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, 2018, 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, 2018, and the consolidated and separate statements of changes in shareholders equity and cash flows for the six-month period ended June 30, 2018, 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. Dr. Suphamit Techamontrikul Certified Public Accountant (Thailand) BANGKOK Registration No. 3356 August 3, 2018 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2018 Consolidated financial statements Separate financial statements 30 June 31 December 30 June 31 December 2018 2017 2018 2017 Notes (Unaudited) (Unaudited) Assets Current assets Cash and cash equivalents 3,420,577 2,260,688 177,995 205,618 Current investments 5 6,622,057 6,156,679 1,708,832 1,662,758 Trade and other current receivables 6, 3 1,852,915 1,806,336 9,542 10,859 Amounts due from, advances and loans to related parties 3 60,701 90,825 3,075 - Current portion of long-term loans to related parties 3 248,291 244,591 - - Inventories 148,478 124,814 - - Non-current assets or disposal groups classified as held for sale 7 53,143 1,887,716 - - Total current assets 12,406,162 12,571,649 1,899,444 1,879,235 Non-current assets Long-term loans to related parties 3 1,738,040 1,712,138 - - Investments in subsidiaries 8 - - 6,320,207 6,430,138 Investments in joint ventures 8 1,523,157 1,439,489 - - Investments in associates 8 23,498,131 21,538,386 23,498,131 21,538,386 Other long-term investments 5 50,252 50,252 50,252 50,252 Property, plant and equipment 9 7,645,117 7,943,051 35,177 36,556 Intangible assets under operating agreements 9 3,426,056 3,986,569 - - Other intangible assets 9 499,781 553,976 4,014 3,659 Deferred tax assets 707,434 779,638 - - Other non-current assets 390,556 384,461 4,038 4,038 Total non-current assets 39,478,524 38,387,960 29,911,819 28,063,029 Total assets 51,884,686 50,959,609 31,811,263 29,942,264 See condensed notes to the financial statements 2
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS AT 30 JUNE 2018 Consolidated Separate financial statements financial statements 30 June 31 December 30 June 31 December 2018 2017 2018 2017 Notes (Unaudited) (Unaudited) Liabilities and equity Current liabilities Trade and other current payables 3, 11 1,050,640 1,293,927 44,435 87,824 Amounts due to related parties 3 1,087 1,601 1,372 1,442 Current portion of long-term liabilities 10 428,715 421,789 - - Accrued operating agreement fees 685,138 263,345 - - Provision for unpaid operating agreement fee and interest 2,890,345 2,890,345 - - Current income tax payable 71,682 8,441 - - Liabilities included in diaposal groups classified as held for sale 7 67 1,055,132 - - Total current liabilities 5,127,674 5,934,580 45,807 89,266 Non-current liabilities Long-term accounts payable - equipment 229,962 226,646 - - Long-term borrowings 10 6,801,622 6,912,628 - - Non-current provisions for employee benefit 261,714 246,939 64,944 52,553 Other non-current liabilities 315,362 312,312 - - Total non-current liabilities 7,608,660 7,698,525 64,944 52,553 Total liabilities 12,736,334 13,633,105 110,751 141,819 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 2018 Consolidated financial statements Separate financial statements 30 June 31 December 30 June 31 December 2018 2017 2018 2017 Notes (Unaudited) (Unaudited) Liabilities and equity Shareholders 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 ordinary shares 10,347,863 10,347,863 10,347,863 10,347,863 Retained earnings Appropriated Legal reserve 500,000 500,000 500,000 500,000 Unappropriated 12,839,091 10,574,986 13,722,838 11,464,223 Other components of shareholders equity 3,925,725 4,285,867 3,923,391 4,281,939 Total equity attributable to equity holders of the Company 30,819,099 28,915,136 31,700,512 29,800,445 Non-controlling interests 8,329,253 8,411,368 - - Total equity 39,148,352 37,326,504 31,700,512 29,800,445 Total liabilities and equity 51,884,686 50,959,609 31,811,263 29,942,264 See condensed notes to the financial statements 4
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF PROFIT OR LOSS FOR THE THREE-MONTH PERIOD ENDED 30 JUNE 2018 (UNAUDITED) Consolidated Separate financial statements financial statements Notes 2018 2017 2018 2017 Revenue 14 Revenues from sales or revenues from services 1,527,731 2,319,080 - - Share of profit of subsidiaries - - 91,178 76,576 joint ventures 37,770 51,272 - - associates 3,278,698 2,884,850 3,278,698 2,884,850 Net foreign exchange gain 74,031 21,160 - - Other income 67,250 254,695 11,734 9,832 Total revenue 4,985,480 5,531,057 3,381,610 2,971,258 Expenses 14 Costs of sales of goods or costs of rendering of services 838,441 1,538,373 - - Operating agreement fee 237,694 249,005 - - Distribution costs 27,959 52,860 - - Administrative expenses 263,283 437,274 70,164 81,360 Directors and management benefit expenses 3 29,952 42,073 15,024 20,739 Total expenses 1,397,329 2,319,585 85,188 102,099 Profit before finance costs and income tax expense 3,588,151 3,211,472 3,296,422 2,869,159 Finance costs (87,052) (103,930) (1,149) (1,137) Profit before income tax expense 3,501,099 3,107,542 3,295,273 2,868,022 Tax expense (52,591) (66,479) - - Profit for the period 3,448,508 3,041,063 3,295,273 2,868,022 Attributable to: Owners of parent 3,298,073 2,870,886 3,295,273 2,868,022 Non-controlling interests 150,435 170,177 - - Profit for the period 3,448,508 3,041,063 3,295,273 2,868,022 Earnings per share to owners of parent (Baht per share) 15 Basic earnings per share 1.03 0.90 1.03 0.90 Diluted earnings per share 1.03 0.90 1.03 0.90 See condensed notes to the financial statements 5
