PDF processed with CutePDF evaluation edition TRUE MOVE COMPANY LIMITED

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1 TRUE MOVE COMPANY LIMITED INTERIM CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS UNAUDITED) 30 JUNE 2011 PDF processed with CutePDF evaluation edition

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3 Statements of Financial Position As at 30 June 2011 and 31 December 2010 (Unaudited) (Audited) (Unaudited) (Audited) 30 June 31 December 30 June 31 December Notes Assets Current assets Cash and cash equivalents 2,018,741,987 1,132,052,328 1,512,450, ,451,196 Restricted cash 1,219,889 44,035,666 1,219,889 44,035,666 Trade accounts receivable, net (including amounts due from related companies) 6 5,513,458,136 5,502,484,953 5,097,414,674 4,754,943,841 Amounts due from related companies ,913, ,451, ,912, ,204,445 Inventories, net 7 1,060,362,262 2,599,640,654 13,302,144 88,450,978 Short-term loan to related company 19 1,300,000 20,300, Claimable value added tax 570, ,382, ,497,664 Other current assets 8 2,237,838,825 2,488,907,852 2,162,311,591 2,366,146,915 Total current assets 11,444,405,164 12,213,255,212 9,008,611,357 8,321,730,705 Non-current assets Investment in subsidiaries Investment in other company 400, , , ,000 Property, plant and equipment, net 10 31,392,658,917 31,419,219,727 31,031,597,414 31,056,568,775 Intangible assets, net 10 3,333,288,999 3,436,802,419 3,304,741,962 3,407,367,831 Other non-current assets 181,051, ,567, ,747, ,090,832 Total non-current assets 34,907,398,958 35,030,989,310 34,468,486,739 34,595,427,438 Total assets 46,351,804,122 47,244,244,522 43,477,098,096 42,917,158,143 Director Director The notes on pages 10 to 27 from integral part of these interim financial statements. 2

4 Statements of Financial Position (Cont d) As at 30 June 2011 and 31 December 2010 (Unaudited) (Audited) (Unaudited) (Audited) 30 June 31 December 30 June 31 December Notes Liabilities and Equity Current liabilities Trade accounts and notes payable (including amount due to related companies) 11 9,530,715,530 8,858,357,809 6,759,033,334 4,808,978,197 Other accounts payable 344,677, ,867, ,834, ,469,797 Current portion of long-term borrowings ,895, ,895,414 Amounts due to related companies ,754, ,074, ,033, ,923,526 Accrued expenses 1,659,869,051 1,233,926,680 1,611,199,436 1,469,126,703 Accrued regulatory cost 4,697,885,371 2,214,464,153 4,697,885,371 2,214,464,153 Unearned service income 659,307, ,278, ,730, ,616,946 Forward contract payable 282,768, ,379, ,768, ,379,175 Liability under agreement for operation ,621, ,286, ,621, ,286,599 Other current liabilities 349,679,906 1,980,063, ,272,365 1,487,368,661 Total current liabilities 18,282,279,045 17,954,594,798 15,410,378,229 13,627,509,171 Non-current liabilities Long-term borrowings 12 21,014,555,684 21,009,114,858 21,014,555,684 21,009,114,858 Forward contract payable 3,117,035,350 4,696,443,666 3,117,035,350 4,696,443,666 Decommissioning liability 22,131,255 19,299,873 22,131,255 19,299,873 Employee benefit obligations 141,400, ,596,054 - Liability under agreement for operation 13 3,688,625,099 3,905,024,260 3,688,625,099 3,905,024,260 Total non-current liabilities 27,983,747,900 29,629,882,657 27,980,943,442 29,629,882,657 Total liabilities 46,266,026,945 47,584,477,455 43,391,321,671 43,257,391,828 The notes on pages 10 to 27 from integral part of these interim financial statements. 3

5 Statements of Financial Position (Cont d) As at 30 June 2011 and 31 December 2010 (Unaudited) (Audited) (Unaudited) (Audited) 30 June 31 December 30 June 31 December Note Liabilities and Equity (Cont d) Equity Share capital Authorised share capital Ordinary shares, 3,728,125,416 shares of par 10 each 14 37,281,254,160 37,281,254,160 37,281,254,160 37,281,254,160 Issued and fully paid-up share capital Ordinary shares, 3,728,125,416 shares of paid-up 10 each 37,281,254,160 37,281,254,160 37,281,254,160 37,281,254,160 Premium on share capital 14 1,858,400,000 1,858,400,000 1,858,400,000 1,858,400,000 Deficits (39,053,877,735) (39,479,887,845) (39,053,877,735) (39,479,887,845) Total parent's equity (deficit) 85,776,425 (340,233,685) 85,776,425 (340,233,685) Non-Controlling interests Total equity (deficit) 85,777,177 (340,232,933) 85,776,425 (340,233,685) Total liabilities and equity 46,351,804,122 47,244,244,522 43,477,098,096 42,917,158,143 The notes on pages 10 to 27 from integral part of these interim financial statements. 4

