REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION BY THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO THE BOARD OF DIRECTORS INTOUCH HOLDINGS PUBLIC COMPANY LIMITED We have reviewed the consolidated statement of financial position of Intouch Holdings Public Company Limited and its subsidiaries and the separate statement of financial position of Intouch Holdings Public Company Limited as at June 30, 2017, and the related consolidated and separate statements of profit or loss, profit or loss and other comprehensive income for the three-month and six-month periods ended June 30, 2017, and the consolidated and separate statements of changes in shareholders equity and cash flows for the six-month period ended June 30, 2017, and the condensed notes to the financial statements. The Company s management is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard No. 34 Interim Financial Reporting. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of Review We conducted our review in accordance with Thai Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the aforementioned interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard No. 34 Interim Financial Reporting.
Deloitte Touche Tohmatsu Jaiyos Audit ด ลอยท ท ช โธม ทส ไชยยศ สอบบ ญช - 2 - Emphasis of Matter Without modifying our conclusion, we draw attention to Note 3 to the financial statements that Intouch Holdings Public Company Limited and its subsidiaries have elected to change accounting policy relating to investments in subsidiaries, joint ventures and associates in the separate financial statements from cost method to equity method for the financial statements for the periods beginning on or after January 1, 2017 onwards and the Company restated the separate statement of financial position as at December 31, 2016 and the separate interim financial statements for the three-month and the six-month periods ended June 30, 2016 which are presented as comparative information, to be in accordance with the revised Thai Financial Reporting Standard. Dr. Suphamit Techamontrikul Certified Public Accountant (Thailand) BANGKOK Registration No. 3356 August 7, 2017 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2017 Consolidated financial statements Separate financial statements Notes 30 June 31 December 30 June 31 December 2017 2016 2017 2016 (Unaudited) (Unaudited) (Restated) Assets Current assets Cash and cash equivalents 4,049,894 3,065,097 266,155 260,238 Current investments 6 5,781,466 6,095,623 1,577,451 1,490,572 Trade and other receivables 4, 7 2,251,189 2,477,263 5,033 6,668 Amounts due from, advances and loans to related parties 4 157,968 143,662 492 1,339 Inventories 166,657 323,878 - - Non-current assets held for discontinued operations 53,072 53,166 - - Total current assets 12,460,246 12,158,689 1,849,131 1,758,817 Non-current assets Long-term loans to related parties 4 2,034,957 2,145,947 - - Investments in subsidiaries 8 - - 7,793,401 7,998,212 Investments in joint ventures 8 1,519,470 1,555,265 - - Investments in associates 8 19,216,429 18,342,130 19,216,429 18,342,130 Long-term investments 6 26,155 32,555 26,155 32,555 Property, plant and equipment 9 9,108,304 9,440,728 37,049 45,577 Intangible assets under operating agreements 9 8,202,056 9,204,748 - - Other intangible assets 9 801,810 849,321 3,725 7,252 Deferred tax assets 278,730 313,689 - - Other non-current assets 562,795 563,790 4,038 4,037 Total non-current assets 41,750,706 42,448,173 27,080,797 26,429,763 Total assets 54,210,952 54,606,862 28,929,928 28,188,580 See condensed notes to the financial statements 3
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS AT 30 JUNE 2017 Consolidated Separate financial statements financial statements Notes 30 June 31 December 30 June 31 December 2017 2016 2017 2016 (Unaudited) (Unaudited) (Restated) Liabilities and equity Current liabilities Short-term borrowings from financial institutions 10 230,000 230,000 - - Trade and other payables 4, 11 1,713,176 2,406,512 49,374 84,112 Amounts due to related parties 4 184 313 202 817 Current portion of long-term borrowings 10 694,397 728,871 - - Accrued operating agreement fees 792,392 316,223 - - Provision for unpaid operating agreement fee and interest 2,890,345 2,890,345 - - Income tax payable 40,479 35,089 - - Liabilities of non-current assets held for discontinued operations 218 161 - - Total current liabilities 6,361,191 6,607,514 49,576 84,929 Non-current liabilities Long-term accounts payable - equipment 235,623 248,417 - - Long-term borrowings 10 8,544,948 9,208,989 - - Employee benefit obligations 495,379 496,169 54,268 50,590 Other non-current liabilities 358,931 370,684 - - Total non-current liabilities 9,634,881 10,324,259 54,268 50,590 Total liabilities 15,996,072 16,931,773 103,844 135,519 See condensed notes to the financial statements 4
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS AT 30 JUNE 2017 Consolidated financial statements Separate financial statements Notes 30 June 31 December 30 June 31 December 2017 2016 2017 2016 (Unaudited) (Unaudited) (Restated) Liabilities and equity Equity Share capital 12 Authorised share capital - ordinary shares 5,000,000 5,000,000 5,000,000 5,000,000 Issued and paid-up share capital - ordinary shares 3,206,420 3,206,420 3,206,420 3,206,420 Additional paid-in capital 12 Share premium on issued of share - ordinary shares 10,349,321 10,347,863 10,349,321 10,347,863 Retained earnings Appropriated Legal reserve 500,000 500,000 500,000 500,000 Unappropriated 9,561,159 8,733,213 10,454,500 9,631,576 Other components of equity 4,318,317 4,369,293 4,315,843 4,367,202 Total equity attributable to equity holders of the Company 27,935,217 27,156,789 28,826,084 28,053,061 Non-controlling interests 10,279,663 10,518,300 - - Total equity 38,214,880 37,675,089 28,826,084 28,053,061 Total liabilities and equity 54,210,952 54,606,862 28,929,928 28,188,580 See condensed notes to the financial statements 5
