ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED INTERIM CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (UNAUDITED) 30 SEPTEMBER 1999 AUDITOR'S REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS To the Shareholders of Advanced Info Service Public Company Limited I have performed a review of the accompanying consolidated and company balance sheets of Advanced Info Service Public Company Limited as at 30 September 1999 and the related consolidated and company statements of income, changes in shareholders' equity, retained earnings, and cash flows for the three-month and nine-month periods then ended. These financial statements are the responsibility of the Company's management. My responsibility is to issue a report on these financial statements based on my review. The interim consolidated and company financial statements (before restatement) of Advanced Info Service Public Company Limited for the three-month and nine-month periods ended 30 September 1998 presented herewith for comparative purposes, except for the consolidated and company statements of cash flows, were reviewed by another independent auditor whose report dated 26 October 1998, expressed that he was not aware of any material modifications that should be made to those interim financial statements for them to be in conformity with generally accepted accounting principles. I conducted my review in accordance with the standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim consolidated and company financial statements consists principally of obtaining an understanding of the system for the preparation of the financial statements, making an analytical review of pertinent financial data, and making inquiries of officials of the Company who have the responsibility for financial and accounting matters. This review is substantially less in scope than an audit 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, I express no opinion on the interim consolidated and company financial statements which I have reviewed. As explained in note 2 to the financial statements, the company has reviewed its accounting for cost of mobile telephone networks under concession agreements and changed to amortise such cost over the period of the underlying assets with effect from 1 July 1999. The company has, therefore, restated its consolidated and company financial statements as at and for the three-month and nine-month periods ended 30 September 1998, which are presented for comparison purposes, to account for the changing in the period of amortisation for the cost of such mobile telephone networks. I have reviewed the adjustment, detailed in note 2, relating to the restatement of the consolidated and company financial statements as at and for the three-month and nine-month periods ended 30 September 1998. Based on my review, the adjustment is appropriately made. Based on my review, I am not aware of any material modifications that should be made to the interim consolidated and company financial statements, referred to in the first paragraph, for them to be in conformity with generally accepted accounting principles. PRASAN CHUAPHANICH Certified Public Accountant (Thailand) No. 3051 PRICEWATERHOUSECOOPERS ABAS LIMITED Bangkok 1 November 1999 The accompanying interim consolidated and company financial statements are not intended to present the financial positions, results of operations, and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Thailand. Consolidated balance sheets and Company balance sheets at 30 September 1999 and 1998 Assets Consolidated The company 1999 1998 1999 1998 Restated Restated Notes Baht'000 Baht'000 Baht'000 Baht'000 Current assets Cash on hand and at banks 1,496,872 208,160 1,330,932 173,803 Short-term investments 3,965,074 3,895,311 3,270,344 3,740,311 Trade accounts receivable, net 4 3,719,977 3,205,008 3,236,378 3,104,767 Amounts due from related companies, net 5 5,465 122,313 19,536 103,964 Inventories, net 894,668 42,658 - - Forward and swap contracts receivable, net 7 371,356 114,241 371,299 114,241 Other current assets 6 672,865 599,912 621,929 587,507 Total current assets 11,126,277 8,187,603 8,850,418 7,824,593 Long-term forward