SAMART TELCOMS PUBLIC COMPANY LIMITED
AND ITS SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
1.	GENERAL INFORMATION
The Company was incorporated as a limited company under Thai laws and registered the change of the status 
of the Company to be a public limited company under the Public Limited Company Act on 16 November 
1995.  Its parent company is Samart Corporation Public Company Limited as a public limited company under 
Thai laws.  The Company operates its business in Thailand and its principal activity is in the satellite 
telecommunications business.  Its registered address is at 59 Moo 2, Phaholyothin Road, Tambol Klong-
Nueng, Amphur Klong-Luang, Pathumthani.
As at the 31 December 2002 and 2001, the Company and its subsidiaries have current liabilities of Baht 313 
million and Baht 453 million, respectively in excess of current assets.  The Companys and its subsidiaries 
ability to continue their business operations as going concerns is hence dependent upon their being able to find 
sources of funds, and on their future operating results.  Nevertheless, the financial statements have been 
prepared on the going concern basis, presuming that the realisation of assets and settlement of liabilities and 
obligations will occur in the ordinary course of the businesses of the Company and its subsidiaries, without 
any expectation of significant disruption to the ongoing activities.

2.	Basis of consolidation
	2.1	The consolidated financial statements include the financial statements for the years ended 31 December 
2002 and 2001 of Samart Telcoms Public Company Limited (herein after called the Company) and its 
subsidiaries (herein after called the subsidiaries) which were incorporated in Thailand as follows :


Equity interest



owned by the


Registered capital
Company/subsidiary
Nature of Business

2002
2001
2002
2001


Million
Million
Percent
Percent


Baht
Baht



Subsidiaries directly held by the Company




Samart Communication 





   Services Co., Ltd.
500
500
100
100
Design and installation of





communication network,





public rural telephone project
Posnet Co., Ltd.
72
72
100
100
Electronic fund transfer
Thai Trade Net Co., Ltd.
53
53
100
100
Electronic data interchange
Samart Broadband Services





   Co., Ltd.
221
221
100
100
Broadband data interchange





services
Subsidiaries held by Posnet Co., Ltd.




Samart Ipas Co., Ltd. 
4
4
51
51
Internet fund transfer
	2.2	Intercompany balance and significant intercompany transactions between the Company and its 
subsidiaries have been eliminated from the consolidated financial statements. 
	2.3	The cost of investments in subsidiaries and the value ascribed to the equity in such subsidiaries at the 
time of acquisition have been eliminated and the difference thereof has been shown as Excess of net 
book value of subsidiary over acquisition cost of investment in the consolidated balance sheets.  It is 
amortized over a period of 20 years.

3.	SIGNIFICANT ACCOUNTING POLICIES 
	The financial statements have been prepared in accordance with accounting standards pronounced by the 
Institute of Certified Accountants and Auditors of Thailand which are effective under the Accounting Act B.E. 
2543.  
	Significant accounting policies adopted by the Company and subsidiaries are summarized below :-
	3.1	Revenue recognition
		a)	Sales and service income
		Sales and service income are the invoiced value, excluding value added tax, of goods supplied 
and services rendered after deducting goods return, discounts and allowances.
	b)	Transponder rental income
		Transponder rental income is recognised as revenue on the monthly accrual basis in accordance 
with the payments due under the agreement.
	c)	Sales of equipment including designation and installation
		Sales of equipment including designation and installation are recognized as income under the 
percentage of completion method.
	3.2	Accounts receivable and allowance for doubtful accounts
		Accounts receivable are stated at the net realizable value.  Allowance for doubtful accounts is provided 
for the estimated collection losses that may be incurred in collection of receivables.  The allowance is 
based on collection experience and current status of receivables outstanding at the balance sheet date.
	3.3	Inventories
		Inventories are valued at lower of cost (on an average method and first-in first-out basis) or net 
realisable value.

	3.4	Investments
		Investments in subsidiaries in the Companys financial statements are stated under the equity method.
		Other investments in related company is stated at cost.  An allowance for impairment loss will be made 
when the net realisable value is lower than the cost of investments.
	3.5	Property, plant and equipment and depreciation
		All items of property, plant and equipment are initially recorded at cost.  Land and buildings, are 
however subsequently revalued by an independent professional valuer, on an asset-by-asset basis, to 
their fair values.  Revaluations are made with sufficient regularity to ensure that the carrying amount of 
assets does not differ materially from their fair value at the balance sheet date.
		The differences arising from revaluation are dealt with in the financial statements as follows :-
		-	When an assets carrying amount is increased as a result of the revaluation, the increase is 
credited directly to the equity under the heading of Revaluation surplus. However, a 
revaluation increase will be recognised as income to the extent that it reverses a revaluation 
decrease of the same asset previously recognised as an expense.
		-	When an assets carrying amount is decreased as a result of a revaluation, the decrease is 
recognised as an expense.  However, a revaluation decrease will be charged directly against the 
related Revaluation surplus to the extent that the decrease does not exceed the amount held in 
the revaluation surplus in respect of that same asset.
		Depreciation of plant and equipment is calculated by reference to their costs on a straight-line basis 
over estimated useful lives of 2 - 20 years.
		No depreciation is provided for land.
	3.6	Communications equipment not yet installed
		Communications equipment not yet installed is valued at lower of cost (on average cost method) or net 
realisable value.
		No depreciation is provided for new equipment.

