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UNAUDITED REVIEWED BEC WORLD PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE SIX-MONTH PERIODS ENDED JUNE 30, THOUSAND BAHT THE GROUP THE COMPANY ONLY 1999 1998 1999 1998 NET INCREASE (DECREASE) IN CASH ON HAND AND AT BANKS 86,334 22,198 12,220 (2,302) CASH ON HAND AND AT BANKS AS AT JANUARY 1 134,253 81,914 10,347 15,040 CASH ON HAND AND AT BANKS AS AT JUNE 30 220,587 104,112 22,567 12,738 ADDITIONAL DISCLOSURE ITEMS TO CASH FLOWS STATEMENTS : CASH ON HAND AND AT BANKS PAID DURING THE PERIODS FOR : Interest expenses 64 42 - - Income tax 613,515 375,129 235,692 110,289 Purchase of investments in subsidiaries (BEC-TERO Entertainment Company Limited) Cash on hand - 5,985 - - Share subscription receivable - 4,000 - - - 9,985 - - Goodwill - 2,125 - - Minority interest - (3,994) - - Investment in purchasing subsidiary - 8,116 - - Cash on hand of subsidiary as at April 1, 1998 - (5,985) - - Cash paid in purchasing - 8,116 - - NON - CASH FLOWS ITEM COMPRISE Dividends receivable - - 199,999 199,999 Notes to the interim financial statements form an integral part of these statements. UNAUDITED REVIEWED BEC WORLD PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO THE INTERIM FINANCIAL STATEMENTS JUNE 30, 1999 AND 1998 1. BASIS OF PREPARATION OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1.1 The consolidated interim financial statements included the interim financial statements of BEC World Public Company Limited and subsidiaries as follows: % HOLDING 1999 1998 SUBSIDIARIES DIRECTLY HOLDING BY COMPANY 1. THE BANGKOK ENTERTAINMENT CO., LTD. 99.99 99.99 2. RUNGSIROJVANIT CO., LTD. 99.99 99.99 3. NEW WORLD PRODUCTION CO., LTD. 99.99 99.99 4. ARIYAWATANA CO., LTD. 99.99 99.99 5. YOU & I CORPORATION CO., LTD. 99.99 99.99 6. 3 MEDIA CO., LTD. 99.99 99.99 7. BEC STUDIO CO., LTD. 99.99 99.99 8. BEC INTERNATIONAL DISTRIBUTION CO., LTD. 99.99 99.99 9. BEC NEWS BUREAU CO., LTD. 99.99 99.99 10. BANGKOK CABLE TELEVISION SYSTEMS CO., LTD. 99.99 99.99 11. BANGKOK SATELLITE & TELECOMMUNICATION CO., LTD. 99.99 99.99 12. SATELLITE BROADCASTING SYSTEM CO., LTD. 99.99 99.99 13. SATELLITE TV BROADCASTING CO., LTD. 99.99 99.99 14. BEC - TERO ENTERTAINMENT CO., LTD. 59.99 59.99 SUBSIDIARY HOLDING BY BEC INTERNATIONAL DISTRIBUTION CO., LTD. 1. TVB 3 NETWORK CO., LTD. 59.99 59.99 SUBSIDIARY HOLDING BY BEC-TERO ENTERTAINMENT CO., LTD. 1. BEC - TERO (YANGON) COMPANY LIMITED 99.80 - - 2 - 1.2 Inter-company balances and transactions have been eliminated in the consolidated interim financial statements. 1.3 The difference between book value of subsidiaries and cost of investments was shown under goodwill. 2. SIGNIFICANT ACCOUNTING POLICIES 2.1 Revenues and expenses recognition Revenues and expenses are recorded on an accrual basis. 2.2 Allowance for doubtful accounts The Company provides allowance for doubtful accounts based on the percentage on aging of the outstanding receivables, of which the percentage on each group of accounts receivable is different. 2.3 Inventories Inventories for sale are stated at cost or net realizable value, whichever is the lower. Cost is calculated by the weighted average method. Programmes which are not on the air are stated at cost and will be treated as cost of sale after transmission. 