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 2018 (UNAUDITED) Consolidated financial statements Separate financial statements 2018 2017 2018 2017 Profit for the period 3,448,508 3,041,063 3,295,273 2,868,022 Other comprehensive income, net of tax Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translating financial statement 77,074 (49,183) 31,704 (20,233) Gains (losses) on remeasuring investments held as available for sale (20,409) 3,328 (10,513) 2,199 Total components of other comprehensive income that will be reclassified to profit or loss 56,665 (45,855) 21,191 (18,034) Components of other comprehensive income that will not be reclassified to profit or loss Share of other comprehensive income of an associate 6,684 3,485 6,684 3,485 Total components of other comprehensive income that will not be reclassified to profit or loss 6,684 3,485 6,684 3,485 Other comprehensive income for the period, net of income tax 63,349 (42,370) 27,875 (14,549) Total comprehensive income for the period 3,511,857 2,998,693 3,323,148 2,853,473 Total comprehensive income attributable to: Owners of parent 3,323,403 2,856,500 3,323,148 2,853,473 Non-controlling interests 188,454 142,193 - - 3,511,857 2,998,693 3,323,148 2,853,473 See condensed notes to the financial statements 6
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF PROFIT OR LOSS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2018 (UNAUDITED) Consolidated Separate financial statements financial statements Notes 2018 2017 2018 2017 Revenue 14 Revenues from sales or revenues from services 3,294,393 5,086,637 - - Construction revenue under operating agreements - 186 - - Share of profit of subsidiaries 8 - - 537,076 176,230 joint ventures 8 59,313 63,469 - - associates 8 6,546,939 5,991,658 6,546,939 5,991,658 Gain on sale of an investment 8 1,634,703 - - - Net foreign exchange gain 50,013 116,048 - - Other income 131,320 320,292 22,063 18,562 Total revenue 11,716,681 11,578,290 7,106,078 6,186,450 Expenses 14 Costs of sales of goods or costs of rendering of services 1,783,786 3,172,602 - - Construction cost under operating agreements - 186 - - Operating agreement fee 462,293 514,669 - - Distribution costs 77,102 123,798 - - Administrative expenses 845,100 967,387 141,350 159,349 Directors and management benefit expenses 3 61,017 84,178 30,414 40,412 Total expenses 3,229,298 4,862,820 171,764 199,761 Profit before finance costs and income tax expense 8,487,383 6,715,470 6,934,314 5,986,689 Finance costs (168,238) (209,083) (1,679) (1,564) Profit before income tax expense 8,319,145 6,506,387 6,932,635 5,985,125 Tax expense (113,854) (142,770) - - Profit for the period 8,205,291 6,363,617 6,932,635 5,985,125 Attributable to: Owners of parent 6,938,125 5,990,147 6,932,635 5,985,125 Non-controlling interests 1,267,166 373,470 - - Profit for the period 8,205,291 6,363,617 6,932,635 5,985,125 Earnings per share to owners of parent (Baht per share) 15 Basic earnings per share 2.16 1.87 2.16 1.87 Diluted earnings per share 2.16 1.87 2.16 1.87 See condensed notes to the financial statements 7
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 2018 (UNAUDITED) Consolidated financial statements Separate financial statements 2018 2017 2018 2017 Profit for the period 8,205,291 6,363,617 6,932,635 5,985,125 Other comprehensive income, net of tax Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translating financial statement 10,939 (157,468) 4,499 (64,779) Gains (losses) on remeasuring investments held as available for sale (13,887) 4,581 (7,185) 2,672 Total components of other comprehensive income that will be reclassified to profit or loss (2,948) (152,887) (2,686) (62,107) Components of other comprehensive income that will not be reclassified to profit or loss Share of other comprehensive income of an associate 10,386 7,275 10,386 7,275 Total components of other comprehensive income that will not be reclassified to profit or loss 10,386 7,275 10,386 7,275 Other comprehensive income for the period, net of income tax 7,438 (145,612) 7,700 (54,832) Total comprehensive income for the period 8,212,729 6,218,005 6,940,335 5,930,293 Total comprehensive income attributable to: Owners of parent 6,944,231 5,935,698 6,940,335 5,930,293 Non-controlling interests 1,268,498 282,307 - - 8,212,729 6,218,005 6,940,335 5,930,293 See condensed notes to the financial statements 8