	3.7	Finance lease
		The Company and its subsidiary company recorded assets under finance leases as assets and liabilities 
in the balance sheets at amounts equal at the inception of the lease to the fair value of the leased 
property or, if lower, at the present value of the minimum lease payments.  In calculating the present 
value of the minimum lease payments, the discount factor used in the interest rate implicit in the lease.  
The interest charge is recorded to periods during the lease term on the remaining balance of the liability 
for each period.
	3.8	Amortization
		The deferred right to the use of communications equipment is amortized on a straight-line basis over 
the estimated useful lives of the transferred assets (10, 15 and 20 years) but for no longer than the 
remaining period of the concessions.
	3.9	Impairment of assets
		The Company and its subsidiaries review the impairment of assets whenever events indicate that 
carrying value of an asset exceeds its recoverable amount or fair value (the higher of an assets net 
selling price or value in use).  The review is made for individual assets or for the cash generating unit.
		The Company and its subsidiaries recognise an impairment loss in the statements of earnings whenever 
the book value of an asset exceeds its recoverable amount.  The Company and its subsidiaries will 
reverse the impairment loss by recording as other income whenever there is any indication that an 
impairment loss recognized may no longer exist or may have decreased.
	3.10	Foreign currencies
		Transactions in foreign currencies incurred during the year are translated into Baht at the rates ruling at 
the transaction dates.  Monetary assets and liabilities denominated in foreign currency outstanding at 
the balance sheet date are translated into Baht at the rates ruling at the balance sheet date with the 
exception of those covered by forward exchange contracts are translated into Baht at the contracted 
rates.
		Exchange gains and losses and premiums on forward exchange contracts are included in determining 
earnings.

	3.11	Financial instruments
	The Company and its subsidiaries have no policy to speculate in or engage in the trading of any 
financial derivative instruments.
	Financial instruments carried in the balance sheets include cash and cash equivalents, deposits with 
financial institutions, long-term trade accounts payable, bank overdrafts and loans, accounts receivable 
and accounts payable and liabilities under finance lease agreements..
	3.12	Cash and cash equivalents
	Cash and cash equivalents include cash in hand and at banks with an original maturity of 3 months or 
less and without pledges.
	3.13	Loss per share
		Loss per share as presented in the statements of earnings is the basic loss per share which is determined 
by dividing net loss for the year by the number of ordinary shares outstanding at the balance sheet date.
	3.14	Use of accounting estimates
Preparation of financial statements in conformity with generally accepted accounting principles 
requires management to make estimates for certain accounting transactions, affecting amounts 
reported in the financial statements and notes thereto.  Subsequent actual results may differ from 
these estimates.

4.	CASH AND CASH EQUIVALENTS / RESTRICTED BANK DEPOSITS
	As at 31 December 2002 and 2001, cash and cash equivalents consist of the following :
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Cash in hand and at banks
31,727,799
41,325,468
10,230,350
18,471,784
Less : Restricted bank deposits
(10,240,000)
(10,240,000)
(120,000)
(120,000)
Cash and cash equivalents
21,487,799
31,085,468
10,110,350
18,351,784
	Restricted bank deposits represent savings accounts of the Company and its subsidiaries amounting to 
Baht 10.2 million (the Company only : Baht 0.1 million) were pledged to secure bank guarantees 
obtained from local commercial banks.

5.	TRADE ACCOUNTS RECEIVABLE
	The aging of the outstanding balances of trade accounts receivable as at 31 December 2002 and 2001 is as 
follows :-
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Related parties




Within 3 months
62,084,842
32,128,947
87,594,165
38,252,636
More than 3 months - 6 months
-
4,540,010
-
65,270
More than 6 months - 12 months
730,595
7,457,900
-
-
More than 12 months
8,095,838
-
-
-
Total
70,911,275
44,126,857
87,594,165
38,317,906
Less : Allowance for doubtful accounts
-
(6,527)
-
(6,527)
Net
70,911,275
44,120,330
87,594,165
38,311,379
Other companies




Within 3 months
121,402,177
100,281,478
27,155,038
23,634,508
More than 3 months - 6 months
1,030,804
2,711,657
1,010,836
2,429,521
More than 6 months - 12 months
410,664
1,657,410
401,631
1,647,856
More than 12 months
17,638,292
23,774,065
16,639,609
19,410,864
Total
140,481,937
128,424,610
45,207,114
47,122,749
Less : Allowance for doubtful accounts
(15,632,238)
(22,275,380)
(14,627,042)
(18,562,882)
Net
124,849,699
106,149,230
30,580,072
28,559,867
Total trade accounts receivable - net
195,760,974
150,269,560
118,174,237
66,871,246
	As at 31 December 2002, the Company and its subsidiaries have Baht 31.0 million outstanding balance of 
trade accounts receivable - related companies, (the Company only : Baht 22.1 million), of which outstanding 
balance between its subsidiary and the related company of Baht 8.0 million has been outstanding over 12 
months.  The Company and its subsidiaries have not provided an allowance for doubtful accounts for this 
related company as it will have revenue from projects of sales and installation of telecommunication 
equipment to government agencies.  These projects are being conducted and will be delivered in the near 
future.  The management therefore believes that the outstanding amount will be fully recoverable.

