Companies (523) 2,129 (297) 87,977 (Increase) in forward and swap contracts Receivable - (48,482) - (48,482) (Increase) in inventories (173,679) (150,127) - - (Increase) in advances to suppliers (3,061,579) - (3,061,493) - Decrease (increase) in other current assets (96,272) 142,214 (93,200) 112,258 Increase (decrease) in trade accounts payable 318,392 (783,875) (126,562) (926,325) Increase (decrease) in amounts due to related Companies (5,736) (532) 29,577 11,693 (Decrease) in forward and swap contracts payable (40,289) (76,706) (37,880) (76,706) Increase in accrued concession fee 820,710 662,279 820,710 662,279 Increase (decrease) in other current liabilities 253,518 (61,762) 392,103 (228,799) (Increase) in other assets (13,403) (66,131) (7,182) (65,404) Increase in deposits from customers 191,355 81,184 213,908 88,452 Cash flows from operating activities 620,021 1,610,759 136,383 1,300,101 The notes to the interim consolidated and company financial statements on pages 11 to 38 are an integral part of these interim financial statements. Consolidated Company (Restated) (Restated) 31 March 31 March 31 March 31 March 2000 1999 2000 1999 Notes Baht'000 Baht'000 Baht'000 Baht'000 Cash flows from operating activities 620,021 1,610,759 136,383 1,300,101 Cash flows from investing activities: Cash invested in long-term investment in subsidiary 17 - (949,600) - (949,600) Cash invested in long-term investment in marketable debt security (60,000) - - - Proceeds from disposals of fixed assets 777 10,535 232 9,201 Purchases of property and equipment (286,778) (171,878) (217,724) (146,844) Cash invested in cost of mobile phone and pager service networks and Datanet tools and equipment under concession agreements (2,730,871) (231,495) (2,701,705) (199,501) Net cash payments from investing activities (3,076,872) (1,342,438) (2,919,197) (1,286,744) Cash flows from financing activities: (Decrease) in short-term loans from banks (1,930,000) (752,097) (1,950,000) (640,583) Receipts (repayments) of loans from related companies - - (650,000) 50,000 Receipts from long-term debentures 9,969,000 1,500,000 10,000,000 1,500,000 Receipts from long-term liabilities - 114,714 - 114,714 Proceeds from capital increase - 8,280,000 - 8,280,000 Repayments of long-term debentures - (2,000,000) - (2,000,000) Repayments of long-term liabilities (1,840,093) (4,352,323) (1,840,093) (4,352,323) Net cash receipts from financing activities 6,198,907 2,790,294 5,559,907 2,951,808 Net increase in cash and cash equivalents 3,742,056 3,058,615 2,777,093 2,965,165 Cash and cash equivalents, beginning balance 3,691,113 4,587,747 2,878,770 3,856,923 Cash and cash equivalents, ending balance 7,433,169 7,646,362 5,655,863 6,822,088 The notes to the interim consolidated and company financial statements on pages 11 to 38 are an integral part of these interim financial statements. Supplemental disclosures of cash flow information Cash and cash equivalents Cash and cash equivalents included in the consolidated and company statements of cash flows for the three-month periods ended 31 March 2000 and 1999 comprise: Consolidated Company (Restated) (Restated) 31 March 31 March 31 March 31 March 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Cash on hand and at banks 2,859 1,703 2,562 1,178 Short-term investments 4,574 5,943 3,094 5,644 Total cash and cash equivalents 7,433 7,646 5,656 6,822 Interest expenses and income tax Interest expenses and income tax paid during the three-month periods ended 31 March 2000 and 1999 comprise: Consolidated Company (Restated) (Restated) 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Interest expenses 183 339 183 335 Income tax 851 912 637 824 Non-cash investing activities for the three-month periods ended 31 March 2000 and 1999 in the consolidated statements of cash flows Additions to investments in property and equipment for general business operation, which are included in property and equipment, and additions to investments in mobile phone and pager service networks and Datanet tools and equipment, which are included in costs of mobile phone and pager service networks and Datanet tools and equipment under concession agreements, for the three-month periods ended 31 March 2000 and 1999 were approximately Baht 3,190 million and Baht 577 million respectively. Outstanding debts in the consolidated balance sheets as at 31 March 2000 and 1999 relating to the aforesaid investments were approximately Baht 1,314 million and Baht 4,095 million respectively. Non-cash investing activities for the three-month periods ended 31 March 2000 and 1999 in the Company's separate statements of cash flows Additions to investments in property and equipment for general business operation, which are included in property and equipment, and additions to investments in mobile phone networks, which are included in costs of mobile phone networks under concession agreement, for the three-month periods ended 31 March 2000 and 1999 were approximately Baht 3,094 million and Baht 520 million respectively. Outstanding debts in the company balance sheets as at 31 March 2000 and 1999 relating to the aforesaid investments were approximately Baht 1,314 million and Baht 4,095 million respectively. The notes to the interim consolidated and company financial statements on pages 11 to 38 are an integral part of these interim financial statements. 