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF PROFIT OR LOSS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2017 (UNAUDITED) Consolidated Separate financial statements financial statements Notes 2017 2016 2017 2016 (Restated) Revenue 14 Revenue from sales and rendering of services 2,319,080 2,932,721 - - Share of profit of investments in subsidiaries 8 - - 76,576 221,629 in joint ventures 8 51,272 38,224 - - in associates 8 2,884,850 3,891,259 2,884,850 3,891,259 Net foreign exchange gain 21,160 4,739 - - Other income 254,695 61,561 9,832 10,644 Total revenue 5,531,057 6,928,504 2,971,258 4,123,532 Expenses 14 Cost of sales and rendering of services 1,538,373 1,501,733 - - Operating agreement fee 249,005 259,929 - - Reversal of provision for interest of unpaid operating agreement fee - (3,881,881) - - Selling expenses 52,860 87,583 - - Administrative expenses 437,274 429,113 81,360 74,226 Directors and management benefit expenses 4 42,073 43,239 20,739 24,135 Total expenses 2,319,585 (1,560,284) 102,099 98,361 Profit before finance costs and income tax expense 3,211,472 8,488,788 2,869,159 4,025,171 Finance costs (103,930) (73,174) (1,137) (1,025) Profit before income tax expense 3,107,542 8,415,614 2,868,022 4,024,146 Income tax expense (66,479) (112,026) - - Profit for the period 3,041,063 8,303,588 2,868,022 4,024,146 Attributable to: Owners of the Company 2,870,886 7,716,840 2,868,022 4,024,146 Non-controlling interests 170,177 586,748 - - Profit for the period 3,041,063 8,303,588 2,868,022 4,024,146 Earnings per share to owners of the Company (Baht per share) 15 Basic earnings per share 0.90 2.41 0.90 1.26 Diluted earnings per share 0.90 2.41 0.90 1.26 See condensed notes to the financial statements 6
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2017 (UNAUDITED) Consolidated financial statements Separate financial statements Note 2017 2016 2017 2016 (Restated) Profit for the period 3,041,063 8,303,588 2,868,022 4,024,146 Other comprehensive income, net of income tax Items that are or may be reclassified to profit or loss Foreign currency translation differences for foreign operations (49,183) (19,494) (20,233) (7,991) Net change in fair value of available-for-sale investments 3,328 (9,567) 2,199 (5,728) (45,855) (29,061) (18,034) (13,719) Items that will never be reclassified to profit or loss Share of other comprehensive income of associates and joint ventures 3,485 3,684 3,485 3,684 3,485 3,684 3,485 3,684 Other comprehensive income for the period, net of income tax (42,370) (25,377) (14,549) (10,035) Total comprehensive income for the period 2,998,693 8,278,211 2,853,473 4,014,111 Total comprehensive income attributable to: Owners of the Company 2,856,500 7,704,773 2,853,473 4,014,111 Non-controlling interests 142,193 573,438 - - 2,998,693 8,278,211 2,853,473 4,014,111 See condensed notes to the financial statements 7
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF PROFIT OR LOSS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017 (UNAUDITED) Consolidated Separate financial statements financial statements Notes 2017 2016 2017 2016 (Restated) Revenue 14 Revenue from sales and rendering of services 5,086,637 6,173,682 - - Construction revenue under operating agreements 186 - - - Share of profit of investments in subsidiaries 8 - - 176,230 484,217 in joint ventures 8 63,469 52,157 - - in associates 8 5,991,658 7,149,442 5,991,658 7,149,442 Net foreign exchange gain 116,048 118,861 - - Other income 320,292 158,833 18,562 52,758 Total revenue 11,578,290 13,652,975 6,186,450 7,686,417 Expenses 14 Cost of sales and rendering of services 3,172,602 3,052,398 - - Construction cost under operating agreements 186 - - - Operating agreement fee 514,669 533,265 - - Reversal of provision for interest of unpaid operating agreement fee - (3,866,486) - - Selling expenses 123,798 159,821 - - Administrative expenses 967,387 1,012,460 159,349 150,827 Directors and management benefit expenses 4 84,178 85,379 40,412 46,395 Total expenses 4,862,820 976,837 199,761 197,222 Profit before finance costs and income tax expense 6,715,470 12,676,138 5,986,689 7,489,195 Finance costs (209,083) (143,135) (1,564) (1,416) Profit before income tax expense 6,506,387 12,533,003 5,985,125 7,487,779 Income tax expense (142,770) (316,121) - - Profit for the period 6,363,617 12,216,882 5,985,125 7,487,779 Attributable to: Owners of the Company 5,990,147 11,174,458 5,985,125 7,487,779 Non-controlling interests 373,470 1,042,424 - - Profit for the period 6,363,617 12,216,882 5,985,125 7,487,779 Earnings per share to owners of the Company (Baht per share) 15 Basic earnings per share 1.87 3.49 1.87 2.34 Diluted earnings per share 1.87 3.49 1.87 2.34 See condensed notes to the financial statements 8
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017 (UNAUDITED) Consolidated financial statements Separate financial statements Note 2017 2016 2017 2016 (Restated) Profit for the period 6,363,617 12,216,882 5,985,125 7,487,779 Other comprehensive income, net of income tax Items that are or may be reclassified to profit or loss Foreign currency translation differences for foreign operations (157,468) (69,146) (64,779) (28,009) Net change in fair value of available-for-sale investments 4,581 (7,103) 2,672 (3,901) (152,887) (76,249) (62,107) (31,910) Items that will never be reclassified to profit or loss Share of other comprehensive income of associates and joint ventures 7,275 30,750 7,275 30,750 7,275 30,750 7,275 30,750 Other comprehensive income for the period, net of income tax (145,612) (45,499) (54,832) (1,160) Total comprehensive income for the period 6,218,005 12,171,383 5,930,293 7,486,619 Total comprehensive income attributable to: Owners of the Company 5,935,698 11,173,401 5,930,293 7,486,619 Non-controlling interests 282,307 997,982 - - 6,218,005 12,171,383 5,930,293 7,486,619 See condensed notes to the financial statements 9