	At 31 December 2002 and 2001, trade accounts receivable of the Company and its subsidiaries included 
amounts of Baht 5.7 million and Baht 10 million, respectively (The Company only : Baht 5.7 million and Baht 
9.5 million respectively), receivable from financial institutions which were ordered to cease their operations by 
the authorities.  The Company and its subsidiaries have already provided full allowance for doubtful accounts 
for these amounts.
6.	RELATED PARTY TRANSACTIONS
	During the years, the Company had significant business transactions with its parent, subsidiary and related 
companies (related by way of common shareholders and/or directors).  The Company has a policy on pricing 
with its related companies as specified below :-
	1.	Sales prices are depending on the type of business and market competition as summarized below :-
		
Policy on pricing


Sales prices to parent and subsidiary companies
At cost plus a margin of approximately 2 to 10%
Sales prices to related companies
At cost plus a margin of approximately 2 to 30%
	2.	Management fees and rental income are charged at the amount stipulated in the relevant agreement.
	3.	Other services income and expenses are charged at the price mutually agreed upon.
	4.	Interest on intercompany loans is charged at the cost of funds plus a margin of approximately 0.25 to 
2.5% per annum, but not in excess of the maximum interest rates fixed by law.  

	Significant transactions between the Company and those companies are summarised below :-
(Unit : Million Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Transactions with parent  company




Sales and service income
11.4
-
11.4
-
Other income
0.1
-
0.1
-
Interest expenses
68.5
104.1
-
-
Rental expenses
1.6
1.2
0.5
1.0
Other expenses
2.8
2.1
1.1
2.1
Transactions with subsidiaries




Sales and service income
             -
             -
102.5
18.5
Installation cost
             -
             -
0.6
1.1
Rental income
             -
             -
60.4
55.5
Management fee income
             -
             -
22.1
26.6
Other income
             -
             -
6.5
11.3
Interest income
             -
             -
13.2
6.4
Interest expenses
             -
             -
1.2
0.1
Transactions with related companies




Sales and service income
149.6
73.5
143.8
57.4
Installation cost
28.8
3.4
27.9
3.0
Rental income
16.4
19.5
16.4
19.5
Other income
3.2
0.5
1.5
0.5
Other expenses
1.8
1.9
0.2
1.0
Acquisition of assets
0.1
-
-
-

	As at 31 December 2002 and 2001, the outstanding balances of the above transactions have been separately 
shown in the balance sheets, and consist of the following :-
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Trade accounts receivable - related parties




Subsidiaries 




Samart Communication Services Co., Ltd.
-
-
26,360,077
10,131,024
Posnet Co., Ltd.
-
-
466,820
312,312
Thai Trade Net Co., Ltd.
-
-
112,654
-
Samart Broadband Services Co., Ltd.
-
-
235,095
-
Related companies




Samart E-Trading Co., Ltd.
32,057,264
25,756,505
32,056,250
25,746,875
Samart Paging Co., Ltd.
525,594
184,575
304,950
182,435
Samart Comtech Co., Ltd.
31,047,047
16,217,549
22,110,189
-
Samart Infonet Co., Ltd.
1,920,670
1,845,750
587,430
1,845,750
Samart International Co., Ltd.
-
78,110
-
78,110
Samart Internet Co., Ltd.
-
39,018
-
21,400
Samart Info Media Co., Ltd.
5,360,700
-
5,360,700
-
Cambodia Air Traffic Services Co., Ltd.
-
5,350
-
-
Total trade accounts receivable-related parties
70,911,275
44,126,857
87,594,165
38,317,906
Less : Allowance for doubtful accounts
-
(6,527)
-
(6,527)
Net trade accounts receivable - related parties
70,911,275
44,120,330
87,594,165
38,311,379
Short-term loans to related parties




Subsidiaries




Samart Communication Services Co., Ltd.
-
-
65,300,000
44,800,000
Samart Broadband Services Co., Ltd.
-
-
96,987,643
49,000,000
Posnet Co., Ltd.
-
-
6,500,000
6,500,000
Total short-term loans to subsidiaries
-
-
168,787,643
100,300,000

(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Amounts due from and advances to related parties




Parent Company




Samart Corporation Public Co., Ltd.
28,904
-
28,904
-
Subsidiaries




Samart Communication Services Co., Ltd.
-
-
19,876,545
37,341,369
Posnet Co., Ltd.
-
-
363,114
459,090
Thai Trade Net Co., Ltd.
-
-
206,647
210,997
Samart Broadband Services Co., Ltd.
-
-
1,736,362
1,005,600
Related companies




Samart Infonet Co., Ltd.
264,402
19,983
264,402
19,983
Samart Internet Co., Ltd.
-
10,272
-
10,272
Samart Comtech Co., Ltd.
17,604,646
-
15,829,151
-
Samart Paging Co., Ltd.
641,680
-
637,223
-
Samart Info Media Co., Ltd.
12,847
-
12,847
-
Samart E-Trading Co., Ltd.
81,363
-
81,363
-
Smart Post Co., Ltd.
13,635
-
13,635
-
Samart International Co., Ltd.
6,424
-
6,424
-
Samart Engineering Co., Ltd.
38,541
-
38,541
-
Samart Research and Development Co., Ltd.
7,512,847
-
12,847
-
Total amounts due from and advances to related parties
26,205,589
30,255
39,108,005
39,047,311
Total short-term loans to related parties
26,205,289
30,255
207,895,648
139,347,311
Trade accounts payable- related parties




Parent Company




Samart Corporation Public Co., Ltd.
107,499,505
366,999,505
-
-
Subsidiary




Samart Communication Services Co., Ltd.
-
-
62,274
41,837
Posnet Co., Ltd.
-
-
4,000
-
Samart Broadband Services Co., Ltd.
-
-
88,810
-
Related companies