6 Statements of Comprehensive Income (Unaudited) For the three-month periods ended 30 June 2011 and June 30 June 30 June 30 June Notes Revenues from mobile phone and other services 7,497,806,657 7,288,435,393 7,283,038,740 7,039,105,489 Revenues from product sales 1,554,650, ,164,038 81,732, ,705,323 Total revenues 9,052,456,797 7,713,599,431 7,364,771,519 7,523,810,812 Cost of providing services 5,429,311,994 5,263,449,299 5,337,437,944 5,171,509,553 Cost of sales 1,490,375, ,668,949 87,030, ,165,600 Total costs 6,919,687,477 5,655,118,248 5,424,468,614 5,612,675,153 Gross profit 2,132,769,320 2,058,481,183 1,940,302,905 1,911,135,659 Other income 10,980,835 31,315,703 8,585,632 31,480,548 Profit before expenses 2,143,750,155 2,089,796,886 1,948,888,537 1,942,616,207 Selling expenses (1,150,798,302) (986,162,781) (945,913,972) (885,866,831) Administrative expenses (724,002,446) (773,587,057) (732,721,457) (735,022,962) Other expenses (16,705,291) (17,994,862) (16,705,291) (9,408,724) Profit before finance costs and income tax 252,244, ,052, ,547, ,317,690 Finance costs, net 16 7,682,471 (474,722,004) 6,378,770 (474,987,508) Profit (loss) before income tax 259,926,587 (162,669,818) 259,926,587 (162,669,818) Income tax Profit (loss) for the period 259,926,587 (162,669,818) 259,926,587 (162,669,818) Other comprehensive income Total comprehensive income (expense) for the period 259,926,587 (162,669,818) 259,926,587 (162,669,818) Profit (loss) attributable to: Owner of the parent 259,926,587 (162,669,818) 259,926,587 (162,669,818) Non-controlling interests ,926,587 (162,669,818) 259,926,587 (162,669,818) Total comprehensive income (expense) attributable to: Owner of the parent 259,926,587 (162,669,818) 259,926,587 (162,669,818) Non-controlling interests ,926,587 (162,669,818) 259,926,587 (162,669,818) Earnings (loss) per share Basic earnings (loss) per share (0.04) 0.07 (0.04) The notes on pages 10 to 27 from integral part of these interim financial statements. 5

7 Statements of Comprehensive Income (Unaudited) 30 June 30 June 30 June 30 June Notes Revenues from mobile phone and other services 15,281,548,286 15,138,682,493 14,852,074,247 14,696,043,704 Revenues from product sales 2,794,982,924 1,062,413, ,331,659 1,104,002,729 Total revenues 18,076,531,210 16,201,095,691 14,964,405,906 15,800,046,433 Cost of providing services 11,001,784,327 10,621,351,375 10,807,819,727 10,434,539,878 Cost of sales 2,616,995, ,686, ,474, ,455,438 Total costs 13,618,779,640 11,571,037,951 10,940,293,971 11,423,995,316 Gross profit 4,457,751,570 4,630,057,740 4,024,111,935 4,376,051,117 Other income 18,255,500 38,084,462 15,677,103 38,053,808 Profit before expenses 4,476,007,070 4,668,142,202 4,039,789,038 4,414,104,925 Selling expenses (2,096,683,382) (1,871,953,610) (1,747,934,030) (1,680,964,371) Administrative expenses (1,350,546,955) (1,525,310,756) (1,263,116,530) (1,469,572,783) Other expenses (16,705,291) (17,994,862) (16,705,291) (9,408,724) Profit before finance costs and income tax 1,012,071,442 1,252,882,974 1,012,033,187 1,254,159,047 Finance costs, net 16 (455,438,601) (1,198,604,497) (457,958,790) (1,199,880,570) Profit before income tax 556,632,841 54,278, ,074,397 54,278,477 Income tax Profit for the period 556,632,841 54,278, ,074,397 54,278,477 Other comprehensive income Total comprehensive income for the period 556,632,841 54,278, ,074,397 54,278,477 Profit attributable to: Owner of the parent 556,632,841 54,278, ,074,397 54,278,477 Non-controlling interests ,632,841 54,278, ,074,397 54,278,477 Total comprehensive income attributable to: Owner of the parent 556,632,841 54,278, ,074,397 54,278,477 Non-controlling interests Earnings per share 556,632,841 54,278, ,074,397 54,278,477 Basic earnings per share The notes on pages 10 to 27 from integral part of these interim financial statements. 6

8 Statements of Changes in Equity (deficit) (Unaudited) Attributable to owners of the parent Issued and fully paid-up Premium Non-controlling common shares on shares Deficit interest Total Opening balance as at 1 January ,281,254,160 1,858,400,000 (39,469,969,587) 752 (330,314,675) Retrospective adjustments from change in accounting policy (Note 3) - - (140,540,989) - (140,540,989) As restated 37,281,254,160 1,858,400,000 (39,610,510,576) 752 (470,855,664) Total comprehensive income for the period ,632, ,632,841 Closing balance as at 30 June ,281,254,160 1,858,400,000 (39,053,877,735) ,777,177 Opening balance as at 1 January ,281,254,160 1,858,400,000 (38,586,767,905) ,887,007 Retrospective adjustment from change in accounting policy (Note 3) - - (8,301,482) - (8,301,482) As restated 37,281,254,160 1,858,400,000 (38,595,069,387) ,585,525 Total comprehensive income for the period ,278,477-54,278,477 Closing balance as at 30 June ,281,254,160 1,858,400,000 (38,540,790,910) ,864,002 Issued and fully paid up - Premium common shares on shares Deficit Total Opening balance as at 1 January ,281,254,160 1,858,400,000 (39,469,969,587) (330,315,427) Retrospective adjustments from change in accounting policy (Note 3) - - (137,982,545) (137,982,545) As restated 37,281,254,160 1,858,400,000 (39,607,952,132) (468,297,972) Total comprehensive income for the period ,074, ,074,397 Closing balance as at 30 June ,281,254,160 1,858,400,000 (39,053,877,735) 85,776,425 Opening balance as at 1 January ,281,254,160 1,858,400,000 (38,586,767,905) 552,886,255 Retrospective adjustment from change in accounting policy (Note 3) - - (8,301,482) (8,301,482) As restated 37,281,254,160 1,858,400,000 (38,595,069,387) 544,584,773 Total comprehensive income for the period ,278,477 54,278,477 Closing balance as at 30 June ,281,254,160 1,858,400,000 (38,540,790,910) 598,863,250 The notes on pages 10 to 27 from integral part of these interim financial statements. 7

