Amortization of deferred charges for the three-month and six-month periods ended June 30, are summarized as follows: Million Baht Three Months Six Months Ended June 30 Ended June 30 1999 1998 1999 1998 Recorded in the consolidated statements of income 52.00 22.31 67.83 42.69 Recorded in the Company's separate statements of income 50.12 22.29 64.33 42.66 Foreign Currency Transactions Foreign currency transactions are recorded in Baht at the rates of exchange ruling on the transaction dates. Outstanding assets and liabilities in foreign currencies at the balance sheet date are translated into Baht at the exchange rates ruling on that date. Translation gain or loss is included as revenue or expense in the statements of income. The Company's forward exchange contracts are intended to hedge the risks of changes in foreign currency exchange rates. Forward exchange contract receivables and payables are recorded in Baht at the spot rate on the date of contract inception, and the balances on the balance sheet date are translated into Baht at the prevailing spot rate. Premiums or discounts under forward exchange contracts for hedging losses on assets and liabilities in foreign currencies are amortized to the profit and loss accounts over the period of the forward exchange contract. Basic Earnings (Loss) Per Share Basic earnings (loss) per share are computed by using the following methods: - Basic earnings per share in the consolidated financial statements for the three-month and six- month periods ended June 30, 1999 are computed by dividing consolidated net income for each period, after considering minority interests in subsidiaries, by the number of common shares outstanding at the end of the period, for the three-month period ended June 30, 1999, and by the weighted average number of common shares outstanding during the period, for the six- month period ended June 30, 1999. Basic earnings (loss) per share in the consolidated financial statements for the three-month and six-month periods ended June 30, 1998 are computed by dividing consolidated net income (loss) for each period, after considering minority interests in subsidiary, by the number of common shares outstanding at the end of each period. - Basic earnings per share in the Company's separate financial statements for the three-month and six-month periods ended June 30, 1999 are computed by dividing net income for each period by the number of common shares outstanding at the end of the period, for the three-month period ended June 30, 1999 and by the weighted average number of common shares outstanding during the period, for the six-month period ended June 30, 1999. Basic earnings (loss) per share in the Company's separate financial statements for the three-month and six-month periods ended June 30, 1998 are computed by dividing net income (loss) for each period by the number of common shares outstanding at the end of each period. Basic earnings (loss) per share is computed by using the following information: Number of Basic Net Income Common Shares Earnings per Share (Million Baht) Equivalent (Baht) For the three-month periods ended: June 30, 1999 1,219.83 270,000,000 4.52 June 30, 1998 (5.84) 234,000,000 (0.02) For the six-month periods ended: June 30, 1999 2,091.47 260,254,144 8.04 June 30, 1998 1,736.79 234,000,000 7.42 NOTE 5 - SEGMENT INFORMATION The business operations of the Company and its subsidiaries, as reflected in the consolidated financial statements, are classified into two major segments; 1) mobile phone segment comprising the operations of a 900-MHz CELLULAR TELEPHONE SYSTEM network, trading mobile phones, rendering repair services for mobile phones and providing mobile phones for rent; 2) pager segment comprising the operations of a DIGITAL DISPLAY PAGING SYSTEM network, trading pagers and providing pagers for rent. Financial information by business segment for the three-month and six-month periods ended June 30, are shown as follows: Million Baht Three Months Six Months Ended June 30 Ended June 30 1999 1998 1999 1998 Revenues from Services and Rental Mobile phone segment 4,000.35 3,427.29 7,822.51 7,209.00 Pager segment 341.26 355.49 680.06 715.01 Adjustments of intercompany transactions (3.64) (0.69) (6.90) (1.37) Total 4,337.97 3,782.09 8,495.67 7,922.64 Revenues from Sales Mobile phone segment 1,671.44 - 3,269.16 - Pager segment 79.03 56.42 145.43 116.16 Adjustments of intercompany transactions (8.21) - (16.57) - Total 1,742.26 56.42 3,398.02 116.16 Revenues from Commission Mobile phone segment 7.99 - 32.53 - Adjustments of intercompany transactions (7.35) - (30.99) - Total 0.64 - 1.54 - Total Revenues from Services, Sales and Commission Mobile phone segment 5,679.78 3,427.29 11,124.20 7,209.00 Pager segment 420.29 411.91 825.49 831.17 Adjustments of intercompany transactions (19.20) (0.69) (54.46) (1.37) Total 6,080.87 3,838.51 11,895.23 8,038.80 Million Baht Three Months Six Months Ended June 30 Ended June 30 1999 1998 1999 1998 Operating Profit Mobile phone segment 1,713.69 884.87 