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2018 (UNAUDITED) Consolidated financial statements Equity attributable to owners of the Company Other components of equity Unrealised gain Fair value Share of other Total Equity Issued and Retain earnings Other reserves on dilution from Translating changes in comprehensive other attributable to Nonpaid-up Premium on Legal share-based investments financial available-for-sale income of components owners of controlling Total Note share capital share capital reserve Unappropriated payment and others statement investments associates of equity the Company interests equity For the six-month 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 - - - (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 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 9
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY (CONTINUED) FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2018 (UNAUDITED) Consolidated financial statements Equity attributable to owners of the Company Other components of equity Unrealised gain Fair value Share of other Total Equity Issued and Retain earnings Other reserves on dilution from Translating changes in comprehensive other attributable to Nonpaid-up Premium on Legal share-based investments financial available-for-sale income of components owners of controlling Total Notes share capital share capital reserve Unappropriated payment and others statement investments associates of equity the Company interests equity For the six-month period ended 30 June 2018 Opening balance at 1 January 2018 3,206,420 10,347,863 500,000 10,574,986 44,878 4,217,389 (45,945) 13,247 56,298 4,285,867 28,915,136 8,411,368 37,326,504 Changes in equity for the period Dividends 16 - - - (4,674,020) - - - - - - (4,674,020) (877,321) (5,551,341) Share-based payment 13 - - - - 3,828 - - - - 3,828 3,828 623 4,451 Unrealised loss on dilution from investments 8 - - - - - (20) - - - (20) (20) 842 822 Change in non-controlling interest in an associate 8 - - - - - (19,085) - - - (19,085) (19,085) - (19,085) Disposal of investment in a subsidiary 8 - - - - - (350,971) - - - (350,971) (350,971) (474,757) (825,728) Comprehensive income for the period Profit for the period - - - 6,938,125 - - - - - - 6,938,125 1,267,166 8,205,291 Other comprehensive income for the period Items that are or may be reclassified to profit or loss - - - - - - 4,499 (8,779) - (4,280) (4,280) 1,332 (2,948) Items that will never be reclassified to profit or loss - - - - - - - - 10,386 10,386 10,386-10,386 Total comprehensive income for the period - - - 6,938,125 - - 4,499 (8,779) 10,386 6,106 6,944,231 1,268,498 8,212,729 Balance at 30 June 2018 3,206,420 10,347,863 500,000 12,839,091 48,706 3,847,313 (41,446) 4,468 66,684 3,925,725 30,819,099 8,329,253 39,148,352 See condensed notes to the financial statements 10
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2018 (UNAUDITED) Separate financial statements Other components of equity Unrealised gain Fair value Share of other Total Issued and Retain earnings Other reserves on dilution from Translating changes in comprehensive other paid-up Share Legal share-based investments financial available-for-sale income of components Total Notes share capital premium reserve Unappropriated payment and others statement investments associates of equity equity For the six-month ended 30 June 2017 Balance at 1 January 2017 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 - - - (5,162,201) - - - - - - (5,162,201) Shared - 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 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 11
INTOUCH HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY (CONTINUED) FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2018 (UNAUDITED) Separate financial statements Other components of equity Unrealised gain Fair value Share of other Total Issued and Retain earnings Other reserves on dilution from Translating changes in comprehensive other paid-up Share Legal share-based investments financial available-for-sale income of components Total Notes share capital premium reserve Unappropriated payment and others statement investments associates of equity equity For the six-month period ended 30 June 2018 Balance at 1 January 2018 3,206,420 10,347,863 500,000 11,464,223 44,878 4,217,389 (45,945) 9,319 56,298 4,281,939 29,800,445 Changes in equity for the period Dividends 16 - - - (4,674,020) - - - - - - (4,674,020) Share - based payment 13 - - - - 3,828 - - - - 3,828 3,828 Unrealised loss on dilution from investments 8 - - - - - (20) - - - (20) (20) Change in non-controlling interest in an associate 8 - - - - - (19,085) - - - (19,085) (19,085) Disposal of investment in a subsidiary 8 - - - - - (350,971) - - - (350,971) (350,971) Comprehensive income for the period Profit