9 Statements of Cash Flows (Unaudited) 30 June 30 June 30 June 30 June Notes Cash flows from operating activities Profit before income tax 556,632,840 54,278, ,074,397 54,278,477 Adjustments: Interest income (13,375,585) (7,905,519) (10,555,915) (6,635,636) Interest expenses on long-term borrowings 1,351,827,819 1,456,355,559 1,351,827,819 1,456,355,559 Interest expenses on liability under decommissioning 482, , , ,187 Interest expenses on liability under minimum payment of agreement for operation ,435, ,129, ,435, ,129,731 Depreciation charges 10 2,066,704,922 2,014,137,838 2,031,449,161 1,976,315,220 Amortisation of debt issuance costs 57,785,808 67,096,004 57,785,808 67,096,004 Amortisation of intangible assets ,560, ,378, ,634, ,217,970 Realised net gain on exchange rate (48,141,008) (102,263,684) (48,141,008) (102,263,684) Realised net loss on exchange rate from repayment borrowings 53,560,895 99,998,911 53,560,895 99,998,911 Unrealised net gain on exchange rate (1,292,739,286) (570,714,253) (1,292,865,825) (570,708,063) Doubtful accounts ,921, ,047, ,486, ,528,260 Write-off prepaid withholding tax 15-6,763, Write-off and loss (gain) on disposals of fixed asset 15 19,730,378 2,306,357 16,692,445 (376,577) Loss on write-off equipment for riot 15-7,939,901-6,991,219 Loss on write-off inventory for riot 15-3,291,877-2,417,504 Employee benefit obligations 10,777,781-10,531,767 - Changes in operating assets and liabilities - trade accounts receivable (266,021,645) (1,009,691,701) (519,819,546) (1,050,807,783) - amounts due from related companies (394,462,129) 51,814,070 (70,707,842) 9,573,028 - inventories 1,539,278, ,759,705 75,148,834 (18,555,136) - claimable value added tax 208,811, ,426, ,497, ,046,693 - other current assets 139,793,204 (718,295,348) 145,398,151 (709,936,850) - other non-current assets (6,483,878) 10,686,146 (656,530) 11,858,500 - trade accounts payable 6,647,331 (63,018,035) 1,284,435, ,829,122 - other accounts payable (313,779,365) (173,268,500) (271,171,153) (147,925,590) - amounts due to related companies (368,813,733) 42,198,127 (435,352,473) (46,904,236) - accrued expenses 2,866,595,277 2,556,333,213 2,582,725,639 2,626,470,653 - other current liabilities (1,493,354,901) (421,689,527) (1,013,982,343) 117,265,021 - liability under minimum payment of agreement for operation (339,500,000) (323,000,000) (339,500,000) (323,000,000) Cash generated from operations 4,931,874,256 4,352,552,104 4,874,413,672 5,078,716,504 Add Interest received 13,279,074 13,249,296 9,486,381 11,693,889 Less Withholding income tax refund 327,641,859 65,291, ,134,474 31,498,205 Less Interest paid (1,356,841,631) (1,475,494,447) (1,356,841,631) (1,475,494,447) Less Income tax paid (withholding tax) (155,372,095) (142,311,290) (141,986,974) (124,273,266) Net cash flows from operating activities 3,760,581,463 2,813,286,687 3,647,205,922 3,522,140,885 The notes on pages 10 to 27 from integral part of these interim financial statements. 8

10 Statements of Cash Flows (Unaudited) (Cont d) 30 June 30 June 30 June 30 June Notes Cash flows from investing activities Decrease in restricted cash 42,815, ,085 42,815, ,085 Purchases of intangible assets 10 (9,565,659) (75,028,868) (8,527,259) (70,789,311) Purchases of non-network assets (116,295,607) (87,071,641) (73,648,549) (52,378,199) Purchases of network equipment (1,360,319,830) (1,552,543,358) (1,360,319,830) (1,552,543,358) Proceeds from disposals of equipment 13,000 2,709,961 13,000 2,672,866 Cash invested in loan to related company 19 (37,000,000) Receipt cash invested in loan to related company 19 56,000, Cash invested in share of other company - (400,000) - (400,000) Net cash used in investing activities (1,424,352,319) (1,712,168,821) (1,399,666,861) (1,673,272,917) Cash flows from financing activities Payment of long-term borrowings (1,449,162,900) (794,023,291) (1,449,162,900) (794,023,291) Net cash used in financing activities (1,449,162,900) (794,023,291) (1,449,162,900) (794,023,291) Net increase in cash and cash equivalents 887,066, ,094, ,376,161 1,054,844,677 Cash and cash equivalents - opening balance 1,132,052,328 2,488,181, ,451,196 1,449,666,150 Effect of exchange rate change on cash (376,585) (134,381) (376,585) (134,381) Cash and cash equivalents - closing balance 2,018,741,987 2,795,141,232 1,512,450,772 2,504,376,446 Supplementary information for cash flows Non-cash transactions Significant non-cash transactions for the periods ended 30 June 2011 and 2010 comprise of : Million Million Million Million Acquisitions of property and equipment which have not been paid 1, , The notes on pages 10 to 27 from integral part of these interim financial statements. 9

