Loss (gain) on disposal of fixed assets 3,590 4,779 4,782 3,405 Loss on write-off deferred charges 8 125,540 - 125,540 - Loss on write-off fixed assets 6 161,643 2,128 168,763 - Unrealised gain on foreign exchange rate (32,380) 56,664 (41,919) 56,664 Realised loss (gain) on foreign exchange rate 33,679 238,765 33,679 238,765 Amortisation of goodwill 8 85,213 62,718 - - Amortisation of bond issuing cost 9,014 - 9,014 - Share of net profit in subsidiaries - - (1,092,609) (717,833) Share of net profit in subsidiaries to minority interests 588 19,009 - - Net income before changes in operating assets and liabilities 9,974,486 6,269,627 8,443,637 5,157,394 Changes in operating assets and liabilities (Excluding the effects of acquisition and disposal) (Increase) in trade accounts receivable (1,065,912) (1,053,235) (994,906) (799,611) (Increase) decrease in amounts due from related companies (1,082) 12,183 1,658 144,742 (Increase) in forward contracts receivable (155,161) 36,192 (152,849) 36,250 (Increase) in inventories (394,600) (231,523) - - (Increase) in advances to suppliers (1,840,670) - (1,840,670) - (Increase) decrease in other current assets 121,759 (243,183) 169,446 (297,507) (Decrease) in trade accounts payable (130,474) (1,758,210) (536,432) (1,508,068) Increase (decrease) in amounts due to related companies 71,986 100,508 24,619 28,475 (Decrease) in forward contracts payable (28,041) (76,706) (8,996) (76,706) Increase in accrued concession fee 3,151,832 2,114,952 3,151,832 2,114,952 Increase in other current liabilities 1,093,362 969,191 1,305,434 554,275 (Increase) in other assets (25,709) (108,638) (50,276) (77,151) Increase in deposits from customers 446,837 258,540 634,764 392,059 Net cash receipts from operating activities 11,218,613 6,289,698 10,147,261 5,669,104 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) (continued) For the nine-month periods ended 30 September 2000 and 1999 Consolidated Company (Restated) (Restated) 30 September 30 September 30 September 30 September 2000 1999 2000 1999 Notes Baht'000 Baht'000 Baht'000 Baht'000 Cash flows from operating activities 11,218,613 6,289,698 10,147,261 5,669,104 Cash flows from investing activities: Cash invested in long-term investment in subsidiary 5, 19 - (949,600) - (949,600) Dividend received from a subsidiary - - 350,000 - Proceeds from disposals of fixed assets 6,280 8,509 2,120 - Purchases of property and equipment (667,636) (471,056) (560,756) (407,209) Cash invested in cost of mobile phone and pager service networks and Datanet tools and equipment under concession agreements (6,594,044) (5,130,801) (6,344,875) (4,993,821) Net cash payments from investing activities (7,255,400) (6,542,948) (6,553,511) (6,350,630) Cash flows from financing activities: Receipt from short-term loans from banks 2,020,000 - 2,000,000 - Repayment in short-term loans from banks (1,950,000) (882,859) (1,950,000) (695,300) Receipts (repayments) of loans from related companies - - (650,000) 50,000 Receipts from long-term debentures, net 9,956,299 1,500,000 9,956,299 1,500,000 Receipts from long-term liabilities 150,000 2,031,482 - 2,031,482 Proceeds from capital increase - 8,280,000 - 8,280,000 Repayments of short-term debentures - (744,300) - (744,300) Repayments of long-term debentures (334,550) (2,000,000) (334,550) (2,000,000) Repayments of long-term liabilities (3,457,630) (6,996,004) (3,457,630) (6,996,004) Net cash receipts from financing activities 6,384,119 1,188,319 5,564,119 1,425,878 Net increase in cash and cash equivalents 10,347,332 935,069 9,157,869 744,352 Cash and cash equivalents, beginning balance 3,691,113 4,587,748 2,878,771 3,856,923 Cash and cash equivalents, ending balance 14,038,445 5,522,817 12,036,640 4,601,275 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) (continued) For the nine-month periods ended 30 September 2000 and 1999 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 nine-month periods ended 30 September 2000 and 1999 comprise: Consolidated Company (Restated) (Restated) 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Cash on hand and at banks 1,256 1,547 934 1,331 Short-term investments 12,782 3,976 11,103 3,270 Total cash and cash equivalents 14,038 5,523 12,037 4,601 Interest expenses and income tax Interest expenses and income tax paid during the nine-month periods ended 30 September 2000 and 1999 comprise: Consolidated Company (Restated) (Restated) 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Interest expenses 538 700 536 694 Income tax 3,949 1,662 3,172 1,441 Non-cash investing activities for the nine-month periods ended 30 September 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 nine-month periods ended 30 September 2000 and 1999 were approximately Baht 7,884 million and Baht 2,729 million respectively. Outstanding debts in the consolidated balance sheets as at 30 September 2000 and 1999 relating to the aforesaid investments were approximately Baht 1,762 million and Baht 1,048 million respectively. Non-cash investing activities for the nine-month periods ended 30 September 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 nine-month periods ended 30 September 2000 and 1999 were approximately Baht 7,528 million and Baht 2,529 million respectively. Outstanding debts in the company balance sheets as at 30 September 2000 and 1999 relating to the aforesaid investments were approximately Baht 1,762 million and Baht 1,048 million respectively. 