AUDITOR'S REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS To the Shareholders of Advanced Info Service Public Company Limited I have reviewed the accompanying consolidated and company balance sheets of Advanced Info Service Public Company Limited as at 30 June 2000 and the related consolidated and company statements of income for the three-month and six-month periods ended 30 June 2000 and the related consolidated and company statements of changes in shareholders' equity, retained earnings, and cash flows for the six-month period ended 30 June 2000. 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 six-month periods ended 30 June 1999, presented herewith for comparative purpose, were reviewed by another independent auditor whose report dated 23 July 1999, 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 auditing standard applicable to review engagements. This standard requires that I plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. I have not performed an audit, and, accordingly, I do not express an audit opinion. Based on my review, nothing has come to my attention that causes me to believe that the consolidated and company financial statements referred to above are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. As explained in Note 2 to the interim consolidated and company financial statements, during the third and fourth quarters of the year 1999, the Company and a subsidiary have changed their accounting policies in respect of: (a) accounting for the cost of mobile phone networks under concession agreements; (b) accounting for the cost of Datanet tools and equipment under concession agreement and (c) accounting for the change in status of investment in associate to be investment in subsidiary, to reflect a change in the reporting unit. The Company and the Group have accounted for these changes retrospectively. Accordingly the consolidated and company financial statements for the three-month and six-month periods ended 30 June 1999 have been restated. I have reviewed the adjustments, detailed in Note 2, relating to the restatement of the consolidated and company financial statements for the three-month and six-month periods ended 30 June 1999, and found that the adjustments have been appropriately made. I have audited the consolidated and company financial statements of Advanced Info Service Public Company Limited for the year ended 31 December 1999 in accordance with generally accepted auditing standards and expressed an unqualified opinion on those statements in my report dated 4 February 2000. The consolidated and company balance sheets as at 31 December 1999, presented for comparative purpose, are components of the Company's financial statements which I have audited and issued a report thereon as stated above, and I have not performed any other auditing procedures subsequent to the date of that report. PRASAN CHUAPHANICH Certified Public Accountant (Thailand) No. 3051 PricewaterhouseCoopers ABAS Limited Bangkok 9 August 2000 Advanced Info Service Public Company Limited Balance Sheets As at 30 June 2000 and 31 December 1999 Consolidated Company (Unaudited) (Audited) (Unaudited) (Audited) 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Notes Baht'000 Baht'000 Baht'000 Baht'000 ASSETS Current assets Cash on hand and at banks 1,042,050 880,982 722,397 525,851 Short-term investments 8,864,819 2,810,131 7,507,531 2,352,920 Trade accounts receivable, net 4 4,172,660 3,848,346 3,824,463 3,430,142 Amounts due from related companies, net 19 2,848 548 821 2,093 Inventories, net 1,178,750 939,473 - - Forward contracts receivable, net 45,765 - 44,815 - Advances to suppliers 1,892,739 - 1,892,739 - Other current assets 624,030 1,090,626 541,314 1,028,223 Total current assets 17,823,661 9,570,106 14,534,080 7,339,229 Non-current assets Long-term investments, net 5 - - 4,213,407 3,825,618 Property and equipment, net 6 1,851,597 1,974,811 1,598,985 1,778,747 Cost of mobile phone and pager service networks and Datanet tools and equipment under concession agreements, net 7 29,618,801 26,812,222 28,538,997 25,720,430 Other assets, net 8 1,266,143 1,507,023 336,930 475,145 Total non-current assets 32,736,541 30,294,056 34,688,319 31,799,940 Total assets 50,560,202 39,864,162 49,222,399 39,139,169 The notes to the interim consolidated and company financial statements on pages 12 to 44 are an integral part of these interim financial statements. Advanced Info Service Public Company Limited Balance Sheets As at 30 June 2000 and 31 December 1999 Consolidated Company (Unaudited) (Audited) (Unaudited) (Audited) 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Notes Baht'000 Baht'000 Baht'000 Baht'000 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term loans from banks 20,000 1,950,000 - 1,950,000 Trade accounts payable 2,034,221 