However, the state-of-the-art compression technology can be viewed as the
                                answer to this question. Secondly, investment in satellite user terminals seems to be much higher than
                                other subsitute technologies such as ADSL and cable modem. Nevertheless, such a high price can be
                                offset by the satellite’s advantages over its competitors. In addition, the greater the number of sales
                                volume, the cheaper the price of the user terminal.
                                (Space and Advanced Communications Research Institute – SACRI)


                                Lastly, heavy rain is always one of critical problems for satellite communication. iPSTAR proprietary
                                technology, Dynamic Link Allocation (DLA), is specifically designed to maintain continuity of the
                                connection between gateway and user terminal. The technology has been tested by our partners in
                                many countries. These issues are currently being addressed by the iPSTAR engineering team, and
                                acceptable solutions seem likely to arise.


                                Obstacles for the growth of satellite services in such a sunrise industry as broadband communications
                                are the oversupply of existing fiber optic terrestrial networks, cable modem, ADSL (heritage of the Dot
                                Com era) as well as reluctance by Asian telcos due to their huge investment in existing telecommunica-
                                tions networks. In addition, the dynamic changes in the market, for instance changing technologies,
Technology: Substitute          shifting demands and regulations, and competition due to globalisation of operations and industry
Products                        consolidation, will have an impact on the satellite industry. (Space and Advanced Communications
                                Research Institute – SACRI)
10
Nevertheless, the fact that the majority of Asian countries have poor communications infrastructure in
rural areas might be seen as a new window of opportunity for the spread of satellite operations, when all
the advantages of satellites over existing technologies such as cable modem or ADSL are taken into
account. Firstly, multicasting allows fast and flexible delivery of content and application. When coupled
with Bandwidth-on-Demand (BOD), satellites seems to be the best choice for the deployment of
telecommunication services in suburban area, as the costs of providing conventional services to these
areas would be tenfold in comparison.




                                                                                                     11
                                                                          Social Contribution

                 As SATTEL is part of the community, it has a clear policy to help society and benefit the community
                 through projects and activities. The Company focuses on education, information, and knowledge about
                 space and communication via satellite.These forces shape our society and help to develop the country
                 and the quality of life of people. The Company, as the operator of the national communication satellite
                 project, disseminates knowledge and information about these subjects into the national education
                 system as much as possible. To achieve this, the Company has the following projects and activities:


Foundation       The Thaicom Foundation was established on 30 December 1993 to support, disseminate and develop
                 education using modern methods. From 1994 to 2000, the Company gave financial support of 121 million
                 baht to develop education in rural areas. The Foundation has thus far provided 15,590 distance education
                 via satellite kits and provided finances of 21 million baht. The Company supports the broadcast of educa-
                 tional programs via Thaicom satellite from Wang Klaikangwon School, Hua Hin in Prachuab Kiri Khan
                 Province. The Foundation also supports the education of underprivileged children around the country.


Museum           The Satellite Museum… a knowledge center for information about communi-
                 cations satellites

                 Originally an exhibition room providing knowledge about space and communications satellites for visitors,
                 people from all walks of life, from the public and private sector, educational institutions, and associations.
                 Their interest is in visiting the operations of satellite communications as there is insufficient educational
                 equipment or information about satellite communications available in the country to create knowledge
                 about a fast changing technology. The Company therefore provided a budget, personnel and resources to
                 create this satellite museum. It mainly acts as a center of information about space and satellite communi-
                 cations to provide young people and other interested persons with knowledge. It is a part of other commu-
                 nity projects, such as Children’s Day, which is held every year and attended by tens of thousands of
                 people. Shin Corporation also arranges a youth camp to bring young people closer to technology. Repre-
                 sentatives of young people around the country join learning activities about communications technology.


Children’s Day   The Company arranges activities on National Children’s Day every year at Thaicom satellite station.
                 On that day, there are demonstrations of satellite broadcasting, and knowledge about satellites as well
                 as entertainment.


                 Supporting the National Science Museum with financing, information, and knowledge about space and
                 satellites.


                 The Company provided about 5 million baht for the National Science Museum, especially knowledge
                 about the three Thaicom satellites.

Books            Production of books and educational materials relating to space and satellite
                 communications

                 The Company produced a book named “Learn About Satellites” as well as educational materials using
                 the national communication satellite as a model. There is also a video with information about space
                 and communication satellites, which is donated to school around the country. This is to provide educa-
                 tion nationally offering a source of knowledge and communicating knowledge efficiently. This will have
                 an impact on young people and individuals in the communications business, creating qualitative and
                 systematic knowledge to international levels.


Kids             The iPSTAR Project for Kids

                 In 2002, the Company donated iPSTAR equipment and broadband Internet connection to Pakhinee
                 Srichumpabal Center, which is an organization that helps poor children and those who are underprivi-
                 leged. The Center’s project includes adult education, non-formal education department, and workshops
                 on skill training for women’s leaders in the countryside. Such iPSTAR equipment and services help to
                 implement the work of the center much more efficiently.

12
Cambodia   Rural Internet via Satellite in Cambodia

           In July 2000, Cambodia Shinawatra Co., Ltd., a subsidiary company, donated VSAT equipment and free
           access to the Internet to a charity called American Assistance for Cambodia/Japan Relief for Cambodia.
           The VSAT equipment and the satellite link is to villages in remote areas. In Cambodia, the village
           supported has no electricity or telephones. A solar panel was donated to supply electricity for the
           computers and satellite modems.


           In 2002, the Company changed the VSAT equipment used in a local school for iPSTAR equipment
           instead and provided one more set to another school. These schools and villages are examples to show
           the benefit of Internet communications in developing our daily lives. These villages are able to use
           technology for business, education, and medicine in rural areas that have no telephone. Telemedicine
           allows doctors to provide consultation to the schools acting as health care centers in the village. The
           faculty of medicine of Harvard University in America acts as a consultant. Villages now conduct
           e-business - selling handicrafts like silk via the Internet while sending the goods by post. For further
           information see http://www.villageleap.com/


Lao PDR    Social Assistance in Laos

           Lao Telecommunications, in which SATTEL hold 49%, makes substantial contributions to society each
           year. One example is the government efforts in the Lao People’s Democratic Republic to overcome drug
           abuse. Educational assistance in 2001 was aimed at underprivileged students mostly in remote areas.
           Other contributions are assistance to social events like the celebration of the Lao New Year.


           In each year, the Company provides support for the community, to youth centers, women’s groups, and
           labor associations. Other than the above activities, the Company supports other organizations in order
           to help the country and its people, such as financial support for an elephant project in cooperation with
           the French Embassy, and sponsorship of an historical investigation group.




                                                                                                                13
                                                                            Industry and Competition

Industry Outlook              Satellites are now playing a crucial role in the Asia-Pacific region. Communications in remote areas
                              used to be costly due to inefficient telecommunications infrastructure. The convergence among media,
                              telecommunications and information sectors continues to shape the satellite industry with new applica-
                              tions being devised at an increasing speed. While satellite networks are already being used for multi-
                              media transmissions and Internet access, the possibility of future convergence of TV programming and
                              Internet content coupled with the growth of electronic commerce will be the driving applications for
                              broadband communications. The International Telecommunications Union (ITU) said strong economic
                              growth and more consumer spending were responsible for the positive growth of telecommunications
                              services in the Asia-Pacific region in the future.


                              Asia, with 160 million users, now accounts for one-third of the total Internet users in the world, more
                              than any other region. There is no doubt that the Asia-Pacific region is an emerging satellite market
                              instrumental to the growth and future development of the international satellite industry. Asia-Pacific
                              also leads the world in broadband Internet, since capacity on Internet bandwidth has risen nearly ten-
                              fold over the last two years. (www.satnewsasia.com)


Satellite Industry            Shin Satellite Plc. (SATTEL) is Thailand’s first, and only, commercial communications satellite operator
                              since 1991, under a 30-year Build–Transfer–Operate concession from the Ministry of Transport and
                              Communications (Currently known as Ministry of Information and Communications Technology, or ICT).
                              SATTEL has three satellites in geostationary orbit over Asia: Thaicom 1A, launched in 1993; Thaicom 2,
                              launched in 1994 and Thaicom 3, launched in 1997. SATTEL is preparing to launch the first broadband
                              satellite, iPSTAR-1, expected to be fully operational in early 2004.


                              Fixed orbits are limited resources. Therefore, it is important that the orbits and frequency bands be
                              properly allocated. The UN International Telecommunication Union (ITU) is in charge of such role, in
                              which Thailand is one of the members, represented by the Post and Telegraph Department, taking care
                              of negotiation and coordination of satellite orbital slots. There are currently 105 satellites over Asia
                              Pacific (source: 2002 International Satellite Directory and www.tbs-satellite.com). The major satellite
                              competitors in Asia are:

Foremost Satellite            Company                                         Country
Competitors in Asia (Alpha-   APT Satellite Holdings (Apstar)                 Hong Kong (China)
betical Order)                Asia Satellite Telecommunications (Asiasat)     Hong Kong (China)
                              PanAmSat Corporation                            USA
                              Satelindo (Palapa)                              Indonesia

                              For more information, please visit www.lyngsat.com


                              The two frequency bands mostly used by satellite operators are C-band and Ku-band operating in the
                              frequency range of 4 - 8 GHz and 12 - 18 GHz. Since C-band has been used in satellite service for more
                              than ten years, it is in high demand compared to other frequency bands. Given the limited fixed orbital
                              slot, the newly constructed satellites cannot use the C-band, but have to wait for the end of life of the
                              existing satellites in those slots, thus making the C-band naturally limited. This environment keeps the
                              competition not too intense and focusing more on quality of service, determine by EIRP (Effective
                              Isotropic Radiated Power), and coverage area.


                              SATTEL’s three Thaicom satellites offer a total of 47 C-band transponders and 20 Ku-band
                              transponders spanning over four continents: Asia, Europe, Australia, and Africa, and its C-band can
                              give maximum EIRP for Thailand, India and countries in Indo-China, thus making Thaicom satellites
                              widely recognized in those regions.


                              As the second largest commercial satellite company in Asia, SATTEL has conceived a new generation
                              of Internet Protocol (IP) satellite that would serve the demand for high speed broadband Internet
                              access in the future. Broadband via satellite has always suffered from high cost compared to other
                              systems available. SATTEL developed iPSTAR technology to increase system capacity and efficiency


14
                        such that the cost of service would be considerably lower than that currently provided by conventional
                        satellites. iPSTAR-1 will be the first of a new generation of broadband satellites that will act both as an
                        Internet backbone connection to fiber optic cables for ISPs and as a last-mile broadband Internet
                        service to consumers, competing with cable modem and ADSL.


                        Once iPSTAR-1 is launched, it will be one of the largest communications satellites ever built, with a mas-
                        sive bandwidth capacity of 40 Gbps, almost equivalent to all satellites serving Asia today. In addition,
                        iPSTAR-1 will make Shin Satellite one of fourteen 2-way satellite operators worldwide. (Source: SATTEL)


Satellite Broadband     Last November (2002) Shin Satellite completed a financial deal with the Export-Import Bank of the
                        United States (US Ex-Im Bank) and COFACE (Compagnie Francaise d’Assurance pour la Commerce
                        Extrieur de France) for loan guarantee facilities of USD 265 million. Shin Satellite also signed a syndi-
                        cated commercial bank facility arranged jointly by BNP Paribas and Citibank/Salomon SmithBarney.
                        The credit support from the Ex-Im Bank and Coface will be in the form of a guarantee facility offered by
                        Citibank and BNP Paribas. IPSTAR Project is now ready to move ahead with this financial backing.


                        iPSTAR’s mission for 2003 is complete installation of 18 gateways in 14 countries to enlarge its footprint
                        over Asia-Pacific. All gateways are set to be ready for the launch of iPSTAR in early 2004 (to date, Shin
                        Satellite has alreay deployed three gateways, in Thailand, Myanmar and India). The company plans to
                        build another four gateways within the first quarter of year 2003 in Taipei (Taiwan), Beijing (China),
                        Jakarta (Indonesia), and Bendingo (Australia).


                        Meanwhile, Shin Satellite will focus on both above-the-line and below-the-line marketing activities in
                        every region, for instance iPSTAR roadshows and Mini Conferences throughout 2003, starting with
                        India, China, Vietnam, Indonesia and Australia within the first quarter.

                        Another iPSTAR strategy for this year is to establish strategic partnerships with expertise in the area of
                        infrastructure, commercial, application and deployment. This is to ensure that our certified partners will
                        be able to deliver the best quality of service to the end users. Our flexible business model allows
                        multiple partners to cooperate for their mutual benefit. Simultaneously, Shin Satellite will continue
                        developing new applications for both mass and vertical market i.e. Hotspot, IP2TV, VPN, etc. in order
                        to provide varieties of products and services for end users.


Broadband Services in   CS Loxinfo Co. Ltd., the leading ISP in Thailand with more than 200,000 customers, has been appointed to
Thailand                provide Internet services over the iPSTAR platform for the whole country. The service was launched at the
                        end of 2001. The following service packages are designed to serve key market segments of users:
                        ♦          StarLink to serve organizations requiring heavy use of Internet services
                        similar to a leased line service.
                        ♦         StarExpress to serve SMEs, SOHOs and residential users for broadband
                        internet access on a shared basis
                        ♦         StarNet to serve the corporate need for building their own network with extranet/
                        intranet access.


                        Services planned for 2003 include iPSTAR hotspots or hybrid satellite/wireless Internet/services,
                        content streaming for hotels, condominiums and serviced apartments.


Transponder Leasing     Economic conditions in 2002 had slightly improved. Demand for C-Band was still more than demand in
Business                other bands – Samart Comtec Co., Ltd. signed a transponder leasing contract for 10 years. Mean-
                        while, the DOS’s (India’s Department of Space) contract on C-Band Regional Beam may end in June.
                        The Company has provisionally searched for new customers from whom the Company would have
                        increased revenue compared to the DOS, which is a big customer with bargaining power for quantity
                        discount. Most of the customers that the Company has in hand are TV broadcasters in Asia who are
                        expected to lease at least 4 –5 C-Band transponders in 2003.



                                                                                                                               15
Broadcasting   The Company had signed an important contract with a partner in 2002 that it regards as an increase in
               its customer base in the broadcasting market for the year. That was the contract to serve a Digital
               MCPC platform in India with VSNL, by which VSNL will provide uplink services for broadcasters in India.
               Shin Satellite will lease out transponders but serve channel by channel until the customers utilize all the
               platform. The Company terminated services for some TV broadcast customers who could not follow
               their contract’s conditions last year. As a result, the number of TV channels on Thaicom satellites has
               decreased.


               However, broadcasting revenue had increased as there was an increase in the number of new TV
               channels on Thaicom satellites. The increase consisted of both new customers and existing customers
               who expanded their transponder utilization by increasing the number of TV channels, hours of usage,
               and occasional usage. These also included additional services such as system integration services by
               which the Company procures and installs equipment and transmission system for customers.


ProTrunk       In 2003, the Company maintained its success in providing ProTrunk services, which is a direct interna-
               tional connection to the Internet for corporations to any geographical location under the footprint of
               Thaicom. Major markets for broadband ISP and corporate customers of the Company are IndoChina,
               India, Pakistan, Bangladesh, and Thailand.


               Broadband services for ISPs belonging to the Company in the past year were stable. There was a
               dramatic decrease in market prices and intense price competition by satellite companies in China,
               Singapore, as well as under-the-sea fiber optic companies from Singapore, Japan and Hong Kong,
               which are the biggest Internet centers in Asia Pacific region.


               In the past year, the Company connected networks directly to the Internet Backbone using both
               Thailand’s gateway, and Hong Kong’s. Thaicom 1A, Thaicom 2, and Thaicom 3 receive and broadcast
               signals to customers worldwide. However, the Company planned to move its customer service base
               to Hong Kong’s gateway only in order to increase the efficiency of the process and the competitiveness
               of iPSTAR as some customers already switched to utilize iPSTAR services in 2003.




16
                                                          Technological and Operational Risks

                                Possible Factors Affecting Investments


Technological and Operational   Technology
Risks                           There can be no guarantee that new technologies will not affect the Company's operations. However, we
                                have not only adopted new advances to benefit customers, but in certain areas, such as iPSTAR, we are
                                global leaders in developing satellite-related technology.


Satellite Capability            Satellites are open to problems due to solar discharges or collision with objects in space. While manu-
                                facturers design satellites so that they can withstand the rigors of space, the probability of damage that
                                could cause complete failure of a satellite in orbit is very small, i.e. less than one per cent. To minimize
                                risk, we take commercial insurance against potential loss, with ourselves and the Ministry of Transport
                                and Communications nominated as joint beneficiaries under the insurance policy.


Service Lives of Satellites     Current projections show that the service life of Thaicom 1A, 2 and 3 should end in 2008, 2009 and 2011
                                respectively. The factors affecting their service lives are their construction, strength and durability, fuel
                                consumption and our skill in controlling them under different conditions. Their service lives may be shorter
                                than expected even under normal operations. The natural end of life of a satellite or satellites may be
                                accompanied by the launch of replacements depending on our business plan at the time. The Engineering
                                Department ensures compliance with the standards laid down by the company under ISO 9001.


Launch of New Satellites        The Company's business is mainly satellite services. New satellites will be launched in the future. Shin
                                Satellite has always minimized launch risk by choosing a launch company with a good history of
                                successful launches. The satellite manufacturer will usually insure a satellite until it is delivered to the
                                launch site. We then insure the satellite for the launch as well as against loss when the satellite is in orbit.

Reservation of Satellite's      As the satellite's position at geostationary orbit is limited, both reservation and frequency coordination
Orbit and Frequency             are very important. International Telecommunications Union (ITU) is an organization under the United
Coordination                    Nations responsible for telecommunications. Thailand is a member, having The Department of Posts
                                and Telegraphs, Ministry of Information Communications and Technology, as an agent to negotiate and
                                coordinate with others. Anyone requesting an orbit reservation will be considered if having the right to
                                utilize such orbit. However, the satellite must be launched within 7 years after receiving such right. Due
                                to limited orbital slots proper frequency coordination increases efficient use of resources. Nevertheless,
                                frequency coordination becomes more complicated, and takes some time as transponder demand
                                increases, which increases the number of satellites, and satellites become closer to each other. To
                                eliminate the issue or minimize frequency disturbances, satellite manufacture may need slight
                                adaptation, or a change in service region, or ground equipment that is larger than normal.


Management Risk                 Major Shareholder Hold over 50% in SATTEL
                                Shin Corporation Plc. held 51.53% of all SATTEL stocks sold as at January 20, 2003. As a result, Shin
                                Corporation has the power to control almost all resolutions in shareholder meetings, which includes the
                                appointment of the Board as well as other resolutions that require a vote except matters prescribed ac-
                                cording to the law and other company regulations which require three fourths of shareholders to approve.


                                Consequently, other shareholders might not able to accumulate all votes under some matters opposed
                                by the major shareholder. However, Shin Corporation's holding in SATTEL is conditional under the
                                concession agreement, which requires Shin Corporation to hold no less than 51% in SATTEL through
                                the concession period.


Financial and Economic Risk     After Thailand changed its exchange rate system to a managed float, the Company started to collect its
Fluctuation of Exchange Rates   revenue from some customers in Thailand in US dollars. Currently, the Company collects approximately
                                91% of its revenue in US dollars. However, the Company manages exchange rate fluctuations by pro-
                                portionately adjusting its loans to revenue ratio in US dollars and Thai Baht (a “natural hedge”). To
                                mitigate the effect of the exchange rate fluctuation, the Company sometimes uses widely accepted
                                methods such as "swap" and "forward" deals in financial markets.


                                                                                                                                            17
Regional Economies           We are a regional company, therefore regional economies affect the demand for satellite services.
                             Whenever the regional economy declines, so does the region's purchasing power. The result is
                             sometimes that fewer people can afford cable television or direct-to-home television and companies
                             offering those services reduce their use of satellite transponders accordingly. Although a regional
                             economic slowdown has had a minor effect on the Company's business, sound fiscal policy and
                             management controls have resulted in very good financial performance over the past three years.


Markets and Competition      The telecommunication business is highly lucrative and therefore very competitive. SATTEL competes
New Operators and Alterna-   in each market on quality of service and is considered the leader for satellite services in Indochina and
tive Services                South Asia, but this lead cannot be guaranteed as new competitors enter the market. To counter this, the
                             Company has taken every measure, in terms of marketing strategies, technology, sales strategies and
                             quality of service etc., to keep clients and seek new ones. The Company also continues developing new
                             products, constantly improves its services, and stresses quality and high standards for reasonable prices
                             rather than competing on price alone.


Potential Loss of Major      Some major customers have 3-10 year contracts. Failure on their part to comply with the terms and
Customers                    conditions of their contracts may adversely affect the Company's revenue. Major customer in Thailand,
                             UBC (United Broadcasting Corporation accounts for 17.7 per cent of total transponder revenue, while
                             the major customer overseas is DOS (Department of Space) who accounts for 16% of total transponder
                             revenue. However, the Company has planned to offset any potential loss of major customers by refilling
                             transponders with new broadcast and high-speed Internet trunking (ProTrunk) customers. Thaicom's
                             position as a “Hotbird” in India, for instance, leads SATTEL to believe it could replace over 50% of
                             revenue from the loss of a major customer within a reasonable period.


                             Shin Satellite is legally obliged to provide services in exchange for money paid to the Company. However,
                             the Company is not liable for estimated future loss of business should a transponder or satellite fail.

Legal and Political Risks    SATTEL operates globally and complies with the laws, rules and regulations of each country, where
International                those laws apply to this Company. The Company's international legal department advises management
                             on any issues that could have a negative impact on it. Generally, the Company avoids or preempts legal
                             problems and complies fully with the laws of all countries where it has business. In certain cases, local
                             partners or legal advisers can be hired to offer the best advice.


                             SATTEL has customers in many countries from a diverse political spectrum. Sometimes there may be
                             some political risk involved, such as protectionism or market entry barriers. However, with the political
                             wind lending itself more to liberalization around the world, this risk is decreasing. As a Thai company,
                             Shin Satellite is assisted by the neutral stance Thailand has taken on numerous issues globally. The
                             Company therefore finds that it has less political concerns than other competitors.

Domestic                     The Company was founded and registered in Thailand and operates domestic satellite communications
                             services under a concession granted by the Ministry of Transport and Communications (now called the
                             Ministry of Information, Communications and Technology) to Shin Corporations Plc, the parent company
                             of Shin Satellite Plc. In September 1999, the eight-year exclusive period awarded to the company
                             expired and in theory competitors were to be allowed to enter the market. In practice, no competitor has
                             been awarded a license as the official licensing body, the National Telecommunications Commission (as
                             stipulated in Section 40 of the Constitution), has not been set up.