and swap contracts receivable, net 7 118,712 520,702 118,712 520,702 Long-term investments 8 130,981 69,673 3,287,355 926,046 Property and equipment, net 9 1,872,905 1,917,388 1,694,225 1,798,646 Cost of mobile phone and pager service networks under concession agreements, net 10 25,341,725 25,702,513 24,583,355 24,906,363 Other assets, net 11 1,316,323 825,332 457,292 504,473 Total assets 39,906,923 37,223,211 38,991,357 36,480,823 The notes to the interim financial statements on pages 15 to 48 form an integral part of the financial statements Auditor's report page 1 Consolidated balance sheets and Company balance sheets at 30 September 1999 and 1998 Liabilities and shareholders' equity Consolidated The company 1999 1998 1999 1998 Restated Restated Notes Baht'000 Baht'000 Baht'000 Baht'000 Current liabilities Short-term loans from financial institutions - 473,684 - 473,684 Trade accounts and notes payable 12 2,164,895 6,700,660 1,620,611 6,553,404 Current portion of long-term liabilities 16 1,646,076 3,487,963 1,646,076 3,487,963 Amounts due to related companies 131,396 16,277 42,835 839 Short-term debentures 13 1,255,700 20,000 1,255,700 20,000 Accrued concession fee 2,770,064 2,593,920 2,770,064 2,593,920 Other current liabilities 14 3,788,128 2,116,250 3,139,442 1,979,178 Total current liabilities 11,756,259 15,408,754 10,474,728 15,108,988 Long-term debentures 15 1,500,000 2,000,000 1,500,000 2,000,000 Long-term liabilities 16 2,591,773 5,962,272 2,591,773 5,962,272 Deposits from customers 17 3,326,502 3,411,790 3,692,468 3,338,790 Total liabilities 19,174,534 26,782,816 18,258,969 26,410,050 Minority interests 1 369,622 - - Shareholders' equity Share capital 18 2,700,000 2,340,000 2,700,000 2,340,000 Share premium 18 10,215,000 2,295,000 10,215,000 2,295,000 Retained earnings Appropriated - legal reserve 22 500,000 500,000 500,000 500,000 Unappropriated 7,317,388 4,935,773 7,317,388 4,935,773 Total shareholders' equity 20,732,388 10,070,773 20,732,388 10,070,773 Total liabilities and shareholders' equity 39,906,923 37,223,211 38,991,357 36,480,823 The notes to the interim financial statements on pages 15 to 48 form an integral part of the financial statements Auditor's report page 1 Consolidated statements of income and Company statements of income for the three-month periods ended 30 September 1999 and 1998 Consolidated The Company 1999 1998 1999 1998 Restated Restated Note Baht'000 Baht'000 Baht'000 Baht'000 Revenues Revenue from services and equipment rentals 4,559,563 3,590,658 4,229,308 3,248,309 Sales 1,670,641 48,903 - - Net result of investments in subsidiaries - - 229,049 39,985 Net result of investment in associate 2,822 1,678 2,822 1,678 Net exchange gain 148,574 579,991 86,777 562,156 Interest income 40,706 107,350 35,181 87,687 Other income 116,656 22,181 95,804 20,456 Total revenues 6,538,962 4,350,761 4,678,941 3,960,271 Expenses Cost of services and equipment rentals 2,739,224 2,510,975 2,648,508 2,442,035 Cost of sales 1,135,155 59,303 - - Selling and administrative expenses 1,086,463 924,133 557,681 747,741 Interest expenses 143,036 311,603 142,777 298,399 Directors' remuneration 20 1,310 1,325 1,340 1,310 Total expenses 5,105,188 3,807,339 3,350,306 3,489,485 Income before tax and minority interests 1,433,774 543,422 1,328,635 470,786 Income tax 549,388 367,264 444,249 327,384 Net income before minority interests 884,386 176,158 884,386 143,402 Minority interests, net - 32,756 - - Net income for period 884,386 143,402 884,386 143,402 Baht Baht Baht Baht Earnings per share Earnings per share before prior period adjustment and before considering minority interests 3.28 2.45 3.28 2.31 Prior period adjustments - (1.70) - (1.70) Earnings per share after prior period adjustment but before considering minority interests 3.28 0.75 3.28 0.61 Less: Share in net income to minority Interests - (0.14) - - Earnings per share 3.28 0.61 3.28 0.61 The notes to the interim financial statements on pages 15 to 48 form an integral part of the financial statements Auditor's report page 1 Consolidated statements of income and Company statements of income for the nine-month periods ended 30 September 1999 and 1998 Consolidated The