SHIN SATELLITE PUBLIC COMPANY LIMITED. CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS s. 31 December 2000 and 1999

SHIN SATELLITE PUBLIC COMPANY LIMITED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS s 31 December 2000 and 1999

AUDITOR S REPORT To the Shareholders of Shin Satellite Public Limited I have audited the accompanying consolidated and company balance sheets of Shin Satellite Public Limited ( the Group ) as at 31 December 2000 and 1999, and the related consolidated and company statements of income, changes in shareholders equity and cash flows for the years then ended. These financial statements are the responsibility of the s management. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits 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 of Shin Satellite Public Limited as at 31 December 2000 and 1999, and the consolidated and company results of operations, and cash flows for the years then ended in accordance with generally accepted accounting principles. As described in note 3 to the consolidated and company financial statements, the Group has reviewed its accounting policies and as a result, the Group has adopted the new accounting standards relating to joint venture and intangible assets effective from the first quarter of 2000. Adjustments have been made retroactively in respect of the above changes. In particular the deferred charges of Baht 668.2 million being the cost of the right to operate Global Mobile Personal Communication services by satellite that will be provided by ICO Global Communications (Holdings) Limited ( ICO ) has been written off. I have audited the adjustments that they are appropriately made. NANGNOI CHAROENTHAVEESUB Certified Public Accountant (Thailand) No. 3044 PricewaterhouseCoopers ABAS Limited Bangkok 16 February 2001 1

Shin Satellite Public Limited Balance Sheets As at 31 December 2000 and 1999 Notes Restated Restated Baht Baht Baht Baht ASSETS Current Assets Cash on hand and at banks 4 643,406,037 318,767,945 542,168,762 290,262,372 Short-term investments 5 96,165,678 33,899,792 801,296 28,797,312 Trade accounts receivable, net 6 539,529,575 419,697,322 465,533,702 372,949,575 Trade accounts receivable from related parties 31 28,531,855 5,814,906 47,748,071 15,439,783 Accrued income 31 99,460,061 69,956,900 110,753,003 59,545,622 Inventories, net 7 26,543,195 20,656,216 14,920,158 1,923,982 Short-term loans and advances to related parties 31-357,833,522 466,958,010 730,185,892 Current portion of foreign currency swap contracts receivable, net 8 73,600,352 69,163,950 73,600,352 69,163,950 Other current assets 9 253,777,903 201,271,297 213,570,662 175,665,776 Total Current Assets 1,761,014,656 1,497,061,850 1,936,054,016 1,743,934,264 Non-Current Assets Investments in subsidiaries and associates 10 237,980,978 89,357,359 334,904,955 72,868,144 Long-term investments 12 18,900,000 18,900,000 18,900,000 18,900,000 Property and equipment, net 13 2,707,076,201 997,844,214 2,005,909,554 493,667,748 Cost of satellite projects under the concession agreement, net 14 6,779,649,353 7,485,071,004 6,779,649,353 7,485,071,004 Deferred charges, net 14 141,282,775 119,787,275 137,078,474 116,852,543 Foreign currency swap contracts receivable, net 8-144,548,667-144,548,667 Intangible assets, net 14 171,157,196 44,036,392 - - Other assets, net 15 14,562,338 5,802,557 1,100,283 755,512 Total Non-Current Assets 10,070,608,841 8,905,347,468 9,277,542,619 8,332,663,618 Total Assets 11,831,623,497 10,402,409,318 11,213,596,635 10,076,597,882 Director Director Date The notes to the consolidated and company financial statements on pages 8 to 44 are an integral part of these financial statements. 2

Shin Satellite Public Limited Balance Sheets As at 31 December 2000 and 1999 Notes Restated Restated Baht Baht Baht Baht LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities Loans from banks 16 1,157,585,743 274,527,344 1,007,475,444 274,527,344 Trade accounts payable 719,565,052 106,151,247 630,942,224 32,818,075 Trade accounts payable to related parties 31 24,375,764 16,103,474 40,160,805 17,883,938 Accrued expenses 31 299,964,864 259,623,506 226,093,006 216,807,877 Current portion of long-term borrowings 16 601,432,497 527,073,856 186,263,667 376,311,789 Current portion of long-term bonds 16 1,500,000,000 569,450,000 1,500,000,000 569,450,000 Short-term loans from parent company 31 184,466,806 179,115,734 - - Current portion of foreign currency swap contracts payable, net 8 157,373,624-157,373,624 - Current portion of advances from customers 234,289,364 21,320,591 229,849,552 21,320,591 Other current liabilities 17 153,166,121 122,157,259 90,298,145 82,304,781 Total Current Liabilities 5,032,219,835 2,075,523,011 4,068,456,467 1,591,424,395 Non-Current Liabilities Foreign currency swap contracts payable, net 8 157,373,624-157,373,624 - Long-term borrowings 16 680,310,028 1,251,301,825 397,106,444 883,837,658 Long-term bonds 16 1,500,000,000 3,000,000,000 1,500,000,000 3,000,000,000 Negative goodwill, net 18 3,004,424 3,805,604 - - Provision for liabilities 11-521,731,695 657,547,754 1,064,743,351 Advances from customer 112,928,283-112,928,283 - Deposits from customers 107,788,398 51,082,827 106,042,790 50,855,570 Total Non-Current Liabilities 2,561,404,757 4,827,921,951 2,930,998,895 4,999,436,579 Total Liabilities 7,593,624,592 6,903,444,962 6,999,455,362 6,590,860,974 Shareholders Equity Share capital Authorized share capital 19 5,500,000,000 5,500,000,000 5,500,000,000 5,500,000,000 Issued and paid-up share capital 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 Retained earnings (Deficit) Appropriated Legal reserve 20 27,577,545 27,577,545 27,577,545 27,577,545 Deficit (2,399,222,650) (3,109,760,439) (2,399,222,650) (3,109,760,439) Minority interests 23,857,632 13,227,448 - - Currency translation differences 20,786,378 2,919,802 20,786,378 2,919,802 Total Shareholders Equity 4,237,998,905 3,498,964,356 4,214,141,273 3,485,736,908 Total Liabilities and Shareholders Equity 11,831,623,497 10,402,409,318 11,213,596,635 10,076,597,882 The notes to the consolidated and company financial statements on pages 8 to 44 are an integral part of these financial statements. 3

