16 สิงหาคม 2542
CONSOLIDATED FINANCIAL STATEMENTS THE 2ND QUARTER OF 1999
-9- (THOUSAND BAHT) TYPE OF BUSINESS RELATIONSHIP PAID-UP CAPITAL DIVIDENDS 1999 1998 1999 1998 13. SATELLITE TV BROADCASTING Satellite Uplink- common 1,000 1,000 - - CO., LTD. ( * ) Downlink services shareholders/ directors 14. BEC-TERO ENTERTAINMENT Sourcing and Pro- common 10,000 10,000 - - CO., LTD. ducing TV programs shareholders/ and Sell air time for directors TV advertising Pro- ducing and Promoting songs for concert ASSOCIATE 1. CVD ENTERTAINMENT PUBLIC Producing video tape common 360,000 360,000 - - COMPANY LIMITED and lazer disc, shareholders/ distributing and directors renting video tape * NOT YET OPERATING 6. DIVIDENDS PAYMENT AND DIRECTORS' REMUNERATION On March 16, 1999, the Board of Directors' Meeting was held and approved to pay dividends at Baht 6.50 per share to the shareholders of 200 million shares, totalling Baht 1,300 million. On April 29, 1999, the Ordinary General Shareholders' Meeting for 1999 was held and approved to pay such proposed dividends and directors' remuneration amounting to Baht 12 million by fixing the payment date for dividends on May 11, 1999. On February 25, 1998, the Board of Directors' Meeting was held and approved to pay dividends at Baht 6.00 per share to the shareholders of 200 million shares, totalling Baht 1,200 million. On April 29, 1998, the Ordinary General Shareholders' Meeting for 1998 was held and approved to pay such proposed dividends and directors' remuneration amounting to Baht 12 million by fixing the payment date for dividends on May 20, 1998. -10- 7. TRANSACTIONS WITH RELATED PARTIES The Company and subsidiaries have certain transactions of assets, liabilities, revenues and expenses arose from transactions with the related parties through the common shareholders and/or directors. Such transactions incur in normal business at market price which are comparable to the business transactions with others. The effects of these transactions were reflected in the accompanying financial statements on the bases mutually determined by the Company and subsidiaries and parties concerned. The significant transactions with related parties for the six-month periods are as follows: (THOUSAND BAHT) 1999 1998 Trade accounts receivable 5,454 - Loans extended 54,478 49,475 Interest receivable 271 446 Advance 463 - Purchase of office equipments 3,145 4,858 Trade accounts payable 122 1,614 Accounts payable - assets - 2,037 Revenues 4,015 - Interest income 3,321 2,774 Cost of sales 262 1,468 Expenses 7,490 9,353 8. FINANCIAL INFORMATION BY SEGMENT The Company and its subsidiaries are engaged in the business of procurement of moving pictures, plays, producing television programmes and selling air time for advertisement through channel 3 color Thai TV station. Besides these, some subsidiaries are granted the right for operation through TV and radio stations, and generated income from selling of advertisement and services, selling of video wall equipment and producing pictures. -11- As mentioned in the preceding paragraph, the Company and its subsidiaries operate in one industrial segment, that is business of entertainment and one geographical area, Thailand. All revenues, income and assets shown in the financial statements are related to the aforementioned industrial segment and geographical area. 9. COMMITMENTS AND CONTINGENT LIABILITIES As at June 30, 1999 and 1998, the Company and its subsidiaries have commitments and contingent liabilities as follows: (MILLION BAHT) PARTICULAR THE GROUP THE COMPANY ONLY 1999 1998 1999 1998 Letter of guarantee issued by commercial banks 23.34 22.10 - - Liabilities which may arise from opening letter of credit 26.16 - - - Copyright charges of pictures under forward purchase contract - Current portion 126.33 - 97.64 - - Portion due after one year 27.07 - 2.65 - 10. GENERAL DATA 10.1 A subsidiary has made an agreement for joint operation of color TV transmission with the Mass Communication Organization of Thailand dated April 28, 1978 as amended the first time on September 13, 1982, the second time on July 16, 1987 and the third time on May 2, 1989. The subsidiary is granted the right for joint operation of Channel 3 color Thai TV station's transmission until March 25, 2020. All property created or procured for the operation under this agreement shall be transferred to the Mass Communication Organization of Thailand on the date the subsidiary creates or procures. The subsidiary has the right to use such property. -12- Under the above agreement, the subsidiary has to pay annual compensation to the Mass Communication Organization of Thailand as specified in the agreement. 10.2 A subsidiary has made an agreement to lease air time for program and advertisement with the Mass Communication Organization of Thailand dated January 25, 1990 as amended on September 22, 1994. The subsidiary is granted the right to operate program and advertise through an MCOT FM radio station, at 105.5 MH frequency in Bangkok until January 31, 2020. To be consistent with the term of the agreement for joint operation of color TV transmission as amended, it is agreed that if the agreement for joint operation of color TV transmission is terminated before its term for whatever reason, this agreement shall be deemed terminated. Under the above agreement, the subsidiary has to pay the monthly air time and other expenses to the Mass Communication Organization of Thailand as specified in the agreement. 11. RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1998 financial statements have been reclassified to conform with the presentation of 1999 financial statements. -13- 12. THE PREPARATION TO SOLVE THE YEAR 2000 PROBLEM (UNREVIEWED - NOT INCLUDED IN THE AUDITOR'S REPORT) The Company and its subsidiaries have analysed and evaluated the effect of the Year 2000 problem which may arise to the Company and its subsidiaries for both transmission system, operation system and management information system, by hiring outside expert to check computer systems and preparing computer transactions, connected equipments and total network system applied in the organization. Such expert co-operated with the vendor of main equipment examine, analyze and evaluate the effect of the Year 2000 problem of total computer systems, both HARDWARE and SOFTWARE under the supervision of one administrative director. Such aforementioned checking and evaluation are completed. From the aforementioned checking and evaluation, the Company found that the problem is at the operating system of the main CPU (Mini-computer of IBM AS/400) which is non-Y2K compliant. The working system fixed six digits for date in the form of YYMMDD which have to be adjusted. Besides, some personal computers (PC) acquired before 1996 must be replaced. In order to solve the Y2K problem, the Company and its subsidiaries start to upgrade the computer systems or programmes by planning to purchase mainframe computer and operating system in new version of Y2K compliance and hiring outside expert to upgrade the operating system of BACK OFFICE including replace the obsoleted PC. The estimated expenses will be about Baht 10 million. The Company expects no significant effects to its operation or even financial status. Although the Company and its subsidiaries expect that the computer systems or programmes can be upgraded in time before the year 2000, they may have some risk due to other enterprises which they deals with are unable to upgrade their computer systems in time. However, the Company expects that such affection is immaterial to the operation of the Company and its subsidiaries.