                             Talks with the government on the conversion of our concession to a license were still continuing at the
                             end of 2002. However, there is no obligation for Shin Satellite to accept a conversion deal that we
                             believe may have a negative impact on the Company's current or future financial health. The conversion
                             process must be acceptable to all parties before it can be implemented.


                             There is a general acknowledgment that the purpose of the conversion and the transfer of licensing
                             power to an independent body is to ensure free and fair competition for the benefit of consumers.


18
After World Trade Organization (WTO) agreements on free competition in the services sector in 2006,
Shin Satellite may face competition in the domestic market. However, our success in competing within
the Asia Pacific region suggests that competition at home will have minimal impact on the Company's
revenues.


New competitors also face certain barriers to entry. Thailand has no pool of skilled satellite engineers
for hire; the number of satellite dishes pointed at Thaicom satellites is such that to move them all at one
time to point at a competitor is unfeasible; customers who consider changing operators mid-contract
face penalties for cancellation, and so on. The Company has spent many years building a strong
relationship with our clients in Thailand as well as continues to raise the standard of service to
international levels. Therefore, the Company believes that the risk of losing a significant proportion to
competitors is negligible.




              Other Factors Affecting Investment

Legal Proceedings
1.      The Company brought bankruptcy proceedings against Thaisky Cable TV Company Limited
(Thaisky) which failed to discharge its debts to Shin Satellite and C.S. Communications Company
Limited (currently known as CS Loxinfo Company Limited), the aggregate amount of approximately
245.67 million Baht together with interest rate at 7.5% p.a. from the default date to the repayment
date, commencing in 1997. On July 27 2001, the Court ordered that the debtor (Thaisky)'s assets be
auctioned for the first time. Consequently, some of those assets were sold, and the remainder
was auctioned on August 30, 2001. On May 13, 2002, SATTEL and C.S. Communications received
repayment from the proceeds of the said sales worth 1,838.57 baht, and 103.5 baht respectively.


The Thaisky case has now been completed. SATTEL has requested a refund of the revenue sharing
payment made under the concession to the Ministry of Information and Communications Technology.
This is currently under consideration. SATTEL had already written off Thaisky's debt in the second
quarter of 2002. However, the Company had provisioned such debt to the full amount. The write off,
therefore, had no effect on the Company's performance.


2.      In the second quarter, 2002, SATTEL brought Criminal and Civil action against Mr. Sirichoke
Sopha, a Democrat Member of Parliament. During a no confidence debate against the Government
in March 2002, Mr. Sirichoke Sopha had stated that SATTEL had imported uplink-downlink television
signals equipment without paying correct import duties. Such statement was not true and caused
damage to the Company's reputation, as the Customs Department had already completed its
investigation of the matter and clearly stated that SATTEL had paid correct import duties on such
equipment. Currently, the action is pending in both the Civil and Criminal Court.




                                                                                                       19
                                                        Corporate Governance

     Compliance with Good Corporate Governance Policies


     Corporate Governance Policy

            The Company believes that the principles of good corporate governance are essential factors in
     maximizing long-term shareholders' wealth. The Company has established a Policy of Good Corporate
     Governance covering five major areas.

     1. The Board of Directors

     2. The Rights and Equitable Treatment of Shareholders and the Role of Stakeholders in Corporate
     Governance

     3. Information Disclosure and Transparency

     4. Internal Control and Risk Management

     5. Corporate Philosophy and Code of Conduct


     The Board of Directors

     Composition and Independence

     The Company's Board of Directors consists of nine experienced directors covering various fields of
     knowledge. Two are representatives of the major shareholders; two are Executive Directors; four —over
     one third of the Board—are Independent Directors, while one is the representative of the Ministry of
     Information, Communications, and Technology (ICT). This structure balances the business direction
     and management functions of the Board. The authorized directors are Dr. Dumrong Kasemset or
     Mr. Boonklee Plangsiri or Mrs. Siripen Sitasuwan: two of the three directors are authorized to sign on
     behalf of the Company together with the Company seal.

     Responsibilities

     The major duties and responsibilities of the Board of Directors are:

     • To work honestly according to laws and regulations, business objectives, Company Articles of
     Association, and shareholders' meeting resolutions, as well to be conscious of what is to the Company's
     benefit.

     • To establish policies, assign the business direction, lead management to operate effectively and
     efficiently toward that direction and any policies assigned in order to maximize shareholders' wealth,
     and ensure continuous improval of the business.

     • To consider and decide upon significant issues, whether conflicts of interest, acquisitions and disposal
     of assets and investments, managerial policy, as well as issues required by law to review and approve.

     • To evaluate the performance of the Chairman of the Executive Committee and the Executive
     Committee regularly, as well as determine remuneration.

     • To be responsible for the performance of management and operations by exercising due professional
     care.

     • To ensure the Company has a reliable accounting system, financial reports, and accounting audit; to
     supervise the internal control evaluation process; to ensure effective and efficient internal audit, risk
     management, and follow up.

     • To ensure there are no conflicts of interest among stakeholders.


20
• To govern the Company to operate ethically.

• To take responsibility in preparing financial reports equal to the report of the auditor in the annual report

Appointment of the Board

The Board should be qualified through experience according to Company requirements, having no
prohibited conditions according to the Public Company Act or other related laws. The Board shall have
sufficient time to devote its knowledge and ability to work for the Company. The Chairman of the Board
has assigned a nomination sub-committee to be responsible for directors' nominations and propose
them for approval at a Shareholders' Meeting.

According to the Articles of Association, the term of one third of the directors shall expire every Annual
General Meeting of Shareholders. The longest serving directors shall be due first, and may be re-elected
to resume duty. In case of vacancy (ies) due to other reasons, the Board, by a vote in which three fourths
of its members agree, shall elect someone who has qualifications and no prohibited conditions according
to clause 68 of the Public Companies Act, B.E. 2535 (1992). The Board can thereby appoint him/her a
director in the next Meeting. An exception is the case of a term with less than 2 months remaining, where
the term of the newly appointed director shall expire at the same time as the preceding director.

The Company does not determine the maximum times a director(s) may be re-elected, or the age of the
directors, but their working capability.

Chairmen

The Company has a policy of Segregation of Duties between the Chairman of the Board, and the
Chairman of the Executive Committee, that they shall not be the same person, in order to maintain a
balance of power between direction and management functions.
• The Chairman of the Board, is the directors' head and is responsible for monitoring and supervising
the Executive Committee members' performance in achieving assignments, as well as chairing the
Board of Directors and Shareholders' meetings.

• The Chairman of the Executive Committee is the head of the Company's management team,
responsible to the Board for achieving planned assignments.

Board Meetings

The Board of Directors' Meeting schedule is determined in advance at least once a quarter. Additional
meetings may be held as required. At the meeting, the Chairman of the Board will allocate sufficient
time for management to give a presentation for discussion on significant issues between management
and the Board. All directors can independently show their opinion and present meeting agenda.

The Secretary of the Board is responsible for making appointments, preparing sufficient documentation
for the meeting, and distributing the Invitation to the Meeting not less than 7 days before the meeting for
the Board to study the documents in advance, except in the case of unavoidable circumstances, and
taking the Minutes of the Meeting.

In year 2002, the Board met 8 times, with the participation of following directors.

Directors                                 Title             No. of                       Participated
                                                          Meetings
1. Mr. Paron Israsena                     Chairman
                                          of the Board            8                                 7
2. Mr. Rianchai Reowvilaisuk              Vice Chairman           8                                 5
3. Mr. Boonklee Plangsiri                 Director                8                                 6
4. Dr. Dumrong Kasemset                   Director                8                                 8
5. Mrs. Siripen Sitasuwan                 Director                8                                 7

                                                                                                           21
     6. Dr. Nongluck Phinainitisart         Director               8                                8
     7. Prof. Hiran Radeesri                Chairman
                                            of the Audit
                                            Committee              8                                8
     8. Mrs. Nilaya Malakul Na Ayudhya      Audit Committee        8                                4
     9. Mrs. Charintorn Wongphutorn         Audit Committee        8                                8
     -- Dr. Nongluck Phinainitisart: Secretary to the Board of Directors


     The Sub-Committees


     The Board of Directors has set up three subcommittees, an Audit Committee, Remuneration Sub-
     Committee and Nomination Sub-Committee.


     Audit Committee


     1. Mr. Hiran Radeesri                           Chairman
     2. Mrs. Nilaya Malakul Na Ayudhya               Member
     3. Mrs. Charintorn Wongphutorn                  Member


     All three audit committee members are independent directors. Two are knowledgeable in Finance and
     Accounting. The committee met 12 times in 2002. Their scope of work and responsibilities are:


     —           To review the Company's Financial Statements under Generally Accepted Accounting
                 Principles and ensure accountability and appropriate information disclosure.
     —           To review the Company's Internal Control and Internal Audit for appropriateness and
                 effectiveness.
     —           To review the Company's compliance with the Securities and Exchange Act, regulations of
                 the Stock Exchange of Thailand, or other laws related to the Company's business.
     —           To consider, select, propose for appointment, and propose the remuneration of the Company's
                 external auditors
     —           Where there are related transactions, or potential conflict of interest transactions, to
                 consider the accuracy and completeness of information disclosure.
     —           To monitor the Company's risk management for effectiveness and appropriateness.
     —           To review and give an opinion on the internal audit plan and the performance of the Internal
                 Audit Office, as well as cooperate with external auditors.
     —           To review the Company's good corporate governance best practice reporting before
                 disclosure in the annual report.
     —           To consider and evaluate the job performance of the Manager of the Internal Audit Office
                 annually.
     —           To approve the Internal Audit plan, budget, and manpower.
     —           To report the results of the Audit Committee's work to the Board at least four times a year
     —           Authorized to invite management, executives, or staff of the Company to give opinions, join
                 meetings, or submit documents deemed necessary or relevant according to their work.
     —           Authorized to hire a consultant, or external individual to give opinions or offer best advice
                 according to Company's rules, when necessary.
     —           Other work as assigned by the Board with the consent of the Audit Committee.


     Remuneration Sub-Committee


     1. Mr. Paron Israsena                   Chairman
     2. Mr. Boonklee Plangsiri               Member
     3. Mrs. Charintorn Wongphutorn          Member


     The Remuneration Sub-Committee consists of three members, two being Independent Directors. The
     Sub-committee's scope of work and responsibilities are:

22
• Appropriately determine necessary remuneration, both monetary and non-monetary, annually in order
to be incentives and maintain the Board, Sub-Committees, and Senior Management of the Company.

• To prepare policies and criteria to determine remuneration of the Board and Senior Management for
approval by the Shareholders' meeting, and/or the Board, depending on the case.

• Report to the Board, and be responsible for providing explanations and clarifications about
remuneration of the Board of Directors, and Senior Management in Shareholders' meetings.

Nomination Sub-Committee

1. Mr. Paron Israsena                   Chairman
2. Mr. Boonklee Plangsiri               Member
3. Mrs. Charintorn Wongphutorn          Member

The Nomination Sub-Committee consisted of three members, two being Independent Directors. The
Sub-committee's scope of work and responsibilities are:

—      To determine policies and criteria for nominating the Board and Sub-Committees of the Company.
—      To nominate directors by considering suitable persons for approval by the Board, and/or Shareholders'
       meeting, depending on the case.
—      To consider suitable persons to be nominated as Chairman of the Executive Committee, if there
       is a vacancy, as well as to determine criteria for succeeding Senior Management.

Executive Committee

The Executive Committee consists of the Chairman of the Executive Committee of the Group of
Companies, the Chairman of the Executive Committee of Business Lines, the President, and/or the
suitable person(s), as approved by the Board of Directors. The current Executive Committee comprises:
1.      Dr. Dumrong Kasemset                    Chairman
2.      Mrs. Siripen Situsawan                  Member
3.      Dr. Nongluck Phinainitisart             Member
4.      Mr. Somprasong Boonyachai               Member

The Board has assigned responsibilities and delegated the following duties and authority to the
Executive Committee:
—      To determine the policies, directions, strategies, and core management structure for business
       operations in line with economic and competitive conditions that have been defined and
       declared to Shareholders, for approval by the Board.
—      To determine the business plans, budgets, and working authority limits of the Company for
       approval by the Board.
—      To monitor efficient policy implementation and operating procedures according to favorable
       business conditions.
—      To monitor the Company's operating performance to be in compliance with the approved
       business plan.
—      To consider any significant investment projects.
—      Others, as assigned by the Board.

• The Executive Committee may delegate power to individuals to perform one or more businesses,
according to the Executive Committee's discretion. However, the power of delegation does not cover
the authority to approve transactions where he/she or any individual may have a conflict of interest
(according to Company rules, and those defined in the notifications of the SEC) with the Company,
or subsidiary (ies). Exempted are situations where approval is in accordance with the policies and
criteria set by the Board.

• The Executive Committee has the authority to approve financial transactions of less than 800 million


                                                                                                        23
     baht. This includes general expenses in normal business operations, project investment, capital asset
     or fixed assets investments, borrowings, lending, credit line facilities, debt instrument offerings,
     guarantees, loans or credit guarantees. Exceptions to this are transactions of money deposits and
     withdrawal, and foreign exchange and interest rate risk hedging instruments. The limits on its authority
     to approve these issues are set at 2,500 million baht and 1,500 million baht, respectively.

     The Executive Committee may delegate authority to Company managerial staff to approve one or more
     such financial transactions according to the Executive Committee's discretion.

     The approval of the Executive Committee or its delegates shall not include any transaction(s) by which
     he/she or any individual may have a conflict of interest (under Company rules, and those defined in the
     notifications of the SEC) with the Company, or its subsidiary (ies). Exceptions are approvals made
     according to the policy and criteria already approved by the Board.

     Committee Self Evaluation

     In the Board of Directors' Meeting no. 2/2546 on February 26, 2003, the Audit Committee proposed a
     Self-Evaluation Questionnaire suggested by the Stock Exchange of Thailand. The meeting concluded
     that the self-evaluation of the Board is an important step for the development of Good Corporate
     Governance. The Board agreed to continue to apply this evaluation.

     Management Team

     1.   Dr. Dumrong Kasemset               Chairman of the Executive Committee - Satellite & International
     2.   Dr. Nongluck Phinainitisart        President
     3.   Dr. Avudh Ploysongsang             Vice President - Business Development
     4.   Mr. Paiboon Panuwattanawong        Vice President - iPSTAR Operations
     5.   Mr. Yongsit Rojsrivichaikul        Vice President - Marketing
     6.   Mr. Tanadit Charoenchan            Vice President - Finance & Accounting
     7.   Mr. Kamonmit Vudhijumnong          Vice President - Legal


     Remuneration of Directors

     • The remuneration of five members of the Board of Directors in year 2002 was 2,875,000 Baht,
     comprising salary, bonus, and meeting allowance. The remuneration did not include those of
     Executive Directors and management.

     The remuneration of five directors and management in year 2002 was 20,863,000 Baht, comprising
     salary, bonus, provident fund, and other fringe benefits. The remuneration did not include that of the
     Vice President for Finance and Accounting.

     • The Company, with the resolution of the Board of Directors' Meeting no. 2/2545 on 26 March 2002,
     approved the allotment of warrants to the Executive Directors, staff, and consultants of the Company.
     The first allotment was for the management. The warrant allotment objective is to be a working
     incentive and remuneration for the recipients to have strengthened determination in their work and
     to bring the greatest benefit to the Company. The Board of Directors proposed a name list of selected
     management and the number of warrants allotted. The allotment criteria were the position of the
     management, experience, number of years' service, as well as potential. The exercise price of the
     warrant is 26.75 Baht. The management selected to benefit under the scheme are:

        Management allotted                   Allotted Warrants     % of the allotment scheme
        Warrants
     1. Dr. Dumrong Kasemset                          2,436,400                        30.46
     2. Dr. Nongluck Phinainitisart                   1,692,800                        21.16
     3. Mr. Yongsit Rojsrivichaikul                     700,000                         8.75
     4. Dr. Avudh Ploysongsang                          204,300                         2.55


24
5. Mr. Kamonmit Vudhijumnong                        203,600                         2.55
6. Mr. Tanadit Charoenchan                          162,000                         2.03


The Rights and Equitable Treatment of Shareholders


The Company has a policy to conduct shareholders' meetings according to the laws and guidelines
prepared by regulatory authorities. In 2002, there was one shareholders' meetings at the Company; i.e.
one Annual General Meeting. The invitation letter to each meeting, together with information on the
meeting agenda, was distributed to shareholders approximately 10 working days before the meeting date.


In each meeting, every shareholder has rights, including equitable treatment, to acknowledge the
information, show opinions, query the meeting, all according to meeting regulations and the issue
under discussion. The Chairman of the meeting allocates an appropriate period for and promotes
discussion and questions in the meeting.


In each shareholders' meeting, the Company appoints at least one independent director to be the proxy
for shareholders who cannot attend the meeting, and who were informed earlier in the invitation letter to
meeting.


The Role of Stakeholders in Corporate Governance


The Company is aware of the rights of stakeholders, and has a policy to ensure awareness by
appropriately prioritizing stakeholders such as shareholders, employees, executives, customers,
partners, creditors, society and the public. There is also cooperation between stakeholders about
their roles and responsibilities in order that the Company can run its business smoothly, strongly, and
fairly entertain the benefit of all stakeholders.


Information Disclosure and Transparency


The Company values accurate, complete, thorough, and timely disclosure of financial, operational, and
other relevant information for investors and concerned persons to use in investment decisions. This
disclosure is made through communication channels via the Stock Exchange of Thailand (SET), the
Securities and Exchange Commission (SEC), and the Company's Internet web site. The Company
has also established an Investors Relations Department to be responsible for communicating
useful information to shareholders, investors, analysts, as well as preparing policies and handbooks
for investor relations activities and information disclosure to the Exchange in order to ensure that the
Company fully complies with laws, rules and regulations.


Other than information disclosure according to the law, the Company also holds quarterly Mini Info
Meeting to disclose operational performance to investors, analysts, fund managers, and interested
persons, by a member of the Executive Committee to give explanations and reply to queries as they
arise. Interested persons can contact and request information from the Investors Relations Department,
tel. no. 02-591-0736 extension 5072-3, or search the website, www.thaicom.net


Internal Control and Risk Management
The Company has an independent Internal Audit Office, reporting directly to the Audit Committee,
evaluating, assuring and consulting about internal control system, risk management, and good
corporate governance.


In the Board of Directors' Meeting no. 2/2546 on February 26, 2003 with the contribution of the
Audit Committee, the Board evaluated sufficiency five areas of internal control; the organization and
environment, risk management system, management control, information and communication system,
and the monitoring system. The evaluation concluded that the Company has sufficient internal control
and an appropriate risk management system. Price Waterhouse Coopers ABAS Co., Ltd. also did not
find any Company material in non-conformance with the internal control system.

                                                                                                     25
     In the past year, the Company published a Risk Management Handbook and Guidelines of Shin
     Corporation Public Co., Ltd. to educate the staff, as well as conducted workshops. On February 1,
     2003, the Chairman of the Executive Committee established a Risk Management Committee,
     consisting of a management team to determine the policies, assess risks, and determine risk
     management strategies and a monitoring system to report to the Chairman of the Executive Committee,
     The Executive Committee, and The Audit Committee.


     The above Risk Management Process is structured to be in compliance with the Company's current
     operations, beginning with Vision Determination, Internal & External Risk Assessment, Measurement
     Determination, and Business Planning, in order to manage the risk and follow up. Through this process,
     Risk Management will be a continuous process.


     Corporate Philosophy and Code of Conduct


     In order to maintain operational standards and business ethics, the Company has established a written
     policy and Code of Conduct, in order to become a Company recognized as following Best Practice at
     both local and international levels. The Company wishes to be recognized as responsible to employees,
     shareholders, customers, competitors, partners, creditors, and society, including the use of information,
     information disclosure, conflict of interest, safeguarding of Company assets, participation in political
     activities, legal and regulatory compliance, good corporate governance, and reporting.


     Regarding issues concerning conflicts of interest, and related transactions, the Company pays special
     attention by using prices and conditions the same as when dealing with outside parties (Arm's
     Length Transactions) or by making use of reports from independent external appraiser(s). The Audit
     Committee also reviews the transactions regularly to ensure fairness to all relevant parties, including
     minority shareholders.




26
                                                                             Management and Directors’ Biodata

Name                 Age Title                         Shares (%) Highest Education                  Experience

Mr. Paron Israsena   76   Chairman of the Board of        None     Bachelor Degree, Mechanical       1992-present     Chairman of the Board of Directors, Shin Satellite Plc.
                          Directors                                and Electrical Engineering,       1992-2002        Director, Shin Corporation Plc.
                                                                   Chulalongkorn University          1985-1992        President and Chief Executive Officer, The Siam Cement Plc.
                                                                   Master of Science (ME), MIT.
                                                                   Ph.D. (Hon.)
                                                                   Chulalongkorn University

Mr. Rianchai         59   Vice Chairman of the Board of None       Master of Engineering,            Present          Vice Chairman of the Board of Directors, Shin Satellite Plc.
Reowilaisuk               Directors                                Chulalongkorn University                           Director General, Post and Telegraph Department


Mr. Dumrong          49   Director and Chairman of the 0.2857 Ph.D., Electrical Engineering          2000-present     Group Vice Chairman of the Group Executive Committee,
Kasemset                  Executive Committee-Satellite       Massachusetts Institute of                              Shin Corporation Plc.
(Ph.D.)                   Communications and                  Technology                                              Member of the Executive Committee, Advanced Info Service Plc.
                          International Business                                                     1997-present     Chairman of the Executive Committee, Satellite Communica
                                                                                                                      tions and International Business, Shin Corporation Plc.
                                                                                                     1995-1997        Vice Chairman of the Executive Committee, Policy, Shinawatra
                                                                                                                      Group
                                                                                                     1994-2000        President, Shinawatra Satellite Plc.
                                                                                                     1993-1994        Executive Vice President, International Broadcasting
                                                                                                                      Corporation Plc.
                                                                                                     1991-1992        Senior Manager - Business Development, Shinawatra
                                                                                                                      Computer and Communications Group
                                                                                                                      General Manager - International Broadcasting Corporation Plc.
                                                                                                     1989-1991        Program Manager Integrated Optoelectronics, GE Aerospace,
                                                                                                                      New York, USA.
                                                                                                     1986-1989        Manager, Ga As IC Materials, Microwave Semiconductor Co.,
                                                                                                                      Ltd. Siemens Group, New Jersey, USA.