Shin Satellite Public Limited Statements of Income Notes Restated Restated Baht Baht Baht Baht REVENUES 31 Sales and services income 4,016,499,038 2,909,917,832 3,416,583,344 2,773,919,309 Net results from subsidiaries, associates and joint ventures 181,603,638 (50,054,211) 96,754,788 (144,773,309) Other operating income 21 35,797,810 90,328,185 84,544,426 117,400,688 Total revenues 4,233,900,486 2,950,191,806 3,597,882,558 2,746,546,688 EXPENSES 31 Cost of sales and services 2,070,673,721 1,557,647,426 1,719,668,568 1,477,604,988 Selling and administrative expenses 541,555,973 361,767,306 325,746,466 318,549,481 Directors remuneration 1,538,233 1,311,240 800,000 340,000 Foreign exchange loss 418,272,267 181,390,869 432,623,839 150,093,827 Interest expenses 22 491,195,949 584,799,525 408,505,896 536,779,630 Total expense 3,523,236,143 2,686,916,366 2,887,344,769 2,483,367,926 Profit before tax and minority interest 710,664,343 263,275,440 710,537,789 263,178,762 Income tax (2,205,450) - - - Profit before minority interests 708,458,893 263,275,440 710,537,789 263,178,762 Minority interests 2,078,896 (96,678) - - Net profit for the year 710,537,789 263,178,762 710,537,789 263,178,762 Basic earnings per share (Baht per share) 24 Profit before prior year adjustments 1.62 0.75 1.62 0.75 Prior year adjustments 3b,c - (0.04) - (0.04) Net profit for the year 1.62 0.71 1.62 0.71 The notes to the consolidated and company financial statements on pages 8 to 44 are an integral part of these financial statements. 4

Shin Satellite Public Limited Statements of Changes in Shareholders Equity Notes Restated Restated Baht Baht Baht Baht Share Capital 19 Beginning balance 4,375,000,000 3,500,000,000 4,375,000,000 3,500,000,000 Increase during the year - 875,000,000-875,000,000 Ending balance 4,375,000,000 4,375,000,000 4,375,000,000 4,375,000,000 Premium on Share Capital 19 Beginning balance 2,190,000,000 1,315,000,000 2,190,000,000 1,315,000,000 Increase during the year - 875,000,000-875,000,000 Ending balance 2,190,000,000 2,190,000,000 2,190,000,000 2,190,000,000 Retained Earnings (Deficit) Appropriated retained earnings Legal reserve 20 Beginning balance 27,577,545 27,577,545 27,577,545 27,577,545 Increase during the year - - - - Ending balance 27,577,545 27,577,545 27,577,545 27,577,545 Deficit Beginning balance - as previously reported (2,339,855,461) (2,433,529,212) (2,339,855,461) (2,433,529,212) - prior year adjustments 3b (769,904,978) (939,409,989) (769,904,978) (939,409,989) Beginning balance as restated (3,109,760,439) (3,372,939,201) (3,109,760,439) (3,372,939,201) - net profit for the year 710,537,789 279,803,436 710,537,789 279,803,436 - prior year adjustments 3b,c - (16,624,674) - (16,624,674) Deficit at the end of the year (2,399,222,650) (3,109,760,439) (2,399,222,650) (3,109,760,439) Minority Interests Beginning balance - as previously reported 28,857,212 16,626,444 - - - prior year adjustments (15,629,764) (3,495,674) - - Increase in interest in joint venture 12,709,080 - - - Decrease during the year - for the year (2,078,896) 249,676 - - - prior year adjustments - (152,998) - - Ending balance 23,857,632 13,227,448 - - Currency translation differences Beginning balance 2,919,802-2,919,802 - Increase during the year 17,866,576 2,919,802 17,866,576 2,919,802 Ending balance 20,786,378 2,919,802 20,786,378 2,919,802 Total Shareholders Equity 4,237,998,905 3,498,964,356 4,214,141,273 3,485,736,908 The notes to the consolidated and company financial statements on pages 8 to 44 are an integral part of these financial statements. 5