Samart Engineering Co., Ltd.
14,281
1,950
13,255
1,950
Samart E-Trading Co., Ltd.
766,400
53,052
90,100
28,000
Samart Infonet Co., Ltd.
677,930
233,834
416,765
-
Samart Internet Co., Ltd.
67,934
25,694
-
-
One to One Contacts Co., Ltd.
17,018
-
14,868
-
Total trade accounts payable-related parties
109,043,068
367,314,035
690,072
71,787
Less : Current portion of long-term trade accounts payable
(109,043,068)
(259,814,530)
(690,072)
(71,787)
Net long-term trade accounts payable-related parties
-
107,499,505
-
-

	During 2001, a subsidiary entered into a debt repayment agreement with the parent company, whereby the 
subsidiary agreed to pay trade accounts payable and loans amounting to Baht 475.1 million and Baht 368.2 
million, respectively, outstanding as at the agreement date.  The amount is payable in 37 monthly 
installments, with a first installment of Baht 64.9 million, and subsequent installments of approximately Baht 
21.6  million each, ending in October 2004.  Trade accounts payable will be paid first.  	The subsidiary agreed 
to pay late payment charge and/or interest at the minimum loan rate of the branch of an overseas bank plus 
2.5 percent per annum.
 (Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Short-term loan from related parties




Subsidiary




Thai Trade Net Co., Ltd.
-
-
30,400,000
6,800,000
Amounts due to and advances from related parties




Parent company




Samart Corporation Public Co., Ltd.
4,114,561
5,941,571
176,879
634,002
Subsidiaries




Samart Communication Services Co., Ltd.
-
-
6,406
9,786,344
Thai Trade Net Co., Ltd.
-
-
408,356
24,548
Related companies




Samart Info Media Co., Ltd.
426
479,414
-
391,673
Samart Internet Co., Ltd.
-
12,847
-
-
Samart Engineering Co., Ltd.
-
5,291
-
696
Samart Paging Co., Ltd.
17,976
20,330
-
-
Samart Comtech Co., Ltd.
24,955
-
2,568
-
Samart Infonet Co., Ltd.
10,066
-
1,663
-
Total amounts due to and advances from related parties
4,167,984
6,459,453
595,872
10,837,263
Total short-term loans from related parties
4,167,984
6,459,453
30,995,872
17,637,263
Long-term loan from related party




Parent company




Samart Corporation Public Co., Ltd.
368,218,495
368,218,495
-
-
Less : Current portion of long-term loan from related party
(152,000,495)
-
-
-
Net long-term loan from related party
216,218,000
368,218,495
-
-
	Interest on loans to subsidiaries has been charged at the average interest rate for short-term loans of financial 
institutions plus 0.5 percent per annum.

	Interest on loan from subsidiaries has been charged at the rate of Minimum Overdraft Rate (MOR) of 
commercial banks plus 0.25 percent per annum.
	During the year, movement of short-term loans to/from subsidiaries and long-term loan from parent company 
are as follows :-
(Unit : Baht)

Balance as at
During the year
Balance as at

1 January 2002
Increase
Decrease
31 December 2002
Short-term loans to subsidiaries




Samart Communication Services Co., Ltd.
44,800,000
72,500,000
52,000,000
65,300,000
Posnet Co., Ltd.
6,500,000
10,000,000
10,000,000
6,500,000
Samart Broadband Services Co., Ltd.
49,000,000
47,987,643
-
96,987,643

100,300,000
130,487,643
62,000,000
168,787,643





Short-term loan from subsidiary
6,800,000
23,600,000
-
30,400,000
Thai Trade Net Co., Ltd.
6,800,000
23,600,000
-
30,400,000
Long-term loan from parent company




Samart Corporation Public Co., Ltd.
368,218,495
-
-
368,218,495

368,218,495
-
-
368,218,495
7.	INVENTORIES
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Finished goods
122,563,136
19,476,905
105,354,596
7,399,210
Supplies
4,938,949
1,840,972
2,721,642
1,809,688
Goods in transit
-
1,806,146
-
1,806,146
Total
127,502,085
23,124,023
108,076,238
11,015,044
Less : Allowance for obsolete inventories
(3,956,874)
(4,254,586)
(64,930)
(582,840)
Inventories - net
123,545,211
18,869,437
108,011,308
10,432,204

8.	INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD
	As at 31 December 2002 and 2001, the Company has long-term investments in the ordinary shares of the 
following companies :-




Investments



Paid-up share capital
Equity interest
Cost method
Equity method
Excess loss over cost of 
investment in subsidiary

Type of business
2002
2001
2002
2001
2002
2001
2002
2001
2002
2001


Million 
Baht
Million 
Baht
%
%
Baht
Baht
Baht
Baht
Baht
Baht
Investments in subsidiaries











Samart Communication
Design and installation of










  Services Co., Ltd.
   communication network,
500
500
100
100
499,999,400
499,999,400
757,466,279
693,787,707
-
-

   public rural telephone 











   project










Posnet  Co., Ltd.
Electronic fund 
72
72
100
100
71,999,930
71,999,930
25,266,228
8,874,597
-
-

   transfer










Samart Broadband Services
Broadband data
55.25
55.25
100
100
55,249,983
55,249,983
-
16,952,032
(40,705,773)
-
   Co., Ltd.
   interchange services










Thai Trade Net Co., Ltd.
Electronic data interchange
53
53
100
100
52,999,930
52,999,930
26,661,651
8,221,205
-
-






680,249,243
680,249,243
809,394,158
727,835,541
(40,705,773)
-
	During the year 2002 and 2001, the subsidiaries did not announce any dividends.
9.	COMMUNICATIONS EQUIPMENT NOT YET INSTALLED
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
New equipment
36,964,728
30,216,020
36,964,728
30,216,020
Less : Allowance for diminution in value 




             of communications equipment
(17,189,655)
(4,029,019)
(17,189,655)
(4,029,019)

19,775,073
26,187,001
19,775,073
26,187,001
	In 2002 and 2001 the Company set aside provision for diminution in value of communications 
equipment of Baht 13.2 million and Baht 2 million, respectively, in the 2002 and 2001 statements of 
earnings, and the management believes that such provision is adequate.  However, the changes of 
technology in the future could lead to future decrease in the value of such communications equipment.