Mr. Boonklee         52   Director and Chairman of the 0.0001 M.A. in Computer Engineering, 2001-present              Chairman of the Board of Directors a, ITV Plc.
Plangsiri                 the Group Executive Committee       University of Illinois        2001-2002                 Chairman of the Board of Directors and Chairman of the
                                                              (Urbana Champaign), U.S.A.                              Executive Committee, ITV Plc.
                                                                                            2000 -present             Director, Advanced Info Service Plc., Shin Satellite Plc.
                                                                                            1999 -present             Director and Chairman of the Group Executive Committee,
                                                                                                                      Shin Corporation Plc.
                                                                                                     1997 - 2000      Director and Member of the Executive Committee, Shin
                                                                                                                      Corporation Plc. Advanced Info Service Plc. Shin Satellite Plc.

Mr. Somprasong       48   Director and Member of the      0.0172 Master of Engineering, Asian        2000 - Present Group Vice Chairman of the Group Executive Committee,
Boonyachai                Executive Committee                    Institute of Technology (AIT)                      Shin Corporation Plc.
                                                                                                     2000-2002      Director and Member of the Executive Committee, Shin Satellite Plc.
                                                                                                     1999 - Present Chairman of the Executive Committee - Wireless
                                                                                                                    Communications, Shin Corporation Plc.
                                                                                                     1997 - 1998    Vice Chairman of the Executive Committee -Wireless
                                                                                                                    Communications
                                                                                                     1995 - 1996    Senior President, Advanced Info Service Plc.
                                                                                                     1994 - 1995    President, Advanced Info Service Plc.
                                                                                                     1993 - 1994    President, Shin Satellite Plc.
                                                                                                     1993           President, Advanced Info Service Plc.
                                                                                                     1992 - 1993    Executive Vice President (Operation 4), Shinawatra Group

Mrs. Siripen         55   Director and Member of the      None     MBA, Wichita State                2001-present     Director and Member of the Executive Committee, ITV Plc.
Sitasuwan                 Executive Committee                      University, Wichita, Kansas,      2000-present     President, Shin Corporation Plc.
                                                                   U.S.A.                            1998-present     Director and Member of the Executive Committee,
                                                                                                                      Shin Corporation Plc. Advanced Info Service Plc. Shin Satellite Plc.
                                                                                                     1998-2000        Chief Finance Officer, Shin Corporation Plc.
                                                                                                     1994-1998        Executive Vice President - Finance, Shinawatra Group
                                                                                                     1991-1993        Vice President - Finance, Shinawatra Group

Miss Nongluck        44   Director, Member of the Executive 0.0079 Doctor of Electrical Engineering, 2000-Present     Member of the Executive Committee and President,
Phinainitisart            Committee and President                 Chulalongkorn University                            Shin Satellite Plc.
(D. Eng.)                                                                                           1995-Present      Director, Shin Satellite Plc.
                                                                                                    1999-2000         Executive Vice President, Shin Satellite Plc.
                                                                                                    1995-1998         Vice President, Shinawatra Satellite Plc.
                                                                                                    1991-1995         General Manager, Shinawatra Satellite Plc.
                                                                                                    1986-1987         Telecommunication Engineer, Operations Division, International
                                                                                                                      Telecommunication Satellite Organization (INTELSAT),
                                                                                                                      Washington D.C., U.S.A.
                                                                                                     1982-1991        Telecommunications Engineer, Planning, Post and Telegraph
                                                                                                                      Department

Professor Hiran      74   Director and Chairman of the    None     Honorary Doctorate in Accounting, Present          Director and Chairman of the Audit Committee, Shin Satellite Plc.
Radeesri                  Audit Committee                          Thammasat University                               Chairman of the Board of Directors, Aberdeen Asset Management Ltd.
                                                                   MBA, Wharton School, University                    Director, Thai Institute of Directors Association
                                                                   of Pennsylvania, U.S.A.                            Exchange of Thailand
                                                                   B-Com; Higher Diploma in                           Chairman Corporate Governance center
                                                                   Accounting, Thammasat University                   The Stock Exchange of Thailand
                                                                   Graduate Member, I.O.D.                            Chairman - Tax Auditor Examination Committee, Revenue
                                                                                                                      Department
                                                                                                                      Chairman of the Audit Committee, Ministry of Finance
                                                                                                     Past             Chairman of Price Waterhouse Ltd.
                                                                                                                      Governor, The Stock Exchange of Thailand
                                                                                                                      Chairman of the Audit Committee, The Stock Exchange of
                                                                                                                      Thailand
                                                                                                                      Director, Thailand Securities Depository Co., Ltd.



NOTE:                1. All shareholding data Includes holding by spouse and minor children
                     2. None of the management or directors listed here have a criminal record within the last 10 years.

                                                                                                                                                                                        27
Name                    Age Title                           Shares (%) Highest Education                Experience


Mrs. Nilaya Malakul    58    Director and Member of the       None    B.A. (Accounting),                1999-Present    Director and Member of the Audit Committee, Shin Satellite Plc.
Na Ayudhaya                  Audit Committee                          Chulalongkorn University          1994-1999       Director, Shin Satellite Plc.
                                                                                                        1990-Present    Managing Director, Siam Niti Law Office Co., Ltd.

Mrs. Charintorn        57    Director and Member of the       None    B.A. (Accounting) ,               1999-Present    Director and Member of the Audit Committee, Shin Satellite Plc.
Vongspootorn                 Audit Committee                          Chulalongkorn University          2001-2002       Director and Member of the Audit Committee, Advanced Info
                                                                                                                        Service Plc.
                                                                      MBA, Creighton University, U.S.A. 1997-1999       Director, Thai Equity Fund
                                                                      Directors Certification          1997-1999        Senior Executive Vice President, MFC
                                                                      Program Class 8/2001


Mr. Avudh              54    Vice President- Business         0.0024 M. Eng and Ph.D. (Eng),            1999-Present    Vice President-Business Development, Shin Satellite Plc. (
Ploysongsang                 Development                             University of Texas at Arlington   1994-1999       Managing Director, C.S. Communications Co., Ltd.
Ph.D.)                                                               Top Management Program,            1993-1994       Senior Manager, Marketing and Sales, Shin Satellite Plc.
                                                                     The Asian Institute of             1998-1989       President, Thai Association of North Texas
                                                                     Management in Bali, Indonesia      1989-1993       Senior Member of Technical Staff, Texas instruments Inc.
                                                                                                        1989-1993       Chairman of the Technology Committee, ATRWG working
                                                                                                                        group of DARPA

Mr. Yongsit            39    Vice President-Marketing         None    Master of Business Administration, 2001-Present   Vice President-Marketing & Sales, Shin Satellite Plc.
Rojsrivichaikul              & Sales                                  California State University, USA. 1991-2001       Shin Satellite Plc.
                                                                      Bachelor of Science in Electrical                 - Business Development Manager
                                                                      Engineering,                                      - Marketing and Sales Manager
                                                                      Chulalongkorn University                          - Assistant Vice President-Marketing and Sales
                                                                                                                        - Assistant Vice President-International Sales
                                                                                                                        - Vice President – International Sales

Mr. Paiboon            43    Vice President -                 0.0004 Master of Engineering              2000-Present    Vice President-Advanced Satellite Systems, Shin Satellite Plc.
Panuwattanawong              Advanced Satellite                      Carnegie Mellon University,        2000            Vice President-Product Engineering, Shin Satellite Plc.
                             System                                  Pittsburgh, U.S.A.                 1997-2000       Assistant Vice President-Product Engineering, Shin Satellite Plc.
                                                                     Bachelor of Science in             1995-1996       General Manager, Shin Satellite Plc.
                                                                     Engineering, Yale University       1995-1997       Senior Manager, Shin Satellite Plc.

Mr. Kamonmit           52    Vice President - Legal                   LL.M University of London         2002-present    Vice President-Legal, Shin satellite Plc.
Vudhijumnonk                                                          LL.M (Magna Cum Laude)            1999-2001       Assistant Vice President-Legal, Shin satellite Plc.
                                                                      University of Brussels            1995-1998       Assistant Vice President-Legal, Shinawatra Computer &
                                                                                                                        Communication Plc.
                                                                      Barrister-at-laws Gray s Inns,    1994-1995       Lawyer - Couderts Brothers, Bangkok Office
                                                                      Thai Barrister Thai Bar           1993-1994       Lawyer - Baker & McKenzie, Bangkok Office
                                                                                                        1978-1993       Legal Officer - Office of the Juridical Council Association
                                                                                                                        (Office of the Council of State)

Mr. Tanadit Charoenchan 36   Vice President - Finance and     None    MBA, Sloan School of            2002-Present      Vice President - Finance and Accounting, Shin satellite Plc.
                                                                      Accounting
                                                                      Management, Massachusetts       2000-2001         Assistant Vice President – Finance and Accounting, Shin Satellite Plc.
                                                                      Institute of Technology,        1995- 1999        Department Manager-Finance & Accounting, Shin satellite Plc.
                                                                      Master of Science (Computer), 1992-1995           Accounting Manager, IBC Plc.
                                                                      Chulalongkorn University        1989-1992         Senior Auditor, SGV Na-Thalang & Co., Ltd.
                                                                      Bachelor of Science (Accounting),
                                                                      Thammasat University




NOTE:                  1. All shareholding data Includes holding by spouse and minor children
                       2. None of the management or directors listed here have a criminal record within the last 10 years.


28
Report of Director’s Securities Holdings in the Company, its Subsidiaries and Associate Companies
Name                                         Shin           C.S.            C.S. Satellite    Shin Broadband   Shenington    Lao                  Cambodia     iPSTAR

                                             Satellite Plc. Communications Phone Co., Ltd. Internet (Thailand) Investments   Telecommunications   Shinawatra   Co., Ltd.

                                                            Co. Ltd.                          Co. Ltd.         Pte. Ltd.     Co. Ltd.             Ltd.

1 Mr. Paron Israsena Na Ayudhaya             -              -               -                 -                -             -                    -            -

2 Mr. Rianchai Reowvilaisuk                  -              -               -                 -                -             -                    -            -

3 Mr. Boonklee Plangsiri                     250            1               -                 1                -             -                    -            -

4 Mrs. Siripen Sitasuwan                                    -               -                 -                -             -                    -            -

5 Mr. Somprasong Boonyachai                  75,100         -               -                 -                -             -                    -            -

6 Mr. Dumrong Kasemset                       1,250,000      -               1                 1                -             -                    -            -

7 Ms. Nongluck Phinainitisart                34,500         1                                 1                -             -                    -            -

8 Mr. Hiran Radeesri                         -              -               -                 -                -             -                    -            -

9 Mrs. Nilaya Malkul Na Ayudhaya             -              -               -                 -                -             -                    -            -

10 Mrs. Charinton Vongspootorn               -              -               -                 -                -             -                    -            -




 Remark :    1. As of December 31, 2002

             2. The information of securities holdings has not changed from December 31, 2000

             3. The report includes securities holding of directors' spouses and any minor children.




Other Reference Persons

Security Registrar                            Thailand Securities Depository Company Limited
                                              62 Ratchadapisek Road, Klongtoey
                                              Bangkok 10110
                                              Tel : (662) 229-2800 Fax : (662) 359-1262-3


Auditor                                       Mr. Prasan Chuapanich
                                              Certified Public Accountant Registration Number 3051
                                              Mr. Suchart Luengsurasawat
                                              Certified Public Accountant Registration Number 2807
                                              Miss Nangnoi Charoenthaveesub
                                              Certified Public Accountant Registration Number 3044
                                              PricewaterhouseCoopers ABAS Ltd.
                                              179/74-80 Bangkok City Tower, 15th Floor
                                              South Sathorn Road, Bangkok 10120
                                              Tel : (662) 286-9999 , 344-1000 Fax : (662) 286-5050




                                                                                                                                                                           29
                                                          Related Transactions

     Shin Satellite, listed on the Stock Exchange of Thailand, seeks to create the maximum benefit for its
     shareholders. It has a policy to disclose sufficient information to investors and to abide by the rules,
     regulations and laws of the countries in which it conducts business. In order to undertake related
     transactions correctly among its groups of companies and with individuals or through activities that are
     related and fairly, and to provide investors with sufficient information to make an investment decision,
     the company has formed a list of companies in the group and individuals or activities that are related
     for consideration as provided in the following.


     Methods of Related Transactions


     Related Transactions are a normal part of business and are conducted in a same way as with external
     customers. This includes payment and benefits such as telephone expenses among companies in the
     group, which are at a rate informed to the TOT and CAT. Advertising in telephone directories is priced at
     the rate informed to the TOT. The leasing cost of Data Net leased line follows the rate informed to the
     TOT. Purchasing is undertaken in the same way, that is, it must be conducted according to the financial
     rules of the Company and must pass a vendor selection process always. This ensures the Company
     provides an opportunity to outside vendors who may provide the company with more advantage. They
     are an outside reference source to compare commercial pricing and conditions.


     The Company and its subsidiaries have a policy on related transaction procedures based on the
     arm's length principle. The prices are normally charged at market rates. The Company authorizes
     management by setting a limit on the transaction budget according to level. If there is an important
     point and the transaction is not normal business, the Company will propose that the Audit Committee
     or a person not related to the transaction, to consider the transaction. The Company follows the rules
     of the Securities Exchange Commission (SEC) and the Stock Exchange of Thailand (SET). The
     Audit Committee examines important related transactions each quarter to ensure no conflict to the
     benefit of the Company.


     The Company discloses information about related transactions in accordance with Thai Accounting
     Principles, especially No. 47 regarding the disclosure of information about related individuals or
     activities, as well as the regulations of the SEC and SET. The Accounting Department lists all related
     transactions each quarter for the consideration of the Audit Committee to comment on the necessity
     and reasonableness. The Audit Committee will decide if the transaction is in the best interest of the
     Company or not before it is forwarded to the Board of Directors.



     In 2002, the Company and its subsidiaries had related transactions as shown in note 27 of the audited
     financial statements for 2002. The auditor remarked that these were considered a normal part of
     business. The Company set a sale or purchase price and services that have commercial price or
     conditions the same as customers in their normal business. For consultation and management fee,
     the Group has agreed on certain rate based on percentage of asset. Financial management fee that
     has been included in consultation and management fee is paid on percentage of transaction value.
     Under-the-process transaction between the Company and related companies was calculated at an
     hourly rate plus actual expenses. The following provides details about related transactions.




30
                                                                             Value of related transaction at 31
Related Companies/                                                           December 2002 (millions of Baht)
relationship                Transaction                                          Company      Consolidated        Reason


Shin Corporations Public    a) The Company hires SHIN for consultancy at                                          This is a policy for
Company Limited / major     1,797,071.05 Baht per month and manage-                                               overseeing subsidiaries
shareholder with joint      ment on an actual cost basis (the monthly                                             when holding shares and
directors                   consultancy charge come from the cost of the                                          managing them so that they
                            consulting executive while the financial                                              can be operated for
                            management fee is fixed according to market                                           maximum benefit for the
                            rates for the actual work done).                                                      parent company and
                            b) Interest rate on loan is at 6.5% p.a., with                                        shareholders
                            semi-annually repayment for 5 times starting
                            from September 2002.
                            1. Revenues from sales and services              -                  1.8
                            2. Expenses and other payments
                               - Consultancy and Management Fee.             36.99              37.35
                               - Interest                                    -                  10.34
                               - Others                                      13.40              13.40
                            3. Amount owed as payment for goods and
                            services
                            Debtor                                           -                  0.12
                            Creditor                                         3.39               3.44
                            Other creditors                                  -                  0.81
                            Expenses owed.                                   20.29              22.67
                            4. Long-term debt                                -                  142.84


Advance Info Service        AIS leases transponders on Thaicom.                                                   Shin Satellite is the only
Public Company Limited      1. Revenues from sales and services.             73.44              84.86             service provider in the
(AIS) / SHIN is a major     2. Amount owed as payment for goods and                                               country.
shareholder with 43.06%     services
and joint directors            - Accrued income                              10.05              10.05




ITV Company Limited /       ITV leases transponders on Thaicom.                                                   Shin Satellite is the only
SHIN is a major share-      1. Revenues from sales and services.             39.13              40.66             service provider in the
holder with 55.53% and      2. Amount owed as payment for goods and                                               country.
joint directors             services
                               - Accrued income                              3.26               3.26


Pramaisuree Property        Shin Satellite leases the Thaicom Teleport &                                          This provides the Company
Company Limited /Major      DTH Center at Ladlumkaew, Pathum Thani for                                            with an earth station and
shareholder of SHIN holds   135,000 baht per month and equipment for                                              backup station for the
100%.                       495,000 baht per month.                                                               Thaicom Satellite Station,
                                                                                                                  Rattanathibet. Ladlumkaew
                            1. Expenses and other payments                                                        is suitable geographically as
                                 - Rent                                      7.56               7.56              it is in a different rain cover
                                                                                                                  area from Rattanathibet.
                                                                                                                  The Company pays a fair
                                                                                                                  market price. This is
                                                                                                                  approved by the Audit
                                                                                                                  Committee each year.




                                                                                                                                               31
                                                          Value of related transaction at 31
Related Companies/                                        December 2002 (millions of Baht)
relationship                Transaction                       Company      Consolidated        Reason


Advanced Data Network       CSC leases lines, equipment                                        This provides CSC with
Communications Company      and domestic circuits in                                           leased telephone lines and
Limited (ADC) / SHIN is a   order to offer Internet                                            connect telephone in
major shareholder through   services.                                                          Bangkok and the provinces
AIS, holding 67.95%.        1. Expenses and other                                              to provide an Internet
                            payments                                                           service. CSC pays the rate
                                 - Rent                   -                 100.74             provided by ADC to the
                            2. Amount owed as payment                                          TOT.
                            for goods and services
                              - Creditor                  -                 13.71


Codespace Inc / Shin        Shin Satellite hired
Satellite holds 12% of a    Codespace for product                                              An expert in broadband
Codespace subsidiary        development in the iPSTAR                                          technology
called Spacecode with the   project.
commitment to increase      1. Expenses and other
this to 70% by the end of   payments
2003.                       - Product development fee     239.31            239.31




32
                                     Report of the Audit Committee

Dear Shareholders of Shin Satellite Plc,


The Audit Committee was established by a resolution of the Board on December 8 , 1999 . It consists
of three independent directors : Professor Hiran Radeesri, its chairman, Mrs. Nilaya Malakul Na Ayudhaya
and Mrs. Charintorn Vongpootorn, Mr. Sivaraks Phinicharomna is the Internal Audit Department
Manager of Shin Satellite and Secretary to the Audit Committee.


In 2002, the Audit Committee met 12 times. Some of these meetings were held jointly with the auditor
and the relevant executive of Shin Satellite. Issues discussed can be summarized as follows:


1. Review quarterly and annual financial statements before presentation to the Board of Directors to
insure they follow accepted accounting principles; and reports of related companies, including those
that may have conflict of interest for the Company.


2. Consider the report of the Internal Audit Department , which audits the company according to an
annual plan , in order to assess the overall efficiency of internal controls. Following the work of the
Internal Audit Department , the Audit Committee is satisfied that the internal control system is sufficient.


3. Review whether the Company has followed the best practices of corporate governance issued by the
Stock Exchange of Thailand and according to official rules and regulations.


4. Suggest to the Executive Committee and the Board of Directors ways of improving the internal
control system. Besides this, monitoring the company to bring in the process of risk management and
develop good corporate governance continuously.


The Audit Committee has unlimited access to information. It can request advice and discuss matters
with management, the Internal Audit Department and the external auditor without restriction. The Audit
Committee is of the opinion that Shin Satellite has an adequate internal control system and current
business system as evaluated by the committee.


The Audit Committee has recommended PriceWaterhouse Coopers ABAS Co.Ltd., remain the Company's
auditors for another year in 2003 and that this be proposed to a shareholders meeting for approval.




( Prof. Hiran Radeesri )
Chairman of the Audit Committee
26 February 2003




                                                                                                        33
     Board of Directors’ Responsibility for Financial Reporting

            The Board of Directors is responsible for Shin Satellite Public Company Limited’s financial statements
            and Shin Satellite Public Company Limited and its subsidiaries’ consolidated financial statements,
            including the financial information presented in this annual report. The aforementioned financial
            statements are prepared in accordance with generally accepted accounting principles, using careful
            judgment and the best estimation. Important information is adequately and transparently disclosed in
            the notes to financial statements to the Company’s shareholders and investors.


            The Board of Directors has provided and maintained a risk management system with appropriate and
            efficient internal controls to ensure that accounting records have accuracy, integrity and adequacy to
            protect its assets and uncover weakness in order to prevent fraud or materially irregular operation. In
            this regard, the Board of Directors has entrusted an Audit Committee responsible for review of the
            accounting policy and financial reports, internal controls, internal audit and risk management system.
            Such comments on these issues have been included in the Audit Committee Report presented in this
            annual report.


            The financial statements of the Company and the consolidated financial statements of the Company
            and its subsidiaries have been examined by an external auditor, PricewaterhouseCoopers ABAS
            Limited. In order to conduct their work and to express an opinion in accordance with generally accepted
            auditing standards, the Company has supported the auditor with all of the Company’s records and
            related data. The auditor’s opinion is presented in the auditor’s report as part of this annual report.


            The Board of Directors believes that the Company’s overall internal control system has functioned up to
            a satisfactory level and rendered credibility and reliability to Shin Satellite Public Company Limited’s
            financial statements and Shin Satellite Public Company Limited and its subsidiaries’ consolidated
            financial statements. These have been prepared according to generally accepted principles and
            related regulations.




                       Mr. Paron Israsena                                        Mr. Dumrong Kasemset
                Chairman of the Board of Directors                                      Director




34
                                                           Management Discussion and Analysis

                                     1. Overview


                                     Shin Satellite Plc successfully developed the iPSTAR Project in 2002 with financial support from the US
                                     Export Import Bank. Apart from the benefits brought by this success for the company's technologically
                                     revolutionary new satellite, the Company also received an award called the Asia Telecom Deal of the
                                     Year 2002.


                                     The Company commenced the rollout of the First Generation of its terrestrial equipment in 2002,which
                                     increased the utilization of transponder capacity leased to customers. Its research and development of
                                     its equipment found acceptance in the Company's small and medium enterprise (SME) markets. This is
                                     one of the targets for the initial phase of the project. It also laid the infrastructure for the iPSTAR system.