for the period - - - 6,932,635 - - - - - - 6,932,635 Other comprehensive income for the period Items that are or may be reclassified to profit or loss - - - - - - 4,499 (7,185) - (2,686) (2,686) Items that will never be reclassified to profit or loss - - - - - - - - 10,386 10,386 10,386 Total comprehensive income for the period - - - 6,932,635 - - 4,499 (7,185) 10,386 7,700 6,940,335 Balance at 30 June 2018 3,206,420 10,347,863 500,000 13,722,838 48,706 3,847,313 (41,446) 2,134 66,684 3,923,391 31,700,512 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 2018 (UNAUDITED) U Consolidated financial statements Separ financial st Notes 2018 2017 2018 Cash flows from operating activities Profit for the period 8,205,291 6,363,617 6,932,635 Adjustments for Depreciation and amortisation 9 993,440 1,545,096 10,227 Past and current service costs of employee and share-based payment expense 26,354 35,055 14,735 Gain on sale of an investment 8 (1,634,703) - - Interest income (125,127) (111,869) (18,845) Interest expense 162,565 199,583 1,048 Tax income (expense) 113,854 142,770 - Share of profit (loss) of subsidiaries 8 - - (537,076) joint ventures 8 (59,313) (63,469) - associates 8 (6,546,939) (5,991,658) (6,546,939) Impairment loss on investment - 6,400 - Unrealised gain on foreign exchange (2,342) (207,187) - Allowance for doubtful accounts 128,633 16,594 - Allowance for obsolete inventory 3,697 2,098 - Others (2,672) (2,575) (1,500) 1,262,738 1,934,455 (145,715) Changes in operating assets and liabilities Trade and other receivables (121,107) 179,364 (2,659) Inventories (36,797) 156,940 - Other non-current assets (42,424) (4,267) - Trade and other payables (290,008) (659,080) (43,847) Accrued operating agreement fees 421,793 476,169 - Other non-current liabilities 2,224 (44,188) - Interest received 119,662 109,307 3,432 Dividend received 4,293,682 5,159,634 4,906,866 Income tax paid (10,365) (101,922) - Net cash from operating activities 5,599,398 7,206,412 4,718,077 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 2018 (UNAUDITED) U Consolidated financial statements Separ financial st Note 2018 2017 2018 Cash flows from investing activities Cash paid for acquisition of associates - net (30,000) (35,000) (30,000) Purchase of property, plant and equipment (58,403) (149,295) (9,294) Purchase of other intangible assets (1,566) (23,996) (1,566) (Increase) decrease in current investments (420,266) 239,739 (34,366) Increase in amounts due from, advances and loans to related parties 30,373 (14,306) - Cash proceed from disposal of an investment 8 1,945,903 - - Cash proceed from disposal of equipment 3,658 7,494 3,546 Net cash (used in) provided from investing activities 1,469,699 24,636 (71,680) Cash flows from financing activities Proceeds from short-term borrowings 10-230,000 - Repayments of short-term borrowings 10 - (230,000) - Repayments of long-term borrowings 10 (200,373) (352,116) - Interest paid (157,324) (204,607) - Dividend paid (5,551,341) (5,689,552) (4,674,020) Net cash used in financing activities (5,909,038) (6,246,275) (4,674,020) Net increase (decrease) in cash and cash equivalents before effects of exchange rate 1,160,059 984,773 (27,623) Effects of exchange rate changes on cash and cash equivalents (170) 24 - Net increase (decrease) in cash and cash equivalents 1,159,889 984,797 (27,623) Cash and cash equivalents at 1 January 2,260,688 3,065,097 205,618 Cash and cash equivalents at 30 June 3,420,577 4,049,894 177,995 See condensed notes to the financial statements 14
rate tatements 2017 5,985,125 9,901 9,248 - (17,373) 843 - (176,230) - (5,991,658) 6,400 - - - (2,092) (175,836) 1,752 - (2) (35,599) - - 3,068 5,475,244-5,268,627 See condensed notes to the financial statements 15
rate tatements 2017 (35,000) (1,139) (294) (70,000) - - 5,924 (100,509) - - - - (5,162,201) (5,162,201) 5,917-5,917 260,238 266,155 See condensed notes to the financial statements 16
Condensed notes to the financial statements Note Contents 1 General information 2 Basis of preparation and presentation of the interim financial statements 3 Related party transactions and balances 4 Additional cash flow information 5 Other investments 6 Trade and other receivables 7 Non-current assets or disposal groups classified as held for sale 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 Thai Financial Reporting Standard not yet adopted 21 Events after the reporting period 22 Approval of the interim financial statements 15