10.	PROPERTY, PLANT AND EQUIPMENT

(Unit : Baht)

CONSOLIDATED

Assets which carry at reappraised 
value
Assets which carried at cost



Building
Telecommunication
Furniture and

Telecommunication



and
and tooling
office

equipment under 


Land
improvement
equipment
equipment
Vehicles
installment
Total
Cost/reappraised value







31 December 2001
28,200,000
52,367,065
312,051,311
73,874,684
8,603,660
2,259,951
477,356,671
Purchase
-
1,009,473
23,811,981
75,437,576
1,338,877
194,725
101,792,632
Transfer in
-
-
5,861,970
555,424
-
654,211
7,071,605
Transfer out
-
-
-
-
-
(2,259,951) 
(2,259,951) 
Disposals
-
-
(47,800)
(62,500)
-
-
(110,300)
31 December 2002
28,200,000
53,376,538
341,677,462
149,805,184
9,942,537
848,936
583,850,654
Accumulated depreciation







31 December 2001
-
34,937,465
164,780,163
52,653,218
4,628,924
-
256,999,770
Depreciation for the year
-
2,573,337
33,463,538
15,677,271
1,516,599
-
53,230,745
Disposals
-
-
(45,295)
(12,226)
-
-
(57,521)
31 December 2002
-
37,510,802
198,198,406
68,318,263
6,145,523
-
310,172,994
Allowance for impairment







31 December 2001
-
-
-
-
-
-
-
Increase during the year
-
-
19,042,000
-
-
-
19,042,000
31 December 2002
-
-
19,042,000
-
-
-
19,042,000
Net book value







31 December 2001
28,200,000
17,429,600
147,271,148
21,221,466
3,974,736
2,259,951
220,356,901
31 December 2002
28,200,000
15,865,736
124,437,056
81,486,921
3,797,014
848,936
254,635,663








Depreciation charged (included in statement of earnings) for the year





   2001






47,029,783
   2002






53,230,745



(Unit : Baht)

THE COMPANY ONLY

Assets which carry at reappraised 
value
Assets which carried at cost



Building
Telecommunication
Furniture and

Telecommunication



and
and tooling
office

equipment under 


Land
improvement
equipment
equipment
Vehicles
installment
Total
Cost/reappraised value







31 December 2001
28,200,000
44,041,345
67,327,823
43,007,004
1,734,752
-
184,310,924
Purchase
-
-
7,032,093
2,791,327
-
-
9,823,420
Transfer in
-
-
3,602,019
555,424
-
654,211
4,811,654
31 December 2002
28,200,000
44,041,345
77,961,935
46,353,755
1,734,752
654,211
198,945,998
Accumulated depreciation







31 December 2001
-
28,130,421
37,361,592
34,706,865
966,413
-
101,165,291
Depreciation for the year
-
1,742,583
11,269,404
2,925,419
310,982
-
16,248,388
31 December 2002
-
29,873,004
48,630,996
37,632,284
1,277,395
-
117,413,679
Net book value







31 December 2001
28,200,000
15,910,924
29,966,231
8,300,139
768,339
-
83,145,633
31 December 2002
28,200,000
14,168,341
29,330,939
8,721,471
457,357
654,211
81,532,319








Depreciation charged (included in statement of earnings) for the year





   2001






13,940,787
   2002






16,248,388
	In 1999, the Company hired an independent professional valuer to appraise the value of its land and building at 
fair market value.  Had land and building been presented at cost in the financial statements, the net book value 
as of 31 December 2002 and 2001 would have been follows:-
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

Land
Building
Land
Building
Net book value (presented at cost) :




As of 31 December 2002
26,661,021
18,946,854
26,661,021
18,946,854
As of 31 December 2001
26,661,021
21,143,600
26,661,021
21,143,600

11.	DEFERRED RIGHT TO THE USE OF COMMUNICATIONS EQUIPMENT
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Deferred right to the use of communications equipment
4,204,578,163
4,214,784,931
1,099,610,924
1,094,104,678
Less : 	Accumulated amortisation
(2,157,361,404)
(1,762,489,015)
(347,287,808)
(303,567,419)
		Allowance for impairment
(440,952,000)
(251,358,000)
(440,952,000)
(251,358,000)
Net
1,606,264,759
2,200,937,916
311,371,116
539,179,259
	In 2002 and 2001 the Company assessed the impairment of deferred right to the use of communications 
equipment by considering the present value of projected future cash inflows on the basis of certain 
assumptions and operations plans prepared by the Companys management.  Based on such information, as at 
31 December 2002 and 2001 the present values of the projected future cash inflows were approximately Baht 
190 and 251 million, respectively lower than net book values.  The Company set aside provisions of Baht 190 
and 251 million for impairment of such assets in the 2002 and 2001 statements of earnings respectively, and 
the management believes that these provisions are adequate.  However, the changes in market competition, the 
economic and financial crisis in Thailand and the changes of technology in the future could lead to further 
decrease in the projected future cash inflows.
12.	IMPAIRMENT LOSS OF COMMUNICATIONS EQUIPMENT AND DEFERRED RIGHT TO 
THE USE OF COMMUNICATIONS EQUIPMENT
	During the years, the Company and its subsidiary company recorded impairment loss of 
communications equipment and deferred right to the use of communications equipment as following :-
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Impairment loss of communications equipment
32,202,636
2,000,036
13,160,636
2,000,036
Impairment loss of deferred right to the use of 




