Financial information by business segment for the years ended December 31, are shown as follows: Million Baht 1998 1997 Revenues from Services and Rental Mobile phone service 13,327.58 13,433.72 Pager service and rental 1,394.47 1,477.06 Adjustments of intercompany transactions (2.63) (2.78) Total 14,719.42 14,908.00 Revenues from Sales Sales of pagers 224.98 258.03 Adjustments of intercompany transactions - - Total 224.98 258.03 Total Revenues from Services, Rental and Sales Mobile phone service 13,327.58 13,433.72 Pager service, rental and sales 1,619.45 1,735.09 Adjustments of intercompany transactions (2.63) (2.78) Total 14,944.40 15,166.03 Operating Profit (Loss) Mobile phone service 3,219.18 5,504.55 Pager service, rental and sales 375.22 385.97 Adjustments of intercompany transactions - - Total 3,594.40 5,890.52 Net result of investments in an associated company 6.20 1.29 Gain on exchange 1,771.70 7.88 Other income 561.32 401.17 Interest expense (1,216.85) (572.17) Directors' remuneration (0.72) (2.48) Other expenses (56.28) (79.78) Net income before income tax and adjustment of net effect derived from the change in exchange rate system 4,659.77 5,646.43 Income tax (1,584.98) (1,797.82) Net income before adjustment of net effect derived from the change in exchange rate system 3,074.79 3,848.61 Adjustment of net effect derived from the change in exchange rate system - (1,239.79) Net income before considering minority interests in subsidiaries 3,074.79 2,608.82 Less Share of net income of subsidiaries to minority interests 109.02 82.95 Net income 2,965.77 2,525.87 Million Baht Classifications of assets by business segment as at December 31, 1998 1997 Property and Equipment - net Segment-Mobile phone service, rental and sales 1,837.31 1,477.48 Segment -Pager service, rental and sales 106.46 152.50 Adjustments of intercompany transactions (0.05) (0.05) Total 1,943.72 1,629.93 Other Assets Costs of mobile phone and pager networks under concession agreements - net Mobile phone service 29,019.63 22,936.85 Pager service 776.18 859.85 29,795.81 23,796.70 Other assets 11,408.61 10,342.01 Adjustments of intercompany transactions (1,621.98) (424.60) Total 39,582.44 33,714.11 Total Assets 41,526.16 35,344.04 Operating profit (loss) by each segment represents revenue by each segment less the related cost of revenue and selling and administrative expenses. There is no intertransaction among those segments. Property and equipment by segment are those assets used in the operations of each segment. Other assets comprise: cash in hand and at banks, short-term investments, accounts and notes receivable, short-term loans and advances to related parties, inventories, other current assets, investments, costs of mobile phone and pager networks, deferred charges, goodwill and others. NOTE 6 - ASSETS PLEDGED AS COLLATERAL As at December 31, 1998, time deposit with a bank of a subsidiary, as referred to in Note 7 to the financial statements, in the amount of approximately Baht 0.51 million was pledged as collateral for credits obtained from a local bank. NOTE 7 - SHORT-TERM INVESTMENTS Short-term investments at December 31, represent time deposits with banks and other financial institutions and investments in bills of exchange of which their withdrawal periods are within 1 year,comprise: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1998 1997 1998 1997 Time deposits with local and foreign banks 2,176.52 2,267.00 2,066.01 2,082.00 Time deposits with other financial institutions 280.00 - 100.00 - Investments in bills of exchange - 1,989.94 - 1,790.68 Total 2,456.52 4,256.94 2,166.01 3,872.68 Investments in bills of exchange as at December 31, are shown net of discount, determined from the remaining periods of those bills of exchange as follows: Discount Rates (%) Million Baht 1998 1997 1998 1997 Recorded in the consolidated financial statements - 11.00-13.25 - 20.06 Recorded in the Company's separate financial statements - 12.25-13.05 - 19.31 NOTE 8 - ACCOUNTS AND NOTES RECEIVABLE Accounts and notes receivable at December 31, were shown net of allowance for doubtful accounts as follows: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1998 1997 1998 1997 Related parties (Note 3) 1.75 7.85 0.74 0.65 Other customers 2,979.24 3,401.58 2,651.07 3,187.79 2,980.99 3,409.43 2,651.81 3,188.44 Less Allowance for doubtful accounts 355.23 257.18 323.00 177.30 Accounts and Notes Receivable - net 2,625.76 3,152.25 2,328.81 3,011.14 Trade notes receivable at December 31, 1998 and 1997 do not exceed 20% of total accounts and notes receivable as shown above. Accounts and notes receivable at December 31, 1998, of which are overdue more than 3 months, are summarized as follows: Million Baht Consolidated Company's Separate Financial Statements Financial Statements Balances overdue more than 3 months but not exceeding 6 months 274.42 270.26 Balances overdue more than 6 months but not exceeding 12 months 448.54 444.97 Balances overdue more than 12 months 33.19 31.90 Total 756.15 747.13 Allowance for doubtful accounts for the above overdue balances 355.23 323.00 Allowance for doubtful accounts for those accounts and notes receivable at December 31, 1998 which are overdue more than 3 months were considered to cover risk from bad debts in conjunction with deposits received from those customers who associated with the above overdue balances. NOTE 9 - INVENTORIES Inventories at December 31, comprise: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1998 1997 1998 1997 Finished goods 612.17 63.47 - - Supplies and spare parts 106.24 28.33 - - 718.41 91.80 - - Less Allowance for