1 Accounting policies The interim consolidated and company financial statements are prepared in accordance with the accounting principles generally accepted in Thailand. However, the primary statements (i.e. balance sheets, statements of income, changes in shareholders' equity, retained earnings and cash flows) are presented in the full format as prescribed by the Ministerial Regulation No. 7 (B.E. 2539) in accordance with the Securities and Exchange Commission's and the Stock Exchange of Thailand's requirements, rather than in the condensed format as required by Thai Accounting Standard No. 41, "Interim Financial Reporting." The accounting policies used in the preparation of the interim financial statements are consistent with those used in the annual financial statements for the year ended 31 December 1999. During the period, the Company and its subsidiaries ("the Group") have adopted a new accounting policy relating to the long-term investment in marketable debt security, which is as follow: Long-term investment in marketable debt security Long-term investment in marketable debt security, which is classified as available-for-sale security, is carried at fair value. Fair value of marketable debt security is calculated by reference to Stock Exchange quoted bid price at the close of business on the balance sheet date. Increases/decreases in the carrying amount are credited/charged against revaluation reserve on investment in available-for-sale security in shareholders' equity. A review for impairment is carried out when there is a factor indicating that such investment might be impaired. If the recoverable amount of the investment is less than its carrying value, impairment loss is charged to the statement of income. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statement of income. On disposal of a revalued investment, amounts in revaluation reserve relating to that investment are reversed to the statement of income. When disposing of part of the Group's holding of a particular investment in marketable debt security, the carrying amount of the disposed part is determined from the weighted average carrying amount of the total holding of the investment. Costs that incur unevenly during the financial year are recognised as expense or deferred in the interim report only if it would be also appropriate to recognise or defer such costs at the end of the financial year. Income tax expense is recognised based on the best estimate of the weighted average annual income tax rate expected for the full financial year. These interim financial statements should be read in conjunction with the 1999 annual financial statements. 2 Adjustments Accounting for cost of mobile phone networks under concession agreements The Company uses 2 systems to provide mobile phone services: a Nordic Mobile Telephone ("NMT") analogue system and a Global System for Mobile ("GSM") digital system. The cost of this system equipment is presented as cost of mobile phone networks under concession agreement under non-current assets in the balance sheet. Previously the Company amortised the cost of such equipment over the remaining period of the concession agreement, commencing from the date of equipment installation, to September 2015 . On 1 July 1999, the Company's management reviewed its accounting for the cost of such mobile phone networks and has amortised such cost over the period the underlying systems equipment assets are expected to contribute revenue and cash to the business. The Company's management has considered that this presents more fairly the economic substance and benefits expected to flow from the use of these assets under the terms of the concession agreement. 2 Adjustments (continued) Therefore, the cost of mobile phone network equipment for the NMT analogue system is amortised on a straight-line basis over a period of 10 years not exceeding year 2005, and for the GSM digital system is amortised on a straight-line basis over a period of 10 years not exceeding the remaining period of concession agreement. Regular reviews are conducted on network carrying values in consideration of global developments in the wireless telecommunications industry. This basis of amortisation has been applied with effect from the commencement of use of the NMT analogue and GSM digital networks. The effects on the consolidated and company balance sheets as at 31 March 1999 and consolidated and company statements of income for the three-month period then ended are as follows: Restated Consolidated Company Million Baht Million Baht Balance sheets Decrease in net book value of mobile phone networks 4,468 4,468 Decrease in retained earnings brought forward at 1 January 4,035 4,035 Statements of income Increase in amortisation expense 433 433 Accounting for cost of Datanet tools and equipment under concession agreement and accounting for the change in status of investment in associate to be investment in subsidiary Datanet operating right, which is owned by Advanced Datanetwork Communications Co., Ltd., formerly "Shinawatra Datacom Co., Ltd.", ("the subsidiary") represents project tools and equipment acquired for the Telephone Organization of Thailand ("TOT"), dated 19 September 