   communications equipment
189,594,000
251,358,000
189,594,000
251,358,000

221,796,636
253,358,036
202,754,636
253,358,036

13.	BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Bank overdrafts
25,697,229
37,186,709
-
5,524,769
Loans from banks
87,395,169
65,000,000
87,395,169
65,000,000
Loans from financial companies
60,000,000
60,000,000
60,000,000
60,000,000
Trust receipts 
95,920,263
35,554,532
93,863,327
35,554,532
Total
269,012,661
197,741,241
241,258,496
166,079,301
	The Company and its subsidiaries received short-term loans from various banks and financial companies 
carrying interest at the rate of minimum loan rate plus a fixed rate, per annum, and due for repayment within 
one year.
	The Company transferred to a commercial bank the right of claim over receivables from a project to sell and 
install communications equipment to a state enterprise in order to secure the issue of letters of credit and trust 
receipts, and of credit facilities provided under promissory notes of Baht 95 million and Baht 53.5 million 
respectively.  These credit facilities were for use in the above project.
14.	LIABILITIES UNDER FINANCE LEASE AGREEMENTS
(Unit : Baht)

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Liabilities under finance lease agreements
45,676,067
54,390,000
5,799,657
-
Less : Deferred interest expenses
(2,717,017)
(5,116,194)
(460,707)
-

42,959,050
49,273,806
5,338,950
-
Less : Portion due within one year
(20,717,305)
(14,384,841)
(3,818,711)
-
Liabilities under finance lease agreements -




   net of current portion
22,241,745
34,888,965
1,520,239
-


	The Company and its subsidiaries entered into certain finance lease agreements for rental of equipments for 
operation.  A deposit of approximately Baht 11.8 million was also made to fulfill the agreement.  The rental 
fee are due between 36 to 42 monthly installments of approximately Baht 2.0 million each.  As at 31 
December 2002, there were leasing commitments under the finance lease agreements payable by the Company 
and its subsidiaries as follows :-


(Unit : Million Baht)
Year
CONSOLIDATED
THE COMPANY ONLY
2003
22.9
4.1
2004
19.7
0.9
2005
3.0
0.7

45.6
5.7
	One of the subsidiarys finance lease agreement is guaranteed by the Company.
15.	LONG-TERM TRADE ACCOUNTS PAYABLE - OTHERS
(Unit : Baht)

CONSOLIDATED

2002
2001
Long-term trade accounts payable - others
-
65,607,500
Less : Current portion due within one year
-
(65,607,500)
Net long-term trade accounts payable - others
-
-
	In February 1999, a subsidiary company entered into memorandums of understanding with two trade creditors 
to extend the repayment term of the debts.  Later, in September 1999 this subsidiary company entered into new 
memorandums of understanding with the creditors to further extend the term of repayment.  Subsequently, in 
March 2001, the subsidiary company entered into new memorandums of understanding with the creditors to 
shorten the term of repayment to one creditor to complete repayment within December 2001, and providing a 
temporary grace period for the payment to the other creditor from April to November 2001.  However, the 
liability must be paid in full within July 2002, with such repayment to be made in monthly instalments of 
approximately Baht 9.4 million each.  Interest is charged at the average of the minimum loan rate (MLR) of 
two local banks per annum.  The current portion is presented in trade accounts payable.
	In 2002 and 2001, the subsidiary company paid interest on the overdue amount to these trade creditors, 
amounting to Baht 1.4 million and Baht 9.7  million respectively.

16.	LONG-TERM LOAN FROM BANK
(Unit : Baht)

CONSOLIDATED

2002
2001
Long-term loan from bank
154,000,000
238,000,000
Less : Current portion due within one year
(84,000,000)
(84,000,000)
Long-term loan from bank - net
70,000,000
154,000,000
	In 1999, a subsidiary company entered into a debt restructuring agreement with a bank to modify the 
repayment schedule for the loan principal and interest to 20 quarterly installments of Baht 21 million each, 
carrying interest at the minimum loan rate (MLR) per annum.  Subsequently, in September 2001 the subsidiary 
company entered into an amendment agreement with the lender to change interest payment installments to 
monthly installments and extend the maturity date from September 2004 to October 2004.  This loan is 
guaranteed by the Company.
	The debt restructuring agreement included covenants and restrictions imposed by the lender, pertaining to, 
among other things, dividend policy, shareholding structure, and the pledge of assets other than permitted 
encumbrances.
17.	STATUTORY RESERVE
	According to the Public Limited Companies Act B.E. 2535, the Company is required to set aside statutory 
reserve at least 5% of its  net earnings for the year after deducting accumulated deficit brought forward (if any) 
until the reserve reaches 10% of the registered share capital.  The statutory reserve could not be used for 
dividend payment.
18.	CORPORATE INCOME TAX
	Corporate income tax of years 2002 and 2001 are calculated on the Company and its subsidiaries net earnings 
(loss) for the years after adjusting certain expenses which are disallowed for tax computation purposes.
19.	DIRECTORS REMUNERATION
	Directors remuneration represents the benefits paid to the Companys director in accordance with Section 90 
of the Public Limited Companies Act, exclusive of salaries and related benefits payable to executive directors.