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 Notes to the Interim Consolidated and Company Financial Statements (Unaudited) For the three-month and nine-month periods ended 30 September 2000 and 1999 1 Accounting policies The interim consolidated and company financial statements are prepared in accordance with the accounting principles generally accepted in Thailand, and are presented in the condensed format as required by Thai Accounting Standard No. 41, "Interim Financial Report" with additional disclosures, in the case of the primary financial statements (i.e. balance sheets, statements of income, changes in shareholders' equity, retained earnings and cash flows), base on the format prescribed by the Ministerial Regulations No. 7 (B.E. 2539) in accordance with the requirements of the Securities and Exchange Commission and the Stock Exchange of Thailand. 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. The company and its subsidiaries ("the Group") have implemented the following new Thai Accounting Standards, effective 1 January 2000, in these interim financial statements: TAS 41 - Interim Financial Statements TAS 44 - Consolidated Financial Statements and Accounting for Investment in Subsidiaries TAS 45 - Accounting for Investments in Associates TAS 47 - Related Party Disclosures TAS 48 - Financial Instruments : Disclosure and Presentation The comparatives, when appropriate, have been adjusted or extended to take into account the requirements of those newly effective standards. Costs that are incurred unevenly during the financial year are anticipated or deferred in the interim report only if it would be also appropriate to anticipate 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. During the period, the Group have adopted a new accounting policy relating to the long-term investment in marketable debt security, which is as follows: Investment in marketable debt security - for sale 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. These interim financial statements should be read in conjunction with the 1999 annual financial statements. 2. Adjustments 2.1 Adjustments during the fourth quarter of 1999 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. The net effects resulting from the above changes on the consolidated and company balance sheets as at 30 September 1999 and consolidated and company statements of income for the three-month and nine-month periods then ended are as follows: Restated Consolidated Company Million Baht Million Baht Balance sheets Decrease in net book value of Datanet tools and equipment 63 - Decrease in investments in subsidiaries - 13 Decrease in minority interests 50 - Decrease in retained earnings as at 1 January 1999 5 5 Statements of income for the three-month period ended 30 September 1999 Increase in amortisation expense 8 - Decrease in net income 2 2 Decrease in net profit in a subsidiary to minority interests 6 - Statements of income for the nine-month period ended 30 September 1999 Increase in amortisation expense 25 - Decrease in net income 7 7 Decrease in net profit in a subsidiary to minority interests 18 - 2.2 Adjustment during the third quarter of 1999 Accounting for cost of mobile phone networks under concession agreements This adjustment has been adjusted to the interim consolidated and company financial statements for the three- month and nine-month periods ended 30 September 1999. The purpose of this disclosure is to explain the situation of the adjustment. 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. 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 effect on the consolidated and company balance sheets as at 30 September 1999 is as follow: Restated Consolidated Company Million Baht Million Baht Balance sheets Decrease in retained earnings brought forward at 1 January 1999 4,035 4,035 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 periods ended 30 September are shown as follows: Consolidated For the three-month period ended 30 September 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 6,337 296 23 64 6,720 Sales - 47 2,412 4 2,463 Other operating income 86 14 34 - 134 Total revenues 6,423 357 2,469 68 9,317 Operating expenses Cost of sales and services and equipment rentals (3,581) (136) (1,600) (55) (5,372) Selling and administrative expenses (695) (160) (413) (11) (1,279) Operating income 2,147 61 456 2 2,666 Finance cost Net gain on exchange 367 Interest income 123 Interest expenses (209) Income before tax 2,947 Income tax (1,007) Income before minority interests 1,940 Share of net profit in subsidiaries to minority interests - Net income for the period 1,940 Consolidated total assets 51,200 1,222 3,583 780 56,785 Consolidated total liabilities 27,835 254 1,540 298 29,927 Depreciation charge 146 9 10 2 167 Amortisation charge 1,096 36 (8) 19 1,143 3 Financial information by segment (continued) Consolidated For the nine-month period ended 30 September 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 17,330 907 122 182 18,541 Sales - 164 6,755 16 6,935 Compensation income 1,032 - - - 1,032 Other operating income 244 32 63 - 339 Total revenues 18,606 1,103 6,940 198 26,847 (more)