Condensed notes to 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 349 SJ Infinite One Business Complex 29 th 30 th floor, 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 2018, the principle shareholder of the Company is Singtel Global Investment Pte. Ltd., holding 21.0%, Anderton Investments Pte. Ltd., ( Anderton ) holding 15.9% and Aspen Holdings Limited ( Aspen ) 3.19% (31 December 2017: Singtel Global Investment Pte. Ltd., 21.0%, Anderton 15.9% and Aspen 3.6%). 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 as at 30 June 2018 and 31 December 2017 were as follows: Country of Unit: % Ownership Name of the entity Type of business incorporation interest 30 31 Jun Dec 2018 2017 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, satellite uplink-downlink services, broadcasting television service & telecommunication, telephone network services and engineering development services on communication technology & electronics. Thailand 41.13 41.14 I.T. Applications and Service Company Limited ( ITAS ) Intouch Media Company Limited and its Group ( Intouch Media ) ITV Public Company Limited and its Group ( ITV ) Matchbox Company Limited ( MB ) Providing computer program and other related services. To do business in relation to broadcasting and television, including other related businesses. At present, ITV has ceased its operation (notes 17 and 18). At present, MB has ceased its operation and is in liquidation process (note 7). Thailand 99.99 99.99 Thailand 99.99 99.99 Thailand 52.92 52.92 Thailand 99.99 99.99 16
Condensed notes to the financial statements Unit: % 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, internet data center services, satellite uplinkdownlink services, distribute internet equipment, advertising and other related services. Associates under Venture Capital (excluded investment in debt security of Venture Capital, shown in long-term investments) 30 31 Jun Dec 2018 2017 Thailand 40.45 40.45 Ookbee Company Limited ( OOKBEE ) Meditech Solution Company Limited ( Meditech ) Sinoze Company Limited ( Sinoze ) Playbasis PTE Limited ( Playbasis ) 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. Create and develop games on smart phone and tablet. Service provider and developer for the digital gamification platform. Thailand 20.94 21.48 Thailand 16.66 16.66 Thailand 16.67 16.67 Singapore 15.36 15.36 Golfdigg Company Limited ( Golfdigg ) Wongnai Media Company Limited ( Wongnai ) 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 Thailand 25.00 25.00 Thailand 9.54 9.99 Digio (Thailand) Company Limited ( Digio ) Service provider of electronic payment Thailand 8.05 8.05 Event Pop Holdings Pte. Ltd. ( Event Pop ) Service provider for technology development and other services in connection with event management Singapore 17.96 17.96 YDM (Thailand) Company Limited ( YDM ) Service provider for online marketing solution Thailand 8.11-17
Condensed notes to the financial statements 2 Basis of preparation and presentation of the interim financial statements 2.1 Basis of preparation of the interim financial statements 1) The interim financial statements are prepared on a condensed basis in accordance with Thai Accounting Standard (TAS) 34 (revised 2017) Interim Financial Reporting including related interpretations and guidelines promulgated by the Federation of Accounting Professions ( FAP ); and applicable rules and regulations at the Securities and Exchange Commission. The format of presentation of the financial statements is not significantly different from the Notification of the Department of Business Development regarding The Brief Particulars in the Financial Statements. 2) The interim financial statements are prepared to provide an update on the financial statements for the year ended 31 December 2017. 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 2017. 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 2017. 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 2017. 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 2018 onwards. These TFRSs have no material impact on the presentation and/or disclosure in the current period financial statements of INTOUCH Group. 2.2 Financial status of ITV Public Company Limited and its Group ( ITV ) As at 30 June 2018, ITV s current liabilities exceed its current assets by an amount of Baht 1,664 million and deficit in excess of its share capital by an amount of Baht 1,665 million (31 December 2017: Baht 1,671 million and Baht 1,673 million, respectively). The consolidated financial statements of the Company have consolidated the financial statements of ITV. Accordingly, the recorded assets amounting to Baht 1,230 million represent 2.4% of consolidated total assets (31 December 2017: Baht 1,225 million, represented 2.4%) and liabilities amounting to Baht 2,895 million represent 22.7% of consolidated total liabilities (31 December 2017: Baht 2,898 million, represented 21.3%), and therefore, the recorded deficit in excess of ITV s issued share capital amounting to Baht 1,665 million (31 December 2017: Baht 1,673 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 2018 and 31 December 2017 would be adjusted to reduce by Baht 1,665 million and Baht 1,673 million, respectively. The retained earnings and shareholders equity as at 30 June 2018 and 31 December 2017 would be increased by Baht 1,665 million and Baht 1,673 million, respectively. 18