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017 (UNAUDITED) Consolidated financial statements Equity attributable to owners of the Company Other components of equity Unrealised Fair value Share of other Total Equity Issued and Retain earnings Other reserves gain on Currency changes in comprehensive other attributable to Nonpaid-up Premium on Legal share-based dilution from translation available-for-sale income of components owners of controlling Total Note share capital share capital reserve Unappropriated payment investments differences investments associates of equity the Company interests equity For the period ended 30 June 2016 Opening balance at 1 January 2016 3,206,420 10,341,569 500,000 7,056,985 28,400 4,229,016 103,398 18,539 (608) 4,378,745 25,483,719 9,856,665 35,340,384 Changes in equity for the period Dividends - - - (7,901,932) - - - - - - (7,901,932) (488,176) (8,390,108) Share-based payment 13-6,294 - - (134) - - - - (134) 6,160 (377) 5,783 Unrealised gain on dilution of investments in subsidiaries and associates - - - - - (23,732) - - - (23,732) (23,732) 3,919 (19,813) Comprehensive income for the period Profit for the period - - - 11,174,458 - - - - - - 11,174,458 1,042,424 12,216,882 Other comprehensive income for the period Items that are or may be reclassified to profit or loss - - - - - - (28,009) (3,798) - (31,807) (31,807) (44,442) (76,249) Items that will never be reclassified to profit or loss - - - - - - - - 30,750 30,750 30,750-30,750 Total comprehensive income for the period - - - 11,174,458 - - (28,009) (3,798) 30,750 (1,057) 11,173,401 997,982 12,171,383 Balance at 30 June 2016 3,206,420 10,347,863 500,000 10,329,511 28,266 4,205,284 75,389 14,741 30,142 4,353,822 28,737,616 10,370,013 39,107,629 See condensed notes to the financial statements 10
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY (CONTINUED) FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017 (UNAUDITED) Consolidated financial statements Equity attributable to owners of the Company Other components of equity Unrealised Fair value Share of other Total Equity Issued and Retain earnings Other reserves gain on Currency changes in comprehensive other attributable to Nonpaid-up Premium on Legal share-based dilution from translation available-for-sale income of components owners of controlling Total Notes share capital share capital reserve Unappropriated payment investments differences investments associates of equity the Company interests equity For the period ended 30 June 2017 Opening balance at 1 January 2017 3,206,420 10,347,863 500,000 8,733,213 36,696 4,217,233 72,641 5,785 36,938 4,369,293 27,156,789 10,518,300 37,675,089 Changes in equity for the period Dividends 16 - - - (5,162,201) - - - - - - (5,162,201) (527,351) (5,689,552) Share-based payment 13-1,458 - - 3,317 - - - - 3,317 4,775 4,871 9,646 Unrealised gain on dilution of investments in subsidiaries and associates - - - - - 156 - - - 156 156 1,536 1,692 Liquidating distribution of a subsidiary - - - - - - - - - - - - Comprehensive income for the period Profit for the period - - - 5,990,147 - - - - - - 5,990,147 373,470 6,363,617 Other comprehensive income for the period Items that are or may be reclassified to profit or loss - - - - - - (64,779) 3,055 - (61,724) (61,724) (91,163) (152,887) Items that will never be reclassified to profit or loss - - - - - - - - 7,275 7,275 7,275-7,275 Total comprehensive income for the period - - - 5,990,147 - - (64,779) 3,055 7,275 (54,449) 5,935,698 282,307 6,218,005 Balance at 30 June 2017 3,206,420 10,349,321 500,000 9,561,159 40,013 4,217,389 7,862 8,840 44,213 4,318,317 27,935,217 10,279,663 38,214,880 See condensed notes to the financial statements 11
For the period ended 30 June 2016 INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017 Unrealised Fair value Share of other Total Issued and Retain earnings Other reserves gain on Currency changes in comprehensive other paid-up Share Legal share-based dilution from translation available-for-sale income of components Total Notes share capital premium reserve Unappropriated payment investments differences investments associates of equity equity Balance at 1 January 2016 - as previously reported 3,206,420 10,341,569 500,000 164,404 21,308 - - 11,982-33,290 14,245,683 Impact of changes in accounting policies 3 - - - 11,481,582 7,092 4,229,016 103,398 2,374 (608) 4,341,272 15,822,854 Balance at 1 January 2016 - as restated 3,206,420 10,341,569 500,000 11,645,986 28,400 4,229,016 103,398 14,356 (608) 4,374,562 30,068,537 Changes in equity for the period Dividends - - - (7,901,932) - - - - - - (7,901,932) Shared - based payment 13-6,294 - - (134) - - - - (134) 6,160 Unrealised gain on dilution of investments in subsidiaries and associates - - - - - (23,732) - - - (23,732) (23,732) Comprehensive income for the period Profit for the period - - - 7,487,779 - - - - - - 7,487,779 Other comprehensive income for the period Items that are or may be reclassified to profit or loss - - - - - - (28,009) (3,901) - (31,910) (31,910) Items that will never be reclassified to profit or loss - - - - - - - - 30,750 30,750 30,750 Total comprehensive income for the period - - - 7,487,779 - - (28,009) (3,901) 30,750 (1,160) 7,486,619 Balance at 30 June 2016 3,206,420 10,347,863 500,000 11,231,833 28,266 4,205,284 75,389 10,455 30,142 4,349,536 29,635,652 For the period ended 30 June 2017 Balance at 1 January 2017 - as previously reported 3,206,420 10,347,863 500,000 102,044 27,842 - - 4,133-31,975 14,188,302 Impact of changes in accounting policies 3 - - - 9,529,532 8,854 4,217,233 72,641 (439) 36,938 4,335,227 13,864,759 Balance at 1 January 2017 - as restated 3,206,420 10,347,863 500,000 9,631,576 36,696 4,217,233 72,641 3,694 36,938 4,367,202 28,053,061 Changes in equity for the period Dividends 16 - - - (5,162,201) - - - - - - (5,162,201) Share - based payment 13-1,458 - - 3,317 - - - - 3,317 4,775 Unrealised gain on dilution of investments in subsidiaries and associates - - - - - 156 - - - 156 156 Comprehensive income for the period Profit for the period - - - 5,985,125 - - - - - - 5,985,125 Other comprehensive income for the period Items that are or may be reclassified to profit or loss - - - - - - (64,779) 2,672 - (62,107) (62,107) Items that will never be reclassified Separate financial statements Other components of equity to profit or loss - - - - - - - - 7,275 7,275 7,275 Total comprehensive income for the period - - - 5,985,125 - - (64,779) 2,672 7,275 (54,832) 5,930,293 Balance at 30 June 2017 3,206,420 10,349,321 500,000 10,454,500 40,013 4,217,389 7,862 6,366 44,213 4,315,843 28,826,084 See condensed notes to the financial statements 12