11 Unaudited Condensed Notes to the Interim and Financial Statements 1 General information ( the ) is incorporated and resident in Thailand. The address of the s registered office is as follows: 18 True Tower, Ratchadapisek Road, Huai Khwang District, Bangkok For reporting purpose, the and its subsidiaries are referred to as the Group. These group interim consolidated and company financial statements have been approved for issue by the s directors on 10 August Thesegroup interim consolidated and company financial statements have been reviewed, not audited. 2 Basis of preparation These interim consolidated and company financial statements are prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Accounting Professions Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission. The primary financial statements (i.e., statement of financial position, statement of comprehensive income, changes in equity and cash flows) are prepared in the full format as required by the Securities and Exchange Commission. The notes to the financial statements are prepared in a condensed format according to Thai Accounting Standard 34, Interim Financial Reporting. 3 Summary of significant accounting policies 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 2010 except as described in note 4. The following new accounting standards, new financial reporting standards, amendments to accounting standards and interpretation are mandatory for the first time for the financial year beginning on or after 1 January 2011:- TAS 1 (Revised 2009), the revised standard will prohibit the presentation of items of income and expenses in the statement of changes in equity. Entities can choose to present the statement of comprehensive income in one statement or two statements (the income statement and statement of comprehensive income). Where entities restate or reclassify comparative information, they will be required to present a restated statement of financial position as at the beginning comparative period in addition to the current requirement to present statement of financial position at the end of the current period and comparative period. However, for the financial statements which period beginning on or after 1 January 2011 and are the first period applied this standard, an entity can choose to present statement of financial position only two periods without the statement of financial position as at the beginning comparative period. The chooses to present statement of comprehensive income in one statement. TAS 16 (Revised 2009), the revised standard requires the entity to include in cost of PPE, an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, when the entity has obligation to do. An entity requires that an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately. The revised standard also requires an entity to review useful life, residual value and depreciation method at least at each financial year-end. 10

12 Unaudited Condensed Notes to the Interim and Financial Statements 3 Summary of significant accounting policies (Cont d) The effects of the adoption of TAS 16 (revised 2009) to the statements of financial position as at 31 December 2010 and the statements of comprehensive income for the period ended 30 June 2010 are presented as following: Statements of financial position as at 31 December 2010 Assets Property, plant and equipment, net As previously reported 31,409,838,112 31,047,187,160 Change in accounting policy - Increase in decommissioning cost 14,008,044 14,008,044 - Increase in accumulated depreciation - decommissioning (4,626,429) (4,626,429) Net book value 9,381,615 9,381,615 As restated (Note 10) 31,419,219,727 31,056,568,775 Liabilities Non-current liabilities As previously reported 29,610,582,784 29,610,582,784 Change in accounting policy - Increase in decommissioning liabilities 19,299,873 19,299,873 As restated 29,629,882,657 29,629,882,657 Equity Deficit As previously reported (39,469,969,587) (39,469,969,587) Change in accounting policy - Increase in deficit of decommissioning (9,918,258) (9,918,258) As restated (39,479,887,845) (39,479,887,845) Statements of comprehensive income for the three-month period ended 30 June 2010 Loss for the period As previously reported (162,265,624) (162,265,624) Change in accounting policy - Depreciation - decommissioning (175,100) (175,100) - Interest expenses - decommissioning (229,094) (229,094) As restated (162,669,818) (162,669,818) 11

13 Unaudited Condensed Notes to the Interim and Financial Statements 3 Summary of significant accounting policies (Cont d) Statements of comprehensive income for the six-month period ended 30 June 2010 Profit for the period As previously reported 55,086,865 55,086,865 Change in accounting policy - Depreciation - decommissioning (350,201) (350,201) - Interest expenses - decommissioning (458,187) (458,187) As restated 54,278,477 54,278,477 TAS 19 deals with accounting for employee benefit. The standard classifies employee benefit into 4 categories: a) short-term employee benefits b) post-employment benefits (including defined contribution plan and defined benefit plan) c) other long-term employee benefits and d) termination benefits. The standard requires the entity to measure the defined benefit plan and other long-term employee benefits by using the Projected Unit Credit method (PUC). An entity can choose to recognise any actuarial gain or loss for defined benefit plan either in other comprehensive income or profit and loss. Actuarial gain or loss for other long-term employee benefit shall recognise in profit and loss. Commencing 2011, the has adopted the accounting policy for employee benefits in accordance with Thai Accounting Standard which is considered to better reflect provision. The has chosen to apply this accounting standard by adjusted the brought forward retained earnings as at 1 January The impact of this standard is as follows: Opening balance at 1 January 2011 Deficit increase (130,622,731) (128,064,287) Employee benefit obligations increase 130,622, ,064,287 TAS 40 (Revised 2009), the standard has specific presentation and measurement requirements for investment property. The entity has to present an investment property separately in the statement of financial position. The entity can choose to measure it either cost model or fair value model. Under fair value model, any changes in fair value are recognised in profit or loss. The effect of the adoption of the above standard to the statements of changes in equity as at 1 January 2011 and 2010 are presented as follows: Increase in deficits of decommissioning cost at 1 January ,301,482 8,301,482 Increase in loss for the year ,616,776 1,616,776 Increase in deficits of decommissioning cost at 1 January ,918,258 9,918,258 Increase in deficits of employee benefit obligations 130,622, ,064,287 Increase in deficits at 1 January ,540, ,982,545 12