2.4 Investments in subsidiary, associate and other companies Investments in subsidiaries and associate are stated by equity method and investments in other companies are stated at cost. 2.5 Investments in land Investments in land are stated at cost. 2.6 Equipments Equipments are stated at cost. Depreciation is calculated by the straight-line method based on the estimated useful lives of assets in 5-10 years. -3- 2.7 Deferred right to use property Deferred right to use property is amortized by the remaining periods of concession or by the straight-line method based on the estimated useful lives of assets in 5-20 years. 2.8 Deferred pictures rental,picture products,plays and copyright charges Pictures rental are amortized by the straight-line method according to the period specified in the agreement or portion of pictures transmission as specified in the agreement or according to the right as obtained for transmission. Picture products are amortized to cost by the ratio of revenues received based on the estimated total revenues. Plays charges are amortized by the straight-line method in 5 years. Copyright charges are amortized by the straight-line method according to the period specified in the agreement. 2.9 Deferred expenses Other deferred expenses are amortized by the straight-line method within 5 years. 2.10 Goodwill Goodwill is amortized by the straight-line method in 5 years. 2.11 Earnings per share Earnings per share are calculated by dividing the net income by the number of issued and paid-up share capital at the end of the period. 2.12 Foreign currency transactions Foreign currency transactions are recorded in Baht at the rate ruling at the date of transaction. Outstanding foreign currency assets and liabilities at the balance sheet date are converted to Baht at the rates of exchange in effect -4- at that date. Gains or losses on exchange rates are credited or charged to operations during the period. For preparation of the consolidated financial statements, the financial statements of subsidiaries denominated in foreign currencies are converted to Baht based on the following exchange rates : - Assets and liabilities were translated by the average of exchange rates at the ended of the period. - Shareholders' equity and depreciation were translated by the exchange rates in effect at that date. - Revenues and expenses were translated by the average of exchange rates of the period. The adjustment from translation of financial statements in foreign currencies was shown under Shareholders' Equity. 3. QUALITY OF ASSETS The Company has invested and carried on business with the companies which become default as at June 30, 1999 as follows : 3.1 Trade accounts receivable which become default can be classified according to the aging as follows: (THOUSAND BAHT) AGING THE GROUP THE COMPANY ONLY 1999 1998 1999 1998 Over 2 to 3 months 10,537 4,147 1,998 - Over 3 to 6 months 29,556 6,783 623 - Over 6 to 12 months 8,020 10,456 - - Over 12 months 24,127 15,183 764 834 Total 72,240 36,569 3,385 834 Allowance for doubtful accounts 39,002 36,419 2,543 2,197 -5- 3.2 Deposits with financial institutions are the exchange of promissory notes issued by the financial institutions which were ordered to close their operations permanently by the Finance Ministry. The promissory notes are replaced by promissory notes issued by Krung Thai