                                     The Company's business continued to grow in 2002. Sales from core operations grew 4%, up from
                                     4,818 million Baht in 2001 to 4,997 million Baht in 2002. Total revenue grew 5% from the previous year,
                                     to 5,429 million Baht. Net profit declined slightly by 10%, from 1,563 million Baht to 1,411 million Baht in
                            16.43
                                     2002. One of the reasons for this was an increase of costs by 13% which largely came from an increase
                   13.20
                                     in the revenue sharing paid under the concession, cost of sales and cost of production of the First
                                     Generation equipment for iPSTAR.
   9.37    9.69



                                     Cambodia Shinawatra Co. Ltd., expanded its telephone network in 2002. This increased revenue to 673
                                     million Baht, with almost 100,000 telephone subscribers. Besides this, Lao Telecom Co. Ltd., paid the
                                     Company a dividend of USD1.5 million. It has a subscriber base of 116,700.
   1999    2000    2001     2002



                                     The Company successfully arranged the merger of its Internet business C.S. Communications Co. Ltd.,
Book value per share
                                     (CS Internet) and Loxley Information Service (Loxinfo), which commenced joint operations in March 2003.
1999-2002
                                     This merger makes it the largest Internet business in Thailand under the brand name "C.S. Loxinfo." It is
                                     expected that the merger will enable to Company to lower its costs and expenses and therefore increase
                                     its profitability in the near future.

                                     1.1 Operational Results
                                     In 2002, the Company had a consolidated net profit of 1,411 million Baht, a decrease of 152 million Baht or
                                     10% compared to the previous year's 1,563 million Baht. The following are details to explain the changes:

                   32.45%
                            28.23%   1.1.1 Revenue
                                     Sales and Service revenue in 2002 amounted to 4,997 million Baht, an increase of 180 million Baht or 4%,
          17.69%
                                     up from 4,817 million Baht in 2002. This can be segemented according to the Company's businesses as
  9.04%                              follows:

                                     Satellite Transponder Leasing and Related Services
  1999     2000    2001      2002
                                     Revenue from the Company's satellite and satellite-related businesses in 2002 came to 3,857 million Baht,
Net profit margin 1999-2002          stable from the previous year. There was some impact from the Baht exchange rate, which strengthened
                                     against the dollar. This appreciation of the Baht had an impact on revenues. However, the Company
                                     saw an increase in utilization of its Ku-band transponders and revenue from the sale of its First
                                     Generation iPSTAR terminals and from the sales and service of its gateways commencing from 2002.

                                     Internet Business
                                     Revenue from the Internet business in 2002 was 467 million Baht, an increase of 31 million Baht or 7%
                                     up from 436 million Baht compared with the same period last year. This was a result of an increase
                                     in revenue from broadband satellite Internet services provided by C. S. Communications Co., Ltd.
                                     However, the Company has emphasized product development utilizing its competitive advantage in
                                     satellite technology, that is broadband satellite Internet, to satisfy customer needs in terms of service
                                     quality rather than price. Moreover, this year Internet revenue generated by Shin Broadband Internet
                                     (Thailand) Co., Ltd. also increased from last year.

                                     Telephone Business
                                     The Company experienced an increase in revenue from its telephone business operated by Cambodia

                                                                                                                                                35
     Shinawatra. In 2002, revenue from the telephone business was 673 million Baht, an increase of 205
     million Baht or 44% from 468 million Baht of the same period in 2001, resulting from an increase in
     telephone subscribers, especially prepaid mobile, of 134% compared with the year 2001. Moreover, an
     increase in average minute utilization per subscriber was another factor leading to an increase in airtime
     revenue per subscriber.

     1.1.2 Costs
     In 2002, the Company's total costs were 2,885 million Baht, an increase of 325 million Baht or 13%
     compared with 2,560 million Baht in the same period last year. This was substantial due to:

     Increased satellite transponder business costs.
     — A 5% increase in revenue sharing with the Ministry of Information and Communications Technology
     to 15.5% from September 11, 2001.
     — An increase due to expenditure on the First Generation of iPSTAR, which comprises iPSTAR
     terminals, high-speed satellite modems compatible with Thaicom 3, together with gateways that could
     also be used with both iPSTAR and Thaicom. The Company started this business in 2002.
     — An increase in the cost of depreciation of its network, maintenance costs and rental costs for the
     locations of its network equipment. Also, depreciation costs for telephone equipment, which increased
     as the Company expanded its network to serve and increasing number of subscribers. There was also
     an increase in the revenue sharing with the Cambodian government accompanying the increase in
     revenue.

     1.1.3 Selling and Administrative Expenses
     Selling and administrative expenses for the year 2002 was 861 million Baht , increased by 291 million Baht
     or 51% from 570 million Baht in 2001. This came from an increase in the number of staff and an increase in
     selling expenses in order to support business expansion, especially telephone services in Cambodia.

     1.1.4 Gain (Loss) from Foreign Exchange
     In 2002, the Company lost 8 million Baht from foreign exchange, down by 95 million Baht or 92%
     compared to the loss in 2001. This is due to greater Baht weakness in 2001 compared to 2002.
     The Company also has a policy to mitigate risk from exchange by using appropriate financial
     instruments.

     1.1.5 Interest Expenses
     Interest expenses were 235 million Baht, decreased by 124 million Baht or 34% from 359 million Baht in
     2001. This was due to the repayment of high interest rate loans and a debenture and interest expenses
     for iPSTAR project being capitalized to the cost of the project.

     1.1.6 Other Income and Share of Profit from Investment in Associate Company
     The Company received 431 million Baht from other income and its investment in its associate company
     in 2002. This was an increase of 88 million Baht, that is an increase of 25% compared to the 345 million
     Baht received in the previous year.

     2. Financial Position
     2.1     Assets

     2.1.1 Asset Components
     At the end of 2002, the Company had assets of 20,307 million Baht, an increase from 2001 of 41%
     (14,377 million Baht). This came from an increase of telephone equipment to provide telephone
     services in Cambodia. The rest of the increase was for iPSTAR equipment and an increase in
     investment in the iPSTAR project. The Company's assets consist of current assets of 2,272 million Baht
     and non-current assets of 18,035 million Baht. Most of the current assets comprises cash and cash
     equivalents if 519 million Baht. Accounts receivable of 760 million Baht, inventory of 408 million Baht
     and other current assets of 526 million Baht. Most of the non-current assets comprise property and
     equipment, including the iPSTAR project under construction at the amount of 11,649 million Baht, and
     satellite project costs under the terms of the concession amounting to 5,357 million Baht.

36
2.1.2 Asset Quality
As of 31 December 2002, the Company had no assets for which it had to make provision for asset
impairment. Most of the company's assets are fixed and generate revenue for the Company. Investment
by subsidiaries and associate companies increased by 300 million Baht over the previous year. Most of
this came from profit sharing to the amount of 207 million Baht.

2.1.3 Accounts Receivable
In 2002, the Company had an average accounts receivable collection period of 55 days, an increase
from 50 days in the previous year. The total amount of accounts receivable over 12 months amounted to
288 million Baht, a decrease of 464 million Baht at the end of 2001. This is largely due to the Company
writing off the amount owed by one cable television company to the amount of 199 million Baht. This
was the result of the final judgement brought in a court case against the customer, which the Company
can use as a taxable expense. The Company has a policy to closely follow and evaluate its collection
performance. The Company analyses individual customers using the specific method and believes it
has sufficient provision as of December 31, 2002, for doubtful accounts.

2.2     Liquidity
2.2.1   Current Ratio and Short-term Liabilities
At the end of 2002, the Company had a current ratio of 0.43 times, increased from 0.28 at the end of 2001.
This was due to full bond redemption for the remaining amount of 1,500 million Baht due in November
2002. The Company anticipates the improvement of this ratio in 2003 since it signed long-term loan
agreements for the iPSTAR Project in November 2002. These loans will be used to repay existing short-
term loans and accounts payable, consequently reducing current liabilities. At the end of 2002 the Company
received approval for a credit line from commercial banks for 700 million Baht and US$ 257 million.

2.2.2 Cash Flow
At the end of 2002, the Company had cash and cash equivalents of 519 million Baht, which comprised:
1. Net cash flows from operations - 1,572 million Baht.
2. Net cash flows used in investing activities, 6,119 million Baht, of which most cash payments were
invested in iPSTAR; and telecommunications equipment for an expansion of network coverage for
mobile phones in Cambodia. In addition, the Company received a dividend of 56 million Baht from
its investment in Lao Telecommunications.
3. Net cash flows from financing activities amounted to 4,257 million Baht. The Company has cash flow
from long-term loans, most of which came from a loan for the iPSTAR Project.

2.3       Capital Expenditures
The current major investing expense is for the iPSTAR project, for which estimated project cost is
approximately US$ 390 million. Sources of funds to proceed with the project are derived from the
company's operating cash flows as well as loans from financial institutions and guarantee facilities from
the Export and Import Bank of the United States of America and France’s COFACE. The iPSTAR project
is the first broadband satellite project in Asia Pacific. The Company is confident that the project will start
operating at the beginning of 2004.

2.4     Sources of Funds

2.4.1 Capital Structure
At the end of 2002, the Company had a debt to equity ratio of 1.50, which was comprised of 60% debt
finance, and 40% equity. The Company increased its debt finance from 53%, and 47% equity at the end
of 2001. Such increase was due to an increase in net borrowings after loan repayments. Such borrowings
were for the iPSTAR project, and the expansion of telephone network coverage in Cambodia.

2.4.2 Shareholder's Equity
At the end of 2002, the Company had surplus retained earnings of 546 million Baht, compared with a
deficit of 836 million Baht at the end of 2001. This was the first surplus after the Company had taken a
significant loss on the exchange rate due to a change in the foreign exchange rate system in 1997. This
was attributable to the Company having continuous growth in net profit over the past four years . Due to

                                                                                                          37
     retained earnings, the Company set additional legal reserves of 29 million Baht, to 56 million Baht at the
     end of 2002.


     2.4.3 Liabilities
     At the end of 2002, the Company had short-term borrowings and long-term loans (net effect after
     hedging) of 10,773 million Baht, an increase of 4,294 million Baht from 6,479 million Baht at the end
     of 2001. That resulted from borrowings for the iPSTAR project and the expansion of the telephone
     network coverage in Cambodia. In 2002, the Company received an approval of long-term loan facilities
     from financial institutions, details as follows:


               Types of loan                                                    Facility Amount      Tenor
     1.        Guaranteed Loan by Export-Import
               Bank of the United States of America
               (US Exim Bank)                                                   US$184.5 m.          9.5 Years
     2.        Guaranteed Loan by Compagnie
               Francaise d'Assurance pour le
               Commerce Exterieur of France (COFACE)                            US$ 79.8 m.          9.5 Years
     3.        Term loan from Commercial Syndicated Lenders                     US$125.0 m.          6 Years

     The first date of repayment will start from 2004. (The details of the facilities are provided in the Notes to
     Financial Statements number 15 - Borrowings)

     3.      Major factors which impact future performance or financial position

     3.1      Power Anomaly on Thaicom-3
     On 7 February 2003, the Thaicom-3 satellite of the Company experienced an anomaly in its power
     supply system causing temporary outages for some of its customers. The Company has investigated
     the background of the failure and restored normal service. The Company is in the process of claiming
     from its Insurer.

     3.2    Cambodia Incident
     On 29 January 2003, Cambodia Shinawatra Co., Ltd. experienced the effects of disturbances in Phnom
     Penh, Cambodia. The Company's building was damaged and some personal computers were looted,
     however, operations have continued as normal as there was no damage to any control center or
     transmission equipment. The Company is now claiming damages from the Cambodian government.

     3.3     Merger between C. S. Communications Co. Ltd. and Loxley Information Services Co. Ltd
     C. S. Communications Co. Ltd. and Loxley Information services Co. Ltd. merged on March 6, 2003. The
     Company foresees increased cost efficiency and synergy after the merger.

     3.4       IPSTAR Project
     As the iPSTAR Project is under construction, success of the project depends on various factors e.g.,
     ability to construct and launch the satellite within the time frame, success of the launch, and the ability to
     attract new customers to the new satellite. The Company undertakes a business plan to support the
     above factors as follows.

     1. The Company has selected one of the best satellite manufacturers in the world, i.e. Space System /
        Loral. Meetings with the Company have been conducted on a regular basis. Moreover, the Company's
        specialized engineers have been sent to such manufacturer to cooperate and control the
        manufacturing process in accordance with the schedule.
     2. The Company has acquired satellite insurance. The insurance will cover risk that could arise during
        the launch as well as 12-months in orbit. In addition, the Company also acquired insurance for a
        replacement rocket from the launcher in case of the loss (Launch Risk Guarantee).
     3. In order to reduce risk to attract new customers, the Company has designed the First Generation of
        iPSTAR terminals to be compatible with Ku-band on existing satellites. In this way, the Company can
        create the customer base for iPSTAR in the future.

38
                                                             Auditor’s Report

To the Shareholders of Shin Satellite Public Company Limited




I have audited the accompanying consolidated and company balance sheets as at 31 December 2002,
and the related consolidated and company statements of income, changes in shareholders' equity and
cash flows for the year then ended of Shin Satellite Public Company Limited and its subsidiaries, and of
Shin Satellite Public Company Limited, respectively. These financial statements are the responsibility
of the Company's management. My responsibility is to express an opinion on these financial
statements based on my audit. The consolidated and company financial statements for the year ended
31 December 2001, presented herewith for comparative purposes, were audited by another auditor in
the same firm as myself and the other auditor expressed an unqualified opinion on those statements in
her report dated 11 February 2002.



I conducted my audit in accordance with generally accepted auditing standards. Those standards
require that I plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my audit provides a reasonable basis for my
opinion.



In my opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated and company financial position as at 31 December 2002, and the consolidated and
company results of operations, and cash flows for the year then ended of Shin Satellite Public Company
Limited and its subsidiaries, and of Shin Satellite Public Company Limited, respectively, in accordance
with generally accepted accounting principles.




PRASAN CHUAPHANICH
Certified Public Accountant
  (Thailand) No. 3051
PricewaterhouseCoopers ABAS Limited


Bangkok
20 February 2003




                                                                                                    39
                                                                                                      Balance Sheets

Shin Satellite Public Company Limited
As at 31 December 2002 and 2001
                                                                        Consolidated                                  Company
                                            Notes                2002                   2001                   2002                   2001
                                                                 Baht                   Baht                   Baht                   Baht

ASSETS
Current Assets
Cash and cash equivalents                           3         519,703,421            819,066,011            362,388,089            457,364,256
Current investments                                 4          10,420,000             10,425,000                420,000                420,000
Trade accounts receivable and
accrued income, net                                 5         759,671,478            662,934,813            643,465,612            532,696,218
Amounts due from
related parties                                  27                 46,513               245,435              1,195,339             12,447,794
Short-term loans and
advances to related parties                      27            48,448,540                        -           40,384,485             40,676,820
Inventories, net                                    6         407,870,474             39,789,527            393,323,377             23,340,381
Other current assets, net                           8         526,000,902            349,620,133            470,226,021            300,075,757
Total Current Assets                                        2,272,161,328          1,882,080,919          1,911,402,923          1,367,021,226


Non-Current Assets
Investments in subsidiaries
and associates                                      9         777,792,180            477,237,397          1,273,578,511            792,739,705
Other investments                                11            18,900,000             18,900,000             18,900,000             18,900,000
Property and equipment, net                      12        11,649,328,796          5,664,443,758          9,529,958,309          4,452,726,323
Cost of satellite projects under
the concession agreement, net                    13         5,357,480,096          6,065,892,237          5,357,480,096          6,065,892,237
Deferred charges, net                            13            82,197,956            100,385,574             76,634,765             96,339,739
Intangible assets, net                           13           123,252,426            150,291,480                       -                     -
Other non-current assets, net                    14            26,153,754             17,337,038                569,820              1,100,283
Total Non-Current Assets                                   18,035,105,208         12,494,487,484         16,257,121,501         11,427,698,287


Total Assets                                               20,307,266,536         14,376,568,403         18,168,524,424        12,794,719,513




      The notes to the consolidated and company financial statements on pages 47 to 76 are an integral part of these financial statements.


40
                                                                                       Balance Sheets (cont’d)

Shin Satellite Public Company Limited
As at 31 December 2002 and 2001
                                                                         Consolidated                                  Company
                                             Notes                2002                   2001                   2002                   2001
                                                                  Baht                   Baht                   Baht                   Baht
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term loans from financial
  institutions                                    15         2,617,011,897          2,509,965,781          2,617,011,897          2,509,965,781
Trade accounts payable                            27         1,094,422,844            941,038,731            967,065,675            791,567,953
Amounts due to related parties                    27               804,932                  12,263                       -                     -
Current portion of long-term loans
  from the parent company                         27            71,423,167            178,507,647                        -                     -
Current portion of long-term
  borrowings, net                                 15           606,340,842            581,970,055            184,839,485            422,764,776
Current portion of long-term debentures                                             1,500,000,000                        -        1,500,000,000
Current portion of forward and swap                                        -
contracts payable, net                                                                200,334,663                        -          200,334,663
Current portion of advances                          7                     -
from customers                                                  82,203,515            167,253,806             67,779,372
Accrued expenses                                  27           533,200,192            385,515,838            344,632,982            156,615,186
Other current liabilities                         16           323,140,670            155,011,887             60,122,884            288,885,526
Total Current Liabilities                                    5,328,548,059          6,619,610,671          4,241,452,295             49,885,777
                                                                                                                                  5,920,019,662
Non-Current Liabilities
Forward contracts payable, net                       7           25,564,030                       -           25,564,030                       -
Long-term loans from the parent
company                                           27             71,415,191                       -                      -                     -
Long-term borrowings                              15         7,524,453,999          1,687,208,291          6,091,519,084            617,685,117
Provision for liabilities                         10                       -                      -          532,659,464            377,961,519
Advances from customers                                           3,974,870            12,828,337              3,974,870             12,828,337
Other liabilities                                              149,197,531            261,167,969             86,551,399             89,382,879
Total Non-Current Liabilities                                7,774,605,621          1,961,204,597          6,740,268,847          1,097,857,852


Total Liabilities                                           13,103,153,680          8,580,815,268         10,981,721,142          7,017,877,514




       The notes to the consolidated and company financial statements on pages 47 to 76 are an integral part of these financial statements.


                                                                                                                                              41
                                                                                      Balance Sheets (cont’d)

Shin Satellite Public Company Limited
As at 31 December 2002 and 2001
                                                                        Consolidated                                  Company
                                            Notes                2002                   2001                   2002                   2001
                                                                 Baht                   Baht                   Baht                   Baht

Shareholders’ Equity
Share capital
 Authorized share capital -
  common stock                                    17         5,500,000,000         5,500,000,000          5,500,000,000          5,500,000,000


Issued and paid-up share capital -
  common stock                                               4,375,000,000         4,375,000,000          4,375,000,000          4,375,000,000
Premium on share capital                                     2,190,000,000         2,190,000,000          2,190,000,000          2,190,000,000
Cumulative foreign currency
  translation adjustment                                        19,780,211            20,339,028             19,780,211             20,339,028
Retained earnings (Deficit)
 Appropriated
   Legal reserve                                  18            56,299,821            27,577,545             56,299,821             27,577,545
  Unappropriated                                              545,723,250           (836,074,574)           545,723,250          (836,074,574)
  Total parent's shareholders’ equity                        7,186,803,282         5,776,841,999          7,186,803,282          5,776,841,999
Minority interests                                              17,309,574             18,911,136                       -                    -
Total Shareholder's Equity                                   7,204,112,856         5,795,753,135          7,186,803,282          5,776,841,999


Total Liabilities and
Shareholders’ Equity                                       20,307,266,536         14,376,568,403         18,168,524,424        12,794,719,513




      The notes to the consolidated and company financial statements on pages 47 to 76 are an integral part of these financial statements.


42
                                                                                          Statements of Income

Shin Satellite Public Company Limited
For the years ended 31 December 2002 and 2001
                                                                        Consolidated                                  Company
                                           NOTES                 2002                   2001                   2002                   2001
                                                                 Baht                   Baht                   Baht                   Baht



Revenues
Revenues from sales and services                             4,996,988,075         4,817,474,860          3,903,224,496          3,983,243,174
Other income                                      19          224,238,928              19,075,549             51,411,571            67,716,854
Share of net results from investments-
 equity method                                 9, 10          207,642,634            324,848,064            326,699,677            225,044,337
 Total revenues                                              5,428,869,637         5,161,398,473          4,281,335,744          4,276,004,365


Expenses
Cost of sales and services                                   2,884,966,044         2,559,922,607          2,112,447,366          1,978,640,220
Selling and administrative expenses                           856,332,781            567,827,243            585,492,902            356,269,451
Directors’ remuneration                           27             4,583,770              1,780,706              2,875,000              1,040,000
Foreign exchange loss                                            7,900,788           103,304,990             12,560,560             99,707,921
 Total expenses                                              3,753,783,383         3,232,835,546          2,713,375,828          2,435,657,592


Profit before interest expense and tax                       1,675,086,254         1,928,562,927          1,567,959,916          1,840,346,773
Interest expense                                              235,153,798            358,556,200            157,439,816            277,198,697
Income tax                                                      31,013,918             11,805,147                       -                       -
Profit before minority interests                             1,408,918,538         1,558,201,580          1,410,520,100          1,563,148,076
Share of net results from subsidiaries
 to minority interests                                           1,601,562              4,946,496                       -                       -
Net profit for the year                                      1,410,520,100         1,563,148,076          1,410,520,100          1,563,148,076



Basic and diluted earnings per share              21
Net income for the year                                                3.22                  3.57                   3.22                     3.57




      The notes to the consolidated and company financial statements on pages 47 to 76 are an integral part of these financial statements.


