FINANCIAL STATEMENTS AND ACCOUNTANTS' REVIEW REPORT ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES SECOND QUARTER ENDED JUNE 30, 1999 AND 1998 Accountants' Review Report To the Shareholders Advanced Info Service Public Company Limited: We have made a review of the consolidated balance sheets of Advanced Info Service Public Company Limited and subsidiaries as at June 30, 1999 and 1998, and the related consolidated statements of income, changes in shareholders' equity, retained earnings and cash flows for the three-month and six-month periods then ended, and the separate financial statements of Advanced Info Service Public Company Limited for the same periods, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. We draw attention to Note 1 to the financial statements. The operations of Advanced Info Service Public Company Limited and its subsidiaries since 1997 have been affected and may continue to be influenced for the foreseeable future by the economic conditions in Thailand and the Asia Pacific Region in general. The ultimate effect that these uncertainties will have on stated values or classifications of assets and liabilities at the balance sheet date cannot presently be determined. Nirand Lilamethwat Certified Public Accountant Registration Number 2316 KPMG Audit (Thailand) Limited Bangkok, July 23, 1999 The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Thailand. The standards, procedures and practices to review these financial statements are those generally accepted and applied in Thailand. ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT JUNE 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 ASSETS CURRENT ASSETS Cash in hand and at banks 2,387,161 808,553 2,218,641 781,469 Short-term investments (Notes 6 & 7) 2,498,382 3,670,913 2,182,755 2,997,322 Accounts and notes receivable - net (Notes 3, 4 & 8) 3,028,666 3,428,905 2,554,862 3,311,147 Short-term loans and advances to related parties - net (Note 3) 10,044 91,000 3,350 72,427 Inventories - net (Note 4) 981,090 55,328 - - Other current assets (Note 9) 999,887 837,427 964,815 812,807 Total Current Assets 9,905,230 8,892,126 7,924,423 7,975,172 INVESTMENTS (Notes 4 & 10) Related Parties 128,159 67,995 3,055,484 884,383 Others - - - - Total Investments 128,159 67,995 3,055,484 884,383 PROPERTY AND EQUIPMENT - net (Notes 4 & 11) 1,881,293 1,805,988 1,696,962 1,676,737 OTHER ASSETS Costs of mobile phone and pager service networks under concession agreements - net (Notes 2, 3 & 4) 29,782,529 27,592,783 29,036,336 26,783,570 Deferred charges - net (Note 4) 427,991 355,463 357,295 355,297 Goodwill - net (Note 4) 783,281 311,090 - - Others 118,360 164,275 87,639 145,404 Total Other Assets 31,112,161 28,423,611 29,481,270 27,284,271 Total Assets 43,026,843 39,189,720 42,158,139 37,820,563 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT JUNE 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses (Notes 3 & 12) 6,279,851 8,536,218 5,449,676 8,371,753 Current portion of long-term liabilities (Notes 13 & 17) 1,235,740 3,136,612 1,235,740 2,473,611 Advances from related parties (Note 3) 31,348 23,819 36,639 3,010 Short-term bonds (Notes 3 & 14) 1,889,900 20,000 1,889,900 20,000 Other current liabilities (Note 16) 1,407,802 1,047,169 1,083,678 954,370 Total Current Liabilities 10,844,641 12,763,818 9,695,633 11,822,744 LONG-TERM BONDS (Notes 3 & 15) 1,500,000 3,000,000 1,500,000 3,000,000 LONG-TERM LIABILITIES - net (Notes 13 & 17) 2,684,847 6,589,713 2,684,847 6,589,713 OTHER LIABILITIES (Notes 3 & 18) 3,249,108 3,351,527 3,529,413 3,260,310 Total Liabilities 18,278,596 25,705,058 17,409,893 24,672,767 MINORITY INTERESTS IN SUBSIDIARIES 1 336,866 - - SHAREHOLDERS' EQUITY Share capital (Note 24) Authorized 500,000,000 common shares, Baht 10 par value 5,000,000 5,000,000 5,000,000 5,000,000 Issued 270,000,000 common shares in 1999 and 234,000,000 common shares in 1998, fully paid 2,700,000 2,340,000 2,700,000 2,340,000 Premium on share capital 10,215,000 2,295,000 10,215,000 2,295,000 Retained earnings Appropriated to legal reserve (Note 26) 500,000 500,000 500,000 500,000 Unappropriated 11,333,246 8,012,796 11,333,246 8,012,796 Total Shareholders' Equity 24,748,246 13,147,796 24,748,246 13,147,796 Total Liabilities and Shareholders' Equity 43,026,843 39,189,720 42,158,139 37,820,563 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht Consolidated Company's Separate except basic earnings (loss) per share) Statements of income Statements of income 1999 1998 1999 1998 REVENUES Revenues from services and equipment rentals (Note 4) 4,337,972 3,782,088 3,971,915 3,427,292 Sales (Note 4) 1,742,258 56,423 - - Commission income 644 - - - Net result of investment in subsidiary and associated companies (Notes 4 & 10) 2,457 2,090 294,146 24,088 Gain on exchange 10,318 - - - Other income (Note 19) 122,066 125,669 111,695 97,474 Total Revenues 6,215,715 3,966,270 4,377,756 3,548,854 EXPENSES Costs of services and equipment rentals (Note 4) 2,165,170 1,963,267 2,080,475 1,893,751 Cost of sales (Note 4) 1,219,694 67,329 - - Selling and administrative expenses 924,114 838,741 555,939 649,200 Loss on exchange - 702,926 2,820 705,206 Interest expense 188,542 273,147 187,640 255,024 Directors' remuneration (Note 20) 2,135 1,590 2,120 1,570 Other expenses (Note 21) 34,736 19,987 3,655 - Total Expenses 4,534,391 3,866,987 2,832,649 3,504,751 Net income before income tax 1,681,324 99,283 1,545,107 44,103 Income tax (461,495) (84,355) (325,278) (49,940) Net income (loss) before considering minority interests in subsidiaries 1,219,829 14,928 1,219,829 (5,837) Less Share of net income of subsidiaries to minority interests - 20,765 - - Net income (loss) 1,219,829 (5,837) 1,219,829 (5,837) Basic earnings (loss) per share (Baht) (Note 4) 4.52 (0.02) 4.52 (0.02) See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht Consolidated Company's Separate except basic earnings per share) Statements of income Statements of income 1999 1998 1999 1998 REVENUES Revenues from services and equipment rentals (Note 4) 8,495,670 7,922,643 7,764,625 7,209,002 Sales (Note 4) 3,398,015 116,160 - - Commission income 1,539 - - - Net result of investment in subsidiary and associated companies (Notes 4 & 10) 6,043 3,591 493,419 56,557 Gain on exchange - 733,650 - 732,722 Other income (Note 19) 251,350 296,934 222,337 249,759 Total Revenues 12,152,617 9,072,978 8,480,381 8,248,040 EXPENSES Costs of services and equipment rentals (Note 4) 4,248,585 3,881,473 4,078,593 3,742,056 Cost of sales (Note 4) 2,355,553 127,103 - - Selling and administrative expenses 1,930,059 1,749,261 1,134,354 1,378,719 Loss on exchange 61,797 - 73,743 - Interest expense 465,497 599,816 461,456 563,494 Directors' remuneration (Note 20) 2,420 2,595 2,390 2,560 Other expenses (Note 21) 49,527 31,101 3,598 1,964 Total Expenses 9,113,438 6,391,349 5,754,134 5,688,793 Net income before income tax 3,039,179 2,681,629 2,726,247 2,559,247 Income tax (927,902) (897,325) (634,775) (822,453) Net income before considering minority interests in subsidiaries 2,111,277 1,784,304 2,091,472 1,736,794 Less Share of net income of subsidiaries to minority interests 19,805 47,510 - - Net income 2,091,472 1,736,794 2,091,472 1,736,794 Basic earnings per share (Baht) (Note 4) 8.04 7.42 8.04 7.42 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Amounts in thousand Baht) Three Months Six Months Ended June 30 Ended June 30 1999 1998 1999 1998 Share capital Common shares Balance at beginning of period 2,700,000 2,340,000 2,340,000 2,340,000 Increase during the period - - 360,000 - Decrease during the period - - - - Balance at end of period 2,700,000 2,340,000 2,700,000 2,340,000 Premium on share capital Balance at beginning of period 10,215,000 2,295,000 2,295,000 2,295,000 Increase during the period - - 7,920,000 - Decrease during the period - - - - Balance at end of period 10,215,000 2,295,000 10,215,000 2,295,000 Retained earnings Appropriated to legal reserve Balance at beginning of period 500,000 500,000 500,000 500,000 Increase during the period - - - - Decrease during the period - - - - Balance at end of period 500,000 500,000 500,000 500,000 Unappropriated Balance at beginning of period 10,113,417 8,276,033 9,241,774 6,531,364 Increase during the period 1,219,829 - 2,091,472 1,738,832 Decrease during the period - 263,237 - 257,400 Balance at end of period 11,333,246 8,012,796 11,333,246 8,012,796 Total Shareholders' Equity 24,748,246 13,147,796 24,748,246 13,147,796 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF RETAINED EARNINGS (UNAUDITED) (Amounts in thousand Baht) Three Months Six Months Ended June 30 Ended June 30 1999 1998 1999 1998 Unappropriated retained earnings Balance at beginning of period 10,113,417 8,276,033 9,241,774 6,531,364 Cumulative effect of adjustment derived from the change of status of investment in other company to beinvestment in associated company (Note 10) - - - 2,038 Appropriation of retained earnings in prior period Dividend (Note 25) - (257,400) - (257,400) Net income (loss) for the period 1,219,829 (5,837) 2,091,472 1,736,794 Balance at end of period 11,333,246 8,012,796 11,333,246 8,012,796 Appropriated retained earnings Legal reserve (Note 26) 500,000 500,000 500,000 500,000 Total Retained Earnings 11,833,246 8,512,796 11,833,246 8,512,796 See notes to financial statements (More)