Condensed notes to the financial statements 3 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: The disposal of ordinary share of a subsidiary On 25 January 2018, DTV Services Co., Ltd. ( DTV ), a subsidiary of THAICOM, sold all ordinary shares that DTV held in CS Loxinfo PLC ( CSL ) to Advanced Wireless Network Company Limited ( AWN ), a subsidiary of AIS (note 7 & note 8). As a result, the investment of the Company in CSL was changed from an indirect subsidiary to an indirect associate company after the date of disposal. Related parties increased during the six-month periods ended 30 June 2018 were as follows: Country of Name of entity Type of business incorporation Relationship Companies under INTOUCH Group increased during the period YDM (Thailand) Company Limited ( YDM ) Service provider for online marketing solution Thailand Associate Consolidated Separate financial statements financial statements For the three-month period ended 30 June 2018 2017 2018 2017 Sales of goods and services Subsidiaries Interest income - - 367 761 Joint ventures Interest income 24,120 22,531 - - Rental income 3,210 4,350 - - Consultant and other incomes 2,587 2,722 - - 29,917 29,603 - - 19
Condensed notes to the financial statements Consolidated Separate financial statements financial statements For the three-month period ended 30 June 2018 2017 2018 2017 Sales of goods and services Associates Mobile content services - 36,039 - - Accounting program services 25,950 27,945 - - Transponder lease 12,679 15,962 - - TV uplink 1,688 - - - Call center and voice services - 16,333 - - Rental and other incomes 6,422 2,782 1,031 194 46,739 99,061 1,031 194 Related parties Rental income - 402 - - Consolidated Separate financial statements financial statements For the three-month period ended 30 June 2018 2017 2018 2017 Purchase of goods and services, Subsidiaries Accounting program services and others - - 560 673 Joint ventures Rental and other expenses 1,314 1,569 - - Associates Rental and other expenses 2,363 6,662 708 588 2,363 6,662 708 588 Related parties Rental and other expenses - 1,415 - - Consolidated Separate financial statements financial statements For the six-month period ended 30 June 2018 2017 2018 2017 Sales of goods and services Subsidiaries Interest income - - 2,387 1,447 20
Condensed notes to the financial statements Consolidated Separate financial statements financial statements For the six-month period ended 30 June 2018 2017 2018 2017 Sales of goods and services Joint ventures Interest income 46,649 44,963 - - Rental income 6,552 8,700 - - Consultant and other incomes 5,118 5,354 - - 58,319 59,017 - - Associates Mobile content services 10,490 82,492 - - Accounting program services 53,244 61,690 - - Transponder lease 25,222 32,273 - - TV uplink 2,585 - - Call center and voice services 3,873 32,663 - - Rental and other incomes 8,508 5,646 1,439 508 103,922 214,764 1,439 508 Related parties Rental income 45 854 - - Consolidated Separate financial statements financial statements For the six-month period ended 30 June 2018 2017 2018 2017 Purchase of goods and services Subsidiaries Accounting program services and others - - 1,121 1,346 Joint ventures Rental and other expenses 2,613 3,176 - - Associates Rental and other expenses 5,918 13,309 1,441 1,067 5,918 13,309 1,441 1,067 Related parties Rental and other expenses 98 2,963 - - 21
Condensed notes to the financial statements Consolidated Separate financial statements financial statements For the six-month period ended 30 June 2018 2017 2018 2017 Dividend transactions Dividend received Subsidiaries - - 613,184 315,610 Associates 4,293,682 5,159,634 4,293,682 5,159,634 4,293,682 5,159,634 4,906,866 5,475,244 Dividend paid Directors 367 292 367 292 Major shareholders 1,876,872 2,090,746 1,876,872 2,090,746 1,877,239 2,091,038 1,877,239 2,091,038 Balances with related parties were as follows: Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2018 2017 2018 2017 Trade accounts and notes receivable Joint ventures - 69 - - Associates 16,500 5,383 - - Related parties 55,101 54,292 - - Total 71,601 59,744 - - Less allowance for doubtful accounts (55,101) (54,293) - - Net 16,500 5,451 - - Accrued income Joint ventures 13 - - - Associates 11,473 12,721 - - Total 11,486 12,721 - - Other receivable Subsidiaries - - 728 1,238 Associates 390 199 390 214 Total 390 199 1,118 1,452 Amounts due from, advances & loans to related parties Joint ventures 57,626 90,825 - - Associates 3,075-3,075 - Total 60,701 90,825 3,075-22