Shin Satellite Public Limited Statements of Cash Flows Notes Restated Restated Baht Baht Baht Baht Cash flows from operating activities 25 2,251,331,289 1,064,673,345 2,171,520,865 1,175,213,725 Cash flows from investing activities Investment in subsidiaries - - (100,871,400) - Acquisition of subsidiaries, net of cash acquired - 50,888,007 - (50,000,000) Investment in joint ventures - - (489,600,000) - Cash acquired from increase in interest in joint ventures 9,718,454 - - - Short-term investments (32,982) - - - Purchases of long-term investments - (18,900,000) - (18,900,000) Loans to joint ventures, associates and subsidiaries - (288,491,113) (239,732,738) (588,693,418) Receipt of repayment of loans to joint ventures - - 502,960,620 - Purchases of property and equipment (1,169,967,939) (182,603,339) (1,026,696,286) (156,704,152) Payments for intangible assets (105,504,102) (21,656,271) - - Payments for cost of satellite (6,464,782) (54,629,985) (6,464,782) (54,629,985) Payments for deferred charges (58,736,697) (30,995,566) (58,736,698) (30,995,566) Dividends received from subsidiary and associate 40,881,600-35,860,356 - Proceeds from sales of property and equipment and intangible assets 2,252,571 793,464 1,459,445 792,954 Net cash payments from investing activities (1,287,853,877) (545,594,803) (1,381,821,483) (899,130,167) Cash flows from financing activities Proceeds from loan from parent company - 460,956,085-460,956,085 Proceeds from short-term loans 1,398,801,793-1,188,691,494 - Proceeds from long-term loans 483,734,371 897,862,600 397,106,444 897,862,600 Proceeds from long-term bonds - 3,000,000,000-3,000,000,000 Issue of ordinary shares - 1,750,000,000-1,750,000,000 Payments for loan from parent company - (460,956,085) - (460,956,085) Payments for long-term bonds (569,450,000) (430,550,000) (569,450,000) (430,550,000) Payments for short-term loans from banks (516,535,584) (249,292,000) (456,535,584) (249,292,000) Payments for long-term borrowings (1,373,527,237) (5,749,282,633) (1,121,069,085) (5,503,759,763) Net cash payments from financing activities (576,976,657) (781,262,033) (561,256,731) (535,739,163) The notes to the consolidated and company financial statements on pages 8 to 44 are an integral part of these financial statements. 6

Shin Satellite Public Limited Statements of Cash Flows Restated Restated Baht Baht Baht Baht Net (decrease)/increase in cash on hand and at banks 386,500,755 (262,183,491) 228,442,651 (259,655,605) Cash and cash equivalents, beginning balance 347,145,257 611,870,884 318,639,684 580,837,425 Effects of exchange rate changes (4,532,277) (2,542,136) (4,532,277) (2,542,136) Cash and cash equivalents, ending balance 729,113,735 347,145,257 542,550,058 318,639,684 Supplementary information for cash flows : Cash and cash equivalents included in cash flows statements comprise: Baht 000 Baht 000 Baht 000 Baht 000 Cash on hand 1,678 2,060 276 542 Deposit held at call with banks 641,728 316,708 541,893 289,720 Time deposits with banks 5,776 28,377 381 28,377 Bills of exchange 79,932 - - - 729,114 347,145 542,550 318,639 Interest paid 529,665 698,800 414,482 618,472 Tax paid - - - - The notes to the consolidated and company financial statements on pages 8 to 44 are an integral part of these financial statements. 7

Shin Satellite Public Limited Notes to the and Financial Statements 1 General Information Shin Satellite Public Limited ( the ) is a public limited company and is incorporated and domiciled in Thailand. On August 2, 1999, the registered its new official company name, Shin Satellite Public Limited with the Commerce Ministry, formerly named Shinawatra Satellite Public Limited. The address of its registered office is: 414 Phaholyotin Road, Samsen Nai, Phayathai, Bangkok 10400 The is listed on the Stock Exchange of Thailand. Its principal business, its subsidiaries and joint ventures (collectively called the Group ) are given below. The has obtained concessions from the Ministry of Transport and Communications for a period of 30 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. The s subsidiaries and associates - Shenington Investments Pte Ltd., Cambodia Shinawatra Co., Ltd., Shin Broadband Internet (Thailand) Co., Ltd. ipstar Co., Ltd. and Lao Telecommunications Co.,Ltd.,- are primarily involved in Internet data center services for domestic and international communications and telephone networks services in Laos and Cambodia. The s joint ventures - C.S. Communications Co., Ltd. and C.S. Satellite Phone Co., Ltd. - are primarily involved in Internet services and satellite uplink-downlink services. The Group has operations in 4 countries, which are Thailand, Singapore, Cambodia and Laos PDR and employs over 573 people. 2 Significant 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 are prepared in accordance with and comply with generally accepted accounting principles in Thailand. The consolidated and company financial statements are prepared under the historical cost convention. The Group has adopted International Accounting Standard # 38 Intangible Assets, effective 1 January 2000: The comparatives have adjusted or extended to take into account to conform to changes in presentation in the current year. 8

Shin Satellite Public Limited Notes to the and Financial Statements 2.2 Consolidation 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, 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 of disposal. All intercompany 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 Group. Separate disclosure is made for minority interests in the consolidated balance sheets and consolidated income statements. The is the guarantor of all loans of its joint venture, C.S. Communications Limited. The, therefore, makes provision for the potential amount that may not be recoverable in respect of the accumulated losses in this joint venture. A listing of the Group s principal subsidiaries is set out in Note 10. The financial effect of the acquisition of subsidiaries is shown in Note 30. 2.3 Investments in subsidiaries Investments in subsidiary undertakings are accounted for in the company financial statements by the equity method of accounting. These are undertakings in which the has an interest of more than one half of the voting rights of the entity. Equity accounting involves recognizing, in the income statement, the s share of a subsidiary s profit or loss for the year. The s interest in the subsidiary is carried in the balance sheet at an amount that reflects its share of the net assets of the subsidiary and includes goodwill on the acquisition. Where a subsidiary undertaking is acquired and held exclusively with a view to be subsequently disposed of in the near future; or a subsidiary undertaking operates under severe long-term restrictions that significantly impair its ability to transfer funds to the, the interest in that subsidiary s undertaking is accounted for in the consolidated and company financial statements in accordance with the accounting policy on investments as shown in Note 2.10. 2.4 Investments in associates Investments in associated undertakings are accounted for in the consolidated and company financial statements by 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 recognizing, in the income statement, the Group s share of an associate s 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 the acquisition. Where an associated undertaking is acquired and held exclusively with a view to be subsequently disposed of in the near future; or an associated undertaking operates under severe long-term restrictions that significantly impair its ability to transfer funds to the Group, the interest in that associated undertaking is accounted for in accordance with the accounting policy on investments as shown in Note 2.10. A listing of the Group s principal associated undertakings is shown in Note 10. 9