14 Unaudited Condensed Notes to the Interim and Financial Statements 3 Summary of significant accounting policies (Cont d) New interpretations of accounting standards during the six-month period ended 30 June 2011 The new interpretations that were announced in the Government Gazette during the six-month period ended 30 June 2011 are as follows: a) Effective for the period beginning on or after 1 January 2011 TSIC 31 Revenue - Barter Transactions Involving Advertising Services The Group s management has assessed and determined that this interpretation does not significantly impact the financial statements being presented. b) Effective for the period beginning on or after 1 January 2013 TAS 20 (Revised 2009) TAS 21 (Revised 2009) TSIC 10 TSIC 21 TSIC 25 Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Government Assistance - No Specific Relation to Operating Activities Income Taxes - Recovery of Revalued Non-Depreciable Assets Income Taxes - Changes in the Tax Status of an Entity or its Shareholders The Group does not early adopt these accounting standards before effective date. The Group s management is currently assessing the impact of applying these accounting 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. 4 New accounting policies 4.1 Employee benefits The Group has post-employment benefits both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. Defined benefit plans Retirement benefit Under Labour Laws applicable in Thailand and Group s employment policy, all employees completing 120 days of service are entitled to severance pay on termination or retrenchment without cause or upon retirement age of 60. The severance pay will be at the rate according to number of years of service as stipulated in the Labour Law which is currently at a maximum rate of 300 days of final salary. Defined contribution plans Provident fund The Group operates a provident fund, being a defined contribution plan, the assets for which are held in a separate trust fund. The provident fund is funded by payments from employees and by the Group. The Group s contributions to the provident fund are charged to the income statement in the years to which they relate. 13

15 Unaudited Condensed Notes to the Interim and Financial Statements 5 Financial position As at 30 June 2011, the consolidated total current liabilities exceed the consolidated total current assets by 6,83787 million. The ultimate parent company and its shareholders entered into the Sponsor Support Agreements ( SSA ) with the secured lenders of True Move pursuant to which they agreed to provide financial support as set forth below: 5.1 In the case of regulatory sponsor support to governmental authorities arising out the mobile phone agreement: where True Move experiences cash shortfalls for its normal operations due to regulatory costs as specified in the SSA, the sponsors shall provide financial support for the amount of the shortfall caused by the excess regulatory costs. 5.2 In the case of general cash deficiency sponsor support: where the cash flows of True Move are insufficient for its normal operations or debt repayments pursuant to the terms of the financing documents with its lenders, the ultimate parent company and its shareholder will provide financial support to True Move in a total amount not exceeding 10.5 billion. Under the terms and conditions of the SSA, the ultimate parent company, its shareholder and concerned parties must comply with certain conditions as stipulated in the SSA. The sponsor support funds must be injected into True Move in the form as specified in the SSA in order to support True Move to continue its operations on going basis. In order to support cash flow of the, the shareholder of the ultimate parent company and the ultimate parent company injected sponsor support as follows: Billion 13 December December March Total Trade accounts receivable, net 30 June 31 December 30 June 31 December Trade accounts receivable - related companies (Note 19) ,904,058,043 3, ,623,115,221 - others ,970,476,965 3,024,666,395 2,897,582,278 Unbilled receivables ,310,740, ,588 1,310,740, ,185,275,164 7,242,746,662 6,831,437,655 Less Allowance for doubtful accounts (1,829,328,133) (1,682,790,211) (2,145,331,988) (2,076,493,814) Trade accounts receivable, net ,502,484,953 5,097,414,674 4,754,943,841 14

16 Unaudited Condensed Notes to the Interim and Financial Statements 7 Inventories, net 30 June 31 December 30 June 31 December Finished goods 454,069, ,462,435 10,153,969 88,450,978 Cash cards 557,728,920 2,301,819, Packaging materials 48,563,658 11,359,209 3,148,175 - Inventories, net 1,060,362,262 2,599,640,654 13,302,144 88,450,978 8 Other current assets 30 June 31 December 30 June 31 December Advance payment 706,337, ,208, ,288, ,492,061 Prepaid withholding tax 567,031, ,301, ,662, ,810,030 Prepaid expenses 308,606, ,927, ,364, ,019,494 Input tax not yet due 269,430, ,815, ,001, ,977,436 Prepaid regulatory costs 176,366, ,689, ,366, ,689,849 Accounts receivable - others 131,577, ,031, ,355, ,857,976 Others 78,488,140 92,934,083 71,272,204 91,300,069 2,237,838,825 2,488,907,852 2,162,311,591 2,366,146,915 9 Investment in subsidiaries 30 June 31 December Opening net book value - - Additional investments - 1,500,000,000 Allowance for impairment - (1,500,000,000) Closing net book value