Condensed notes to the financial statements Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2018 2017 2018 2017 Current investment in debenture through private funds, manage by independent fund manager Subsidiaries - - 68,352 118,017 Associates 64,122 22,617 64,122 22,617 Total 64,122 22,617 132,474 140,634 Current portion of long-term loans to related parties Joint ventures 248,291 244,591 - - Long-term loans to related parties Joint ventures 1,738,040 1,712,138 - - 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 2018 2017 Opening balance at 1 January - 18,186 Unrealised loss on currency translation - (18,186) Balance at 30 June - - 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. Movements of long-term loan to a related party were as follows: Consolidated Financial statements For the six-month period ended 30 June 2018 2017 Opening balance at 1 January 1,956,729 2,145,947 Unrealised gain (loss) on currency translation 29,602 (110,990) Balance at 30 June 1,986,331 2,034,957 Long-term loan is a ten years loan to a joint venture bearing interest rates at LIBOR plus margin. 23
Condensed notes to the financial statements Consolidated Separate financial statements financial statements 30 31 30 31 June December June December 2018 2017 2018 2017 Trade accounts and notes payable Joint ventures 455 - - - Associates 3,295 1,017 - - Related parties 1,414 1,393 - - Total 5,164 2,410 - - Other payable Subsidiaries - - - 43 Joint ventures 3,578 4,867 - - Associates 2,246 5,583-11 Total 5,824 10,450-54 Amounts due to and loans from related parties Subsidiaries - - 285 - Associates 1,087 1,601 1,087 1,442 1,087 1,601 1,372 1,442 Other non-current liabilities Associates 2,149 2,878 - - 24
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 2018 2017 2018 2017 Short-term benefit Directors' remuneration 14,536 17,557 8,866 10,420 Key management compensation 15,416 24,516 6,158 10,319 Total management benefit expenses 29,952 42,073 15,024 20,739 Long-term benefit Included in administrative expenses Current service costs 714 841 425 406 Share-based payment (5,516) 3,567 986 2,476 Included in finance costs Interest on obligation 339 366 133 115 Total long-term management benefit expenses (4,463) 4,774 1,544 2,997 Total 25,489 46,847 16,568 23,736 Consolidated Separate For the six-month period Financial statements Financial statements ended 30 June 2018 2017 2018 2017 Short-term benefit Directors' remuneration 30,863 34,836 18,157 20,115 Key management compensation 30,154 49,342 12,257 20,297 Total management benefit expenses 61,017 84,178 30,414 40,412 Long-term benefit Included in administrative expenses Current service costs 1,428 1,682 851 812 Share-based payment 4,295 7,338 2,200 5,057 Included in finance costs Interest on obligation 678 732 266 230 Total long-term management benefit expenses 6,401 9,752 3,317 6,099 Total 67,418 93,930 33,731 46,511 25
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 nonexecutive 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 2018, 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 2018, the Company and associates committed to pay the subsidiary for services in respect of the agreements at approximately Baht 28 million on consolidated financial statements and approximately Baht 1 million on the separate financials statements (31 December 2017: 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 2018, associates committed to pay the subsidiary for the service of the agreements at Baht 12 million (31 December 2017: Baht 14 million). 4 Additional cash flow information Significant non-cash items were as follows: For the six-month period ended 30 June 2018 2017 2018 2017 Purchase of property, plant and equipment and other intangible assets - by liabilities 11,957 2,293 388 244 5 Other investments Consolidated financial statements Separate financial statements Consolidated Separate financial statements financial statements 30 June 31 December 30 June 31 December 2018 2017 2018 2017 Current investments Short-term deposit 2,211,483 2,818,297 350,000 315,634 Debt securities available for sale 4,410,574 3,338,382 1,358,832 1,347,124 6,622,057 6,156,679 1,708,832 1,662,758 Other long-term investments (included investment in debt security of Venture Capital which is not classified as investments in subsidiaries, joint ventures and associates) Investment in other company 81,652 81,652 81,652 81,652 Less impairment loss on investment (31,400) (31,400) (31,400) (31,400) 50,252 50,252 50,252 50,252 Total 6,672,309 6,206,931 1,759,084 1,713,010 26
Condensed notes to the financial statements 6 Trade and other receivables Consolidated Separate financial statements financial statements 30 June 31 December 30 June 31 December 2018 2017 2018 2017 Trade receivables Trade and notes receivable 1,909,919 1,768,771 - - Accrued income 453,272 434,663 - - Less allowance for doubtful accounts (899,212) (754,059) - - 1,463,979 1,449,375 - - Other receivables 388,936 356,961 9,542 10,859 Total 1,852,915 1,806,336 9,542 10,859 Consolidated financial statements 30 June 31 December Note 2018 2017 Trade and notes receivable Related parties 3 71,601 59,744 Other parties 1,838,318 1,709,027 Total 1,909,919 1,768,771 Accrued income Related parties 3 11,486 12,721 Other parties 441,786 421,942 Total 453,272 434,663 Total trade receivables and accrued income 2,363,191 2,203,434 Less allowance for doubtful accounts (899,212) (754,059) Net 1,463,979 1,449,375 Aging analyses for trade accounts receivable and notes receivable were as follows: Consolidated financial statements 30 June 31 December 2018 2017 Within credit terms 195,384 258,767 Overdue: Less than 3 months 381,922 426,581 3-6 months 232,836 395,135 6-12 months 496,863 390,274 Over 12 months 602,914 298,014 Total 1,909,919 1,768,771 Less allowance for doubtful accounts (899,212) (754,059) Net 1,010,707 1,014,712 27