Shin Satellite Public Limited Notes to the and Financial Statements 2.5 Joint venture The Group s interest in a jointly controlled entity is accounted for by proportionate consolidation. Under this method the Group includes its share of the joint venture s individual income and expenses, assets and liabilities in the relevant components of the financial statements. Further details about the joint venture are shown in Note 11. 2.6 Negative goodwill Negative goodwill represents the excess fair value of the Group s share of the net assets of the acquired subsidiary/associate over the cost of acquisition at the date of acquisition. Negative goodwill on acquisitions is reported in the consolidated balance sheet and is amortized using the straight-line method over its estimated useful life. Negative goodwill arising on acquisitions of the Group is amortized over a period of 5 years. 2.7 Foreign currencies Transactions denominated in foreign currencies are translated into Baht at the rates of exchange ruling on the transaction dates. Realized gains and losses on exchange are recognized 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 rates of exchange ruling at that date. Gains and losses on exchange are recognized in the statement of income as incurred. Income statement 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 year end exchange rates ruling on 31 December. Exchange differences arising from the translation of the net investment in foreign subsidiaries are taken to Currency translation differences in shareholders equity. On disposal of the foreign entity, such translation differences are recognised in the income statements as part of the gain or loss on disposal. 2.8 Financial instruments Financial instruments carried on the balance sheet include cash and bank balances, investments, trade receivables, trade creditors and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. The Group and the are also parties to financial instruments that reduce exposure to fluctuations in foreign currency exchange and interest rates. These instruments, which mainly comprise foreign currency forward contracts and interest rate swap agreements, are recongnized in the financial statements on inception. The purpose of these instruments is to reduce risk. Foreign currency forward contracts protect the Group from movements in exchange rates by establishing the rate at which a foreign currency asset and liability will be settled. Forward contract transactions are recorded as forward contracts receivable and forward contracts payable. Premiums or discounts are amortized in the statements of income on the straight-line basis over the contracts period. Interest rate swap agreements protect the Group from fluctuation in floating interest rates. Any differential to be paid or received on an interest rate swap agreement is recognized as a component of interest revenue or expense over the period of the agreement. Gains and losses on early termination of interest rate swaps or on repayment of the borrowings are taken to the income statement. Disclosures about financial instruments to which the Group is a party are provided in Note 26. 10

Shin Satellite Public Limited Notes to the and Financial Statements 2.9 Trade receivables Trade receivables are carried at anticipated realisable value. An estimate is made for doubtful receivables based on a review of all outstanding amounts at year end. Bad debts are written off during the year in which they are identified. 2.10 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. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited 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. 2.11 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. 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. 2.12 Intangible assets Costs of the satellite projects under the concession agreement The costs of satellite projects under the concession agreement represents the cost of all satellites (Thaicom 1, Thaicom 2 and Thaicom 3), telemetry, tracking, command and monitoring stations and other operational 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 amortized 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. Deferred charges Deferred charges principally represent costs of computer software and costs of equipment provided to certain overseas customers in connection with the utilization of transponder services obtained from the. The cost of computer software is amortized over 5 years. The cost of equipment provided to certain overseas customers in connection with the utilization of transponder services obtained from the is amortized over the period of each service agreement. Intangible assets The cost of intangible assets comprises Internet networks, servers, fiber optic networks and other operational equipment which have been transferred to the Communications Authority of Thailand under the concession agreement. The cost of intangible assets is amortized by the straight-line method over the estimated useful lives of these assets, ranging from 5 to 10 years. 11

Shin Satellite Public Limited Notes to the and Financial Statements 2.13 Property and equipment All property and equipment are initially recorded at cost. All other property and equipment are stated at historical cost, less 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 lives as follows: Leasehold land Building and improvement Equipment Furniture and fixtures Office equipment Motor vehicles 30 years 5-10 years 5-10 years 5 years 5 years 5 years 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. Borrowing costs to finance the construction of property and 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, and related taxes. 2.14 Provident fund policy 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. 2.15 Revenue recognition Revenues from rendering transponder services and services related to the satellite business are recognized 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 recognized upon delivery of products and customer acceptance, if any, or performance of services, net of sales taxes and discounts, and after eliminating sales within the Group. Advances from customers will be released to income when services are provided. Interest income is recognized as it accrues unless collectibility is in doubt. 12