2,324,113 1,160,212 1,683,336 Current portion of long-term debentures 9 308,000 - 308,000 - Current portion of long-term liabilities 10 - 1,033,127 - 1,033,127 Amounts due to and loans from related companies 19 113,050 135,047 71,271 693,480 Forward contracts payable, net - 57,450 - 57,227 Accrued concession fee 2,943,935 953,231 2,943,935 953,231 Other current liabilities 5,618,225 4,518,769 4,873,760 3,614,102 Total current liabilities 11,037,431 10,971,737 9,357,178 9,984,503 Non-current liabilities Long-term forward and swap contracts payable, net - 24,565 - 24,565 Long-term debentures 9 10,818,802 1,500,000 10,818,802 1,500,000 Long-term liabilities 10 21,293 2,391,869 1,294 2,391,869 Deposits from customers 3,764,962 3,450,606 4,286,790 3,871,811 Total non-current liabilities 14,605,057 7,367,040 15,106,886 7,788,245 Total liabilities 25,642,488 18,338,777 24,464,064 17,772,748 Shareholders' equity Share capital Authorised share capital 5,000,000 5,000,000 5,000,000 5,000,000 Issued and fully paid-up share capital 11 2,700,000 2,700,000 2,700,000 2,700,000 Premium on share capital 11 10,215,000 10,215,000 10,215,000 10,215,000 Retained earnings Appropriated - Legal reserve 500,000 500,000 500,000 500,000 Unappropriated 11,343,335 7,951,421 11,343,335 7,951,421 Minority interests 12 159,379 158,964 - - Total shareholders' equity 24,917,714 21,525,385 24,758,335 21,366,421 Total liabilities and shareholders' equity 50,560,202 39,864,162 49,222,399 39,139,169 The notes to the interim consolidated and company financial statements on pages 12 to 44 are an integral part of these interim financial statements. Advanced Info Service Public Company Limited Statements of Income (Unaudited) For the three-month periods ended 30 June 2000 and 1999 Consolidated Company (Restated) (Restated) 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Notes Baht'000 Baht'000 Baht'000 Baht'000 Revenues Revenues from services and equipment rentals 6,135,796 4,379,269 5,748,269 3,971,915 Sales 2,414,598 1,742,258 - - Net gain on exchange 163,026 10,535 174,866 - Compensation income 13 1,031,570 - 1,031,570 - Other operating income 195,459 149,334 150,809 136,363 Total revenues 9,940,449 6,281,396 7,105,514 4,108,278 Expenses Cost of services and equipment rentals 3,426,045 2,623,632 3,277,129 2,513,474 Cost of sales 1,631,241 1,226,244 - - Selling and administrative expenses 1,149,575 990,355 638,888 583,122 Net loss on exchange - - - 2,820 Interest expenses 182,014 188,542 181,542 187,640 Directors' remuneration 1,365 2,135 1,350 2,120 Total expenses 6,390,240 5,030,908 4,098,909 3,289,176 Operating income 3,550,209 1,250,488 3,006,605 819,102 Share of net profit in subsidiaries - - 364,018 291,828 Income before tax 3,550,209 1,250,488 3,370,623 1,110,930 Income tax 1,248,483 465,346 1,068,654 325,278 Income before minority interests 2,301,726 785,142 2,301,969 785,652 Share of net loss in subsidiaries to minority interests 12 243 510 - - Net income for the period 2,301,969 785,652 2,301,969 785,652 Baht Baht Baht Baht Basic earnings per share 14 Income before minority interests 8.53 2.91 8.53 2.91 Share of net loss in subsidiaries to minority interests - - - - Net income for the period 8.53 2.91 8.53 2.91 The notes to the interim consolidated and company financial statements on pages 12 to 44 are an integral part of these interim financial statements. Advanced Info Service Public Company Limited Statements of Income (Unaudited) For the six-month periods ended 30 June 2000 and 1999 Consolidated Company (Restated) (Restated) 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Notes Baht'000 Baht'000 Baht'000 Baht'000 Revenues Revenues from services and equipment rentals 11,819,713 8,577,363 10,999,645 7,764,625 Sales 4,472,260 3,398,061 - - Net gain on exchange 260,584 - 271,911 - Compensation income 13 1,031,570 - 1,031,570 - Other operating income 336,810 288,968 270,744 254,832 Total revenues 17,920,937 12,264,392 12,573,870 8,019,457 Expenses Cost of services and equipment rentals 6,798,622 5,166,218 6,517,893 4,945,721 Cost of sales 2,960,495 2,355,573 - - Selling and administrative expenses 2,369,806 2,036,869 1,366,281 1,168,165 Net loss on exchange - 61,706 - 73,742 Interest expenses 303,874 465,757 311,499 461,456 Directors' remuneration 440 2,420 410 2,390 Total expenses 12,433,237 10,088,543 8,196,083 6,651,474 Operating income 5,487,700 2,175,849 4,377,787 1,367,983 Share of net profit in subsidiaries - - 737,789 488,280 Income before tax 5,487,700 2,175,849 5,115,576 1,856,263 Income tax 2,095,371 935,788 1,723,662 634,775 Income before minority interests 3,392,329 1,240,061 3,391,914 1,221,488 Share of net profit in subsidiaries to minority interests 12 415 18,573 - - Net income for the period 3,391,914 1,221,488 3,391,914 1,221,488 Baht Baht Baht Baht Basic earnings