17 Unaudited Condensed Notes to the Interim and Financial Statements 9 Investments in subsidiaries (Cont d) as at 30 June 2011 Paid-up Percentage Cost Allowance Investment share capital of holding method for impairment net Type of business % Investments in subsidiaries True Distribution and Trading and providing services Sales Limited for telecommunication equipment 1,501,000, ,501,000,000 1,501,000,000 - True Music Limited Content Provider 200, , ,000 - Total investments in subsidiaries 1,501,200,000 1,501,200,000 - as at 31 December 2010 Paid-up Percentage Cost Allowance Investment share capital of holding method for impairment net Type of business % Investments in subsidiaries True Distribution and Trading and providing services Sales Limited for telecommunication equipment 1,501,000, ,501,000,000 1,501,000,000 - True Music Limited Content Provider 200, , ,000 - Total investments in subsidiaries 1,501,200,000 1,501,200,000 - As at 26 August 2010, the acquired newly issued 15 million ordinary shares of True Distribution and Sales Limitedat par value of 100 per share. Total cash considerations for the additional shares was 1,500 million. As at 30 June 2011, the investment in True Distribution and Sales Limited has been pledged to secure credit facilities for general operations and activities of the Group and the (Note 12). The provided for allowance for doubtful accounts for trade accounts receivable-subsidiary, as shown in Note 19, for those amount considered uncollectible.. 16

18 Unaudited Condensed Notes to the Interim and Financial Statements 10 Property, plant, equipment and intangible assets, net Property, plant and equipment Intangible assets Property, plant and equipment Intangible assets For the six-month period ended 30 June 2011 Opening net book value 31,409,838,112 3,436,802,419 31,047,187,160 3,407,367,831 Change in accounting policy - Decommissioning cost (Note 3) 9,381,615-9,381,615 - Opening net book value, as restated 31,419,219,727 3,436,802,419 31,056,568,775 3,407,367,831 Additions 2,098,279,642 9,565,659 2,061,575, Disposals (19,743,378) - (16,705,445) - Transfers (42,339,453) 42,339,453 (42,339,453) 42,339,453 Adjustments/Reclassifications 3,947,301 (3,858,398) 3,947,301 (3,858,398) Depreciation and amortisation (2,066,704,922) (151,560,134) (2,031,449,161) (149,634,183) Closing net book value 31,392,658,917 3,333,288,999 31,031,597,414 3,304,741,962 As at 30 June 2011, intangible assets include Right to operate of 2, million, net of 1, million accumulated amortisation. The related amortisation for the period was million. For the six-month period ended 30 June 2011, borrowing costs of million were capitalised as cost of network equipment. and Million Capital commitments As at 30 June , As at 31 December 2010, According to the agreement for operation granted by CAT, during the six-month period ended 30 June 2011, the transferred network assets with net book value of 2, million to CAT. CAT is now in the process of investigation those transferred network assets. The still has right to operate the mobile phone service over the transferred assets. 11 Trade accounts and notes payable 30 June December June December 2010 Current Trade accounts payable - related companies (Note 19) ,919,176, ,947,039,699 - others ,615,417, ,538,173,998 Notes payable ,764, ,764,500 Total ,858,357, ,808,978,197 The trade accounts payable-others mainly represent payables to network construction companies who provide supplier credit to the. According to the construction agreement, once the supplier s invoices become due those invoices are converted to note payable. The terms of the notes payable are based on the terms of the contracts with vendors. 17

19 Unaudited Condensed Notes to the Interim and Financial Statements 11 Trade accounts and notes payable (Cont d) As at 30 June 2011, notes payable are interest free promissory notes denominated in US Dollar of US$ 4.82 million (31 December 2010: US$ million) issued to supplier for payment of network equipment acquired. The first payment will be due on 20 September 2011 and the final maturity date will be due on 20 December Borrowings and loans and 30 June December 2010 Current - Banks and financial institutions - 933,895,414 Total current - 933,895,414 Non-current - Banks and financial institutions - 455,115,107 - US Dollar notes 21,014,555,684 20,553,999,751 Total non-current 21,014,555,684 21,009,114,858 Total borrowings 21,014,555,684 21,943,010, Borrowings from banks and financial institutions and 30 June 31 December Current - 933,895,414 Non-current - 455,115,107 Total borrowings - 1,389,010,521 The movements in borrowings are as follows: and For the six-month period ended 30 June 2011 Opening net book value 1,389,010,521 Loan repayment during the year (1,395,602,005) Amortisation of debt issuance costs 6,591,484 Closing net book value - Further to the re-structuring in mobile business, the made prepayment of its offshore loan amounting to million on 30 June

20 Unaudited Condensed Notes to the Interim and Financial Statements 12 Borrowings and loans (Cont d) 12.2 US Dollar notes and 30 June 31 December Non-current 21,014,555,684 20,553,999,751 Total borrowings 21,014,555,684 20,553,999,751 The movements in borrowings are as follows: and For the six-month period ended 30 June 2011 Opening net book value 20,553,999,751 Amortisation of debt issuance costs 52,144,933 Currency translation 408,411,000 Closing net book value 21,014,555, Credit facilities The Group and the have the following undrawn committed credit facilities: and 30 June 31 December Expiring beyond one year 13,837,461 18,206,154 13,837,461 18,206,154 The credit facilities such as bank guarantee, letter of credit and short-term loan have been arranged to use for general operations and activities of the Group and the. 13 Liability under agreement for operation Detail of liabilities under agreement for operation can be summarised as follow: and 30 June 31 December Current 562,621, ,286,599 Non-current 3,688,625,099 3,905,024,260 4,251,246,640 4,412,310,859 19