                                                                                                                                              43
                                          Statements of Changes in Shareholders’ Equity

Shin Satellite Public Company Limited
For the years ended 31 December 2002 and 2001
                                                                  Consolidated (Baht)
                                                                   Foreign
                                 Issued and                        currency                          Retained
                                     paid up                     translation             Legal       earnings         Minority
                               share capital       Premium      adjustment           reserve          (Deficit)        interest              Total


Opening balance 2002           4,375,000,000   2,190,000,000     20,339,028       27,577,545     (836,074,574)      18,911,136    5,795,753,135
Foreign currency translation
  adjustment                               -               -       (558,817)                 -                -               -       (558,817)
Net profit for the year                    -               -                -                -   1,410,520,100                -   1,410,520,100
Legal reserve increase
  during the year                          -               -                -     28,722,276      (28,722,276)                -                  -
Minority interests decrease
  during the year                          -               -                -                -                -    (1,601,562)      (1,601,562)


Closing balance as at
     31 December 2002          4,375,000,000   2,190,000,000     19,780,211       56,299,821      545,723,250       17,309,574    7,204,112,856


Opening balance 2001           4,375,000,000   2,190,000,000     20,786,378       27,577,545 (2,399,222,650)        23,857,632    4,237,998,905
Foreign currency translation
  adjustment                               -               -       (447,350)                 -                -               -       (447,350)
Net profit for the year                    -               -                -        -           1,563,148,076                -   1,563,148,076
Minority interests decrease
  during the year                          -               -                -                -                -    (4,946,496)      (4,946,496)


Closing balance as at
     31 December 2001          4,375,000,000   2,190,000,000     20,339,028       27,577,545     (836,074,574)      18,911,136    5,795,753,135


                                                                    Company (Baht)
                                                                    Foreign
                                 Issued and                        currency                          Retained
                                    paid up                      translation             Legal       earnings         Minority
                               share capital       Premium      adjustment           reserve          (Deficit)        interest              Total


Opening balance 2002           4,375,000,000   2,190,000,000     20,339,028       27,577,545     (836,074,574)                -   5,776,841,999
Foreign currency translation
  adjustment                               -               -       (558,817)                 -                -               -       (558,817)
Net profit for the year                    -               -                -                -   1,410,520,100                -   1,410,520,100
Legal reserve increase
  during the year                          -               -                -     28,722,276      (28,722,276)                -                  -


Closing balance as at
     31 December 2002          4,375,000,000   2,190,000,000     19,780,211       56,299,821      545,723,250                 -   7,186,803,282


Opening balance 2001           4,375,000,000   2,190,000,000     20,786,378       27,577,545 (2,399,222,650)                  -   4,214,141,273
Foreign currency translation
  adjustment                               -               -       (447,350)                 -                -               -       (447,350)
Net profit for the year                    -               -                -                -   1,563,148,076                -   1,563,148,076


Closing balance as at
     31 December 2001          4,375,000,000   2,190,000,000     20,339,028       27,577,545     (836,074,574)                -   5,776,841,999


      The notes to the consolidated and company financial statements on pages 47 to 76 are an integral part of these financial statements.
44
                                                                                 Statements of Cash Flows

Shin Satellite Public Company Limited
For the years ended 31 December 2002 and 2001
                                                                        Consolidated                                  Company
                                              Notes              2002                   2001                  2002                   2001
                                                                 Baht                   Baht                  Baht                   Baht

Net cash flows from operating
 activities                                      22         1,572,083,560          2,204,978,277          1,596,037,420          2,103,803,938


Cash flows from investing activities
Investment in subsidiaries                        9                      -                      -                      -         (572,464,970)
Current investments                                                  5,000                32,982                       -                      -
Loans and advances to
 associates and subsidiaries                                             -                      -                      -          (15,072,576)
Receipt of repayment of loans to subsidiary                     9,999,818                       -                      -          452,585,892
Purchases for property and equipment                      (6,169,472,284)        (2,882,854,932)        (5,377,453,255)        (2,456,213,129)
Investments in intangible assets                 13              (319,000)            (6,310,389)                      -                      -
Payments for deferred charges                    13           (24,417,211)            (4,853,704)          (24,417,211)            (4,027,166)
Dividends received from
 subsidiaries and associates                                   56,429,472             59,640,972                       -            59,640,972
Proceeds from sale of property and
 equipment                                                      8,397,195              2,916,206              8,365,195              2,685,206
Net cash flows used in
investing activities                                      (6,119,377,010)        (2,831,428,865)        (5,393,505,271)        (2,532,865,771)


Cash flows from financing activities
Proceeds from loan from subsidiary                                       -                      -                      -            10,000,000
Proceeds from short-term borrowings                         9,022,094,138          3,368,516,755          9,022,094,138          2,943,106,755
Proceeds from long-term loans
net of financial expenses                                   6,426,983,282          1,260,199,652          5,621,398,166           613,718,361
Repayments of loan from
subsidiary and parent company                                (35,730,000)                       -                      -          (10,000,000)
Repayments of long-term debentures                        (1,655,579,149)        (1,631,700,114)        (1,655,579,149)        (1,631,700,114)
Repayments of short-term borrowings                       (8,835,241,109)        (2,045,211,339)        (8,835,241,109)        (1,467,794,500)
Repayments of long-term borrowings                          (665,962,589)          (233,487,266)          (441,547,862)          (111,607,641)


Net cash flows from
financing activities                                        4,256,564,573            718,317,688          3,711,124,184           345,722,861


Net increase (decrease) in cash
 and cash equivalents and at banks                          (290,728,877)             91,867,100           (86,343,667)           (83,338,972)


Cash and cash equivalents, opening balance                    819,066,011            729,113,735           457,364,256            542,550,058
Unrealised loss on exchange rate                               (8,633,713)            (1,914,824)           (8,632,500)            (1,846,830)
Cash and cash equivalents, closing balance        3           519,703,421            819,066,011           362,388,089            457,364,256




      The notes to the consolidated and company financial statements on pages 47 to 76 are an integral part of these financial statements.


                                                                                                                                             45
                                                                 Statements of Cash Flows (Cont’d)

Shin Satellite Public Company Limited                                             Supplementary disclosures of Statements of Cash flows :
For the years ended 31 December 2002 and 2001
                                                                        Consolidated                                  Company
                                               Note             2002                   2001                   2002                  2001
                                                            Baht ’000              Baht ’000              Baht ’000             Baht ’000

Interest paid
                                                                   387,306               346,236                273,198                277,583
Income tax paid
                                                                     5,685                  9,839                       -                    -

Non-cash transactions


Acquisition of property and equipment
                                                                   874,183                709,755               585,685                709,755
Acquisition of investment in associates
                                                   9               134,602                       -                      -                    -




      The notes to the consolidated and company financial statements on pages 47 to 76 are an integral part of these financial statements.


46
            Notes to the Consolidated and Company Financial Statements
                                                                            for the years ended 31 December 2002 and 2001



1.       General information
Shin Satellite Public Company Limited ("the Company") is a public limited company and is incorporated and domiciled in Thailand. The
registered office of the Company is:


414 Phaholyotin Road, Samsen Nai, Phayathai, Bangkok 10400.


The Company is listed on the Stock Exchange of Thailand. Its principal business, and those of its subsidiaries, and associates of the
Company (collectively called "the Group") are given below:


The Company has obtained concessions from the Ministry of Transport and Communications for a period of thirty years to operate and
administer satellite projects and to render transponder services for domestic and international communications as well as the right to
collect, for a thirty year period, service charges from users of the transponders. These concessions agreement have transfer to Ministry of
Information Communication and Technology.


The Company's subsidiaries and its associates, being Shenington Investments Pte Ltd., Cambodia Shinawatra Co., Ltd., Shin Broadband
Internet (Thailand) Co., Ltd., C.S. Communications Co., Ltd., C.S. Satellite Phone Co., Ltd., iPSTAR Co., Ltd. and Lao Telecommunications
Co., Ltd., are primarily involved in Internet data centre services, Internet services, satellite uplink-downlink services for domestic and
international communications and telephone networks services in Laos and Cambodia.


The Group has operations in four countries, Thailand, Singapore, Cambodia and Laos PDR and employs 730 people (2001: 644 people).



2.     Accounting policies


The principal accounting policies adopted in the preparation of these consolidated and company financial statements are set out below:


2.1     Basis of preparation


The consolidated and company financial statements have been prepared in accordance with Thai Generally Accepted Accounting
Principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued by the Institute of Certified Accountants
and Auditors of Thailand and approved under law by the Board of Supervision of Auditing Practice appointed by the Minister of
Commerce under the Auditor Act B.E. 2505, and the financial reporting requirements of the Securities and Exchange Commission.
In the absence of an effective Thai Accounting Standard on intangible assets, the Company has applied International Accounting
Standard 38 "Intangible assets", effective 1 January 2000.


The consolidated and company financial statements have been prepared under the historical cost convention except as disclosed in
the accounting policies below:


2.2     Group accounting


a)      Subsidiary undertakings


Subsidiary undertakings, which are those companies in which the Group, directly or indirectly, has an interest of more than one half of the
voting rights or otherwises has power to exercise control over the operations, have been consolidated. Subsidiaries are consolidated
from the date on which effective control is transferred to the Group and are no longer consolidated from the date which the Group, directly
or indirectly, has an interest of less than one half of the voting rights or otherwise ceases to have the power to exercise control over the
operations. All inter-company transactions, balances and unrealised surpluses and deficits on transactions between group companies
have been eliminated. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies
adopted by the Company. Separate disclosure is made for minority interests. The interest of third parties in subsidiaries is accounted for
on the basis of their share in the underlying equity of these undertakings. A list of the principal subsidiaries is set out in note 9.




                                                                                                                                        47
     Notes to the Consolidated and Company Financial Statements
                                                         for the years ended 31 December 2002 and 2001


                The Company is the guarantor of all loans of its subsidiary, C.S. Communication Co., Ltd. The
                Company, therefore, makes provision for the potential amount that may not be recoverable in respect
                of the accumulated losses in this subsidiary.


                In the Company's separate financial statements, the Company accounts for its interest in subsidiaries
                on an equity basis.


                b)      Associated undertakings


                Investments in associated undertakings are accounted for using the equity method of accounting. These
                are undertakings over which the Group has between 20% and 50% of the voting rights, and over which
                the Group exercises significant influence but which it does not control. Equity accounting involves
                recognising in the consolidated statement of income the Group's share of the associates' profit or loss
                for the year. The Group's interest in the associate is carried in the balance sheet at an amount that
                reflects its share of the net assets of the associate and includes goodwill on acquisition. A list of the
                principal associates is set out in note 9.


                In the Company's separate financial statements, the Company accounts for its interest in associates on
                an equity basis.


                2.3     Related companies


                Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are
                controlled by, or are under common control with, a company, including holding companies, subsidiaries
                and fellow subsidiaries are related parties of the company. Associates and individuals owning, directly
                or indirectly, an interest in the voting power of the company that gives them significant influence over the
                enterprise, key management personnel, which are directors and officers of the company and close
                members of the family of these individuals and companies associated with these individuals also
                constitute related parties.


                In considering each possible related party relationship, attention is directed to the substance of the
                relationship, and not merely the legal form.


                2.4     Foreign currencies translation


                Transactions denominated in foreign currencies are translated into Baht at the rate of exchange
                prevailing on the transaction dates. Realised gains and losses on exchange are recognised as income
                or expense as incurred. Monetary assets and liabilities at the balance sheet date denominated in
                foreign currencies are translated into Baht at the rate of exchange prevailing at the balance sheet
                date. Unrealised gains and losses on exchange are recognised as income or expense as incurred.


                Income statements of foreign entities are translated into the Group's reporting currency at average
                exchange rates for the year and the balance sheets are translated at the exchange rates prevailing at
                the balance sheet date. Exchange differences arising from the translation of the net investment in
                foreign subsidiaries and associated undertakings, is taken to 'Cumulative foreign currency translation
                adjustment' in shareholders' equity. On disposal of the foreign entity, such translation differences are
                recognised in the income statement as part of the gain or loss on sale or disposal.




48
Notes to the Consolidated and Company Financial Statements
                                                    for the years ended 31 December 2002 and 2001


           2.5     Cash and cash equivalents


           For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and
           deposits held at banks as defined in the Thai Accounting Standard with respect to the preparation of the
           statement of cash flows which is in line with the definition prescribed in the regulation relating to the
           financial statements issued under Ministerial Regulation No. 7 (B.E. 2539) under the Public Companies
           Limited Act B.E. 2535.

           Cash and cash equivalents represent cash and short-term highly liquid investments with original
           maturities of three months or less.

           2.6     Current investments

           Current investments represent time deposits, bills of exchange and promissory notes with original
           maturities more than 3 months but less than twelve months.

           2.7     Trade accounts receivable

           Trade accounts receivable are carried at anticipated realisable value. An allowance is recorded for
           doubtful accounts receivable, which is equivalent to the estimated collection losses that may be
           incurred. The estimated losses are based on historical collection experience combined with a review of
           the current status of the existing receivables at the balance sheet date.

           2.8     Inventories

           Inventories are stated at the lower of cost or net realisable value. Cost is determined by the weighted
           average method for the Group and the Company. Net realisable value is the estimate of the selling price
           in the ordinary course of business, less selling expenses. Provision is made, where necessary, for
           obsolete, slow-moving and defective inventory.

           2.9     Investments

           Investments in non-marketable equity securities, which are classified as general investments, are
           carried at cost.

           A test for impairment is carried out when there is a factor indicating that such investment might be
           impaired. If the carrying value of the investment is less than its recoverable amount, impairment loss is
           charged to the income statement.


           When disposing of part of the Group's holding of a particular investment in equity securities, the carrying
           amount of the disposed part is determined from the weighted average carrying amount of the total
           holding of the investment.


           On disposal of an investment, the difference between the net disposal proceeds and the carrying amount
           is charged or credited to the income statement.


           2.10    Goodwill


           Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of
           the net identifiable tangible and intangible assets of the acquired associated or subsidiary or joint
           venture at the date of acquisition. Goodwill is capitalised and is amortised using the straight-line
           method over its estimated useful life not exceeding 20 years.


           The gain or loss on disposal of an entity includes the unamortised balance of goodwill relating to the
           entity disposed of.



                                                                                                                  49
     Notes to the Consolidated and Company Financial Statements
                                                         for the years ended 31 December 2002 and 2001


                2.11    Costs of the satellite projects under the concession agreement


                The costs of satellite projects under the concession agreement represent the cost of all satellites (Thaicom
                1, Thaicom 2 and Thaicom 3), telemetry, tracking, command and monitoring stations and other opera-
                tional equipment which have been transferred to the Ministry of Transport and Communications and
                expenditure relating to satellite project arrangements. Costs of satellites and other assets which have
                been transferred to the Ministry of Transport and Communications and expenditure relating to satellite
                project arrangements are amortised by the straight-line method over the estimated useful lives of
                satellites and other assets, and over the concession period, ranging from 5 to 27.5 years.


                Borrowing costs to finance the construction of satellite projects under the concession agreement are
                capitalised, during the period of time that is required to complete and prepare the property for its
                intended use, as part of the cost of the asset. The borrowing cost includes interest on bank overdrafts,
                short-term and long-term borrowings, and related taxes.


                2.12    Deferred charges


                Deferred charges principally represent costs of computer software and costs of equipment provided
                to certain overseas customers in connection with the utilisation of transponder services obtained from
                the Company. The cost of computer software is amortised by straight-line method over 5 years. The
                cost of equipment provided to certain overseas customers in connection with the utilisation of
                transponder services obtained from the Company is amortised by straight-line method over the period
                of each service agreement.


                2.13    Intangible assets


                The cost of intangible assets comprises Internet networks, servers, fiber optic networks and other
                operational equipment which has been transferred to the Communications Authority of Thailand
                under the concession agreement. The cost of intangible assets is amortised by the straight-line method
                over the estimated useful lives of these assets, ranging from 5 to 10 years.


                2.14    Leases - where the group company is the lessee


                Leases of assets where the Group assumes substantially all the benefits and risks of ownership are
                classified as finance leases. Finance leases are capitalised at the estimated present value of the
                underlying lease payments. Each lease payment is allocated between the liability and finance charges
                so as to achieve a constant rate on the finance balance outstanding. The corresponding rental
                obligations, net of finance charges, are included in other long-term payables. The interest element of
                the finance charge is charged to the income statement over the lease period. The equipment acquired
                under finance leasing contracts is depreciated over the useful life of the assets.


                Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are
                classified as operating leases. Payments made under operating leases are charged to the income
                statements on a straight-line basis over the period of the lease.




50
Notes to the Consolidated and Company Financial Statements
                                                    for the years ended 31 December 2002 and 2001


           2.15    Leases - where a group company is the lessor


           Assets leased out under operating leases are included in property and equipment in the balance sheet.
           They are depreciated over their expected useful lives on a basis consistent with similar fixed assets.
           Rental income is recognised on a straight-line basis over the lease term.


           2.16    Property and equipment


           All property and equipment is initially recorded at cost, and subsequently stated at historical cost, less
           accumulated depreciation. Depreciation is calculated by the straight-line method to write off the cost of
           each asset to their residual values over their estimated useful life as follows:


           Leasehold land                                                       30 years
           Buildings and improvements                                       5 - 10 years
           Equipment                                                        5 - 10 years
           Furniture and fixtures                                                5 years
           Office equipment                                                      5 years
           Motor vehicles (includes finance leases of motor vehicles)            5 years


           Borrowing costs to finance the construction of property and purchase of equipment are capitalized;
           during the period of time that is required to complete and prepare the property for its intended use, as
           part of the cost of the asset. The borrowing cost includes interest on bank overdrafts, short-term and
           long-term borrowings, amortisation of discounted bill of exchange, amortisation of deferred financial
           expenses and related taxes.


           Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written
           down immediately to its recoverable amount. The estimated recoverable amount is the higher of the
           anticipated, discounted cash flows from the continuing use of the asset and the amount obtainable
           from the sale of the asset, less any cost of disposal.


           Gains and losses on disposal of property and equipment are determined by reference to their carrying
           amount and are taken into account in determining operating profit.


           2.17    Financial instruments


           Financial instruments carried on the balance sheet include cash and bank balances, investments, trade
           receivables, trade creditors finance leases, borrowings and certain derivative financial instruments. The
           particular recognition methods adopted are disclosed in the individual policy statements associated
           with each item.


           The Group and the Company are also parties to financial instruments that reduce exposure to
           fluctuations in foreign currency exchange and interest rates. These instruments mainly comprise foreign
           currency forward contracts, cross currency and interest rate swap agreements and option contracts.
           The foreign currency forward contracts, cross currency agreements are recognised in the financial
           statements on inception. The purpose of these instruments is to reduce risk.


                   Foreign currency forward contracts


           Foreign currency forward contracts protect the Group from movements in exchange rates by establish-
           ing the rate at which a foreign currency asset and liability will be settled. Forward contract transactions
           are recorded as forward contracts receivable or forward contracts payable on inception, and translated
           at the year end rate. Unrealised gains and losses on translation are recognised in statements of income.
           Premiums or discounts are amortised in the statements of income on the straight-line basis over the
           contract periods.


                                                                                                                  51
     Notes to the Consolidated and Company Financial Statements
                                                           for the years ended 31 December 2002 and 2001


                        Cross-currency and interest rate swaps


                In cross-currency and interest rate swap contracts, the Group agrees with a counter party to exchange
                their respective currency and interest rate positions between an agreed pair of currencies. An exchange
                of principal in the different currencies occurs at the inception of the cross-currency and interest rate
                swap at a predetermined exchange rate, with an equal but opposite exchange of principal at the maturity
                of the contract. The foreign currency receivable/payable under these contracts is translated at the
                year-end exchange rate and the unrealised gains or losses are recognised in the income statement.
                Each party also pays and receives interest on a pre-determined amount of principal in different
                currencies over the contract period. Any differential to be paid or received on the interest rate swaps
                is recognised as a component of interest income or expense over the period of the agreement.


                        Option contracts


                Foreign currency option are contractual agreements under which the seller (writer) grants the purchaser
                (holder) the right, but not the obligation, either to buy (a call option) or sell (a put option) at a set date, a
                specific amount of a foreign currency at a pre-determined exchange rate. In consideration for the
                assumption of foreign exchange risk, the seller receives a premium from the purchaser. The principal
                of option contracts is not recognised on the balance sheets. Premiums are amortised in the statements
                of income on the straight-line basis over the period of the contract. Options are accordingly not adjusted
                to fair value or recorded on the balance sheet.


                Disclosures related to financial instruments to which the Group is a party are provided in Note 23.


                2.18    Employee benefits


                The Group operates a provident fund, being a defined contribution plan, the assets for which are held
                in a separate trustee-administered fund. The provident fund is funded by payments from employees
                and by the Group. The Group's contributions to the provident fund are charged to the income statement
                in the year to which they relate.


                2.19    Revenue recognition


                Revenues from rendering transponder services and services related to the satellite business are
                recognised when said services are rendered and provided to customers. All costs of services incurred
                during the relevant periods are treated as period cost.


                Sales are recognised upon delivery of products and customer acceptance, if any, or performance of
                services net of sales taxes and discounts.


                Advances from customers will be released to income when services are provided.


                Interest income is recognised as it accrues unless collectibility is in doubt.


                Dividend income is recognised when the shareholder's right to receive payment is established.


                2.20    Income tax


                The Group calculates income tax in accordance with the Revenue Code and records them on accrual
                basis. The Group does not recognise income tax payable or receivable in future periods in respect of
                temporary differences.




52
Notes to the Consolidated and Company Financial Statements
                                                 for the years ended 31 December 2002 and 2001


           2.21   Segment reporting


           The segmental reporting has been prepared based on the Group's method of internal reporting, which
           desaggregates its business by service or product.


           2.22   Earnings per share


           Basic consolidated earnings per share are calculated by dividing the consolidated net earnings after
           considering minority interest in subsidiaries, attributable to shareholders by the weighted average
           number of ordinary shares in issue during the year.


           Basic company earnings per share are calculated by dividing the Company's earnings by the weighted
           average number of ordinary shares in issue during the year.


           2.23   Presentation of comparative information


           The comparative figures have been amended to conform with reclassification of certain items in the
           financial statements for the year ended 31 December 2002.




                                                                                                           53
        Notes to the Consolidated and Company Financial Statements
                                                                    for the years ended 31 December 2002 and 2001


3.   Cash and cash equivalents




                                                                            Consolidated                       Company


                                                                        2002              2001             2002            2001
                                                                    Baht '000         Baht '000        Baht '000       Baht '000

                             Cash in hand                              26,092              3,864          18,848             496
                             Savings deposits and deposits held
                             at call with banks                       493,611          815,202          343,540          456,868
                                                                      519,703          819,066          362,388          457,364


                             The weighted average effective interest rate of deposits held with banks was 0.72% per annum (2001:
                             0.93% per annum).


4.   Current investments
                                                                           Consolidated                        Company

                                                                        2002             2001             2002             2001
                                                                    Baht '000        Baht '000        Baht '000        Baht '000


                            Time deposits with local banks             10,420           10,425              420              420
                                                                       10,420           10,425              420              420



                  The weighted average effective interest rates of time deposits was 0.51 % per annum (2001: 2.03% per annum ).


                  As at 31 December 2002, Baht 10.42 million of time deposits was pledged as collateral in respect of bank
                  guarantees.