per share 14 Income before minority interests 12.56 4.76 12.56 4.69 Share of net profit in subsidiaries to minority interests - (0.07) - - Net income for the period 12.56 4.69 12.56 4.69 The notes to the interim consolidated and company financial statements on pages 12 to 44 are an integral part of these interim financial statement Advanced Info Service Public Company Limited Statements of Changes in Shareholders' Equity (Unaudited) For the six-month periods ended 30 June 2000 and 1999 Consolidated Company (Restated) (Restated) 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Notes Baht'000 Baht'000 Baht'000 Baht'000 Share capital Beginning balance 2,700,000 2,340,000 2,700,000 2,340,000 Increase during the period 11 - 360,000 - 360,000 Decrease during the period - - - - Ending balance 2,700,000 2,700,000 2,700,000 2,700,000 Premium on share capital Beginning balance 10,215,000 2,295,000 10,215,000 2,295,000 Increase during the period 11 - 7,920,000 - 7,920,000 Decrease during the period - - - - Ending balance 10,215,000 10,215,000 10,215,000 10,215,000 Retained earnings Appropriated retained earnings Legal reserve Beginning balance 500,000 500,000 500,000 500,000 Increase during the period - - - - Decrease during the period - - - - Ending balance 500,000 500,000 500,000 500,000 Unappropriated retained earnings Beginning balance - as previously reported - 9,241,774 - 9,241,774 Adjustments 2 Change in amortisation period for cost of mobile phone networks under concession agreements - (4,035,398) - (4,035,398) Change in status of investment in associate to be investment in subsidiary, net of change in amortisation period for cost of Datanet tools and equipment of the subsidiary under concession agreement - (5,016) - (5,016) Beginning balance - as restated - 5,201,360 - 5,201,360 Beginning balance 7,951,421 - 7,951,421 - Net income for the period - as previously reported - 2,091,472 - 2,091,472 Net income for the period 3,391,914 - 3,391,914 - Adjustments 2 Change in amortisation period for cost of mobile phone networks under concession agreements - (864,846) - (864,846) Change in status of investment in associate to be investment in subsidiary, net of change in amortisation period for cost of Datanet tools and equipment of the subsidiary under concession agreement - (5,138) - (5,138) Ending balance 11,343,335 6,422,848 11,343,335 6,422,848 Minority interests 12 159,379 342,883 - - Total shareholders' equity 24,917,714 20,180,731 24,758,335 19,837,848 The notes to the interim consolidated and company financial statements on pages 12 to 44 are an integral part of these interim financial statements. Advanced Info Service Public Company Limited Statements of Retained Earnings (Unaudited) For the six-month periods ended 30 June 2000 and 1999 Consolidated Company (Restated) (Restated) 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Note Baht'000 Baht'000 Baht'000 Baht'000 Unappropriated retained earnings: Beginning balance - as previously reported - 9,241,774 - 9,241,774 Adjustments 2 Change in amortisation period for cost of mobile phone networks under concession agreements - (4,035,398) - (4,035,398) Change in status of investment in associate to be investment in subsidiary, net of change in amortisation period for cost of Datanet tools and equipment of the subsidiary under concession agreement - (5,016) - (5,016) Beginning balance - as restated - 5,201,360 - 5,201,360 Beginning balance 7,951,421 - 7,951,421 - Net income for the period - as previously reported - 2,091,472 - 2,091,472 Net income for the period 3,391,914 - 3,391914 - Adjustments 2 Change in amortisation period for cost of mobile phone networks under concession agreements - (864,846) - (864,846) Change in status of investment in associate to be investment in subsidiary, net of change in amortisation period for cost of Datanet tools and equipment of the subsidiary under concession agreement - (5,138) - (5,138) Unappropriated retained earnings at end of the period 11,343,335 6,422,848 11,343,335 6,422,848 Appropriated retained earnings: Legal reserve 500,000 500,000 500,000 500,000 Retained earnings at end of the period 11,843,335 6,922,848 11,843,335 6,922,848 The notes to the interim consolidated and company financial statements on pages 12 to 44 are an integral part of these interim financial statements. Advanced Info Service Public Company Limited Statements of Cash Flows (Unaudited) For the six-month periods ended 30 June 2000 and 1999 Consolidated Company (Restated) (Restated) 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Notes Baht'000 Baht'000 Baht'000 Baht'000 Cash flows from operating activities: Net income for the period 3,391,914 1,221,488 3,391,914 1,221,488 Adjusted by: Depreciation charge 6 326,942 284,077 287,836 240,898 Amortisation of costs of mobile phone and pager (more)