Shin Satellite Public Limited Notes to the and Financial Statements 2.16 Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks and short term highly liquid investments with original maturities of three months or less. 3 Prior year adjustments (a) Accounting for Joint Venture TAS 46 With effect from the first quarter of 2000, the Group has adopted the provisions of TAS 46 Joint Ventures in accounting for its interest in C.S. Communications Limited. The effect of this change has been to recognize only the proportionate share of each individual balance sheet and income statement item of the jointly controlled company. Previously C.S.Communications Limited had been consolidated in full and minority interests had been recognized in the income statement and balance sheet. The impact on the consolidated balance sheet as at 31 December 1999 and income statement for the year ended 31 December 1999 has been to reduce the individual line items included from C.S.Communications Limited by 49% to 51% and to eliminate minority interests items. There has been no impact on the s net asset position at 31 December 1999 or the net result for the year ended 31 December 1999. (b) Intangible Assets IAS 38 With effect from the first quarter of 2000, the Group has adopted the provisions of IAS 38 Intangible Assets. As required by the standard, its provisions have been applied retroactively. Previously certain items were recognized as separate assets in the financial statements however under the provisions of IAS 38 these items do not meet the definition of, or recognition criteria for intangible assets. Accordingly these items have now been expensed. These items mainly relate to the right to operate Global Mobile personal communication (ICO project) provided by ICO Global Communications (Holding) Limited. 13

Shin Satellite Public Limited Notes to the and Financial Statements 3 Prior year adjustments (Con t) (b) Intangible Assets IAS 38 (Con t) The effect on the balance sheets of these adjustments has been to reduce the net book value as at 1 January 2000 of the following assets: 1999 1999 Baht'000 Baht'000 Deferred expenses - (decrease) (705,793) - Deficit at 1 January 2000 increase 701,672 702,872 Net loss increase 1,200 - Provision for liabilities - increase - 702,872 Minority interests - (decrease) (2,921) - In the third quarter of 2000, the Group has written off research costs relating to the development of the ipstar project of Baht 67 million, which were previously included in property and equipment. The adjustment has been made retroactively to retained earnings at 1 January 2000. The effects on the balance sheets as at 1 January 2000, income statement and deficit for the year ended 31 December 1999 are as follows: 1999 1999 Baht'000 Baht'000 Property and equipment - (decrease) (67,033) (67,033) Deficit at 1 January 2000 increase 51,608 51,608 Net profit for the year 1999 decrease 15,425 15,425 (c) Other adjustments Furthermore, adjustments have been made to restate the net profit for 1999 from Baht 279.8 million to Baht 278.6 million (excluding the adjustment in Note 3b above relating to the write off of research costs of Baht 15.43 million). These adjustments represent the derecognition of interest capitalized in equity share and pre-operating expenses in the joint venture companies. The comparative figures have been amended to reflect these adjustment in 1999. 14

Shin Satellite Public Limited Notes to the and Financial Statements 4 Cash on hand and at Banks Cash on hand 1,678 2,060 276 542 Deposits held at call with banks 641,728 316,708 541,893 289,720 643,406 318,768 542,169 290,262 The weighted average effective interest rate of deposits held at call with banks was 3.71% per annum (1999: 1.81%) 5 Short-term Investments Time deposits with local and foreign banks 16,235 33,900 801 28,797 Bills of exchange 79,931 - - - 96,166 33,900 801 28,797 The weighted average effective interest rates of time deposits and Bills of exchange were 2.46 % per annum (1999: 1.00 %). At 31 December 2000, Baht 10.42 million of time deposits was pledged as collateral in respect of bank guarantees. 6 Trade Accounts Receivable, net Gross trade accounts receivable 924,039 736,287 671,899 579,315 Less Allowance for doubtful accounts (384,509) (316,590) (206,365) (206,365) Trade accounts receivable, net 539,530 419,697 465,534 372,950 15

Shin Satellite Public Limited Notes to the and Financial Statements 6 Trade Accounts Receivable, net (Con t) Outstanding trade accounts receivable as at 31 December can be analyzed as follows: Not due 196,371 138,835 150,057 135,466 Up to 3 months 222,465 229,105 197,417 191,243 3-6 months 47,642 61,335 37,284 42,652 6-12 months 91,209 20,241 68,786 3,589 Over 12 months 366,352 286,771 218,355 206,365 924,039 736,287 671,899 579,315 Less Allowance for doubtful accounts (384,509) (316,590) (206,365) (206,365) 539,530 419,697 465,534 372,950 7 Inventories, net Finished goods 26,761 20,656 14,920 1,924 Less Provision for obsolete stock (218) - - - 26,543 20,656 14,920 1,924 8 Foreign currency swap contract receivable (payable) As at 31 December, the Group has entered into foreign currency and interest rate swap contracts to cover long-term loans and bonds. Foreign currency swap contracts receivable and payable under these contracts are shown below: Foreign currency swap contract on long-term loans Amount due from bank 185,208 388,853 185,208 388,853 Amount due to bank (111,608) (271,236) (111,608) (271,236) Foreign currency swap contract receivable, net 73,600 117,617 73,600 117,617 Less Current portion (73,600) (69,164) (73,600) (69,164) Non-current portion - 48,453-48,453 Foreign currency swap contract on long term bonds Amount due from bank 2,800,000 2,800,000 2,800,000 2,800,000 Amount due to bank (3,114,747) (2,703,904) (3,114,747) (2,703,904) Foreign currency swap contract receivable (payable), net (314,747) 96,096 (314,747) 96,096 Less Current portion 157,374-157,374 - Non-current portion (157,373) 96,096 (157,373) 96,096 Total non-current portion (157,373) 144,549 (157,373) 144,549 16