3,219.89 2,089.26 Pager segment 58.20 84.30 141.14 191.71 Adjustments of intercompany transactions - - - - Total 1,771.89 969.17 3,361.03 2,280.97 Net result of investment in an associated company 2.45 2.09 6.04 3.59 Gain (loss) on exchange 10.32 (702.92) (61.80) 733.65 Other income 122.06 125.67 251.35 296.93 Interest expense (188.54) (273.15) (465.50) (599.82) Directors' remuneration (2.13) (1.59) (2.42) (2.60) Other expenses (34.73) (19.99) (49.53) (31.10) Net income before income tax 1,681.32 99.28 3,039.17 2,681.62 Income tax (461.49) (84.35) (927.90) (897.32) Net income before considering minority interests in subsidiaries 1,219.83 14.93 2,111.27 1,784.30 Less Share of net income of subsidiaries to minority interests - 20.77 19.80 47.51 Net income (loss) 1,219.83 (5.84) 2,091.47 1,736.79 Million Baht Classifications of assets by business segment as at June 30, 1999 1998 Property and Equipment - net Mobile phone segment 1,784.93 1,676.74 Pager segment 96.39 129.30 Adjustments of intercompany transactions (0.03) (0.05) Total 1,881.29 1,805.99 Other Assets Costs of mobile phone and pager networks under concession agreements - net Mobile phone segment 29,036.34 26,783.57 Pager segment 746.19 809.21 29,782.53 27,592.78 Other assets 13,264.06 10,233.91 Adjustments of intercompany transactions (1,901.04) (442.96) Total 41,145.55 37,383.73 Total Assets 43,026.84 39,189.72 Operating profit 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 June 30, 1999, time deposit with a bank of a subsidiary, as referred to in Note 7 to the financial statements, in the amount of approximately Baht 0.27 million was pledged as collateral for bank guarantees obtained by a subsidiary. NOTE 7 - SHORT-TERM INVESTMENTS Short-term investments at June 30, represent time deposits with banks and other financial institutions and held-to-maturity securities of which their withdrawal periods are within 1 year, comprise: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 Time deposits with local and foreign banks 2,398.46 2,580.26 2,082.83 2,070.26 Held-to-maturity securities (Note 4) 99.92 1,090.65 99.92 927.06 Total 2,498.38 3,670.91 2,182.75 2,997.32 Held-to-maturity securities represent investments in bills of exchange issued by foreign banks. NOTE 8 - ACCOUNTS AND NOTES RECEIVABLE Accounts and notes receivable at June 30, were shown net of allowance for doubtful accounts as follows: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 Related parties (Note 3) 3.51 1.96 1.17 0.88 Other customers 3,367.64 3,781.49 2,846.19 3,542.57 3,371.15 3,783.45 2,847.36 3,543.45 Less Allowance for doubtful accounts 342.48 354.55 292.50 232.30 Accounts and Notes Receivable - net 3,028.67 3,428.90 2,554.86 3,311.15 Trade notes receivable at June 30, 1999 and 1998 do not exceed 20% of total accounts and notes receivable as shown above. Accounts and notes receivable at June 30, 1999, of which are overdue more than 3 months, are summarized as follows: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 Balances overdue more than 3 months but not exceeding 6 months 204.86 630.55 186.69 606.98 Balances overdue more than 6 months but not exceeding 12 months 243.17 307.31 232.99 271.67 Balances overdue more than 12 months 140.12 42.29 135.53 5.13 Total 588.15 980.15 555.21 883.78 Allowance for doubtful accounts for the above overdue balances 342.48 354.55 292.50 232.30 Allowance for doubtful accounts for those accounts and notes receivable at June 30, 1999 was considered in conjunction with deposits received from those customers who used mobile phone services and pager services, while allowance for doubtful accounts for balances receivable from dealers was considered in conjunction with bank guarantees received from those dealers. NOTE 9 - OTHER CURRENT ASSETS Other current assets at June 30, comprise: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 Other receivables 807.51 545.31 785.81 543.83 Prepaid expenses 118.52 166.26 107.18 159.81 Premium on purchases of foreign currencies under forward exchange contracts - net of amortization 45.45 - 45.45 - Refundable value added tax - 70.27 - 67.35 Accrued interest income 11.71 19.85 10.66 8.93 Others 36.44 35.73 16.53 32.88 1,019.63 837.42 965.63 812.80 Less Allowance for loss on collection from other receivables 19.74 - 0.82 - Total 999.89 837.42 964.81 812.80 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 10 - INVESTMENTS Investments at June 30, 1999 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 Advanced Paging Company Limited 99.99 350.00 1,703.36 1,887.75 1,887.75 - Advanced Wireless Marketing Company Limited 99.99 240.00 600.00 1,039.57 1,039.57 - Associated company Shinawatra Datacom Company Limited 27.86 457.52 147.37 128.16 128.16 - 3,055.48 Other Company Fonepoint (Thailand) Company Limited 17.80 15.00 - - - - In the consolidated financial statements Related Parties Associated company Shinawatra Datacom Company Limited 27.86 457.52 147.37 128.16 128.16 - Other Company Fonepoint (Thailand) Company Limited 17.80 15.00 - - - - (More)