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017 (UNAUDITED) Consolidated financial statements Separate financial statements Notes 2017 2016 2017 2016 (Restated) Cash flows from operating activities Profit for the period 6,363,617 12,216,882 5,985,125 7,487,779 Adjustments for Depreciation and amortisation 9 1,545,096 1,383,638 9,901 11,856 Past and current service costs of employee and share-based payment expense 35,055 28,942 9,248 9,006 Gain from disposal of investments - (30,257) - (30,257) Interest income (111,869) (106,803) (17,373) (22,379) Interest expense 199,583 133,184 843 768 Income tax expense 142,770 316,121 - - Share of profit of investments in subsidiaries 8 - - (176,230) (484,217) in joint ventures 8 (63,469) (52,157) - - in associates 8 (5,991,658) (7,149,442) (5,991,658) (7,149,442) Impairment loss on investment 6,400-6,400 - Reversal of provision for interest of unpaid operating agreement fee 18.2 - (3,866,486) - - Unrealised gain on foreign exchange (207,187) (117,244) - - Allowance for doubtful accounts 16,594 77,139 - - Allowance for obsolete inventory 2,098 4,120 - - Amortisation cost of loans 10 529 530 - - Others (3,104) (7,917) (2,092) 4,460 1,934,455 2,830,250 (175,836) (172,426) Changes in operating assets and liabilities Trade and other receivables 179,364 (33,962) 1,752 (4,342) Inventories 156,940 20,691 - - Other non-current assets (4,267) 285,827 (2) - Trade and other payables (659,080) (199,382) (35,599) (69,448) Accrued operating agreement fees 476,169 487,333 - - Other non-current liabilities (44,188) (38,175) - (21,630) Interest received 109,307 102,410 3,068 4,019 Dividend received 5,159,634 7,805,601 5,475,244 8,098,667 Income tax paid (101,922) (260,891) - - Net cash from operating activities 7,206,412 10,999,702 5,268,627 7,834,840 See condensed notes to the financial statements 13
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017 (UNAUDITED) Consolidated financial statements Separate financial statements Note 2017 2016 2017 2016 (Restated) Cash flows from investing activities Additional investment in associates (35,000) (59,999) (35,000) (59,999) Purchase of property, plant and equipment (149,295) (813,040) (1,139) (3,267) Purchase of other intangible assets (23,996) (4,859) (294) (1,632) (Increase) decrease in current investments 239,739 (753,011) (70,000) 118,690 Increase in amounts due from, advances and loans to related parties (14,306) 60,212 - - Cash proceed from disposal of investments - 54,279-54,279 Net cash received from disposal of equipment 7,494 21,247 5,924 30 Net cash (used in) provided from investing activities 24,636 (1,495,171) (100,509) 108,101 Cash flows from financing activities Proceeds from short-term borrowings 230,000 1,856,134 - - Repayments of short-term borrowings (230,000) (2,038,757) - - Repayments of long-term borrowings (352,116) (38,242) - - Interest paid (204,607) (129,208) - - Dividend paid (5,689,552) (8,390,103) (5,162,201) (7,901,932) Net cash used in financing activities (6,246,275) (8,740,176) (5,162,201) (7,901,932) Net increase (decrease) in cash and cash equivalents 984,773 764,355 5,917 41,009 Cash and cash equivalents at 1 January 3,065,097 3,620,623 260,238 175,110 Effects of exchange rate changes on balances held in foreign currencies 24 (7,213) - - Cash and cash equivalents at 30 June 4,049,894 4,377,765 266,155 216,119 See condensed notes to the financial statements 14
Condensed notes to the financial statements Note Contents 1 General information 2 Basis of preparation and presentation of the interim consolidated and separate financial statements 3 Changes in accounting policies 4 Related party transactions and balances 5 Additional cash flow information 6 Other investments 7 Trade and other receivables 8 Investments in subsidiaries, joint ventures and associates 9 Capital expenditure 10 Interest bearing liabilities 11 Trade and other payables 12 Share capital and premium 13 Share-based payment 14 Segment information 15 Earnings per share 16 Dividends 17 Commitments 18 Significant events, disputes and litigation of INTOUCH Group 19 Bank guarantees 20 Events after the reporting period 21 Approval of the interim financial statements 15
Condensed notes to the financial statements These notes form an integral part of the financial statements. 1 General information Intouch Holdings Public Company Limited (the Company ) is a public limited company and is incorporated and domiciled in Thailand and its registered office is at 29 th 30 th floor, SJ Infinite One Business Complex, 349 Vibhavadi-Rangsit Road, Chompol, Chatuchak, Bangkok, 10900. The Company was listed on the Stock Exchange of Thailand ( SET ) in August 1990. As at 30 June 2017, the principle shareholder of the Company is Singtel Global Investment Pte. Ltd., holding 21.0%, Anderton Investments Pte. Ltd., ( Anderton ) holding 12.27% and Aspen Holdings Limited ( Aspen ) 7.23% (31 December 2016: Singtel Global Investment Pte. Ltd., 21.0% and Aspen Holdings Limited 19.5%). However, on 21 July 2017, the ownerships of Anderton and Aspen were changed to 15.90% and 3.60%, respectively. The Company, subsidiaries, joint ventures and associates, collectively called INTOUCH Group, are principally engaged in the satellite, internet, telecommunications, and media and advertising businesses. Detail of the Company s subsidiaries and associates