Company 1999 1998 1999 1998 Restated Restated Notes Baht'000 Baht'000 Baht'000 Baht'000 Revenues Revenue from services and equipment rentals 13,055,234 11,513,334 11,993,933 10,457,311 Sales 5,068,655 165,063 - - Net result of investments in subsidiaries - - 716,425 92,951 Net result of investment in associate 8,865 5,269 8,865 5,269 Net exchange gain 86,777 1,313,641 86,777 1,294,878 Interest income 185,305 351,182 163,481 286,712 Other income 224,946 75,283 189,842 71,190 Total revenues 18,629,782 13,423,772 13,159,323 12,208,311 Expenses Cost of services and equipment rentals 19 7,852,654 7,092,977 7,591,947 6,884,620 Cost of sales 3,490,708 186,406 - - Selling and administrative expenses 3,066,050 2,704,528 1,769,377 2,128,424 Interest expenses 608,533 911,419 604,233 861,893 Directors' remuneration 20 3,730 3,920 3,730 3,870 Total expenses 15,021,675 10,899,250 9,969,287 9,878,807 Income before tax and minority interests 3,608,107 2,524,522 3,190,036 2,329,504 Income tax 1,477,289 1,264,589 1,079,023 1,149,837 Net income before minority interests 2,130,818 1,259,933 2,111,013 1,179,667 Minority interests, net 19,805 80,266 - - Net income for period 2,111,013 1,179,667 2,111,013 1,179,667 Baht Baht Baht Baht Earnings per share Earnings per share before prior period adjustment and before considering minority interests 8.09 10.06 8.01 9.72 Prior period adjustments - (4.68) - (4.68) Earnings per share after prior period adjustment but before considering minority interests 8.09 5.38 8.01 5.04 Less: Share in net income to minority interests (0.08) (0.34) - - Earnings per share 8.01 5.04 8.01 5.04 The notes to the interim financial statements on pages 15 to 48 form an integral part of the financial statements Auditor's report page 1 Consolidated statements of changes in shareholders' equity and Company statements of changes in shareholders' equity for three-month periods ended 30 September 1999 and 1998 Consolidated The Company 1999 1998 1999 1998 Restated Restated Notes Baht'000 Baht'000 Baht'000 Baht'000 Share capital Ordinary shares Beginning balance 2,700,000 2,340,000 2,700,000 2,340,000 Increase during period - - - - Ending balance 2,700,000 2,340,000 2,700,000 2,340,000 Share premium Beginning balance 10,215,000 2,295,000 10,215,000 2,295,000 Increase during period - - - - Ending balance 10,215,000 2,295,000 10,215,000 2,295,000 Appropriated retained earnings - legal reserve 22 Beginning balance 500,000 500,000 500,000 500,000 Increase during period - - - - Ending balance 500,000 500,000 500,000 500,000 Unappropriated retained earnings Beginning balance - as previously reported 11,333,246 8,012,796 11,333,246 8,012,796 Prior period adjustment 2 (4,900,244) (3,220,425) (4,900,244) (3,220,425) Beginning balance - as restated 6,433,002 4,792,371 6,433,002 4,792,371 Net income for period As previously reported - 541,435 - 541,435 Net income for period 884,386 - 884,386 - Prior period adjustments Changing in amortisation period for cost of mobile telephone networks under concession agreements 2 - (399,711) - (399,711) Cumulative effect of adjustment derived from the change of status of investment in other company to be investment in associate - 1,678 - 1,678 884,386 143,402 884,386 143,402 Ending balance 7,317,388 4,935,773 7,317,388 4,935,773 Total shareholders' equity 20,732,388 10,070,773 20,732,388 10,070,773 The notes to the interim financial statements on pages 15 to 48 form an integral part of the financial statements Auditor's report page 1 Consolidated statements of changes in shareholders' equity and Company statements of changes in shareholders' equity for the nine-month periods ended 30 September 1999 and 1998 Consolidated The Company 1999 1998 1999 1998 Restated Restated Notes Baht'000 Baht'000 Baht'000 Baht'000 Share capital Ordinary shares Beginning balance 2,340,000 2,340,000 2,340,000 2,340,000 Increase during period 18 360,000 - 360,000 - Ending balance 2,700,000 2,340,000 2,700,000 2,340,000 Share premium Beginning balance 2,295,000 2,295,000 2,295,000 2,295,000 Increase during period 18 7,920,000 - 7,920,000 - Ending balance 10,215,000 2,295,000 10,215,000 2,295,000 Appropriated retained earnings - legal reserve 