Thanakit Public Company Limited and the certificates of deposit issued by Krung Thai Bank Public Company Limited. Such promissory notes and certificates of deposit are forbidden to redeem before 3-5 years of maturity. No provision is made due to the Government guarantee. (MILLION BAHT) THE GROUP THE COMPANY ONLY 1999 1998 1999 1998 Promissory notes 280.09 280.09 94.32 94.32 Certificates of deposit 71.05 71.05 - - TOTAL 351.14 351.14 94.32 94.32 4. SHORT-TERM LOANS TO RELATED PARTIES (THOUSAND BAHT) THE GROUP THE COMPANY INTEREST RATE ( % ) 1999 1998 1999 1998 1999 1998 LOANS TO -SUBSIDIARIES 1. THE BANGKOK ENTERTAINMENT CO., LTD. - - 800,000 800,000 5.75-12.25 10.00-12.25 2. YOU & I CORPORATION CO., LTD. - - 206,976 90,144 5.75-15.25 10.00-12.25 3. 3 MEDIA CO., LTD. - - 5,000 13,359 6.75-12.25 10.00-12.25 4. BEC STUDIO CO., LTD. - - - 100 - 10.00-11.50 5. BEC INTERNATIONAL DISTRIBUTION CO., LTD. - - 1,668 1,398 5.75-12.25 10.00-12.25 6. BEC NEWS BUREAU CO., LTD. - - - 100 - 10.00-11.50 7. BANGKOK CABLE TELEVISION SYSTEMS CO., LTD. - - 86,483 75,666 5.75-12.25 10.00-12.25 8. BANGKOK SATELLITE & TELECOMMUNICATION CO., LTD. - - - 500 - 10.00-11.50 -6- (THOUSAND BAHT) THE GROUP THE COMPANY INTEREST RATE ( % ) 1999 1998 1999 1998 1999 1998 9. SATELLITE TV BROADCASTING CO., LTD. - - 100 100 5.75-11.50 11.50 10. BEC-TERO ENTERTAINMENT CO., LTD. - - 26,750 4,000 5.75-12.25 12.25 TOTAL SHORT-TERM LOANS TO SUBSIDIARIES - - 1,126,977 985,367 -RELATED PARTIES 1. INFO BIZ CO., LTD. 31,466 27,421 31,466 27,421 8.25-14.75 12.50-14.75 2. INFO PACIFIC CORPORATION LTD. 23,012 20,054 23,012 20,054 8.25-14.75 12.50-14.75 TOTAL SHORT-TERM LOANS TO RELATED PARTIES 54,478 47,475 54,478 47,475 TOTAL 54,478 47,475 1,181,455 1,032,842 RELATED PARTIES LOANS FROM SUBSIDIARY COMPANY 1. INFO PACIFIC CORPORATION LTD. - 2,000 - - - 16.25 TOTAL 54,478 49,475 1,181,455 1,032,842 5. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATE AND INVESTMENTS DEFICIENCY (THOUSAND BAHT) % HOLDING COST METHOD EQUITY METHOD 1999 1998 1999 1998 1999 1998 SUBSIDIARIES 1. THE BANGKOK ENTERTAINMENT CO., LTD. 99.99 99.99 299,999 299,999 1,086,847 1,153,261 2. RUNGSIROJVANIT CO., LTD. 99.99 99.99 35,000 35,000 1,220,664 848,257 3. NEW WORLD PRODUCTION CO., LTD. 99.99 99.99 59,999 59,999 992,147 720,361 4. ARIYAWATANA CO., LTD. 99.99 99.99 42,997 42,997 637,459 592,373 5. YOU & I CORPORATION CO., LTD. 99.99 99.99 34,999 34,999 (117,266) (31,453) 6. 3 MEDIA CO., LTD. 99.99 99.99 30,000 30,000 6,853 19,798 7. BEC STUDIO CO., LTD. 99.99 99.99 5,000 5,000 6,406 6,044 8. BEC INTERNATIONAL DISTRIBUTION CO., LTD. 99.99 99.99 5,000 5,000 (1,688) 6,004 9. BEC NEWS BUREAU CO., LTD. 99.99 99.99 5,000 5,000 6,404 6,042 10. BANGKOK CABLE TELEVISION SYSTEMS CO., LTD. 99.99 99.99 5,000 5,000 (81,989) (63,216) 11. BANGKOK SATELLITE & TELECOMMUNICATION CO., LTD. 99.99 99.99 25,000 25,000 33,037 31,014 12. SATELLITE BROADCASTING SYSTEM CO., LTD. 99.99 99.99 1,000 1,000 1,152 1,107 -7- (THOUSAND BAHT) %HOLDING COST METHOD EQUITY METHOD 1999 1998 1999 1998 1999 1998 13. SATELLITE TV BROADCASTING CO., LTD. 99.99 99.99 1,000 1,000 720 732 14. BEC-TERO ENTERTAINMENT CO., LTD. 59.99 59.99 8,116 8,116 (10,098) 6,260 TOTAL INVESTMENTS IN SUBSIDIARIES 558,110 558,110 3,991,689 3,391,253 TOTAL INVESTMENTS DEFICIENCY - - (211,041) (94,669) ASSOCIATE 1. CVD ENTERTAINMENT