20.	PROVIDENT FUND
	The Company, its subsidiaries and their employees jointly established a provident fund as approved by the 
Ministry of Finance in accordance with the Provident Fund Act (B.E. 2530).  The fund is contributed to by 
both employees, the Company and the subsidiaries.  The fund is managed by Siam Commercial Bank Public 
Company Limited and will be paid to the employees upon retirement or cessation of employment in 
accordance with the rules of the fund.
	Total contributions of the Company and its subsidiaries for the year 2002 and 2001 amounted to approximately 
Baht 2.9 million and Baht 2.2 million respectively (The Company only : Baht 0.6 million and Baht 0.7 million 
respectively).
21.	NUMBER OF EMPLOYEES AND RELATED COSTS

CONSOLIDATED
THE COMPANY ONLY

2002
2001
2002
2001
Number of employees at end of year (Persons)
459
394
57
79
Employee costs for the year (Thousand Baht)
109,953
95,261
21,573
31,164
22.	RELATED PARTY GUARANTEES
	As at 31 December 2002, the Company was guarantor of credit facilities of its subsidiaries from banks and a 
leasing company amounting to Baht 299 million. Generally, the guarantees are effective so long as the 
underlying obligations have not yet been discharged by those subsidiaries.  No fee has been charged for the 
provision of these guarantees.	
23.	BANK GUARANTEES
	As at 31 December 2002, there were outstanding bank guarantees of approximately Baht 157 million (The 
Company only : Baht 143 million) issued by banks on behalf of the Company and the subsidiaries in respect of 
certain performances bonds as required in the normal course of their businesses.
	The Company transferred to a commercial bank the right of claim over receivables from a project to sell and 
install communications equipment to a state enterprise in order to secure of credit facilities provided bank 
guarantees of Baht 115 million.  This credit facility was for use in the above project.

24.	COMMITMENTS
	As at 31 December 2002, the Company and its subsidiaries had the following outstanding commitments :-
24.1	The Company entered into transponder lease agreements with a local company.  Under the 
agreements, the Company had commitment to pay rental fees to its contractual partner in monthly 
installment, totally amounting to Baht 9.4 million each. The agreements covered a 10-year period, 
expiring in 2002 and 2007.  However, in October 2002, the Company terminated an existing 
agreement which will be expired in 2007 and entered into new agreements with the contractual 
partner.  The Company had commitments to pay the rental fees for the last installment of the 
existing agreements totaling Baht 4.4 million, to pay the rental fee for the first installment of the 
new agreements totaling USD 0.1 million, and to pay the rental fee for the consecutive 
installments, totaling USD 0.2 million each.  The new agreements are expiring in October 2012.
	24.2	The Company entered into an agreement with an overseas company for the supply and development of 
software systems and the provision of technical assistance in operating the Satellite Rural Public 
Telephone System Project of its subsidiary company.  The Company has an outstanding commitment of 
approximately USD 0.4 million.
24.3	The Company entered into an agreement with the Posts and Telegraph Department to provide 
local audio and visual data communications via satellite service for a period of 22 years starting 
on 1 June 1995.  The Company has commitments to comply with the terms under the contract, 
which included commitments to transfer ownership of telecommunications equipment used in 
provision of the data communication via satellite service to the Posts and Telegraph Department 
free of charge, and to pay the service fee stipulate under the agreement, based on the minimum 
annual fee or the percentage of income obtained from provision of such service whichever is 
higher.  However, the Company requested the Posts and Telegraph Department to reconsider such 
terms and the Posts and Telegraph Department presented the Company's request to the National 
Radio Frequency Management Board and in the meeting of 1/2545 on 28 June 2002, the Board 
passed the resolution that in this case the Director-General of the Posts and Telegraph Department 
had the authority to amend the terms of contract.  The Posts and Telegraph Department later 
notified the Company of such amendments including the followings :-

- To reduce the fee that the Company is to pay to the Posts and Telegraph Department from 
the year 2001 until the end of the contract term to a rate of 9% of revenue before expenses 
per annum.
- To cancel the minimum fee to be paid to the Posts and Telegraph Department from the year 
2001 until the end of the contract term.
- To cancel the ownership transfer of assets, which are to be installed by the Company in the 
future for the provision of such service, to the Posts and Telegraph Department, with effect 
from the date of amendment.
- To render the Company responsible for payments of value-added tax, duties, and fees 
incurred through the course of setting up radio telecommunications stations and using radio 
telecommunications equipment, effective from the date of amendment.
	24.4	The Company and its subsidiary company have outstanding commitments of USD 0.3 million 
(the Company only : USD 0.05 million) under agreements to repair and maintain the equipment 
of the Satellite Telecommunications and Rural Public Telephone System Project.  These 
agreements will be terminated in April, 2003.
	24.5	A subsidiary company entered into agreements with the Telephone Organization of Thailand 
(TOT) to rent remote stations for the rural public telephone by satellite project.  Under these 
agreements, which will terminate in 2006, the subsidiary is obliged to comply with certain 
conditions, including an obligation to transfer the ownership of various assets such as the 
communications tooling and equipment to TOT without charge, and to maintain the station in 
good condition for use.
	24.6	A subsidiary company has entered into a 15-year agreement with the Telephone Organization of 
Thailand (TOT) in respect of the provision of network services.  The subsidiary company is 
obliged to comply with certain conditions as stated in the agreements and has to pay an annual 
interconnection charge of Baht 1 million together with an additional fee, which are determined 
based on bandwidth usage at rates stipulated in the agreement.