was as follows: Country of Unit: % Ownership Name of the entity Type of business incorporation interest 30 June 31 December 2017 2016 Subsidiaries Thaicom Public Company Limited and its Group ( THAICOM ) Operating transponder services for domestic & international communications, sale of user terminal of IPSTAR, broadband content services, sale of direct television equipment, internet data center services, internet services, satellite uplink-downlink services, broadcasting television service & telecommunication, printing & publishing of business telephone directories, banner advertising, telephone network services, mobile contents, and engineering development services on communication technology & electronics. Thailand 41.14 41.14 I.T. Applications and Service Company Limited ( ITAS ) Providing computer program and related services. Thailand 99.99 99.99 Intouch Media Company Limited and its Group ( Intouch Media ) ITV Public Company Limited and its Group ( ITV ) Matchbox Company Limited ( MB ) To do business in relation to broadcasting and television, including other related businesses. At present, ITV has ceased its operation (notes 17.1 and 18.2) having previously operated a television broadcasting station under a UHF radio-television broadcasting agreement, provided by the Office of the Permanent Secretary of the Office of the Prime Minister. At present, MB is in the liquidation process, having previously provided advertising services and production of advertisements for radio and television broadcast. Thailand 99.99 99.99 Thailand 52.92 52.92 Thailand 99.99 99.99 16
Condensed notes to the financial statements Country of Ownership Name of the entity Type of business incorporation interest Associates Advanced Info Service Public Company Limited and its Group ( AIS ) Operating a 2.1-GHz, 1.8-GHz and 900MHz cellular telephone system, service provider of online data communications via telephone land line & optical fiber, telecom & network operator, broadcasting network services or television, importer & distribution of handset & accessories, and other related services. Unit: % 30 31 June December 2017 2016 Thailand 40.45 40.45 Associates under Venture Capital (excluded investment in debt security of Venture Capital, shown in long-term investments) Ookbee Company Limited ( OOKBEE ) Meditech Solution Company Limited ( Meditech ) Service provider and developer of digital publication, e-booking and multimedia platform. A manufacturer and vendor of eye blink communication aids for paralytics and disabled people. Thailand 21.48 21.48 Thailand 16.66 16.66 Sinoze Company Limited ( Sinoze ) Create and develop games on smart phone and tablet. Thailand 16.67 16.67 Playbasis PTE Limited ( Playbasis ) Golfdigg Company Limited ( Golfdigg ) Wongnai Media Company Limited ( Wongnai ) Service provider and developer for the digital gamification platform. Service provider for the golf course booking platform and other golf-related services. Developer of website and application to review and search for restaurants & lifestyle, including e-voucher Singapore 15.36 15.36 Thailand 25.00 25.00 Thailand 9.99 9.99 Digio Company Limited ( Digio ) Service provider of electronic payment Thailand 8.05-2 Basis of preparation and presentation of the interim consolidated and separate financial statements 2.1 Basis of preparation of the financial statements 1) The interim financial statements are prepared on a condensed basis in accordance with Thai Accounting Standard (TAS) 34 (revised 2016) Interim Financial Reporting; guidelines promulgated by the Federation of Accounting Professions (FAP); applicable rules and regulations of the Thai Securities and Exchange Commission, the SET and generally accepted accounting principles in Thailand. Also, these interim financial statements are prepared according to the notification of the Department of Business Development regarding The Brief Particulars in the Financial Statements (No. 2) B.E. 2559. 2) The interim financial statements are prepared to provide an update on the financial statements for the year ended 31 December 2016. They do not include all of the financial information required for full annual financial statements but focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim financial statements should be read in conjunction with the financial statements of the Company and its subsidiaries for the year ended 31 December 2016. 17
Condensed notes to the financial statements 3) The interim financial statements are presented in Thai Baht, which is the Company s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest thousand unless otherwise stated. 4) The accounting policies and methods of computation applied in these interim financial statements are consistent with those applied in the financial statements for the year ended 31 December 2016 except that the Group has changed the accounting policies. The impact of the change is disclosed in note 3 of the interim financial statements. 5) The preparation of interim financial statements in conformity with Thai Financial Reporting Standards (TFRS) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. 6) In preparing these interim financial statements, the significant judgments made by management in applying the INTOUCH Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December 2016. 7) INTOUCH Group has adopted the new and revised TFRSs that are announced by the FAP and become effective for the financial statements for the period beginning on or after 1 January 2017 onwards. These TFRSs have no material impact on the presentation and/or disclosure in the current period financial statements of INTOUCH Group. The change in accounting policies impacted from TAS 27 (revised 2016) Separate Financial Statements was disclosed in the interim finance statements note 3. 