PUBLIC COMPANY LIMITED 20.00 - 328,847 328,847 255,079 304,055 TOTAL INVESTMENTS IN SUBSIDIARIES AND ASSOCIATE 886,957 886,957 4,246,768 3,695,308 TOTAL INVESTMENTS DEFICIENCY - - (211,041) (94,669) Due to some subsidiary companies have capital deficiency on June 30, 1999 and 1998, therefore, the amount of investments in subsidiaries by equity method was presented in liabilities under "investments deficiency". The financial statements of CVD Entertainment Public Company Limited are based on financial data prepared by the management of such company without any review of auditors. The Company's portion recorded in the consolidated financial statements and the Company only is immaterial. The Company invested in stocks of CVD Entertainment Public Company Limited which is listed company in the Stock Exchange of Thailand amount of 7.20 million shares. The market value as at June 30, 1999 and 1998 is equal to Baht 104.40 million and Baht 50.40 million, respectively. The Company invested in BEC - TERO Entertainment Company Limited of 599,995 ordinary shares at Baht 10 each with the acquisition expenses of Baht 2.12 million, totalling investments are Baht 8.12 million. The financial statements of BEC - TERO (YANGON) COMPANY LIMITED which is located in the Union of Myanmar holding by subsidiary and is partly included in the consolidated financial statements for the three - month and six - month periods ended June 30, 1999, based on the data prepared by the management which have not been reviewed by the auditors. The amount of assets, liabilities and equity are immaterial to the consolidated financial statements and the Company's financial statements. -8- (THOUSAND BAHT) TYPE OF BUSINESS RELATIONSHIP PAID-UP CAPITAL DIVIDENDS 1999 1998 1999 1998 SUBSIDIARIES 1. THE BANGKOK ENTERTAINMENT Broadcasting Thai common 300,000 300,000 199,999 399,999 CO., LTD. TV Channel 3 shareholders/ directors 2. RUNGSIROJVANIT CO., LTD. Sourcing and common 5,000 5,000 - - Producing shareholders/ TV Programs and directors Sell air time 3. NEW WORLD PRODUCTION Sourcing and common 5,000 5,000 - - CO., LTD Producing shareholders/ TV Programs directors Sell air time 4. ARIYAWATANA CO., LTD. Sourcing and common 1,000 1,000 - - Producing shareholders/ TV Programs directors Sell air time 5. YOU & I CORPORATION Producing Radio common 35,000 35,000 - - CO., LTD. Programs , Operating shareholders/ Radio Stations and directors producing pictures 6. 3 MEDIA CO., LTD. Sourcing and common 30,000 30,000 - - Sell air time, shareholders/ equipment and directors Electronics advertising media services 7. BEC STUDIO CO., LTD. ( * ) Producing programs common 5,000 5,000 - - and Studio services shareholders/ directors 8. BEC INTERNATIONAL Sourcing and Producing common 5,000 5,000 - - DISTRIBUTION CO., LTD. TV Programs shareholders/ directors 9. BEC NEWS BUREAU CO., LTD(*) Producing news common 5,000 5,000 - - programs shareholders/ directors 10. BANGKOK CABLE TELEVISION Pay TV Operator common 5,000 5,000 - - SYSTEMS CO., LTD. ( * ) shareholders/ directors 11. BANGKOK SATELLITE & Satellite Uplink- common 25,000 25,000 - - TELECOMMUNICATION Downlink services shareholders/ CO., LTD. ( * ) directors 12. SATELLITE BROADCASTING Satellite Uplink- common 1,000 1,000 - - SYSTEM CO., LTD. ( * ) Downlink services shareholders/ directors (more)