21 Unaudited Condensed Notes to the Interim and Financial Statements 13 Liability under agreement for operation (Cont d) Movement of liabilities under agreement for operation can be analysed as follow: and For the six-month period ended 30 June 2011 Opening net book value 4,412,310,859 Repayments (339,500,000) Interest expense charges 178,435,781 Closing net book value 4,251,246,640 According to the MOA as described in Note 22, the recognised Right to operate as intangible assets (Note 10) and Liabilities under agreement for operation amounting to 2, million in the statements of financial position. This amount is derived from the best estimated cost of obtaining right discounted by MLR at the MOA s signing date and might be changed should the company reach the definitive agreement. The interest derived from liabilities being capitalised and contrary recognised in the consolidated and company statements of comprehensive income. 14 Share capital and premium on share capital Number of shares and Ordinary Premium on shares share capital Total As at 31 December ,728,125,416 37,281,254,160 1,858,400,000 39,139,654,160 Issue of shares As at 30 June ,728,125,416 37,281,254,160 1,858,400,000 39,139,654,160 As at 30 June 2011, the total authorised number of ordinary shares is 3,728,125,416 shares (31 December 2010: 3,728,125,416 shares) with a par value of 10 per share. 15 Operating profit The following expenditures, classified by nature, have been charged in arriving at operating profit. For the three-month periods ended 30 June 30 June 30 June 30 June Depreciation on property, plant and equipment 1,056,705,287 1,045,229,889 1,037,738,227 1,029,132,854 Amortisation intangible assets 76,847,539 74,436,620 75,868,225 73,593,060 Doubtful accounts 116,465, ,703, ,207, ,383,937 Write-off and loss (gain) on disposals of fixed asset 19,730,378 (114,830) 16,692,445 (387,294) Write-off prepaid withholding tax - 6,763, Loss on write-off equipment for riot - 7,939,901-6,991,219 Loss on write-off inventory for riot - 3,291,877-2,417,504 20

22 Unaudited Condensed Notes to the Interim and Financial Statements 15 Operating profit (Cont d) For the six-month periods ended 30 June 30 June 30 June 30 June Depreciation on property, plant and equipment (Note 10) 2,066,704,922 2,014,137,838 2,031,449,161 1,976,315,220 Amortisation intangible assets (Note 10) 151,560, ,378, ,634, ,217,970 Doubtful accounts 259,921, ,047, ,486, ,528,260 Write-off and loss (gain) on disposals of fixed asset 19,730,378 2,306,357 16,692,445 (376,577) Write-off prepaid withholding tax - 6,763, Loss on write-off equipment for riot - 7,939,901-6,991,219 Loss on write-off inventory for riot - 3,291,877-2,417, Finance costs, net For the three-month periods ended 30 June 30 June 30 June 30 June Net foreign exchange gain (812,518,883) (372,221,127) (812,820,288) (372,221,524) Interest income (9,369,987) (4,273,579) (7,764,881) (4,007,678) Interest expense 757,226, ,011, ,226, ,011,972 Other finance costs 56,980,068 40,204,738 56,980,068 40,204,738 Finance costs, net (7,682,471) 474,722,004 (6,378,770) 474,987,508 For the six-month periods ended 30 June 30 June 30 June 30 June Net foreign exchange gain (1,140,958,335) (535,331,273) (1,141,257,816) (535,325,083) Interest income (13,375,585) (7,905,519) (10,555,915) (6,635,636) Interest expense 1,530,745,973 1,659,943,477 1,530,745,973 1,659,943,477 Other finance costs 79,026,548 81,897,812 79,026,548 81,897,812 Finance costs, net 455,438,601 1,198,604, ,958,790 1,199,880, Income tax There is no tax amount to be paid as there are accumulated losses carried forward. 21

23 Unaudited Condensed Notes to the Interim and Financial Statements 18 Basic earnings (loss) per share Basic earnings (loss) per share attributable to the equity holders of the is calculated by dividing the net profit (loss) attributable to the equity holders of the by the weighted average number of common shares in issue during the period. For the three-month periods ended 30 June 30 June 30 June 30 June Net profit (loss) attributable to the shareholders () 259,926,587 (162,669,818) 259,926,587 (162,669,818) Weighted average number of common shares in issue during the period (Shares) 3,728,125,416 3,728,125,416 3,728,125,416 3,728,125,416 Basic earnings (loss) per share () 0.07 (0.04) 0.07 (0.04) For the six-month periods ended 30 June 30 June 30 June 30 June Net profit attributable to the shareholders () 556,632,841 54,278, ,074,397 54,278,477 Weighted average number of common shares in issue during the period (Shares) 3,728,125,416 3,728,125,416 3,728,125,416 3,728,125,416 Basic earnings per share () Related party transactions The is owned by Bangkok Inter Teletech Public Limited ( BITCO ), incorporated in Thailand, at 99.92% (2010: 99.92%) of the s ordinary shares. BITCO is controlled by True Corporation Public Limited ( TRUE ), which own 99.14% (directly own 51.30% and indirectly owned 47.84%) of BITCO s total ordinary shares. TRUE is the ultimate parent company. In the normal course of business, the Group and the enter into transactions with shareholders and related companies. The terms and basis of such transactions are carried out on a basis agreed between the parties in the ordinary course of business and according to normal trade conditions. 22