5.   Trade accounts receivable and accrued income, net
                                                                            Consolidated                       Company


                                                                         2002             2001             2002            2001
                                                                     Baht '000        Baht '000        Baht '000       Baht '000

                            Trade accounts receivable
                              -Third parties                           809,990          829,686          476,606         510,824
                              -Related parties (Note 27)                 2,556            1,327           11,525           1,103
                            Accrued income
                              -Third parties                           223,797          226,748          214,454         218,290
                              -Related parties (Note 27)                13,322           13,420           27,391          14,227
                            Total trade accounts receivable and
                            accrued income                           1,049,665        1,071,181          729,976         744,444
                            Less Allowance for doubtful
                            accounts                                 (289,994)        (408,246)          (86,510)       (211,748)
                            Total trade accounts receivable and
                            accrued income, net                        759,671          662,935          643,466         532,696




54
         Notes to the Consolidated and Company Financial Statements
                                                                     for the years ended 31 December 2002 and 2001


                    Outstanding trade accounts receivable - third parties as at 31 December can be analysed as follows:

                                                                             Consolidated                      Company


                                                                          2002             2001             2002               2001
                                                                      Baht '000        Baht '000        Baht '000          Baht '000

                              Current                                  168,518            69,230           91,224             18,597
                              Over-due less than 3 months              151,401           123,239          115,856            100,468
                              Over-due 3-6 months                      101,426           117,832           83,857            107,570
                              Over-due 6-12 months                     100,647            55,782           86,118             45,067
                              Over-due over 12 months                  287,998           463,603           99,551            239,122
                                                                       809,990           829,686          476,606            510,824
                              Less Allowance for doubtful
                              accounts - third parties                (289,994)        (408,246)         (86,510)          (211,748)
                              Trade accounts-third parties, net         519,996          421,440         390,096            299,076



6.   Inventories, net
                                                                          Consolidated                          Company


                                                                          2002             2001             2002               2001
                                                                      Baht '000        Baht '000        Baht '000          Baht '000


                              Finished goods                           408,087            40,013         393,323              23,340
                              Less Allowance for obsolete stock          (217)             (223)               -                   -
                                                                       407,870            39,790         393,323              23,340



7.   Forward and swap contracts


                    As at 31 December, the Group has entered into cross-currency and interest rate swaps and forward foreign
                    exchange contracts to cover loans and bonds issued. Cross-currency and interest rate swaps and forward
                    foreign exchange contracts receivable and payable under these contracts are shown below:



                                                                             Consolidated                      Company


                                                                          2002             2001             2002               2001
                                                                      Baht '000        Baht '000        Baht '000          Baht '000

                              Forward and swap contracts
                              payable, net
                                Contracts receivable                  6,727,083        3,343,902        6,727,083           3,343,902
                                Contracts payable                   (6,752,647)      (3,544,237)      (6,752,647)         (3,544,237)
                              Total Forward and swap
                                contracts payable, net                 (25,564)        (200,335)         (25,564)          (200,335)
                              Less Current portion of forward and
                              swap contracts payable, net                     -        (200,335)                -          (200,335)
                              Non-current portion, net                 (25,564)                -         (25,564)                  -




                                                                                                                                 55
        Notes to the Consolidated and Company Financial Statements
                                                                           for the years ended 31 December 2002 and 2001


8.   Other current assets

                                                                                    Consolidated                         Company


                                                                                2002               2001               2002         2001
                                                                            Baht '000          Baht '000          Baht '000    Baht '000


                                Withholding taxes and other taxes             179,855            245,324           142,725         212,749
                                Prepaid expenses                               48,029             44,856            30,810          32,618
                                Advance payment                               255,627             27,830           250,681          23,139
                                Deposits                                       39,547             23,196            39,034          23,196
                                Others                                         19,024              8,414            23,057           8,374
                                                                              542,082            349,620           486,307         300,076
                                Less Allowance for non refundable
                                withholding taxes                            (16,081)                  -           (16,081)              -
                                                                             526,001             349,620           470,226         300,076



9.   Investments in subsidiaries and associates

a)   Long-term investments in subsidiaries and associates as at 31 December comprise of:

                                                                                    Consolidated                         Company


                                                                                2002               2001               2002         2001
                                                                            Baht '000          Baht '000          Baht '000    Baht '000

                                Investments in subsidiaries                         -                  -          1,273,578        792,740
                                Investments in associates                     777,792            477,237                  -              -
                                Total long-term investments                   777,792            477,237          1,273,578        792,740



b)   Movements in investment in subsidiaries, and associates for the years ended 31 December 2002 and 2001 comprise of:



                                                                                    Consolidated                          Company

                                                                                2002               2001               2002         2001
                                                                            Baht '000          Baht '000          Baht '000    Baht '000

                                Opening net book value                       477,237             237,981           792,740         334,905
                                Investment in subsidiaries
                                and associates                               134,602                   -                 -       572,465
                                Share of net results from investments        207,643            324,848            481,667       377,076
                                Dividends received                           (62,699)           (66,241)                 -      (59,641)
                                Impairment charge                                   -                  -                 -     (432,694)
                                Foreign currency translation adjustment
                                Closing net book value                        21,009            (19,351)              (829)            629
                                                                             777,792            477,237           1,273,578        792,740



                     c) The details of investments in subsidiaries and associates can be summarised as follows:




56
          Notes to the Consolidated and Company Financial Statements
                                                                      for the years ended 31 December 2002 and 2001


                              Name                                Business                            Country           Currency
                              Subsidiaries
                              Shin Broadband Internet             Providing Internet data center      Thailand          Baht
                               (Thailand) Company Limited         services


                              Shenington Investments Pte          Holding company                     Singapore         S$
                               Company Limited


                              Cambodia Shinawatra Company         Providing fixed line and mobile     Cambodia          US$
                              Limited                             phones services


                              C.S. Communications                 Providing Internet and satellite    Thailand          Baht
                               Company Limited.                   uplink-downlink services


                              C.S. Satellite Phone                Providing mobile personal com-      Thailand          Baht
                               Company Limited                    munication services via satellite


                              iPSTAR Company Limited              Providing broadband satellite       The British       US$
                                                                  services                            Virgin
                                                                                                      Islands
                              Associates of the company           Providing fixed phone, mobile
                              Lao Telecommunications              phone, international facilities,    Laos              US$
                               Company Limited                    internet and paging services


As at 31 December 2002, C.S. Satellite Phone Company Limited and iPSTAR Company Limited have not yet commenced business
operations.
d)      Carrying value of investments in subsidiaries and associates

                                                                          Consolidated
                                                                       31 December 2002
                                                                                     Accumulated
                                                                                      share of net
                                      Paid-up        Investment                           result of
                                       capital       portion(%)             Cost       investment            Equity          Dividend
                                       Million                            Million           Million          Million           Million
                                                                            Baht              Baht               Baht            Baht
         Associated company
         Lao Telecommunications
          Company Limited           US$ 96.84               49            187.31            590.48           777.79             62.70



                                                                          Consolidated
                                                                       31 December 2001
                                                                                     Accumulated
                                                                                      share of net
                                      Paid-up        Investment                           result of
                                       capital       portion(%)             Cost       investment            Equity          Dividend
                                       Million                            Million           Million          Million           Million
                                                                            Baht              Baht               Baht            Baht
         Associated company
         Lao Telecommunications
          Company Limited           US$ 91.84               49             52.71            424.53           477.24             66.24




                                                                                                                                   57
            Notes to the Consolidated and Company Financial Statements
                                                                            for the years ended 31 December 2002 and 2001


                                                                                  Company
                                                                             31 December 2002
                                                                                          Accumulated
                                                                                           share of net
                                           Paid-up       Investment                            result of
                                            capital       portion(%)             Cost       investment             Equity         Dividend
                                            Million                            Million           Million          Million           Million
                                                                                 Baht              Baht             Baht              Baht
         Subsidiaries
         Shenington Investments
         Company Limited                  S$ 14.66               100           269.88          1,003.70          1,237.58                 -



                                                                                  Company
                                                                             31 December 2001
                                                                                          Accumulated
                                                                                           share of net
                                           Paid-up       Investment                            result of
                                            capital       portion(%)             Cost       investment             Equity         Dividend
                                            Million                            Million           Million          Million           Million
                                                                                 Baht              Baht             Baht              Baht
         Subsidiaries
         Shenington Investments
         Company Limited                  S$ 14.66               100           269.88            522.74            792.74            59.64



e)      Significant movements in investments during the year ended 31 December 2002 were as follows:


Subsidiaries
i)     C.S. Communications Co.,Ltd. ("CSC")


At the CSC extraordinary shareholders' meetings on 24 September and 10 October 2002, the shareholders passed a resolution to approve
the registered share capital reduction from Baht 970 million (97 million shares at 10 Baht each) to Baht 242.5 million (24.25 million shares
at 10 Baht each) for the purposes of eliminating the deficit. The share capital reduction was made to the portion of share held by Shin
Broadband Internet (Thailand) Co., Ltd. ("SBI") only. This resulted in the percentage of shareholding in CSC by SBI decreasing from 99.5%
to 98.0%. The share capital reduction was finalised on 21 January 2003.


 At the CSC extraordinary shareholders' meetings on 17 December 2002 and 15 January 2003, the shareholders passed a resolution to
approve the registration of the new official company name of CSC as "CS Loxinfo Company Limited". On 29 January 2003, the new official
company name was registered with the Ministry of Commerce. In addition, the shareholders also passed a resolution to approve an
increase of the authorised share capital from 24,250,000 ordinary shares with a par value of Baht 10 per share to 50,000,000 ordinary
shares with a par value of Baht 10 per share. The shareholders passed a resolution to approve the issuance of 25,750,000 additional
shares at a par value of Baht 10 per share. 1,250,000 of the shares were priced at Baht 563.20 per share, and 24,500,000 shares were
priced at par value. All new additional shares were offered to existing shareholders.


Associates
ii)   Lao Telecommunications Co., Ltd. ("LTC")


At a shareholders' meeting of Lao Telecommunications Co., Ltd. on 24 October 2002, the shareholders passed a resolution to approve the
increase of authorised share capital from 91,840,000 ordinary shares with a par value of US$ 1 per share to 96,840,000 ordinary shares
with a par value of US$ 1 per share. 2,550,000 new shares were issued to Laos PDR and 2,450,000 new shares were issued to Shenington
Investments Pte Ltd. All new shares were fully paid up by being offset against an inter-company loan.




58
              Notes to the Consolidated and Company Financial Statements
                                                                              for the years ended 31 December 2002 and 2001


10.       Provision for liabilities


The Company has provided a loan guarantee in respect of C.S. Communications Co.,Ltd's bank loans amounting to Baht 827.7 million.
Accordingly, the Company has equity accounted for the full net deficit of C.S. Communications Co.,Ltd's at 31 December 2002 and 2001 to
reflect the extent of its obligations.


On an annual basis the Company assesses the probability that it will incur an outflow of resources in respect of its guarantee of liabilities in
respect of these particular borrowings and records the necessary provision. For the years ended 31 December 2002 and 2001, C.S.
Communications Co.,Ltd's had negative shareholders' equity and negative cash outflows from operations; accordingly, the Company
recognised a provision under the loan guarantees to be extent of the net shareholders' deficit of C.S. Communications Co.,Ltd's.


For the year ended 31 December 2002 and 2001, iPSTAR Co., Ltd. ("iPSTAR") had negative shareholders' equity and the Company has
recognised a provision for liabilities on its investment in iPSTAR.


The movements of provision for liabilities in respect of C.S. Communications Co.,Ltd's and IPSTAR Co.,Ltd's for the year ended 31
December 2002 and 2001 are as follows:




                                                                                                                      Company
                                                                                                                    2002               2001
                                                                                                                Baht '000          Baht '000


                                                         Opening net book value                                 (377,962)          (657,548)
                                                         Investment                                                     -           470,400
                                                         Share of net loss from investments                     (154,967)          (152,032)
                                                         Provision for share of net losses in
                                                         subsidiary in excess of investment                             -           (37,705)
                                                         Foreign Currency translation adjustment                     270             (1,077)
                                                         Closing net book value                                 (532,659)          (377,962)

                                                                                     Company
                                                                               31 December 2002
                                                                                                Accumulated
                                                                                                 share of net
                                            Paid-up       Investment                                result of
                                             capital       portion(%)               Cost         investment             Equity           Dividend
Subsidiaries                                 Million                              Million             Million           Million            Million
                                                Baht                                Baht                Baht                Baht               Baht
Shin Broadband
Internet (Thailand) Company
Limited                                       947.29               100            947.29           (1,468.92)          (521.63)                   -


iPSTAR Company Limited                     US$ 0.02                100               0.87             (11.89)           (11.02)                   -
      Total                                                                       948.16           (1,480.81)          (532.65)




                                                                                                                                                 59
              Notes to the Consolidated and Company Financial Statements
                                                                         for the years ended 31 December 2002 and 2001


                                                                                Company
                                                                           31 December 2001
                                                                                       Accumulated
                                                                                         share of net
                                          Paid-up      Investment                           result of
                                           capital      portion(%)             Cost      investment            Equity         Dividend
Subsidiaries                               Million                           Million          Million          Million          Million
                                             Baht                              Baht             Baht             Baht             Baht
Shin Broadband
 Internet (Thailand) Company
Limited                                    947.29              100           947.29        (1,314.06)         (366.77)                -


iPSTAR Company Limited                   US$ 0.02              100             0.87           (12.06)          (11.19)                -
      Total                                                                  948.16        (1,326.12)         (377.96)



11.       Other investments
                                                                                   Consolidated                      Company
                                                                              2002             2001             2002              2001
                                                                          Baht '000        Baht '000        Baht '000         Baht '000


                                   Opening net book amount                   18,900           18,900           18,900            18,900
                                   Acquisitions                                   -                -                -                 -
                                   Closing net book amount                   18,900           18,900           18,900            18,900


On 30 April 1999, the Company entered into a Membership Purchase Agreement with Codespace, Inc., to acquire a 70% shareholding in a
company, Spacecode LLC, for the total price of US$ 3 million over a period of 3 years. The payment for the 70% shareholding in Spacecode
LLC was to be made by way of a cash payment of US$ 500,000, and the remaining US$ 2.5 million, will be paid by way of the allotment of
2.5 million shares in iPSTAR Co., Ltd.( a subsidiary) valued at US$ 2.5 million.


An initial payment of US$ 500,000 has been paid to Codespace Inc. and 12% of the shares in Spacecode LLC have been transferred to the
Company, which represent the other investment amounting to Baht 18.9 million.




60
            Notes to the Consolidated and Company Financial Statements
                                                                             for the years ended 31 December 2002 and 2001


12.     Property and equipment


Property and equipment comprise:

                                                                                           Consolidated
                                                           Leasehold                       Motor vehicles           Assets
                                                             Lands &                             & office            under
                                                            buildings       Equipment         equipment       construction              Total
                                                            Baht '000         Baht '000         Baht '000        Baht '000         Baht '000


                  As at 31 December 2001
                  Cost                                         52,984         1,797,501          151,339         4,735,603         6,737,427
                  Less Accumulated depreciation              (19,366)         (970,463)          (83,154)                 -       (1,072,983)
                  Net book Value                               33,618           827,038            68,185        4,735,603         5,664,444



                  Transactions during the year ended
                  31 December 2002
                  Opening net book Value                       33,618           827,038            68,185        4,735,603         5,664,444
                  Additions                                     1,556           278,320            47,264        6,008,326         6,335,466
                  Transfer, net(Note 13)                             -          286,402            15,034         (307,969)           (6,533)
                  Write-offs, net                                    -                 -                  -         (6,884)           (6,884)
                  Disposals, net                                     -           (4,138)          (5,086)                 -           (9,224)
                  Foreign currency translation
                  adjustment                                       (9)         (16,433)             (205)           (8,943)          (25,590)
                  Depreciation charges                         (3,962)        (269,807)          (28,581)                 -         (302,350)
                  Closing net book Value                       31,203         1,101,382            96,611       10,420,133        11,649,329


                  As at 31 December 2002
                  Cost                                         54,421         2,328,516          203,887        10,420,133        13,006,957
                  Less Accumulated depreciation               (23,218)      (1,227,134)         (107,276)                 -       (1,357,628)
                  Net book Value                               31,203         1,101,382            96,611       10,420,133        11,649,329



As at 31 December 2002, property and equipment included a project in progress of Baht 8,782 million relating to the iPSTAR project. The
iPSTAR project will be fully operational with the launch of iPSTAR -1 at the end of 2003. According to the concession agreement made with
Ministry of Information Communication and Technology, the Company must transfer its ownership in iPSTAR Satellite to the Ministry on the
date of the completion of construction and installation.


Borrowing costs of Baht 356 million (2001:Baht 13 million), arising on financing specifically entered into for assets under construction, were
capitalised during the year .


Property and equipment include property and equipment under concession agreements of a subsidiary, Cambodia Shinawatra Co., Ltd., of
approximately Baht 1,992 million. According to the concession agreement, Cambodia Shinawatra must transfer its ownership of this related
property and equipment to the government of Cambodia on the expiration date of the concession agreement, on 4 March 2028.




                                                                                                                                          61
         Notes to the Consolidated and Company Financial Statements
                                                                           for the years ended 31 December 2002 and 2001


                                                                                           Company
                                                          Leasehold                       Motor vehicles               Assets
                                                           Lands &                              & office                under
                                                          buildings        Equipment         equipment           construction           Total
                                                          Baht '000         Baht '000          Baht '000            Baht '000       Baht '000


               As at 31 December 2001
               Cost                                          43,210          768,150              86,828            3,975,686       4,873,874
               Less Accumulated depreciation                (13,053)        (362,464)           (45,631)                       -    (421,148)
               Net book Value                                30,157          405,686              41,197            3,975,686       4,452,726
               Transactions during the year ended 31
               December 2002
               Opening net book Value                        30,157          405,686              41,197            3,975,686       4,452,726
               Additions                                        273          218,155              24,703            5,011,819       5,254,950
               Transfers, net (Note 13)                            -         196,062                  59             (198,555)        (2,434)
               Write-offs, net                                     -                -                   -              (6,884)        (6,884)
               Disposals, net                                      -          (4,126)            (5,083)                       -      (9,209)
               Depreciation charges                          (2,786)        (140,429)           (15,976)                       -    (159,191)
               Closing net book Value                        27,644          675,348              44,900            8,782,066       9,529,958


               As at 31 December 2002
               Cost                                          43,483         1,173,068           102,827             8,782,066      10,101,444
               Less Accumulated depreciation                (15,839)        (497,720)           (57,927)                       -    (571,486)
               Net book Value                                27,644          675,348              44,900            8,782,066       9,529,958



13.   Cost of satellite projects under concession agreements, deferred charges and Intangible assets



                                                                                                                Consolidated
                                                                                        Satellite projects
                                                                                        under concession              Deferred      Intangible
                                                                                             agreements               charges          assets
                                 As at 31 December 2001                                         Baht '000            Baht '000      Baht '000
                                 Cost
                                 Less Accumulated amortisation                                 10,591,117              236,831        209,543
                                 Net book value                                               (4,525,225)            (136,445)        (59,252)
                                                                                                6,065,892              100,386        150,291
                                 Transactions during the year ended 31
                                 December 2002
                                 Opening net book value                                         6,065,892              100,386        150,291
                                 Additions                                                                  -           24,417            319
                                 Transfers, net                                                     3,636                2,897                  -
                                 Foreign currency translation adjustment                                    -             (26)                  -
                                 Amortisation charges                                           (712,048)             (45,476)        (27,358)
                                 Closing net book value                                         5,357,480               82,198        123,252


                                 As at 31 December 2002
                                 Cost                                                         10,594,753               263,416        209,861
                                 Less Accumulated amortisation                                (5,237,273)            (181,218)        (86,609)
                                 Net book value                                                 5,357,480               82,198        123,252




62
         Notes to the Consolidated and Company Financial Statements
                                                                           for the years ended 31 December 2002 and 2001


                                                                                                                    Company
                                                                                                        Satellite projects
                                                                                                    under concession           Deferred
                                                                                                             agreements        charges
                                                                                                                Baht '000     Baht '000
                                                  As at 31 December 2001
                                                  Cost                                                        10,591,117        212,389
                                                  Less Accumulated amortisation                               (4,525,225)     (116,049)
                                                  Net book value                                                6,065,892        96,340


                                                  Transactions during the year ended 31 December 2002
                                                  Opening net book value                                        6,065,892        96,340
                                                  Additions                                                              -       24,417
                                                  Transfers, net                                                    3,636       (1,202)
                                                  Amortisation charges                                          (712,048)      (42,920)
                                                  Closing net book value                                        5,357,480        76,635


                                                  As at 31 December 2002
                                                  Cost                                                        10,594,753        235,604
                                                  Less Accumulated amortisation                               (5,237,273)     (158,969)
                                                  Net book value                                                5,357,480        76,635




                             Commitments related to rendering transponder service


                             As at 31 December 2002, the future revenues from rendering transponder services under non-
                             cancellable service contracts in respect of the satellite business are as follows:

                                                                                          Baht '000


                             Not later than 1 year                                        2,456,401
                             Later than 1 year and not later than 5 years                 5,458,440
                             Later than 5 years                                           1,320,459
                                                                                          9,235,300




14.   Other non-current assets


                                                                              Consolidated                          Company
                                                                                2002            2001                2002          2001
                                                                           Baht '000      Baht '000            Baht '000      Baht '000


                             Deposits                                         39,613          31,559              15,326        15,326
                             Accounts receivable other                         1,297             534                    -          530
                             Less Allowance for impairment asset             (14,756)        (14,756)           (14,756)       (14,756)
                                                                              26,154          17,337                 570         1,100




                                                                                                                                    63
         Notes to the Consolidated and Company Financial Statements
                                                                         for the years ended 31 December 2002 and 2001


15.   Borrowings
                                                                             Consolidated                        Company
                                                                               2002             2001           2002              2001
                                                                          Baht '000         Baht '000      Baht '000        Baht '000
                   Short-term borrowings
                   Short-term loans from financial institutions           2,617,012         2,509,966      2,617,012        2,509,966
                   Total short-term borrowings                            2,617,012         2,509,966      2,617,012        2,509,966


                   Current portion of long-term borrowings
                   Bank borrowings                                          606,341          581,970        184,840           422,765
                   Debentures                                                      -        1,500,000              -        1,500,000
                   Total current portion of long-term
                     Borrowings                                             606,341         2,081,970       184,840         1,922,765


                   Long-term borrowings
                   Bank borrowings                                        7,520,166         1,683,294      6,088,885          613,771
                   Other                                                      4,288            3,914           2,634            3,914
                   Total long-term borrowings                             7,524,454         1,687,208      6,091,519          617,685


                   Total borrowings                                      10,747,807         6,279,144      8,893,371        5,050,416


                                As at 31 December 2002, the Company has provided guarantees relating to long - term borrowings of a
                                subsidiary amounting to Baht 828 million (2001 : Baht 789 million).