Shin Satellite Public Limited Notes to the and Financial Statements 9 Other Current Assets Withholding taxes 173,067 111,544 149,515 97,387 Prepaid expenses 40,624 50,828 31,194 45,063 Advance payment for equipment 24,593 26,743 24,112 26,744 Interest receivable from related parties - - 2,402 - Others 15,494 12,156 6,348 6,472 253,778 201,271 213,571 175,666 10 Investments in Subsidiaries and Associates Baht '000 Baht '000 Baht '000 Baht '000 Opening net book amount 89,357-72,868 - Acquisition of subsidiary and associated (Note 30) - 52,709-50,000 Investment in subsidiary - - 100,871 - Net result from subsidiary and associated 181,604 36,648 178,358 18,046 Dividend received (40,882) - (35,860) - Goodwill amortization - - 801 1,902 Provision for impairment (9,983) - - - Exchange differences 17,885-17,867 2,920 Closing net book amount 237,981 89,357 334,905 72,868 31 December 2000 Business Country of Ownership Paid up Carrying Dividend Incorporation Interest Capital value Million Million Million Baht Associated company Lao Telecommunications Providing fixed Laos PDR 49% USD 96.84 237.98 USD 1.0 Co., Ltd. (Associate phone, mobile of Shenington) phone, international facilities, Internet and paging services 31 December 1999 Business Country of Ownership Paid up Carrying Dividend Incorporation interest Capital value Million Million Million Baht Baht Associated company Lao Telecommunications Providing fixed Laos PDR 49% USD 96.84 89.36 - Co., Ltd. (Associate phone, mobile of Shenington) phone, international facilities, Internet and paging services 17

Shin Satellite Public Limited Notes to the and Financial Statements 10 Investments in Subsidiaries and Associates (Con t) Directly held by the 31 December 2000 Business Country of Ownership Paid up Cost Carrying Dividend Incorporation interest Capital value value Million Million Million Million Baht Baht Subsidiaries Shenington Investments Pte Holding company Singapore 100% S$ 5.50 50.0 237.66 USD 0.88 Ltd. (Shenington) Shin Broadband Internet Providing Internet Thailand 100% Baht 100.0 97.29 - (Thailand) Co., Ltd. (SBI) data center 100.00 services ipstar Co., Ltd (ipstar) Providing broadband The British 100% USD 0.87 (10.68) - satellite services Virgin Islands 0.02 Joint Venture C.S. Communications Co., Providing Internet Thailand 99% Baht 494.7 (646.87) - Ltd. (CSC) & satellite uplink- 499.60 downlink services Indirectly held by the Cambodia Shinawatra Co., Providing fixed Cambodia 100% USD - - - Ltd. (100% Subsidiary of phone and 12.00 Shenington) mobile phone C.S. Satellite Phone Co., Providing mobile Thailand 79% Baht - - - Ltd. ( 80% Subsidiary of personal 125.00 CSC) communication services via satellite Lao Telecommunications Providing fixed Laos PDR 49% USD - - USD 1.0 Co., Ltd. (49 % Associate of phone, mobile 96.84 Shenington) phone, international facilities, Internet and paging services On 11 May 2000, the established a new subsidiary, Shin Broadband Internet (Thailand) Limited (SBI), which provides services related to the Internet business, such as a Web Hosting Service Server Co-Location, e-commerce, Domain Name Registration and Web Development. The total authorised number of ordinary shares of SBI is 10,000,000 shares with a par value of Baht 10 per share. All issued shares are fully paid. As at 31 December 2000 it has not yet commenced normal operations. On 12 May 2000, the established a new subsidiary, ipstar Limited (ipstar), which will be primarily involved in broadband satellite business. The total authorised number of ordinary shares of ipstar is 200,000,000 shares with a par value of USD 0.01 per share and 2,000,000 shares are issued and paid up. As at 31 December 2000, it has not yet commenced normal operations. 18

Shin Satellite Public Limited Notes to the and Financial Statements 10 Investments in Subsidiaries and Associates (Con t) Directly held by the 31 December 1999 Business Country of Ownership Paid up Cost Carrying Dividend Incorporation interest Capital value value Million Million Million Million Baht Baht Baht Subsidiary Shenington Investments Holding company Singapore 100% S$ 5.50 50.0 72.87 - Pte Ltd. (Shenington) Joint Venture C.S. Communications Co., Providing Internet Thailand 51% Baht 5.1 (1,064.74) - Ltd. (CSC) & satellite uplink- 10.00 downlink services Indirectly held by the Cambodia Shinawatra Co., Providing fixed Cambodia 100% USD - - - Ltd. (100% Subsidiary of phone and 12.00 Shenington) mobile phone C.S. Satellite Phone Co., Providing mobile Thailand 41% Baht - - - Ltd. ( 80% Subsidiary of personal 125.00 CSC) communication services via satellite Lao Telecommunications Providing fixed Laos PDR 49% USD - - - Co., Ltd. (49 % Associate phone, mobile 96.84 of Shenington) phone, international facilities, Internet and paging services 19