	24.7	The Company and its subsidiary have outstanding commitments totalling approximately Baht 
167.3 million (the Company only : Baht 165.8 million) in respect of the uncalled portion of their 
investments in its subsidiaries.
	24.8	The Company and its subsidiary have leasing and services commitments payable in the future of 
approximately Baht 19.1 million (the Company only : Baht 2.6 million).
25.	FINANCIAL INFORMATION BY SEGMENT
	The operations of the Company and its subsidiaries involve two principal segments, namely the 
telecommunications and network system service business and the sales and installation of equipment. These 
activities are carried on in the single geographic area in Thailand.  
	25.1	The results of operations separated by business segment

(Unit : Million Baht)

For the years ended 31 December

The 
telecommunications 
and net work system 
service business
The sales and 
installation of 
equipment
Eliminated
Consolidated

2002
2001
2002
2001
2002
2001
2002
2001
Sales and services income








-  Related parties
27.7
40.8
251.7
67.6
(118.3)
(34.9)
161.1
73.5
-  Third parties
1,001.0
1,029.2
147.4
126.8
-
-
1,148.4
1,156.0
Total sales and services income
1,028.7
1,070.0
399.1
194.4
(118.3)
(34.9)
1,309.5
1,229.5
Cost of sales and services
826.9
812.4
344.7
164.6
(157.8)
(74.3)
1,013.8
902.7
Gross profit
201.8
257.5
54.4
29.8
39.5
39.5
295.7
326.8
Impairment loss of communications equipment 
and deferred right to the use of communications 
equipment
(221.8)
(253.4)
-
-
-
-
(221.8)
(253.4)
Selling and administrative expenses






(146.4)
(138.7)
Other income






74.0
31.0
Directors remuneration






(0.9)
(1.1)
Interest expenses






(105.7)
(159.2)
Corporate income tax






(33.5)
(29.0)
Loss in respect of minority interests






0.2
0.2
Net loss






(138.4)
(223.4)


	25.2	Assets separate by business segment are as follows :-

(Unit : Million Baht)

As at 31 December

The 
telecommunications 
and net work system 
service business
The sales and 
installation of 
equipment
Eliminated
Consolidated

2002
2001
2002
2001
2002
2001
2002
2001
Assets








Trade accounts receivable - net
133.6
133.2
93.6
39.7
(31.4)
(22.7)
195.8
150.2
Accrued income
77.9
67.5
15.0
0.1
-
-
92.9
67.6
Inventories - net
-
-
123.6
19.0
(0.1)
(0.1)
123.5
18.9
Deferred right to the use of communications 
equipment - net
1,610.0
2,205.3
-
-
(3.7)
(4.3)
1,606.3
2,201.0
Communications equipment not yet installed - net
19.8
26.2
-
-
-
-
19.8
26.2
Property, plant and equipment - net






254.6
220.4
Others






130.2
127.0
Total assets






2,423.1
2,811.3
26.	FINANCIAL INSTRUMENTS
Financial risk management and policies
The Group is exposed to risks from changes in market interest rates and in currency exchange rates, and from 
nonperformance of contractual obligations by counterparties. The Group uses derivative instruments, as and 
when it considers appropriate, to manage such risks. It does not hold or issue derivative instruments for 
speculative or trading purposes.
Interest rate risk
The interest rate risk is the risk that future movements in market interest rates will affect the results of the 
Groups operations and its cash flows. The Groups exposure to interest rate risk relates primarily to its 
deposits with financial institutions, long-term trade accounts payable, bank overdrafts and loans.  Since the 
interest rate of the majority of these financial assets and liabilities are subject to be change with the market 
rate, the Group does not use derivative financial instruments to hedge such risk. 

The details of loan to, bank overdrafts and short-term loans from financial institutions, long-term trade 
accounts payable and long-term loans are set out in Note 6, 13, 15 and 16.
Foreign currency risk
The Groups exposure to foreign currency risk relates primarily to their payables which are denominated in 
foreign currencies. The Group primarily utilizes forward exchange contracts to hedge such foreign currency 
risk.
As at 31 December 2002, the outstanding forward exchange contracts which maturity of less than one year are 
as follow :-
Foreign currency
Amount bought
Forward rate for amount bought


(Baht per unit of foreign currency)



US dollar
1,308,092
43.3650
As at 31 December 2002, the Company and its subsidiaries had net foreign currency liabilities which had not 
been hedged against foreign exchange rate risk amounting to approximately USD 2.0 million (The Company 
only : USD 1.3 million), which majority of them are due for payment within one year.
Credit risk
The Group is exposed to credit risk primarily with respect to trade accounts.  However, since the majority of 
sales and services are supplied to creditworthy customers such as state enterprises, government agencies and 
the banking sector, the Group does not anticipate material losses from their debt collection.  In addition, the 
management believes that the maximum exposure to credit risk is limited to the carrying amount of receivable 
less allowance for doubtful debts as stated in the balance sheets.
Fair value
Since the majority of the financial assets and liabilities are short-term and the loans carry interest at rates close 
to current market rates, the management believes that the fair value of the Groups financial assets and 
liabilities does not materially differ from  their carring value. 

25.	PRESENTATION
The presentation of the financial statements has been made in compliance with the stipulations of the 
notification of the Commercial Registration Department dated 14 September 2001 as empowered under the 
Accounting Act B.E. 2543.	
Certain amounts in the financial statements for the year ended 31 December 2001 have been reclassified to 
conform to the current years classification, with no effect on previously reported net loss or shareholders 
equity.
26.	APPROVAL OF FINANCIAL STATEMENTS
	These financial statements have been approved by the Companys directors.
-  3  -

