Translation AIS 313/2002 August 9, 2002 Subject : Submission of Reviewed Financial Statements for the Second Quarter of the Year 2002 To : The President The Stock Exchange of Thailand Enclosure : One set of Reviewed Financial Statement for quarter 2/2002 Advanced Info Service Public Company Limited (the Company) would like to submit the reviewed financial statement for the second quarter of 2002. In addition, the Company would like to clarify performance of the second quarter of 2002 compared to performance of the second quarter of 2001 as follows: Million Baht Quarter2/2002 Quarter 2/2001 Revenues from services and equipment rentals 13,214 9,489 Cost of services and equipment rentals (6,062) (4,886) Gross Profit 7,152 4,603 Selling and administrative expenses (2,642) (1,554) Operating profit 4,510 3,049 Interest expenses (632) (335) Other income 170 252 Profit before FX and extra item 4,048 2,966 Gain (loss) on FX (447) (9)/2 Extra item - Accelerated NMT network amortization (161)/1 0 - Impairment loss for investment in subsidiary (259) 0 Profit before net results and tax 3,181 2,957 Net results from subsidiaries (312) 472 Income before tax 2,870 3,429 Tax (1,343) (1,128) Net income 1,526 2,301 Net income excl. Gain (loss) on FX & Extra item 2,258 2,307 Remark: 1/ Included in cost of services and equipment rentals in financial statement 2/ Included in selling and administrative expenses in financial statement 1. The Company's operating profit of Baht 4,510 million in the second quarter of 2002 increased from Baht 3,049 million in the first quarter of 2002 due to the following : - The Company's revenue from services and equipment rentals in the second quarter of 2002 was Baht 13,214 million, increased from the second quarter of 2001 by Baht 3,725 million or 39% from Baht 9,489 million. The increase was mainly due to the increase in subscriber base from 3,029,304 subscribers in the second quarter of 2001 to 7,452,429 subscribers in the second quarter of 2002 or and increase of 3,029,304 subscribers which is equivalent to 146%. - The Company's cost of services and equipment rentals in the second quarter of 2002 was Baht 6,062 million (excluding the accelerated NMT network amortization of Baht 161 million, as a result of the shorten of useful life estimation from June 2003 to September 2002), increased from the second quarter of 2001 by Baht 1,337 million or 27% from Baht 4,886 million. This increase was primarily from the accretion in revenue sharing paid to the TOT, in line with the service revenue growth. In addition, the amortization of property and equipment under concession agreements also increased as a result of the expansion of GSM network. - The Company's selling and administrative expense in the second quarter of 2002 was Baht 2,642 million, increased from the second quarter of 2001 by Baht 1,080 million or 69% from Baht 1,562 million. This was mainly due to an increase in provision for doubtful accounts as currently the Company waives the deposits from customers and recently has been refunding them. 2. The Company's interest expense in the second quarter of 2002 was Baht 632 million, increase from the second quarter of 2001 by Baht 297 million from Baht 335 million or 89%. This increase was from an increase in the Company's interest bearing debt, used to expand mobile phone network, from Baht 23,524 million at the end of second quarter 2001 to Baht 47,333 million at the end of second quarter 2002. 3. The Company's loss on exchange in the second quarter of 2002 was Baht 447 million due to an appreciation in Thai Baht currency against the US dollar. 4. In the second quarter of 2002, the Company provided Baht 259 million for an impairment loss for investment in subsidiary (Advanced Paging Co.,Ltd.) after paging business was transferred to the TOT. 5. Share of net profit of investment (equity method) decreased by Baht 784 million in the second quarter of 2002. This is mainly due to loss from Digital Phone Co., Ltd. (DPC), which the Company owns 98.17%, in the amount of Baht 1,347 million (the Company bought DPC in August of 2001). However, Advanced Wireless Marketing Co., Ltd. (AWM), in which the Company holds 99.99%, contributed higher net results due to significant increase in its handset sales volume from 601,444 units in the second quarter of 2001 to 764,246 units in the second quarter of 2002 or an increase of 27%. In addition, refill cards sales also increased significantly. Details of net profit of investment are as follow : Million Baht Share of net profit from Quarter2/2002 Quarter 2/2001 Advanced Paging Co., Ltd. (APG) (8) (82) Advanced Wireless Marketing (AWM) 1,043 565 Advanced Datanetwork Communications Co., Ltd. (ADC) 0 (11) Data network Solutions Co., Ltd. (DNS) 1 0 Shin Digital Co., Ltd. (SDT) and Digital Phone Co., Ltd. (DPC) * (1.347) 0 Total share of net profit in investments (312) 472 *Including share of net loss of Baht 1,057 million and amortization of goodwill of Baht 290 million. 6. The Company's net profit in the second quarter of 2002 was 1,526 million, decreased 34% from Baht 2,031 million in the second quarter of 2001. The Company's profit before foreign exchange loss, accelerated NMT amortization and impairment loss for investment in APG was Baht 2,258 million or a small decrease of 2% from Baht 2,307 million in the second quarter of 2001. Please be informed accordingly, Sincerely yours, -Signed- Mr. Somprasong Boonyahcai Director Advanced Info Service Public Company Limited Compliance Department Tel. 0-2299-5206, 5221