Condensed notes to the financial statements 7 Non-current assets or disposal groups classified as held for sale INTOUCH Group reclassified assets and liabilities of CSL, an indirect subsidiary of THAICOM, and MB to Non-current assets or disposal groups classified as held for sale in the consolidated financial statements as at 31 December 2017. INTOUCH Group had derecognised the assets and liabilities of CSL from the consolidated statement of financial position as at 30 June 2018. This is because of the disposal of all investment in CSL to AWN, a subsidiary of AIS, as discussed in Note 8 to the financial statements. 8 Investments in subsidiaries, joint ventures and associates Movements of investments in subsidiaries, joint ventures and associates were as follows: Consolidated Separate financial financial statements statements Investment in subsidiaries Opening balance at 1 January 2018-6,430,138 Share of profits equity method - 537,076 Adjustment of intercompany sale of an investment - 314,813 Realised dilution gain from an investment - (350,971) Dividend received - (613,184) Share of other comprehensive income - (2,164) Unrealised gain (loss) on currency translation and other - 4,499 Balance at 30 June 2018-6,320,207 Investment in joint ventures Opening balance at 1 January 2018 1,439,489 - Share of profits equity method 59,313 - Unrealised gain (loss) on currency translation 24,355 - Balance at 30 June 2018 1,523,157 - Investment in associates Opening balance at 1 January 2018 21,538,386 21,538,386 Acquisition 30,000 30,000 Share of profits equity method 6,546,939 6,546,939 Adjustment of intercompany sale of an investment (314,813) (314,813) Dividend received (4,293,682) (4,293,682) Share of other comprehensive income 10,386 10,386 Change in non-controlling interest in an associate (19,085) (19,085) Balance at 30 June 2018 23,498,131 23,498,131 28
Condensed notes to the financial statements Investments in joint ventures and associates, and dividend for the periods then ended were as follows: Consolidated financial statements Ownership interest Paid-up capital Cost method Equity method Dividend income for the 30 31 30 31 30 31 30 31 six-month period ended June December June December June December June December 30 June 2018 2017 Currency 2018 2017 2018 2017 2018 2017 2018 2017 (%) (in Thousand) (in Thousand Baht) (in Thousand Baht) (in Thousand Baht) Joint ventures SHEN 51.00 51.00 SGD 14,658 14,658 137,639 137,639 1,465,452 1,356,701 - - High Shopping 51.00 51.00 Baht 500,000 500,000 255,000 255,000 57,705 82,788 - - Total 392,639 392,639 1,523,157 1,439,489 - - Associates AIS 40.45 40.45 Baht 2,973,095 2,973,095 8,382,316 8,382,316 23,241,495 21,292,614 4,293,682 5,159,634 Venture Capital Investments* 339,044 309,044 256,636 245,772 - - Total 8,721,360 8,691,360 23,498,131 21,538,386 4,293,682 5,159,634 Less impairment (79,658) (79,658) - - - - Net 8,641,702 8,611,702 23,498,131 21,538,386 4,293,682 5,159,634 * Excluded investment in debt security of Venture Capital 29
Condensed notes to the financial statements Investments in subsidiaries and associates, and dividend for the periods then ended were as follows: Separate financial statements Ownership interest Paid-up capital Cost method Equity method Dividend income for the 30 31 30 31 30 31 30 31 six-month period ended June December June December June December June December 30 June 2018 2017 Currency 2018 2017 2018 2017 2018 2017 2018 2017 (%) (in Thousand) (in Thousand Baht) (in Thousand Baht) (in Thousand Baht) Subsidiaries THAICOM 41.13 41.14 Baht 5,480,510 5,480,333 3,612,974 3,612,974 6,070,189 6,161,901 613,184 315,610 ITV 52.92 52.92 Baht 6,033,487 6,033,487 3,297,255 3,297,255 - - - - ITAS 99.99 99.99 Baht 10,000 10,000 10,000 10,000 125,528 118,777 - - MB 99.99 99.99 Baht 58,980 58,980 121,946 121,946 53,075 52,981 - - Intouch Media 99.99 99.99 Baht 279,000 279,000 279,000 279,000 71,415 96,479 - - Total 7,321,175 7,321,175 6,320,207 6,430,138 613,184 315,610 Less impairment (3,369,221) (3,369,221) - - - - Net 3,951,954 3,951,954 6,320,207 6,430,138 613,184 315,610 Associates AIS 40.45 40.45 Baht 2,973,095 2,973,095 8,382,316 8,382,316 23,241,495 21,292,614 4,293,682 5,159,634 Venture Capital Investments* 339,044 309,044 256,636 245,772 - - Total 8,721,360 8,691,360 23,498,131 21,538,386 4,293,682 5,159,634 Less impairment (79,658) (79,658) - - - - Net 8,641,702 8,611,702 23,498,131 21,538,386 4,293,682 5,159,634 * Excluded investment in debt security of Venture Capital 30