                                The movements in the borrowings can be analysed as follows:

                                                                             Consolidated                        Company
                                                                               2002             2001           2002              2001
                                                                          Baht '000      Baht '000        Baht '000         Baht '000
                   For the year ended 31 December 2002
                   Opening net book value                                 6,279,144      5,439,328        5,050,416         4,590,845
                   Proceeds from short-term borrowings                    9,022,095      3,368,517        9,022,095         2,943,107
                   Proceeds from long-term borrowings net of financial
                   expenses                                               6,473,657      1,260,200        5,622,596           613,719
                   Repayment of borrowings                               (9,501,204)   (2,358,779)       (9,276,789)      (1,659,482)
                   Repayment of long-term debentures                     (1,500,000)   (1,500,000)       (1,500,000)      (1,500,000)
                   Discounted bills of exchange                              70,382           59,046         70,382            57,149
                   Capitalisation of discounted bills of exchange               370                 -           370                  -
                   Realised gain on exchange                              (100,911)             (239)      (100,911)            (239)
                   Unrealised loss on exchange                                5,212            5,316          5,212             5,317
                   Foreign currency translation adjustment                    (938)            5,755               -                 -
                   Closing net book value                                10,747,807      6,279,144        8,893,371         5,050,416


                   After taking into account of interest rate swaps, the interest rate exposure of the borrowings of the Group and the
                   Company are as follows:
                                                                             Consolidated                        Company
                                                                               2002             2001           2002              2001
                                                                          Baht '000      Baht '000        Baht '000         Baht '000
                                Total borrowings:
                                - at fixed rates                          3,002,187      3,231,668        3,000,245         3,231,668
                                - at floating rates                       7,745,620      3,047,476        5,893,126         1,818,748
                                                                         10,747,807      6,279,144        8,893,371         5,050,416




64
            Notes to the Consolidated and Company Financial Statements
                                                                             for the years ended 31 December 2002 and 2001


                                    Weighted average effective interest rates:
                                              - bank borrowings                     2.83%            4.83%        2.25%            4.80%
                                              - bonds                                    -           7.65%             -           7.65%


                        As at 31 December 2002, the carrying amounts and fair value of long-term bank borrowings is as follows:

                                                                                    Consolidated                    Company
                                                                                 Carrying                       Carrying
                                                                                  Amount       Fair value        amount         Fair value
                                                                                 Baht'000          Baht'000     Baht'000         Baht'000


                                    Long-term bank borrowings                    7,520,166     7,596,632       6,088,885        6,138,880


                        The value of non-current borrowings is estimated using discounted cash flows based on the Company's
                        incremental borrowing rates for similar types of borrowings.
                        Maturity of non-current borrowings as at 31st December is as follows:

                                                                                   Consolidated                     Company
                                                                                     2002             2001         2002              2001
                                                                                 Baht '000     Baht '000       Baht '000        Baht '000


                        Later than 1 year but not later than 2 years             1,554,684         448,755      908,019           176,802
                        Later than 2 years                                       5,969,770     1,238,453       5,183,500          440,883
                                                                                 7,524,454     1,687,208       6,091,519          617,685


Credit facilities


The available credit facilities for loans from local and overseas banks as at 31 December 2002 are Baht 700 million and US$ 257 million.


Facility agreements in relation to the financing of the iPSTAR satellite project


On 7 November 2002 the Company entered into a US$ 389.3 million credit agreement with 3 groups of banks.
A.      Loan credit agreement for US$ 184.5 Million. The guarantor is the Export-Import Bank of the United States. The loan is repayable
within 9.5 years.
B.      Loan credit agreement for US$ 79.8 Million. The guarantor is a French export and import bank (Compagnie Francaise d'
Assurance pour le Commerce Exterieur). The loan is repayable within 9.5 years.
C.      Loan credit agreement from another group of commercial banks for US$ 125 Million. The loan is repayable within 6 years. This
has no guarantors.

The loan under each loan credit agreement bear interest at various rates. These are based on margins over the London Inter-bank Offer
Rate ("LIBOR") for period of six months and have fixed rate. The Company pays a commitment fee on the unused portion of the facilities. In
addition, regarding the aforementioned credit agreements, the Company must comply with the conditions in the credit agreements
concerning maintaining certain financial ratios, dividend payment policy, guarantee, sales or transfer of assets, and investment. The
amounts of principal begin to be repayable in 2004 , with repayment on a semi-annual basis.


16.     Other current liabilities

                                                                                    Consolidated                    Company
                                                                                     2002             2001         2002              2001
                                                                                 Baht '000     Baht '000       Baht '000        Baht '000
                                    Deposits from
                                    customers                                      78,874           67,101        36,428           25,021
                                    Other taxes                                    28,540           32,121        15,467           16,795
                                    Other payables                                215,727           55,790         8,228            8,070
                                                                                  323,141          155,012        60,123           49,886

                                                                                                                                      65
            Notes to the Consolidated and Company Financial Statements
                                                                              for the years ended 31 December 2002 and 2001


17.     Share capital and premium on share capital


                                                                                     For the year ended 31 December 2002
                                                                              Number of
                                                                                 shares        Ordinary             Share
                                                                              Thousand           shares          premium              Total
                                   Issued and paid-up share                      shares        Baht '000        Baht '000         Baht '000
                                   capital
                                   As 31 December 2000                          437,500        4,375,000        2,190,000         6,565,000
                                   Issue of shares                                    -                 -                -                 -
                                   As 31 December 2001                          437,500        4,375,000        2,190,000         6,565,000
                                   Issue of shares                                    -                 -                -                 -
                                   As 31 December 2002                          437,500        4,375,000        2,190,000         6,565,000


The Company's registered share capital as at 31 December 2002 comprised of 550 million ordinary shares of Baht 10 each.


On 19 December 2001, an Extraordinary General Meeting of shareholders approved the issuance and offer of warrants to managing
directors, employees and advisors of the Company under an Employees Shares Option Program ("ESOP"). The total number of warrants
to be issued and offered during the 5-year period is approximately 21.87 million units, or approximately 21.87 million ordinary shares (at a
par value of Baht 10 each), or approximately 5% of total paid-up capital (before dilution), are to be reserved for the exercise of rights
pursuant to the warrants. Each annual issuance and offer is subject to approval by the Shareholders 'Meeting.


Share capital and premium on share capital


On 26 March 2002, a meeting of the Board of Directors meeting approved the issue and offering of 8 million warrants, or equivalent to
1.83% of the Company's total paid up share capital (before dilution) to managing directors, employees and advisors who are eligible for
such allocation. The warrants are in registered form and non-transferable. The term of the warrant does not exceed 5 years and there is
no offering price. The Securities and Exchange Commission of Thailand approved this offer on 13 March 2002.


Warrants were granted to managing directors and employees on 27 March 2002 at Baht nil per unit. The exercise price is set at Baht 26.75
per unit, which is the closing share price as of 26 March 2002. Movements in the number of warrants outstanding are as follows:

                                                     For the year ended 31 December 2002                                     Unit: Thousand
                                                     At the beginning of the year                                                          -
                                                     Granted to
                                                     - directors                                                                      4,129
                                                     - employees                                                                      3,871
                                                     Exercised                                                                             -
                                                     At the end of the year                                                           8,000


                                                     At the end of 31 December 2002
                                                     Directors                                                                        4,129
                                                     Employees                                                                        3,871
                                                     At the end of the year                                                           8,000


Additionally, Shin Corporation Public Company Limited, a major shareholder, granted 3,244,500 units of its warrants to a managing director
of the Company at Baht nil per unit. The warrants are in registered form and non-transferable. The term of the warrant does not exceed 5
years and there is no offering price. The exercise price is set at Baht 17.80 per unit, which was Shin Corporation Public Company Limited's
closing share price as of 26 March 2002.


Compensation costs related to the warrants is not recognised in these financial statements for the fair value or intrinsic value of warrants
granted.




66
             Notes to the Consolidated and Company Financial Statements
                                                                               for the years ended 31 December 2002 and 2001


18.       Legal reserve
Under the Public Company Limited Act B.E.2535, the Company is required to set aside a statutory reserve of at least 5 percent of its net
profit after the accumulated deficit brought forward (if any) until the reserve is not less than 10 percent of the registered capital. The reserve
is non-distributable.


19.     Other operating income
                                                                                        Consolidated                                Company
                                                                                      2002                  2001              2002             2001
                                                                                   Baht'000           Baht'000            Baht'000          Baht'000


                                      Consulting and Management fees                      -                     -           30,537            25,497
                                      Interest income                                 7,754               17,820             7,977            40,247
                                      Other income from transfer accounts
                                      receivable                                    190,559                     -                   -                 -
                                      Surcharge                                       6,658                     -            6,658                    -
                                      Other                                          19,268                1,256             6,240             1,973
                                                                                    224,239               19,076            51,412            67,717


Other income from transfer accounts receivable is a subsidiary company and the Government of the Lao PDR have agreed to recognise the
amount of US$ 1.05 million (Baht 45.6 million), which an associated company of the group owes to the subsidiary, and Baht 145 million,
which such associate borrowed from the subsidiary. This amount has been transferred from a third party company to the subsidiary com-
pany under a share purchase agreement signed between the subsidiary and the third party company.

20.     Operating profit


The following expenditures, classified by nature, have been credited/(charged) to arrive at operating profit:
                                                                               Consolidated                                       Company
                                                                            2002                   2001                   2002                 2001
                                                                       Baht’000                Baht’000                Baht’000           Baht’000
                  Depreciation on property and equipment               (302,350)              (263,995)               (159,191)         (131,297)
                  Amortisation of cost of the satellite projects
                    under the concession agreement,
                    deferred charges, and intangible assets            (784,882)              (785,129)               (754,968)         (756,973)
                  Staff costs                                          (309,593)              (271,197)               (209,184)         (181,078)




21.     Basic and diluted earnings per share

Basic and diluted earnings per share is calculated by dividing the net income for the period attributable to shareholders by the weighted
average number of ordinary shares in issue during the year.

                                                                                Consolidated                     Company
                                                                                        2002                  2001      2002                  2001
                             Net profit attributable to shareholders
                             (Baht ’000)                                             1,410,520            1,563,148    1,410,520        1,563,148
                             Weighted average number of ordinary shares
                             issued during the year (Thousand shares)                  437,500             437,500       437,500            437,500
                             Basic and diluted earnings per share
                             (Baht per share)                                             3.22                 3.57          3.22              3.57

The warrants outstanding are in connection with the managing directors’, employees’ and advisors’ share option plan and did not affect the
diluted earnings per share since the average share price calculated from the date the warrants were granted to the reporting year was below
the exercise price of the outstanding warrants.




                                                                                                                                                 67
            Notes to the Consolidated and Company Financial Statements
                                                                               for the years ended 31 December 2002 and 2001


22.   Cash flows from operating activities
Reconciliation of net profit for the year to cash flows from operating activities:


                                                                  Note                      Consolidated                      Company
                                                                                     2002             2001            2002              2001
                                                                                     Baht             Baht            Baht              Baht


                         Net profit for the year                           1,410,520,100     1,563,148,076    1,410,520,100    1,563,148,076
                         Adjustments for:
                          Depreciation of property and
                         equipment                                   12      302,350,906       263,995,489     159,190,825      131,297,402
                         Allowance for doubtful accounts                      97,739,118        23,736,686      77,273,790        5,382,276
                         Write-off of
                            withholding tax                                   22,350,649                  -     16,080,708                 -
                         Write off of
                          doubtful accounts                                   (3,897,818)                 -     (3,897,818)                -
                         Other income from transfer
                          accounts receivable                        19    (190,558,975)                  -               -                -
                         Amortisation of costs of satellite
                         projects                                    13      712,048,555       711,919,780     712,048,555      711,919,780
                         Amortisation of deferred
                          charges                                    13       45,475,851        46,054,714      42,920,045       45,052,833
                         Amortisation of intangible
                          assets                                     13       27,358,054        27,154,580                -                -
                         Discount bills of exchange                  15       70,382,404        59,046,411      70,382,404       57,149,870
                         Loss (profit) on sale of property
                         and equipment                                          (318,521)          150,804        (301,421)         284,757
                         Asset transfer to cost of sales and
                         services                                    12         6,884,339                 -      6,884,339                 -
                         Unrealised loss on
                          exchange rate                                       40,280,812        65,384,109      40,860,771       50,443,882
                         Realised gain on exchange rate                    (145,666,199)       (32,392,185)   (145,666,199)     (32,392,185)
                         Minority interest                                    (1,601,562)       (4,946,496)               -                -
                         Net result from subsidiaries,
                         associates and joint venture              9,10    (207,642,634)      (324,848,064)   (326,699,677)    (225,044,337)
                         Changes in operating assets and
                         liabilities
                         - trade accounts receivable
                             and accrued income                            (187,490,301)       (46,355,041)   (185,309,486)      27,759,545
                         - amount due from
                             related parties                                  (2,288,200)       26,959,599      11,256,827       34,197,103
                         - inventories                                     (368,081,288)       (13,246,332)   (369,983,641)      (8,420,222)
                         - other current assets                            (192,461,476)       (95,842,231)   (186,230,971)     (86,505,094)
                         - other non-current assets                           (8,816,716)       (2,774,699)        530,462                 -
                         - accounts payable and
                            accrued expenses                                 426,284,753       168,632,709     356,461,462       61,499,511
                         - amount due to
                             related parties                                            -       (9,292,157)               -      (1,562,667)
                         - advance from customers                            (93,903,759)     (167,135,504)    (97,689,281)    (173,334,312)
                         - other current liabilities                         (74,894,095)      (35,553,500)     10,237,106      (40,412,368)
                         - other liabilities                                (111,970,437)      (18,818,471)     (2,831,480)     (16,659,912)
                         Cash flows from operating
                         activities                                        1,572,083,560     2,204,978,277    1,596,037,420    2,103,803,938




68
            Notes to the Consolidated and Company Financial Statements
                                                                             for the years ended 31 December 2002 and 2001


23.     Financial instruments


The principal financial risks faced by the Group are interest rate risk and exchange rate risk. The Group borrows at fixed and floating rates
of interest to finance its operations. Sales, purchases and a portion of borrowings are transacted in foreign currencies. In order to manage
the risks arising from fluctuations in exchange rates and interest rates, the Group and the Company make use of derivative financial
instruments.


The objectives in using financial instruments are to reduce uncertainty over future cash flows arising from movements in interest and
exchange rates, and to manage the liquidity of cash resources. The following strategies are employed to achieve these objectives. Interest
rate exposures are managed through interest rate swaps taken out with commercial banks and foreign exchange forward contracts and
foreign currency options are taken out to manage the currency risks in future sales, purchases and loan repayments. Decisions on the level
of risk undertaken are confined to the Management Committee of Shin Corporation Group which has established limits by transaction type
and by counter party.


Trading for speculative purposes is prohibited. All derivative transactions are subject to approval by management before execution.


Foreign currency risk


As at 31 December the Company and its subsidiaries had outstanding foreign currency assets and liabilities after cross-currency and
interest rate swaps and forward foreign exchange contracts as follows :


                                                                                           Consolidated
                                                                                 2002                                2001
                                                                             Currency              Baht          Currency               Baht
                                                                               Million           Million           Million            Million
                         Assets
                                       US Dollars                                20.50            883.28             15.59            688.87
                                       Australian Dollars                         0.36              8.74              0.21               4.77
                                       Pounds Sterling                            0.03              1.99              0.21             13.73
                                                                                                  894.01                              707.37
                         Liabilities
                                       US Dollars                                37.68          1,631.78             57.67          2,558.01
                                       Australian Dollars                            -                    -           0.13               2.94
                                       Hong Kong Dollars                             -                    -           0.41               2.33
                                                                                                1,631.78                            2,563.28



Foreign currency assets represent US dollars cash in hand and deposits with foreign and local banks for the future payments of foreign
currency liabilities, trade accounts receivable and accrued income. Foreign currency liabilities represent trade accounts payable and
forward contracts payable.


Cross currency and interest rate swaps


The Group enters into cross-currency and interest rate swaps ranging from approximately 3 years. As of 31 December 2001 the fixed
exchange rates is 44.36 Baht per US$ and fixed interest rate is 7.65% per annum.


The remaining receivables of the outstanding cross-currency and interest rate swap contracts at 31 December were as follows:


                                                                                                2002                                   2001
                                                                                             Baht’000                               Baht’000


                                        US$ 35.85 million in 2001                                     -                            1,400,000




                                                                                                                                          69
             Notes to the Consolidated and Company Financial Statements
                                                                           for the years ended 31 December 2002 and 2001


Forward foreign exchange contracts


Forward foreign exchange contracts are entered into to manage exposure to fluctuations in foreign currency exchange rates related to
short-term and long-term borrowings in US Dollar currency.


At 31 December 2002 the settlement dates on open forward contracts were within ranged within of 2 years. (2001: 1 month - 6 months) The
local currency amounts to be received and contractual exchange rates of the outstanding contracts were as follows:


                                                                                           Consolidated/Company
                                                                                 2002                                2001
                                                                            US$ ’ 000        Baht ’000         US$ ’ 000         Baht ’000


                                   Current                                           -                -             44,000       1,943,902
                                   Non – current                              156,100        6,752,647                   -                -
                                   Total                                      156,100        6,752,647              44,000       1,943,902



Net fair values


The net fair values of the Company’s deriviative financial instruments at the balance sheet date were as follows:


                                                                                 Consolidated                           Company
                                                                                2002              2001               2002            2001
                                                                            Baht ’000        Baht ’000         Baht ’000         Baht ’000
                  Favourable forward foreign exchange contracts                49,268                 -             49,268               -
                  Unfavourable cross currency and interest rate swap
                   contracts                                                        -         (196,077)                  -       (196,077)
                  Unfavourable forward foreign exchange contracts                   -           (3,347)                  -         (3,347)
                  Unfavourable option contracts                                51,272                 -             51,272               -
                                                                               51,272         (199,424)             51,272       (199,424)



The net fair values of cross-currency and interest rate swaps, foreign currency forward contracts and option contracts have been calculated
based on rates quoted by the Group’s bankers to terminate the contracts at the balance sheet date.

Fair value


The carrying amount of cash and cash equivalents, receivables, accounts payables and short-term borrowings approximates the fair value
due to the short maturities of these instruments.


24.    Contingencies


Bank guarantees and letter of credit


At 31 December, the Group had contingencies with banks whereby the banks issued letters of guarantee in respect of business contracts
and others for the following amounts:




70
            Notes to the Consolidated and Company Financial Statements
                                                                            for the years ended 31 December 2002 and 2001


                                                                                     Consolidated                             Company
                                                              Currency           2002              2001             2002                2001
                                                                                  ‘000              ‘000             ‘000                ‘000
                  Bank guarantees
                  Minimum concession fee to Ministry of
                  Information Communication and Technology         Baht        81,000            70,000           81,000            70,000
                  Satellite space segment leasing of customers     Baht          3,360            3,360             3,360               3,360
                                                                   US$            624             8,250              624                8,250
                                                                   AUD           1,028            1,028             1,028               1,028
                  Satellite space segment leasing with suppliers   Euro             92               92                92                 92
                  ICO Gateway                                      Baht        10,000            10,000                 -                   -
                  Others                                           Baht        13,641            15,014             2,845               4,494


                  Letter of credit                                 US$         10,841                  -          10,841                    -


Import duties for the importation of the telecommunications equipment

C.S. Communications Co., Ltd. (CSC) a subsidiary, was investigated by the Customs Department in relation to the payment of import duties
on the import of telecommunications equipment in 1997. The investigation was completed in March 2002. The outcome of the investigation
had no any material adverse effect on CSC.

Assessment for the withholding tax in India

The Income Tax Authority of India made an assessment against the Company for withholding tax for the period 1 April 1996 - 31 March
1997. However, tax consultant company in India commented that this assessment will have no adverse impact on the Company and a
favourable decision by the Commissioner of Income Tax (Appeals) is expected by the end of February 2003.

25.     Commitments

a)      Concession contracts

The Company is permitted by the Ministry of Transport and Communications, under an agreement dated 11 September 1991 and an
amendment thereto dated 22 March 1992, to operate and administer certain satellite projects and to render transponder services for
domestic and international communications as well as the right to collect, for a thirty year period, service charges from users of the
transponders. These concessions agreement have transfer to Ministry of Information Communication and Technology.

The Company had the monopoly rights to operate and administer satellite projects and to render transponder services for domestic and
international communications from the Ministry of Transport and Communications. The said rights had a period of 8 years and expired on 11
September 2000.

Under the aforesaid agreement, the Company must pay an annual fee to the Ministry of Information Communication and Technology based
on a certain percentage of certain service incomes or at the minimum level specified in the agreement, whichever is higher. In addition, the
Company, according to the aforesaid agreement, must transfer its ownership of all satellites, telemetry, tracking, command and monitoring
stations and other operating equipment to the Ministry of Information Communication and Technology on the dates of completion of
construction and installation.

b)      Assets transfer commitment under telephone network agreement in Cambodia

Cambodia Shinawatra Co., Ltd., a subsidiary in Cambodia, has obtained a concession from the directorate of Posts and Telecommunica-
tions of Cambodia to operate a domestic telephone network under an agreement dated 4 March 1993 and an amendment thereto dated
4 March 1997, for a period of 35 years. Under the agreement Cambodia Shinawatra Co., Ltd. will transfer its ownership of all fixed assets
to the Government of Cambodia on the expiration date of the agreement, in 2028.

c)      Capital commitments

Capital expenditure contracted for at the balance sheet date, but not recognised in the financial statements is as follows:


                                                                                                                                          71
            Notes to the Consolidated and Company Financial Statements
                                                                            for the years ended 31 December 2002 and 2001


                                                                                     Consolidated                         Company
                                                                                 2002            2001             2002              2001
                                                             Currency             ‘000              ‘000           ‘000              ‘000


                               Relating to iPSTAR Project          US$        150,689         122,719          150,689           122,719
                                                                 NOK           10,750               267          10,750               267
                               Relating to GSM 1800 Network        US$          7,771            4,351                -                 -
                               Others                              US$               -               46               -                 -
                                                                   Baht         2,851            4,100                -                 -
                               Total                               US$        158,460         127,116           150,689          122,719
                                                                 NOK           10,750               267          10,750               267
                                                                   Baht         2,851            4,100                -                 -


d)     Shareholder agreement

(“LTC”) is an associated company, which was established under the terms of a Master Agreement dated 8 October 1996 signed by
the Government of the Laos People’s Democratic Republic and Shinawatra Computer and Communications Public Company Limited,
the former name of Shin Corporation Public Company Limited. According to the Master Agreement, LTC has the right to provide
telecommunications services - fixed phone, mobile phone, international facilities, Internet and paging - within the Laos PDR for 25 years
and has 5 years exclusive rights. At the end of the 25th year, Shinawatra Computer and Communications Public Company Limited
will transfer all of its shares in Lao Telecommunications Co., Ltd. to the Government of the Laos PDR, without any charges.
e)       Commitments with related parties

As at 31 December 2002, the Company has provided guarantees relating to borrowings of a subsidiary amounting to Baht 828 million.
(2001: Baht 789 million). In addition, the Company has issued a letter of comfort to banks to provide financial support to Cambodia
Shinawatra Co., Ltd. Under the terms of the letter of comfort, the Company must hold an interests in the subsidiary of not less than 80%
of the share capital until the loans are fully paid.