Shin Satellite Public Limited Notes to the and Financial Statements 11 Investment in Joint Ventures C.S. Communications Limited Consolidation C.S. Communications Limited (CSC) is a joint venture company between Shin Satellite Public Limited (SSA) and Communications Authority of Thailand (CAT). The company is managed under a joint venture agreement between the two ventures. The original interests in the equity share capital of CSC were 51% and 49% for SSA and CAT, respectively. The restated results for 1999 reflect the proportionate consolidation of 51% of the results of CSC following the adoption of TAS 46 (see note 2.5). On 7 January 2000, the shareholders of CSC, at an extraordinary meeting passed a resolution to approve the increase of the authorized share capital from 1,000,000 common shares of Baht 10 par value to 97,000,000 common shares of Baht 10 par value. The shareholders also passed a resolution to approve the issuance of 96,000,000 new common shares and to offer 48,960,000 shares of Baht 10 par value to the existing shareholders proportional to their shareholdings. CAT waived its right to subscribe for these new shares and 48,960,000 shares of Baht 10 at par value, were fully subscribed for by SSA and its percentage interest in CSC increased from 51% to 99%. Accordingly the percentage interest of SSA in CSC that is proportionately consolidated in the consolidated financial statements has increased from 51% to 99%. Under the terms of the joint venture agreement, CAT has an option to subscribe for the remaining 47,040,000 shares of Baht 10 at par value to return its percentage interest in CSC to 49% by June 2001. The following amounts represent the Group s share of the assets, liabilities and revenue in its consolidated balance sheets and income statements: Balance Sheets 2000 1999 Baht'000 Baht'000 Proportionate interest in joint venture 99% 51% Current assets 195,930 50,291 Non current assets 361,318 154,385 Current liabilities (1,042,252) (501,523) Long term liabilities (138,006) (232,937) Net liabilities (623,010) (529,784) Income Statement 2000 1999 for the year ended Baht'000 Baht'000 Proportionate interest in joint venture 99% 51% Gross revenue 481,100 117,461 Result for the year (71,724) (78,019) 20

Shin Satellite Public Limited Notes to the and Financial Statements 11 Investment in Joint Ventures C.S. Communications Limited (Con t) Provision for liabilities Additionally, SSA has provided a loan guarantee in respect of bank loans and bills of exchange of CSC amounting to Baht 606 million. Accordingly, SSA recognized the net deficit of CSC in full at 31 December 2000 and 1999 to reflect the extent of this obligation. The provision for joint venture guarantees relates to certain obligations recognized in respect of its joint venture interest in CSC. Under the terms of the shareholders agreement with CAT, the is required to guarantee in full certain bank borrowings of CSC. On an annual basis the assesses the probability that it will incur an outflow of resources in respect of its guarantee of its joint venture partner s share of liabilities in respect of these certain bank borrowings and records the necessary provision. For the years ended 31 December 2000 and 1999, CSC had negative shareholders equity and negative cash outflow from operations in 1999, accordingly the has recognized a provision under the loan guarantees. 2000 Baht'000 Opening net book value - as previously reported (361,870) - prior year adjustment (note 3b) (702,873) - as restated (1,064,743) Share of loss during the year (82,405) New share capital issued 489,600 Closing net book value (657,548) 12 Long-term Investments Opening net book amount 18,900-18,900 - Acquisition - 18,900-18,900 Closing net book amount 18,900 18,900 18,900 18,900 On 30 April 1999, Shin Satellite Plc. (SSA) entered into the Membership Purchase Agreement with Codespace, Inc, to acquire a 70% shareholding in Spacecode LLC at the total price of USD 3 million over a period of 3 years. Codespace, Inc established and wholly owns Spacecode LLC. Codespace, Inc has the right to buy 2.5 million shares in ipstar. The initial payment of USD 500,000 was paid to Codespace and 12% of shares in Spacecode LLC were transferred to SSA, which represent the long-term investment amounting to Baht 18.9 million. 21

Shin Satellite Public Limited Notes to the and Financial Statements 13 Property and Equipment Property and equipment comprise: Leasehold Vehicles & Assets land & office under buildings Equipment equipment construction Total Baht'000 At 31 December 1999 Cost 33,766 1,395,985 89,752 209,905 1,729,408 Less Accumulated depreciation (11,030) (496,859) (56,618) - (564,507) Net book amount as previously reported 22,736 899,126 33,134 209,905 1,164,901 Prior year adjustment (Notes 3a,3b) (570) (98,032) (1,422) (67,033) (167,057) Net book amount as restated 22,166 801,094 31,712 142,872 997,844 Year ended 31 December 2000 Opening net book amount 22,166 801,094 31,712 142,872 997,844 Increase in interest in joint venture 570 98,032 1,422-100,024 Additions 8,410 154,797 35,511 1,564,150 1,762,868 Transfer out to satellite project under concession - - - (6,465) (6,465) Reclassifications 264 - - (264) - Disposals, net - (122) (850) - (972) Exchange differences 317 47,596 857 13,191 61,961 Depreciation charges (2,879) (191,782) (13,523) - (208,184) Closing net book amount 28,848 909,615 55,129 1,713,484 2,707,076 At 31 December 2000 Cost 43,385 1,633,691 127,452 1,713,484 3,518,012 Less Accumulated depreciation (14,537) (724,076) (72,323) - (810,936) Net book amount 28,848 909,615 55,129 1,713,484 2,707,076 Property and equipment included a subsidiary s property and equipment under concession agreements of approximately Baht 511.16 million. Cambodia Shinawatra has to transfer its ownership of these property and equipment to the government of Cambodia on the expiration date of the concession agreement, on 4 March 2028. 22

Shin Satellite Public Limited Notes to the and Financial Statements 13 Property and Equipment (Con t) Leasehold Vehicles & Assets land & office under buildings Equipment equipment construction Total Baht'000 At 31 December 1999 Cost 25,707 553,472 56,638 123,993 759,810 Less Accumulated depreciation (6,515) (159,428) (33,166) - (199,109) Net book amount as previously reported 19,192 394,044 23,472 123,993 560,701 Prior year adjustment (Note 3b) - - - (67,033) (67,033) Net book amount as restated 19,192 394,044 23,472 56,960 493,668 Year ended 31 December 2000 Opening net book amount 19,192 394,044 23,472 56,960 493,668 Additions 8,389 111,533 26,355 1,473,319 1,619,596 Transfer out to satellite project under concession - - - (6,465) (6,465) Reclassifications 264 - - (264) - Disposals, net - - (801) - (801) Depreciation charges (1,819) (88,792) (9,477) - (100,088) Closing net book amount 26,026 416,785 39,549 1,523,550 2,005,910 At 31 December 2000 Cost 34,360 665,005 81,515 1,523,550 2,304,430 Less Accumulated depreciation (8,334) (248,220) (41,966) - (298,520) Net book amount 26,026 416,785 39,549 1,523,550 2,005,910 As at 31 December 2000, property and equipment included project in progress relating to satellite no.4 of ipstar of Baht 1,343 million. 23