22 Beginning balance 500,000 500,000 500,000 500,000 Increase during period - - - - Ending balance 500,000 500,000 500,000 500,000 Unappropriated retained earnings Beginning balance - as previously reported 9,241,774 6,531,364 9,241,774 6,531,364 Cumulative effect of adjustment derived from change of status of investment - 2,038 - 2,038 Prior period adjustment Changing in amortisation period for cost of mobile telephone networks under concession agreements 2 (4,035,399) (2,519,896) (4,035,399) (2,519,896) Beginning balance - as restated 5,206,375 4,013,506 5,206,375 4,013,506 Net income for period As previously reported - 2,274,638 - 2,274,638 Net income for period 2,111,013 - 2,111,013 - Prior period adjustments Changing in amortisation period for cost of mobile telephone networks under concession agreements 2 - (1,100,241) - (1,100,241) Cumulative effect of adjustment derived from the change of status of investment in other company to be investment in associate - 5,270 - 5,270 2,111,013 1,179,667 2,111,013 1,179,667 Dividend 21 - (257,400) - (257,400) Ending balance 7,317,388 4,935,773 7,317,388 4,935,773 Total shareholders' equity 20,732,388 10,070,773 20,732,388 10,070,773 The notes to the interim financial statements on pages 15 to 48 form an integral part of the financial statements Auditor's report page 1 Consolidated statements of retained earnings and Company statements of retained earnings for the three-month periods ended 30 September 1999 and 1998 Consolidated The Company 1999 1998 1999 1998 Restated Restated Notes Baht'000 Baht'000 Baht'000 Baht'000 Unappropriated retained earnings Balance at beginning of period - as previously reported 11,333,246 8,012,796 11,333,246 8,012,796 Prior period adjustment 2 (4,900,244) (3,220,425) (4,900,244) (3,220,425) Beginning balance - as restated 6,433,002 4,792,371 6,433,002 4,792,371 Add: Net income for period As previously reported - 541,435 - 541,435 Net income for period 884,386 - 884,386 - Prior period adjustments Changing in amortisation period for cost of mobile telephone networks under concession agreements 2 - (399,711) - (399,711) Cumulative effect of adjustment derived from the change of status of investment in other company to be investment in associate - 1,678 - 1,678 884,386 143,402 884,386 143,402 Unappropriated retained earnings at end of period 7,317,388 4,935,773 7,317,388 4,935,773 Appropriated retained earnings - legal reserve 22 Balance at beginning of period 500,000 500,000 500,000 500,000 Add: addition during period - - - - Appropriated retained earnings at end of period 500,000 500,000 500,000 500,000 Total retained earnings 7,817,388 5,435,773 7,817,388 5,435,773 The notes to the interim financial statements on pages 15 to 48 form an integral part of the financial statements Auditor's report page 1 Consolidated statements of retained earnings and Company statements of retained earnings for the nine-month periods ended 30 September 1999 and 1998 Consolidated The Company 1999 1998 1999 1998 Restated Restated Notes Baht'000 Baht'000 Baht'000 Baht'000 Unappropriated retained earnings Beginning balance - as previously reported 9,241,774 6,531,364 9,241,774 6,531,364 Cumulative effect of adjustment derived from change of status of investment - 2,038 - 2,038 Prior period adjustment Changing in amortisation period for cost of mobile telephone networks under concession agreements 2 (4,035,399) (2,519,896) (4,035,399) (2,519,896) Beginning balance - as restated 5,206,375 4,013,506 5,206,375 4,013,506 Add: Net income for period As previously reported - 2,274,638 - 2,274,638 Net income for period 2,111,013 - 2,111,013 - Prior period adjustments Changing in amortisation period for cost of mobile telephone networks under concession agreements 2 - (1,100,241) - (1,100,241) Cumulative effect of adjustment derived from the change of status of investment in other company to be investment in associate - 5,270 - 5,270 2,111,013 1,179,667 2,111,013 1,179,667 Less: Dividend 21 - (257,400) - (257,400) 2,111,013 922,267 2,111,013 922,267 Unappropriated retained earnings at end of period 7,317,388 4,935,773 7,317,388 4,935,773 Appropriated retained earnings - legal reserve 22 (more)