26.    Segment information

Financial information by business segment

                                                                                                 Consolidated
                                   Year ended                             Transponder         Internet      Telephone             Group
                                   31 December 2002                          Services        Services         Network
                                                                             Baht’000        Baht’000         Baht’000         Baht’000


                                   Revenues                                 3,856,938         466,949          673,101         4,996,988
                                   Allocation costs and expenses           (2,714,541)      (421,032)         (506,323)      (3,641,896)
                                   Segment result                           1,142,397          45,917          166,778         1,355,092
                                   Other income                                                                                 224,239
                                   Unallocated costs and expenses                                                              (103,988)
                                   Earnings before interest and tax                                                            1,475,343
                                   Interest expenses                                                                           (235,153)
                                   Foreign exchange loss                                                                         (7,901)
                                   Share of net result from associate                                                           207,643
                                   Operating profit                                                                            1,439,932
                                   Income tax                                                                                   (31,014)
                                   Minority interest                                                                                1,602
                                   Net profit for the year                                                                     1,410,520


                                   Segment assets                          16,829,138         320,052        2,203,023        19,352213
                                   Associate                                                                                    777,792
                                   Unallocated assets                                                                           177,262
                                   Consolidated total assets                                                                 20,307,267


72
            Notes to the Consolidated and Company Financial Statements
                                                                              for the years ended 31 December 2002 and 2001


Financial information by business segment
                                                                                          Consolidated
                                  Year ended                           Transponder            Internet    Telephone             Group
                                  31 December 2001                         Services          Services       Network
                                                                          Baht ’000          Baht ’000     Baht ’000        Baht ’000


                                  Revenues                                 3,913,543           436,362        467,570        4,817,475
                                  Allocation costs and expenses          (2,284,262)         (435,071)      (319,768)      (3,039,101)
                                  Segment result                           1,629,281             1,291        147,802        1,778,374
                                  Other income                                                                 19,076
                                  Unallocated costs and expenses                                                              (90,430)
                                  Earnings before interest and tax                                                          1,707,020
                                  Interest expenses                                                                         (358,556)
                                  Foreign exchange loss                                                                     (103,305)
                                  Share of net result from associate                                                          324,848
                                  Operating profit                                                                          1,570,007
                                  Income tax                                                                                  (11,805)
                                  Minority interest                                                                              4,946
                                  Net profit for the year                                                                   1,563,148


                                   Segment assets                            12,085,143         256,126      1,438,487      13,779,756
                                   Associate                                                                                   477,237
                                   Unallocated assets                                                                          119,575
                                   Consolidated total assets                                                                14,376,568

Thailand is the home country of the parent company, which is also the main operating company.


The Group is organised into the following business segments:


        •   Services relating to the satellite business and the transponder services’ segment
        •   Sales and services relating to the Internet business
        •   Sales and services relating to the telephone network business in Cambodia


The share of profit from the associate is the Company’s share of profit from Lao Telecommunications Co., Ltd. which operates and provides
services relating to fixed phone, mobile phone, international facilities, Internet and paging services.


Unallocated costs and expenses represent corporate expenses. Segment assets consist primarily of property and equipment, intangible
assets, inventories, receivables and operating cash, and exclude investments.


27.     Related party transactions


The Company is controlled by Shin Corporation Public Company Limited (incorporated in Thailand) which owns 51.53% of the Company’s
shares. Transaction related to companies within Shin Corporation Group are recognised as related party transactions to the Company.
During the year, the Group entered into a number of transactions with related parties, the terms of which were negotiated on an arm’s
length basis in the ordinary course of business and according to normal trade conditions. Consulting and management service fees are
charged on a mutually agreed basis as a percentage of assets. Treasury fees which are included in consulting and management service
fees are charged on a percentage of transaction amounts. Transactions of work in progress between a company and related parties were
carried out based on hourly rates plus reimbursement of actual expenses.


The following material transactions were carried out with related parties:




                                                                                                                                      73
     Notes to the Consolidated and Company Financial Statements
                                                   for the years ended 31 December 2002 and 2001


                a)      Revenues
                                                          Consolidated                   Company
                                                       2002               2001        2002             2001
                                                    Baht’000        Baht’000      Baht’000         Baht’000
                Sales and services income:


                The parent company                     1,806               693            -                -
                Subsidiaries                               -                  -     88,007           69,025
                Joint ventures                             -                  -           -          43,502
                Associates                             3,503               533       3,503              533
                Related parties                      128,565         125,832       112,573          115,594


                Other operating income:


                Subsidiaries                               -                  -     31,682           25,398
                Joint ventures                             -                  -           -          25,153
                Related parties                           19                  -         19                 -
                                                     133,893         127,058       235,784          279,205


                b)       Expenses


                                                           Consolidated                   Company
                                                        2002              2001        2002             2001
                                                    Baht ’000      Baht ’000      Baht ’000        Baht ’000
                 Purchase of services and goods:


                 Subsidiaries                               -                 -     41,711           34,013
                 Joint ventures                             -                 -           -          58,816
                 Related parties                     110,952         111,701         8,046            7,818


                 Other expenses:


                 The parent company                   37,351          32,537        36,990           32,537
                 Subsidiaries                               -                 -      1,447              620
                 Joint ventures                             -                 -           -             614
                 Related parties                      16,667          21,299         8,448            6,662


                 Purchase of fixed assets:


                 The parent company                   13,403                  -     13,403                 -
                 Related parties                          91               768          91              566


                 Interest expenses:


                 The parent company                   10,342              9,630           -                -
                 Subsidiaries                               -                 -           -              12


                 Payment for work in progress:


                 Related parties                     239,309         223,187       239,309          223,187
                                                     428,115         399,122       349,445          364,845




74
Notes to the Consolidated and Company Financial Statements
                                                   for the years ended 31 December 2002 and 2001


   c)     Outstanding balances arising from sales/purchases of goods/services/and expenses



                                                          Consolidated                    Company
                                                        2002           2001           2002         2001
                                                     Baht’000       Baht’000       Baht’000     Baht’000
   Trade accounts receivable


   The parent company                                     118             61              -             -
   Subsidiaries                                             -              -         11,457           994
   Associates                                              68            109             68           109
   Related parties                                      2,370          1,157              -             -
   Total trade accounts receivable                      2,556          1,327         11,525         1,103


   Amounts due from related parties


   Subsidiaries                                             -              -          1,149        12,202
   Associates                                              41            192             41           192
   Related parties                                          5             53              5            54
   Total amounts due from related parties                  46            245          1,195        12,448

   Interest receivable


   Subsidiaries                                              -              -         2,574         1,163


   Accrued income


   Subsidiaries                                             -              -         14,069           807
   Associates                                               9              -              9             -
   Related parties                                     13,313         13,420         13,313        13,420
   Total accrued income                                13,322         13,420         27,391        14,227



                                                          Consolidated                    Company
                                                        2002           2001           2002         2001
                                                     Baht’000       Baht’000       Baht’000     Baht’000
   Trade accounts payable
   The parent company                                   3,443          3,553          3,396         3,374
   Subsidiaries                                             -              -         13,653        34,341
   Related parties                                     15,367         11,519          1,558           883
   Total trade accounts payable                        18,810         15,072         18,607        38,598


   Amounts due to related parties
   The parent company                                     805             12                 -          -


   Accrued expenses
   The parent company                                  22,673          3,660         20,297         1,410
   Subsidiaries                                             -              -         15,885         6,223
     Related parties                                    7,286          3,466          4,632           458
   Total accrued expenses                              29,959          7,126         40,814         8,091


   Advance from related parties
   Subsidiaries                                              -              -                -      8,686




                                                                                                      75
     Notes to the Consolidated and Company Financial Statements
                                                         for the years ended 31 December 2002 and 2001


                d)      Short-term loans and advances to related parties


                                                               Consolidated                         Company
                                                            2002            2001                2002          2001
                                                        Baht ’000      Baht ’000            Baht ’000     Baht ’000
                Short-term loans to related parties
                  Subsidiaries                                  -                   -          28,772            28,772
                  Associates                               48,449                   -               -                 -
                Advances to related parties
                  Subsidiaries                                    -                 -          11,612            11,905
                Total short-term loans and
                advances to related parties                48,449                   -          40,384            40,677


                The movements of short-term loans and advances to related parties can be analysed as follows:



                                                                                        Consolidated           Company
                                                                                           Baht ’000           Baht ’000
                                  For the year ended 31 December 2002
                                  Opening balance                                                    -            40,677
                                  Loans during the year (Note 19)                             145,000                  -
                                  Repayment of loans during the year                          (10,000)
                                  Conversion of loan to investment                            (87,767)                 -
                                  Realised loss on exchange                                      (545)                 -
                                  Unrealised loss on exchange                                    (929)                 -
                                  Foreign Currency translation adjustment                        2,690             (293)
                                  Closing balance                                               48,449            40,384


                The loans to subsidiaries bear interest at the rate of 4.5-5.0% per annum. The term of repayment is at
                call. In addition, according to the loan agreement from last year, loan to associate is non-bear interest.
                The term of repayment is at call.


                e)      Long-term loans from the parent company

                                                              Consolidated                         Company
                                                            2002           2001                 2002         2001
                                                        Baht ’000      Baht ’000            Baht ’000    Baht ’000


                Current                                     71,423          178,508                   -                -
                Non-current                                 71,415                -                   -                -
                Total long-term loans from
                   the parent company                     142,838           178,508                   -                -

                The movements of long-term loans from the parent company can be analysed as follows:


                                                                                        Consolidated          Company
                                                                                           Baht ’000          Baht ’000
                For the year ended 31 December 2002
                Opening balance                                                               178,508                      -
                Repayment of loans                                                            (35,730)                     -
                Unrealised loss on exchange                                                         60                     -
                Closing balance                                                               142,838                      -




76
            Notes to the Consolidated and Company Financial Statements
                                                                          for the years ended 31 December 2002 and 2001


e)     Long-term loans from the parent company


The loans from Shin Corporation Public Company Limited bear interest at the rate of 6.5% per annum (2001: 5% per annum). The terms
of repayment is semi-annually repayment with 5 consecutive installments. (2001: The terms of repayment was at call).The first
installment was due in September 2002. The loans were made directly to a subsidiary.


e)     f)      Warrants granted to directors (Note 17)


g)     Directors’ remuneration


In 2002, the remunerations of the directors was Baht 4.6 million (2001: Baht 1.8 million). Directors’ remuneration represents salaries,
meetings fees and gratuities as approved by the shareholders of the Group and the Company at their Annual General Meeting.


h)     Commitments with related parties( See Note 25 e)


28.     Promotion privileges


The Company was granted promotion privileges under the Investment Promotion Act (B.E. 2520) by the Board of Investment (BOI) in
respect of earnings derived from rendering telecommunication services to customers outside Thailand. Promotion privileges include
exemption from corporate income tax for a period of 8 years commencing from March 1997, when its revenue was first earned from
the promoted business. The Company must comply with certain terms and conditions required for the promoted industries.


In 2002, total revenue derived from BOI-promoted activities amounted to Baht 1,238 million (2001: Baht 1,273 million).


29.    The merger of businesses of (“CSC”) and Loxley Information Services Co., Ltd.


On 16 October 2002, CSC and Shin Broadband Internet (Thailand) Co., Ltd. (“SBI”) signed a share purchase agreement and a
shareholders’ agreement with Point Asia Dot Com Co., Ltd. (the parent company of Loxley Information Services Co., Ltd.) and other
related shareholders in order to merge the internet businesses of CSC and Loxley Information Services Co., Ltd. The agreement is in
the process of being implemented.


30.    Subsequent events
       Cambodia incident


On 29 January 2003, Cambodia Shinawatra Co.,ltd. experienced the effects of the disturbances in Phnom Penh, Cambodia, Its building
was damaged and some personal computers were looted however, the operation has continued as normal as there was no damage to
any control centre or transmission equipment. It is now claiming damages from the Cambodian government. These financial statements
accordingly do not take account of any costs or damages claims related to the Cambodia incident.


       Satellite Thaicom 3 incident


On 7 February 2003, the Thaicom-3 satellite of the Company experienced an anomaly in its power supply system causing temporary
outages for some of its customers. At present, the Company is in the process of checking the background to the failure and to restoring
normal service. At the date of these financial statements, the Company is not able to determine the financial impact of this incident on
the consolidated and company financial results and financial positions.




                                                                                                                                    77
                                                                   Subsidiaries and Associated Companies
Company                                                 Type of Business                     Registered           Par     Value      Paid Up Capital         % of Investment
                                                                                       Capital (millions of   (Baht, or as stated)   (millions of Baht, or
                                                                                                   shares)                                     as stated)


Shin Satellite Plc.                                     Operator of satellite lease                   550                     10                  4,375                    -
Head Office : 414 Phaholyothin Rd.                      transponders to public
Samsennai, Phayathai, Bangkok 10400                     and private telecoms and
Tel : (662) 299-5000                                    broadcasters
Fax : (662) 299-5224
Branch 1 : 41/103 Rattanathibet Rd., Nonthaburi 11000
Tel : (662) 591-0736
Fax : (662) 591-0705
Homepage : www.thaicom.net
C.S. Loxinfo Co., Ltd.                                  Providing internet &                            97                    10                    970                99%*
Head Office : 414 Phaholyothin Rd.                      satellite uplink-downlink
Samsennai Phayathai, Bangkok 10400                      services
Tel : (662) 299-5000
Fax : (662)299-5224
Branch 1 : 50 Moo 1 Bho Ngeng
Ladlumkaew Pathumthani
Tel : (662) 976-3007-17
Fax : (662) 976-3001
Homepage : www.cscoms.com
C.S. Satellite Phone Co., Ltd. **                       Providing mobile personal                       50                    10                    125                 80%
Head Office : 414 Phaholyothin Rd.                      communications services
Samsennai, Phayathai, Bangkok 10400                     by satellite
Tel : (662) 299-5000
Fax : (662)299-5224
Shin Broadband Internet (Thailand) Co., Ltd. Providing internet, mobile                          94.7285                      10               947.285                 100%
41/103 Rattanathibet Rd., Nonthaburi 11000              satellite phone, and
Tel : (662) 591-0736                                    related telecommunica-
Fax : (662) 591-0705                                    tion services
www.shinbroadband.com
Shenington Investments Pte Ltd.                         Holding Company                                 15               1 SGD          14.66 MSGD                     100%
1 Temasak Ave., #27-01
Millenia Tower, Singapore 039192
Tel : (65) 338-1888
Fax : (65) 337-5100
Lao Telecommunications Co., Ltd.***                     Providing fixed phone,                      96.84                1 USD          96.84 MUSD                      49%
Lane Xang Avenue, No. 100, Vientiane,                   mobile phone, interna-
Lao People's Democratic Republic                        tional facilities, internet,
Tel : (007) 856-2121-6465                               and paging service in Lao
Fax : (007) 856-2121-4486
www.laotel.com
Cambodia Shinawatra Ltd.***                             Providing fixed phone and                       17               1 USD              17 MUSD                    100%
66 Mao Tse Toung Boulevard                              mobile phone in
Phnom Penh, Kingdom of Cambodia                         Cambodia
Tel : (855)233-60001-5
Fax : (855) 11-90-0999
www.camshin.com
IPSTAR Co.,Ltd.                                         Operator of IPSTAR                               2           0.01 USD             0.02 MUSD                    100%
Trident Chambers, P.O. Box 146,                         satellite, leases tran-
Road Town, Tortola, British Virgin Islands              sponders

As at December 31, 2002
Remarks 1. C.S. Loxinfo Co.Ltd. was 99.49% held by Shin Broadband Internet (Thailand) Co. Ltd. As of March 6, 2003, this was reduced to 50.02%.
          2. C.S. Satellite Phone Co.Ltd. is 80% held by C.S. Loxinfo Co.,Ltd
          3. Lao Telecommunications Co., Ltd. and Cambodia Shinawatra Ltd. are held by Shenington Investments Pte Ltd.


78
                                                                             Glossary

Analog
Images or sounds are converted to electrical signals (like the action of a microphone).
Bandwidth
How fast data flows on a given transmission path. The width of the range of frequencies that an elec-
tronic signal occupies. Any digital or analog signal has a bandwidth. Bandwidth is measured in Megabits
per second.
Broadband
In general, this means any speed that will send and receive video and sound smoothly.
C- and Ku-bands
C and Ku-bands are ranges of frequencies used for communication via satellite. The differences are
summarized here:
                                     C-band                          Ku-band
Frequency Range                      4-8 GHz                         12-18 GHz
Coverage                             Large footprint                 Small footprint
Dish Size                            Large dish (expensive)          Small dish (inexpensive)
Rain Interference                    Not much rain fade              More rain fade
Power                                Standard power                  Higher power
Availability                         Most Transponders full          Still many Transponders available
Price                                Low Transponder cost            High Transponder cost (but
                                                                     dropping to C levels)
Cable Modem
A modem attached to a cable of the type used by cable TV companies. Can achieve up to 4 Mbps.
Everyone in the neighborhood shares the bandwidth, therefore, the more people using the Internet, the
slower it becomes.
Compression
A way of squeezing more data through a transponder.
Digital
Data converted to numbers 0 and 1.
Digital Broadcasting
Converting TV pictures to numbers when transmitting and re-converting them to pictures when they are
received.
Digital Direct-to-Home (DTH)
Digital signals transmitted by Thaicom to a small satellite dish attached to a customer’s television
Digital Subscriber Line (DSL)
A technology using standard copper telephone lines to provide high-speed Internet access. Speeds
vary between 144 Kbps to 9 Mbps. Distance from exchanges is a factor that affects cost and availability.
Downlink
A satellite to ground link.
Digital Video Broadcast (DVB)
A technical standard for digital broadcasting.
Encryption
The process of encoding, as in the scrambling of TV signals.
Fiber Optics
A glass cable used to send data as light. Generally used for international links due to high rollout costs.
Free-to-Air
Television channels that do not charge the viewer. Money comes from advertisers.
Frequency
The number of times that an alternating current goes through its complete cycle in one second of time.
Geostationary Earth Orbit (GEO)
Satellites placed over the equator appear continuously over a certain spot at 36,000 km from the surface.
It takes only three or four satellites to cover the Earth’s surface.
Hertz (Hz)
The number of cycles per second of a sound wave or electromagnetic wave. Gigahertz (GHz): One
billion Hertz, or cycles per second. Megahertz (MHz): One million Hertz, or cycles per second.



                                                                                                       79
     Integrated Services Digital Network (ISDN)
     Digital, high-bandwidth lines that can deliver data over the Internet. Data travels at 64-128K bits per
     second.
     Local Multipoint Distribution Service (LMDS)
     A wireless broadband point-to-multipoint wireless technology for Internet and data services.
     Low Earth Orbit (LEO)
     Satellites in low Earth orbit are about 800-1,600 kilometers above the Earth’s surface. They can circle
     the Earth in about an hour and a half but require at least 32 satellites to cover the Earth.
     Medium Earth Orbit (MEO)
     A medium altitude orbit, approximately 10,000-16,000 km, requiring 10-20 satellites to cover the Earth.
     Microwave
     Line-of sight, point-to-point transmission of high-frequency radio signals (about 1 GHz and above).
     Multipoint microwave distribution system (MMDS)
     Another wireless technology, similar to LMDS (see above), but operating at lower frequencies.
     Point-to-Multipoint
     A Thaicom satellite circuit connecting one place to many places.
     Point-to-Point
     A single Thaicom circuit connecting two locations.
     Quarter TV
     Broadcasts of approximately one quarter of the normal quality. Most often used by customers for
     in-house training course.
     Radio Frequency (RF)
     Frequencies from 100 kHz to 20 GHz.
     Teleport
     A teleport (telecommunications port) is an earth station providing a comprehensive range of broadcast-
     ing and telecommunications services.
     Terminal
     The end point of a network. In the iPSTAR project it refers to the satellite modem (indoor equipment) and
     the satellite dish, including cables (outdoor unit).
     Transponder
     In a Thaicom satellite, a device that receives a earth-based signal, shifts the signal’s frequency,
     amplifies the signal, and retransmits the signal to receivers on the earth. It can be shaped to cover
     a particular area. Several transponders aimed at a target area are called a beam, hence “India Beam”
     for the group of transponders that cover India.
     Turnaround Service
     A teleport takes a signal from one satellite and “turns it around” (re-sends it) to go to another satellite.
     Uplinking
     Transmitting a signal up to a Thaicom satellite.
     Very Small Aperture Terminal (VSAT)
     VSAT refers to receive/transmit terminals installed at dispersed sites connecting to a central hub via
     satellite using small diameter antenna dishes (0.6 to 3.8 meter).




80
                             Investor Information:



                                            Investor Relations
                           Investors should contact the Investor
                                Relations Department to request
                           information about Shin Satellite or its
                         subsidiaries and associate companies:

                                 Investor Relations Department
                                               Shin Satellite Plc.
                                     41/103 Rattanathibet Road
                                               Nonthaburi 11000
                         Tel: +66 (0)2 591 0736-49 Ext. 5072-3
                                        Fax: +66 (0)2 591 0724
                                  E-mail: richardw@thaicom.net
                     Online information: http://www.thaicom.net

Shin Satellite is listed on the Stock Exchange of Thailand (SET)
                            SET ticker:                     SATTEL
                            Reuters:                   SATTEL.BK
                            Bloomberg:                  SATTEL.TB

                                                Foreign limit : 40%
                                                    Free float : 49%
                                 Fiscal year ends December 31
                        The Company and its subsidiaries have
                         a policy to issue a dividend of not less
                       than 40% and not more than 60% of net
                               profit after tax if the funds are not
                                required elsewhere or when the
                             payment would have no significant
                        effect on the running of the company or
                                                     its subsidiaries.

				
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