2.2 Financial status of ITV Public Company Limited and its Group ( ITV ) As at 30 June 2017, ITV s current liabilities exceed its current assets by an amount of Baht 1,682 million and deficit in excess of its share capital by an amount of Baht 1,683 million (31 December 2016: Baht 1,692 million and Baht 1,693 million, respectively). The consolidated financial statements of the Company as at 30 June 2017 have consolidated the financial statements of ITV. Accordingly, the recorded assets amounting to Baht 1,212 million represent 2.2% of consolidated total assets (31 December 2016: Baht 1,201 million, represented 2.2%) and liabilities amounting to Baht 2,895 million represent 18.1% of consolidated total liabilities (31 December 2016: Baht 2,894 million, represented 17.1%), and therefore, the recorded deficit in excess of ITV s issued share capital amounting to Baht 1,683 million (31 December 2016: Baht 1,693 million) has been taken up in full in the consolidated financial statements. Due to the fact that the Company s legal liability for any losses incurred by ITV is limited to the Company s share paid to ITV s capital. In the event that ITV is unable to continue its operations, the Company s consolidated net liabilities as at 30 June 2017 and 31 December 2016 would be adjusted to reduce by Baht 1,682 million and Baht 1,692 million, respectively. The retained earnings and shareholders equity as at 30 June 2017 and 31 December 2016 would be increased by Baht 1,683 million and Baht 1,693 million, respectively. In the Separate Financial Statements, the Company does not continue to recognise further share of losses of ITV in the equity method. This is because the Company s investment in ITV is reduced to zero and due to the Company s legal liability for any losses incurred by ITV is limited to the Company s share paid to ITV s capital. However, the Company resumes recognizing its share of profit from ITV only after its share of the profits equals the share of losses that is not recognised. 3 Changes in accounting policies From 1 January 2017, INTOUCH Group has adopted TAS 27 (revised 2016) Separate Financial Statements, which includes the equity method as an accounting option in addition to the cost method or the fair-value method (has not effective yet). The equity method is in accordance with TAS 28 Investments in Associates and Joint Ventures, and the change in accounting policy is to be applied retrospectively. INTOUCH Group has elected to change accounting policy relating to investments in subsidiaries, joint ventures and associates in the separate financial statements from cost method to equity method. This has impacted to the accounting policy applied to the financial statements for the year ended 31 December 2016. 18
Condensed notes to the financial statements The change of the accounting policy has affected to the restatement of particular items shown below (however, there has been no impact on the consolidated financial statements). Statements of financial position As previously Impacts of change in accounting reported policy As restated opening balance as at 1 January 2016 Assets Non-current assets Investments in subsidiaries 3,951,954 3,800,397 7,752,351 Investments in associates 8,567,295 12,022,457 20,589,752 Equity Retained earnings Unappropriated 164,404 11,481,582 11,645,986 Other components of equity 33,290 4,341,272 4,374,562 Statements of financial position opening balance as at 31 December 2016 Assets Non-current assets Investments in subsidiaries 3,951,954 4,046,258 7,998,212 Investments in associates 8,523,629 9,818,501 18,342,130 Equity Retained earnings Unappropriated 102,044 9,529,532 9,631,576 Other components of equity 31,975 4,335,227 4,367,202 19
Condensed notes to the financial statements As previously Impacts of change in accounting reported policy As restated Statements of income for the three-month period ended 30 June 2016 Income Dividend income 10,000 (10,000) - Share of profit of investments in subsidiaries - 221,629 221,629 in associates - 3,891,259 3,891,259 Net profit (loss) before finance costs and income tax expense (77,717) 4,102,888 4,025,171 Profit (loss) for the period (78,742) 4,102,888 4,024,146 Profit (loss) attributable to owners of the Company (78,742) 4,102,888 4,024,146 Earnings (loss) per share attributable to owners of the Company (Baht per share) Basic earnings (loss) per share (0.02) 1.28 1.26 Diluted earnings (loss) per share (0.02) 1.28 1.26 20
Condensed notes to the financial statements Impacts of change in As previously accounting reported policy As restated Statements of comprehensive income for the three-month period ended 30 June 2016 Profit (loss) for the periods (78,742) 4,102,888 4,024,146 Items that are or may be reclassified to profit or loss Foreign currency translation differences for foreign operations - (7,991) (7,991) Net change in fair value of available-for-sale investments (5,728) - (5,728) (5,728) (7,991) (13,719) Items that will never be reclassified to profit or loss Share of other comprehensive income from associates - 3,684 3,684-3,684 3,684 Other comprehensive income, net of income tax (5,728) (4,307) (10,035) Total comprehensive income for the period (84,470) 4,098,581 4,014,111 Total comprehensive income attributable to: Owners of the Company (84,470) 4,098,581 4,041,111 21
Condensed notes to the financial statements Impacts of change in As previously accounting reported policy As restated Statements of income for the six-month period ended 30 June 2016 Income Dividend income 8,108,667 (8,108,667) - Share of profit of investments in subsidiaries - 484,217 484,217 in associates - 7,149,442 7,149,442 Other income 47,775 4,983 52,758 Net profit before finance costs and income tax expense 7,959,220 (470,025) 7,489,195 Profit for the period 7,957,804 (470,025) 7,489,195 Profit attributable to owners of the Company 7,957,804 (470,025) 7,487,779 Earnings per share attributable to owners of the Company (Baht per share) Basic earnings per share 2.48 (0.14) 2.34 Diluted earnings per share 2.48 (0.14) 2.34 22