1989. Under the terms of the concession agreement the ownership of the system equipment, including tools, vests with the TOT on completion of equipment installation. The subsidiary is entitled to operate the DATAKIT VIRTUAL CIRCUIT SWITCH system over the concession period. Previously the subsidiary amortised the cost of such tools and equipment over the remaining period of the concession agreement, commencing from the date of equipment installation, to September 2022. During the fourth quarter of the year 1999, the subsidiary's management reviewed its accounting for the cost of such system equipment and has amortised such cost over the period the underlying system equipment assets are expected to contribute revenue and cash to the business. The subsidiary's management has considered that this presents more fairly the economic substance and benefits expected to flow from the use of these assets under the terms of the concession agreement. Therefore, the cost of the system equipment, including tools, is amortised on a straight-line basis over a period of 10 years not exceeding the remaining period of concession agreement. This basis of amortisation has been applied with effect from the commencement of use of Datanet equipment. On 29 October 1999, the Company increased its interest in the subsidiary, which formerly was an associate, by 40.08% of the total share capital. As a result, the Company has 67.95% interest, causing a change in status to be a subsidiary. Therefore, the financial statements of the subsidiary have been consolidated with the Company since 29 October 1999. 2 Adjustments (continued) The net effects resulting from the above changes on the consolidated and company balance sheets as at 31 March 1999 and consolidated and company statements of income for the three-month period then ended are as follows: Restated Consolidated Company Million Baht Million Baht Balance sheets Decrease in net book value of Datanet tools and equipment 46 - Decrease in investments in subsidiaries - 8 Decrease in minority interests 38 - Decrease in retained earnings as at 1 January 5 5 Statements of income Increase in amortisation expense 8 - Decrease in net income 3 3 Decrease in net profit in subsidiaries to Minority interests 5 - 3 Financial information by segment The business operations of the Group, as reflected in the interim consolidated financial statements, are classified into four major segments as follows: 1) the operations of a 900-MHz CELLULAR TELEPHONE SYSTEM network 2) the operations of a DIGITAL DISPLAY PAGING SYSTEM network, trading pagers, and providing pagers for rent 3) trading of mobile phones, rendering repair services for mobile phones and providing mobile phones for rent 4) the operations of data network 3 Financial information by segment (continued) Financial information by business segment for the three-month periods ended 31 March are shown as follows: Consolidated 2000 Mobile phone Pager sales Mobile phone Datanet services and services sales services Group Million Baht Million Baht Million Baht Million Baht Million Baht Revenues from services and Equipment rentals 5,249 311 55 69 5,684 Sales - 56 1,996 6 2,058 Other operating income 76 8 7 - 91 Total revenues 5,325 375 2,058 75 7,833 Operating expenses Cost of sales and services And equipment rentals (3,241) (137) (1,272) (52) (4,702) Selling and Administrative expenses (750) (176) (276) (17) (1,219) Operating income 1,334 62 510 6 1,912 Finance cost Net gain on exchange 98 Interest income 50 Interest expenses (122) Income before tax 1,938 Income tax (847) Income before minority Interests 1,091 Share of net profit in subsidiaries to minority Interests (1) Net income for the period 1,090 Consolidated total assets 43,758 1,540 2,910 618 48,826 Consolidated total liabilities 24,166 303 1,607 134 26,210 Depreciation charge 149 9 8 1 167 Amortisation charge 989 35 15 17 1,056 3 Financial information by segment (continued) Consolidated 1999 Mobile phone Pager sales Mobile phone Datanet services and services sales services Group Million Baht Million Baht Million Baht Million Baht Million Baht Revenues from services and equipment rentals 3,790 338 29 41 4,198 Sales - 60 1,596 - 1,656 Other operating income 49 4 8 - 61 Total revenues 3,839 402 1,633 41 5,915 Operating expenses Cost of sales and services And equipment rentals (2,432) (137) (1,079) (25) (3,673) Selling and administrative Expenses (575) (178) (280) (13) (1,046) Operating income 832 87 274 3 1,196 Finance cost Net loss on exchange (72) Interest income 78 Interest expenses (277) Income before tax 925 Income tax (470) Income before minority Interests 455 Share of net profit in Subsidiaries to minority Interests (19) Net income for the period 436 Consolidated total assets 37,794 1,383 1,708 557 41,442 Consolidated total liabilities 20,435 333 1,197 81 22,046 Depreciation charge 115 12 8 1 136 Amortisation charge 877 30 2 12 921 4 Trade accounts receivable, net Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Trade accounts receivable: Third parties 4,336 4,086 3,698 3,579 Related companies (Note 18) 35 42 67 84 Total trade accounts receivable 4,371 4,128 3,765 3,663 Less: Allowance for doubtful accounts (280) (280) (223) (233) Total trade accounts receivable, net 4,091 3,848 3,542 3,430 (more)