obsolescence 34.98 25.80 - - Inventories - net 683.43 66.00 - - NOTE 10 - OTHER CURRENT ASSETS Other current assets at December 31, comprise: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1998 1997 1998 1997 Other receivables 722.44 322.53 643.73 321.28 Prepaid expenses 135.20 146.71 125.82 136.28 Premium on purchases of foreign currencies under forward exchange contracts - net of amortization 57.66 - 57.70 - Refundable value added tax 5.35 404.35 6.55 403.19 Accrued interest income 6.73 18.81 3.68 14.72 Others 50.09 28.39 29.69 25.17 Total 977.47 920.79 867.17 900.64 Other receivables mainly comprise service cost to be reimbursed by International network operators, value added tax to be claimed from the Telephone Organization of Thailand, and amounts receivable from franchisees. NOTE 11 - INVESTMENTS Investments at December 31, 1998 comprise investments in share capital of the following companies Values (Million Baht) % Paid-up Cost Equity Recorded Dividend Holding Capital Method Method Values Income In the Company's separate financial statements Related Parties Subsidiary companies Shinawatra Paging Company Limited 59.99 350.00 753.76 890.35 890.35 - Shinawatra Wireless Marketing Company Limited 99.99 240.00 600.00 600.00 600.00 - Associated company Shinawatra Datacom Company Limited 27.86 457.52 147.37 122.11 122.11 - 1,612.46 Other Company Fonepoint (Thailand) Company Limited 17.80 15.00 - - - - In the consolidated financial statements Related Parties Associated company Shinawatra Datacom Company Limited 27.86 457.52 147.37 122.11 122.11 - Other Company Fonepoint (Thailand) Company Limited 17.80 15.00 - - - - Investments at December 31, 1997 comprise investments in share capital of the following companies: Values (Million Baht) % Paid-up Cost Equity Recorded Dividend Holding Capital Method Method Values Income In the Company's separate financial statements Related Parties Subsidiary company Shinawatra Paging Company Limited 59.99 350.00 753.76 763.42 763.42 105.00 Associated company Shinawatra Datacom Company Limited 18.00 695.30 95.87 64.40 64.40 - 827.82 Other Company Fonepoint (Thailand) Company Limited 17.80 15.00 - - - - In the consolidated financial statements Related Parties Associated company Shinawatra Datacom Company Limited 18.00 695.30 95.87 64.40 64.40 - Other Company Fonepoint (Thailand) Company Limited 17.80 15.00 - - - - Shinawatra Paging Company Limited is principally engaged in the operations of a DIGITAL DISPLAY PAGING SYSTEM network, trading of pagers and providing pagers for rent. Shinawatra Wireless Marketing Company Limited is principally engaged in trading of mobile phone,rendering repair services for mobile phones and providing mobile phones for rent. Shinawatra Datacom Company Limited is principally engaged in the operations of simultaneous voice and data transfer system known as DataNet. In December 1998, the Company acquired additional investment in common share capital of Shinawatra Datacom Company Limited (6,449,176 shares at the value of Baht 51,508,548), and the Company's shareholding in Shinawatra Datacom Company Limited therefore increased from 13.77% to 27.86%. Accordingly, the Company is required to record such investment by using the equity method of accounting for the year ended December 31, 1998 and the financial statements for the year ended December 31, 1997 have to be adjusted retroactively from the cost method to the equity method. As a result, investments in associated company and the Company's shareholders' equity as at December 31, 1998 and 1997, the results of the Company's operations and earnings per share for the years ended December 31, 1998 and 1997 are effected as follows: - Investments in associated company and the Company's shareholders' equity as at December 31, 1998, and net income for the year ended December 31, 1998, were equally increased by approximately Baht 6.20 million. Earnings per share for the year ended December 31, 1998 was increased by approximately Baht 0.03. - Investments in associated company and the Company's shareholders' equity as at December 31, 1997, were equally increased by approximately Baht 2.03 million. Net income for the year ended December 31, 1997 was increased by approximately Baht 2.79 million (comprising net result from investment of approximately Baht 1.29 million and a reversal of loss from decline in value of investment of approximately Baht 1.50 million), while earnings per share for the year ended December 31, 1997 was increased by approximately Baht 0.01. Investment in the aforesaid associated company as at December 31, 1998, at the book value of approximately Baht 122.11 million, which is equivalent to 0.29% of the total consolidated assets and 0.30% of the Company's total assets at December 31, 1998, was recorded by using the equity method of accounting based on the related financial information of the financial statements for the year ended December 31, 1998 prepared by the management of the said company and had not been audited or reviewed by the auditors. The related unaudited or unreviewed net result of investment in the said associated company for the year ended December 31, 1998 was approximately Baht 6.20 million. Investment in an other company, Fonepoint (Thailand) Company Limited, as at December 31, 1998 and 1997, which do not represent marketable securities, are shown net of adjustment relating to the decline in value of investment, determined from its financial status in the amount of approximately Baht 17.20 million. The Company and its subsidiaries do not have significant influence in the management of this company. (More)