Condensed notes to the financial statements Statements of comprehensive income for the six-month period ended 30 June 2016 Impacts of change in As previously accounting reported policy As restated Profit for the periods 7,957,804 (470,025) 7,487,779 Items that are or may be reclassified to profit or loss Foreign currency translation differences for foreign operations - (28,009) (28,009) Net change in fair value of available-for-sale investments (1,527) (2,374) (3,901) (1,527) (30,383) (31,910) Items that will never be reclassified to profit or loss Share of other comprehensive income from associates - 30,750 30,750-30,750 30,750 Other comprehensive income, net of income tax (1,527) 367 (1,160) Total comprehensive income for the period 7,956,277 (469,658) 7,486,619 Total comprehensive income attributable to: Owners of the Company 7,956,277 (469,658) 7,486,619 Statements of cash flow for the six-month period ended 30 June 2016 Cash flows from operating activities Profit for the period 7,957,804 (470,025) 7,487,779 Adjustments for Gain from disposal of investments (25,274) (4,983) (30,257) Share of profit of investments in subsidiaries - (484,217) (484,217) associates - (7,149,442) (7,149,442) Dividend income (8,108,667) 8,108,667 - Net cash used in operating activities 7,834,840-7,834,840 23
Condensed notes to the financial statements 4 Related party transactions and balances Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, INTOUCH Group, including holding companies, subsidiaries and fellow subsidiaries are related parties of INTOUCH Group. Associates and individuals owning, directly or indirectly, an interest in the voting power of INTOUCH Group that gives them significant influence over the enterprise, key management personnel of INTOUCH Group and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. Transactions among INTOUCH Group are transactions among the Company, its subsidiaries, joint ventures and associates, also the transactions with management and other related companies of the Company, including with major shareholder s group are recognised as related party transactions of the Company. INTOUCH Group conducted transactions with related parties in the ordinary course of business, the terms of which were negotiated on an arm s length basis and according to normal trade conditions. Significant transactions with related parties were as follows: Consolidated Separate For the three-month period financial statements financial statements ended 30 June 2017 2016 2017 2016 Sales of goods and services Subsidiaries Interest income - - 761 500 Joint ventures Interest income 22,531 21,524 - - Rental income 4,350 8,894 - - Consultant income and others 2,722 3,342 - - 29,603 33,760 - - Associates Mobile content services 36,039 59,528 - - Accounting program services 27,945 29,540 - - Transponder lease 15,962 16,379 - - Sales income from turnkey projects - 24,404 - - Call center and voice services 16,333 17,271 - - Rental income and others 2,782 2,717 194 317 99,061 149,839 194 317 Related parties Rental income 402 473 - - 24
Condensed notes to the financial statements Consolidated Separate For the three-month period financial statements financial statements ended 30 June 2017 2016 2017 2016 Purchase of goods and services, including dividend paid Subsidiaries Accounting program services and others - - 673 655 Joint ventures Rental and others 1,569 1,526 - - Associates Management fee 535-535 - Rental and others 6,341 9,301 267 314 6,876 9,301 802 314 Related parties Rental and others 1,415 1,928 - - 25
Condensed notes to the financial statements Consolidated Separate For the six-month period financial statements financial statements ended 30 June 2017 2016 2017 2016 Associates Mobile content services 82,492 121,447 - - Accounting program services 61,690 58,442 - - Transponder lease 32,273 32,922 - - Sales income from turnkey projects - 24,404 - - Call center and voice services 32,663 33,291 - - Rental income and others 5,646 4,734 508 637 214,764 275,240 508 637 Related parties Rental income 854 1,088 - - Consolidated Separate For the six-month period financial statements financial statements ended 30 June 2017 2016 2017 2016 Purchase of goods and services, including dividend paid Subsidiaries Accounting program services and others - - 1,346 1,590 Joint ventures Rental and other expenses 3,176 3,217 - - Associates Management fee 535-535 - Rental and others 12,774 15,591 532 574 13,309 15,591 1,067 574 Related parties Rental and others 2,963 3,857 - - 26
Condensed notes to the financial statements Consolidated Separate For the six-month period financial statements financial statements ended 30 June 2017 2016 2017 2016 Dividend transactions Dividend income Subsidiaries - - 315,610 303,066 Associates 5,159,634 7,805,601 5,159,634 7,805,601 5,159,634 7,805,601 5,475,244 8,108,667 Dividend paid Directors 292 568 292 568 Major shareholders 2,090,746 3,207,543 2,090,746 3,207,543 2,091,038 3,208,111 2,091,038 3,208,111 Balances with related parties were as follows: Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2017 2016 2017 2016 Trade accounts and notes receivable Joint ventures 2,900 226 - - Associates 50,829 37,914 - - Related parties 56,935 60,053 - - Total 110,664 98,193 - - Less allowance for doubtful accounts (56,453) (59,526) - - Net 54,211 38,667 - - Accrued income Joint ventures 57 - - - Associates 37,002 50,386 - - Total 37,059 50,386 - - Other receivable Subsidiaries - - 1,109 641 Associates 216 434 211 345 Related parties 17 17 - - Total 233 451 1,320 986 27