Shin Satellite Public Limited Notes to the and Financial Statements 14 Cost of the Satellite Projects under the Concession Agreement, Deferred Charges and Intangible Assets Satellite project Deferred Intangible under concession charges assets Baht'000 Baht'000 Baht'000 At 31 December 1999 Cost 10,587,052 875,982 98,330 Less Accumulated amortization (3,101,981) (48,368) (11,983) Net book amount as previously reported 7,485,071 827,614 86,347 Prior year adjustment, net (Note 3b) - (707,827) (42,311) Net book amount as restated 7,485,071 119,787 44,036 Year ended 31 December 2000 Opening net book amount 7,485,071 119,787 44,036 Increase in interest in joint venture, net - 2,034 42,311 Additions 6,465 58,736 105,504 Disposals, net - - (566) Exchange differences - 108 - Amortization charges (711,887) (39,382) (20,128) Closing net book amount 6,779,649 141,283 171,157 At 31 December 2000 Cost 10,593,516 231,297 203,259 Less Accumulated amortization (3,813,867) (90,014) (32,102) Net book amount 6,779,649 141,283 171,157 Satellite project Deferred under concession charges Baht'000 Baht'000 At 31 December 1999 Cost 10,587,052 149,338 Less Accumulated amortization (3,101,981) (32,485) Net book amount 7,485,071 116,853 Year ended 31 December 2000 Opening net book amount 7,485,071 116,853 Additions 6,465 58,737 Amortization charges (711,887) (38,511) Closing net book amount 6,779,649 137,079 At 31 December 2000 Cost 10,593,516 208,075 Less Accumulated amortization (3,813,867) (70,996) Net book amount 6,779,649 137,079 24

Shin Satellite Public Limited Notes to the and Financial Statements 15 Other Assets, net Deposits 28,787 19,803 15,326 14,756 Less provision for impairment (14,756) (14,756) (14,756) (14,756) Accounts receivable other 531 756 530 756 14,562 5,803 1,100 756 16 Borrowings The movements in the borrowings can be analyzed as follows: Opening amount - as previously reported 5,947,639 8,322,396 5,104,127 7,202,586 - prior period adjustment (note 3b) (325,287) (548,715) - - - as restated 5,622,352 7,773,681 5,104,127 7,202,586 Acquisition (note 30) - 197,973 - - Proceeds from short-term loans 1,398,802-1,188,691 - Proceeds from long-term loans 483,734 897,863 397,106 897,863 Proceeds from long-term bonds - 3,000,000-3,000,000 Increase in interest in joint venture 325,287 - - - Repayment of borrowings (1,977,714) (6,066,931) (1,665,256) (5,821,409) Repayment of long-term bonds (569,450) (430,550) (569,450) (430,550) Realised loss on exchange 111,058 284,647 111,058 271,666 Unrealized loss on exchange 24,569 (16,029) 24,569 (16,029) Exchange difference 20,690 (18,302) - - Closing amount 5,439,328 5,622,352 4,590,845 5,104,127 The Group repaid loan principals amounting to USD 41 Million and Baht 887 Million for the year ended 31 December 2000 and USD 148 Million and Baht 177 Million for the year ended 31 December 1999. 25

Shin Satellite Public Limited Notes to the and Financial Statements 16 Borrowings (Con t) Short-term borrowings Bank borrowings 1,157,586 274,527 1,007,475 274,527 Total short-term borrowings 1,157,586 274,527 1,007,475 274,527 Current portion of long-term borrowings Bank borrowings 601,432 527,074 186,264 376,312 Bonds 1,500,000 569,450 1,500,000 569,450 Total current portion of long-term borrowings 2,101,432 1,096,524 1,686,264 945,762 Long-term borrowings Bank borrowings 680,310 1,251,302 397,106 883,838 Bonds 1,500,000 3,000,000 1,500,000 3,000,000 Total long-term borrowings 2,180,310 4,251,302 1,897,106 3,883,838 Total borrowings 5,439,328 5,622,353 4,590,845 5,104,127 The borrowings above are all unsecured. The interest rate exposure of the borrowings of the Group and the are as follows: Total borrowings: - at fixed rates 4,554,692 3,569,450 4,404,581 3,569,450 - at floating rates 884,636 2,052,903 186,264 1,534,677 5,439,328 5,622,353 4,590,845 5,104,127 Weighted average effective interest rates: - loans from banks - 6.70% - 6.70% - bank borrowings 5.31% 8.57% 5.31% 8.57% - bonds 8.80% 8.55% 8.80% 8.55% - bills of exchange 4.39% - 4.39% - At 31 December 2000, the carrying amounts and fair value of long-term bonds is as follow: Carrying Carrying Amount Fair Value Amount Fair Value Baht 000 Baht 000 Baht 000 Baht 000 Long-term bonds 3,000,000 3,088,710 3,000,000 3,088,710 The fair value of long-term bonds is calculated by reference to the last trading in the market (Baht 1,029.57 per unit from Thai Bond Dealer as at 20 October 2000). 26