24 Unaudited Condensed Notes to the Interim and Financial Statements 19 Related party transactions (Cont d) The following significant transactions were carried out with shareholders and related companies: i) Sales of goods and services For the six-month periods ended 30 June 30 June 30 June 30 June Million Million Million Million Sales of mobile phone handsets and simcards - ultimate parent company subsidiaries company fellow subsidiaries related companies Sales of cash cards - fellow subsidiaries related companies Service income from mobile - ultimate parent company fellow subsidiaries related companies Service income from service charge - ultimate parent company subsidiaries company fellow subsidiaries Commission income - fellow subsidiaries Other income - ultimate parent company fellow subsidiaries related companies Sales of mobile phone handsets and sim cards to related companies were carried out on related terms and conditions and at the actual cost plus certain margin. The sales and cost of cash card is reflected net in statement of comprehensive income. The related receivables and payables are reflected gross in statement of financial position. Sales and commission income to related companies were carried out on commercial terms and conditions and at the actual cost plus certain margin, sales of cash cards to a related company was carried out at market prices equal to its face value. Sales of cash cards to a related company was carried out at market prices equal to its face-value. The Group received commission income for the six-month period ended 30 June 2011 of million (30 June 2010: million) from a fellow subsidiary company in True Group at the commission rate as stipulated in the agreement for the distribution of cash cards to retail outlets. On the other hand, the Group has to pay commission expenses for the six-month period ended 30 June 2011 of million (30 June 2010: million) (as shown in under 19 ii) Purchase of goods and services ) to other related company for its margin. The net profit (loss) regarding to distribution of cash cards is amounting to million (30 June 2010: million). The cash card could be used to buy various services within True Group. In case where subscribers use our network, the Group records face value of cash cards as unearned service income in the statement of financial position. The Group recognised revenue based on the actual airtime minutes. The would pay commission expense to a fellow subsidiary company for connecting subscribers to our network. The commission expense paid in this respect for the six-month period ended 30 June 2011 was million (30 June 2010: million). 23

25 Unaudited Condensed Notes to the Interim and Financial Statements 19 Related party transactions (Cont d) ii) Purchase of goods and services For the six-month periods ended 30 June 30 June 30 June 30 June Million Million Million Million Purchase of mobile phone handsets and accessories - ultimate parent company 2, subsidiaries company fellow subsidiaries Purchase of cash cards - fellow subsidiaries , Cost of content - subsidiaries company fellow subsidiaries related companies Cost of other services - fellow subsidiaries related companies Roaming/IP cost - fellow subsidiaries Commission paid-cash cards - ultimate parent company fellow subsidiaries related companies Network construction - ultimate parent company fellow subsidiaries Transmission rental expense - fellow subsidiaries Network operating and maintenance - ultimate parent company fellow subsidiaries related companies Personnel expense - fellow subsidiaries related companies Commission expense - ultimate parent company Selling, advertising and publicity expenses - ultimate parent company subsidiaries company fellow subsidiaries related companies Office building expenses - ultimate parent company fellow subsidiaries related companies Transportation expenses - ultimate parent company fellow subsidiaries related companies

26 Unaudited Condensed Notes to the Interim and Financial Statements 19 Related party transactions (Cont d) ii) Purchase of goods and services (Cont d) For the six-month periods ended 30 June 30 June 30 June 30 June Million Million Million Million Collection fee - fellow subsidiaries related companies Administrative expenses - ultimate parent company subsidiaries company fellow subsidiaries related companies Computer system expenses - ultimate parent company fellow subsidiaries related companies Purchases from related companies, network construction, transmission rental expense and commission expense were carried out on commercial terms and conditions and at the actual cost plus margin except rental expense was carried out on market prices and purchase of PCT refilled card which was carried out on market prices deducted with agreed discount. Purchase of cash cards was carried out at market prices equal to its face-value. Content cost was carried out at commercial price. iii) Short-term loan to related company 30 June 31 December Million Million Opening net book value Addition Repayment (56.00) - Closing net book value As at 30 June 2011, a subsidiary has the outstanding short-term loan to related company of 1.30 million (31 December 2010: million) to related company, by received the promissory notes. The interest rate is the fixed deposit interest rate of Bangkok Bank Public Limited plus a fixed of 1 percent per annum. The loan is due for repayment on demand. 25

27 Unaudited Condensed Notes to the Interim and Financial Statements 19 Related party transactions (Cont d) iv) Outstanding balance arising from sales/purchasesof goods/services 30 June 31 December 30 June 31 December Million Million Million Million Trade accounts receivable - ultimate parent company subsidiary company fellow subsidiaries 2, , , , related companies , , , , Less Allowance for doubtful debt - - (326.23) (403.93) 3, , , , Amount due from related companies - ultimate parent company subsidiary company fellow subsidiaries Trade accounts payable - ultimate parent company 1, subsidiary company fellow subsidiaries 4, , , , related companies , , ,710.94, Amount due to related companies - ultimate parent company subsidiary company fellow subsidiaries related companies Amounts due from and to related companies represent receivables and payables to TRUE, True Vision group and CP Group. Trade account receivable related to cash card business approximately 1, million and 1, million, respectively (31 December 2010: 1, million and 1, million) are included in the consolidated and company financial statements. Trade accounts payable related to cash card business approximately 2, million and million, respectively (31 December 2010: 4, million and million) are included in the consolidated and company financial statements. 20 Bank guarantees At 30 June 2011, there are outstanding bank guarantees of 1, million (31 December 2010: 1, million) on the consolidated and company basis issued by local banks on behalf of the Group and the in the normal course of business. 26