Condensed notes to the financial statements Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2017 2016 2017 2016 Amounts due from, advances & loans to related parties Subsidiaries - - 3 Joint ventures 157,479 142,323 - - Associates 489 1,339 489 1,339 Total 157,968 143,662 492 1,339 Current investment in debenture through private funds, manage by independent fund manager Subsidiaries - - 107,135 60,221 Associates 22,571 38,607 22,571 38,607 Total 22,571 38,607 129,706 98,828 Long-term loans to related parties Joint ventures 2,034,957 2,145,947 - - Movements of loan to related parties (included in amounts due from, advances and loans to related parties) were as follows: Consolidated Financial statements For the six-month period ended 30 June 2017 2016 Opening balance at 1 January 18,186 168,521 Repayments (18,186) (102,301) Unrealised gain (loss) on currency translation - (1,671) Balance at 30 June - 64,549 Loan in consolidated financial statements is a short-term loan to a joint venture, which is a call loan bearing interest rate at London Inter-Bank Offered Rate ( LIBOR ) plus margin. 28
Condensed notes to the financial statements Movements of long-term loan to a related party were as follows: Consolidated Financial statements For the six-month period ended 30 June 2017 2016 Opening balance at 1 January 2,145,947 2,161,864 Unrealised gain (loss) on currency translation (110,990) (54,559) Balance at 30 June 2,034,957 2,107,305 Long-term loan is a ten years loan to a joint venture bearing interest rates at LIBOR plus margin. Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2017 2016 2017 2016 Trade accounts and notes payable Joint ventures 851 332 - - Associates 765 1,860 - - Related parties 1,449 1,913 - - Total 3,065 4,105 - - Other payable Subsidiaries - - - 43 Joint ventures 4,813 - - - Associates 4,892 7,205 119 13 Related parties 873 909 - - Total 10,578 8,114 119 56 Amounts due to and loans from related parties Subsidiaries - - 43 532 Associates 184 313 159 285 184 313 202 817 Other non-current liabilities Associates 3,607 2,878 - - 29
Condensed notes to the financial statements Management compensation Directors remuneration and key management personnel compensation comprised of: Consolidated Separate For the three-month period Financial statements Financial statements ended 30 June 2017 2016 2017 2016 Short-term benefit Directors' remuneration 17,557 18,060 10,420 12,745 Key management compensation 24,516 25,179 10,319 11,390 Total management benefit expenses 42,073 43,239 20,739 24,135 Long-term benefit Included in administrative expenses Current service costs 406 804 406 385 Share-based payment 2,198 2,802 2,198 2,471 Included in finance costs Interest on obligation 115 326 115 98 Total long-term management benefit expenses 2,719 3,932 2,719 2,954 Total 44,792 47,171 23,458 27,089 Consolidated Separate For the six-month period Financial statements Financial statements ended 30 June 2017 2016 2017 2016 Short-term benefit Directors' remuneration 34,836 32,029 20,115 20,795 Key management compensation 49,342 53,350 20,297 25,600 Total management benefit expenses 84,178 85,379 40,412 46,395 Long-term benefit Included in administrative expenses Current service costs 1,247 1,607 812 771 Share-based payment 4,874 5,554 4,622 4,970 Included in finance costs Interest on obligation 481 652 230 196 Total long-term management benefit expenses 6,602 7,813 5,664 5,937 Total 90,780 93,192 46,076 52,332 30
Condensed notes to the financial statements Directors remuneration Directors remuneration represents monthly allowance, meeting allowance, daily expense allowance (per diem) and bonus which are paid to chairman of the board, independent directors, and non-executive directors as approved by the Annual General Meeting of shareholders of the Company and INTOUCH Group. Commitments and other agreements with related parties As at 30 June 2017, the significant commitments with related parties are as follows: 1. The Company and certain associates entered into agreements with a subsidiary, under which the subsidiary committed to maintain accounting programme service for one year with an option to renew one year each. The parties have the right to terminate the agreement by giving at least three-month advance written notice. As at 30 June 2017, the Company and associates committed to pay the subsidiary for services in respect of the agreements at approximately Baht 29 million on consolidated financial statements and approximately Baht 0.9 million on the separate financial statements (31 December 2016: nil as the agreement had matured). 2. A subsidiary entered into agreements with associates, under which the subsidiary committed to provide transponder service, advisory service and Thaicom 4 (IPSTAR) bandwidth service. As at 30 June 2017, associates committed to pay the subsidiary for the service of the agreements at Baht 17 million and approximately USD 1 million (31 December 2016: Baht 20 million and approximately USD 1 million). 5 Additional cash flow information Significant non-cash items were as follows: Consolidated Separate financial statements financial statements For the six-month period ended 30 June 2017 2016 2017 2016 Purchase of property, plant and equipment and other intangible assets - by liabilities 2,293 134,711 244 1,731 31
Condensed notes to the financial statements 6 Other investments Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2017 2016 2017 2016 Current investments Short-term deposit 2,758,246 3,114,860 250,000 180,000 Debt securities available for sale 3,023,220 2,980,763 1,327,451 1,310,572 5,781,466 6,095,623 1,577,451 1,490,572 Long-term investments (included investment in debt security of Venture Capital) Investment in other company 57,555 57,555 57,555 57,555 Less impairment loss on investment (31,400) (25,000) (31,400) (25,000) 26,155 32,555 26,155 32,555 Total 5,807,621 6,128,178 1,603,606 1,523,127 During the three-month period ended 30 June 2017, the Company recognized an impairment loss on an investment in debt security of Venture Capital project Baht 6.4 million in consolidated and separate financial statements. 7 Trade and other receivables Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2017 2016 2017 2016 Trade receivables Trade and notes receivable 1,631,153 1,816,807 - - Accrued income 663,852 655,402 - - Less allowance for doubtful accounts (346,509) (352,498) - - 1,948,496 2,119,711 - - Other receivables 302,693 357,552 5,033 6,668 Total 2,251,189 2,477,263 5,033 6,668 32