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1999 1998 1999 1998 1999 1998 SUBSIDIARIES 1. THE BANGKOK ENTERTAINMENT CO., LTD. 99.99 99.99 299,999 299,999 1,106,434 1,176,318 2. RUNGSIROJVANIT CO., LTD. 99.99 99.99 35,000 35,000 1,324,358 955,135 3. NEW WORLD PRODUCTION CO., LTD. 99.99 99.99 59,999 59,999 1,063,751 783,002 4. ARIYAWATANA CO., LTD. 99.99 99.99 42,997 42,997 638,387 605,383 5. YOU & I CORPORATION CO., LTD. 99.99 99.99 34,999 34,999 (133,130) (46,106) 6. 3 MEDIA CO., LTD. 99.99 99.99 30,000 30,000 2,751 15,095 7. BEC STUDIO CO., LTD. 99.99 99.99 5,000 5,000 6,453 6,189 8. BEC INTERNATIONAL DISTRIBUTION CO., LTD. 99.99 99.99 5,000 5,000 (2,472) 3,877 9. BEC NEWS BUREAU CO., LTD. 99.99 99.99 5,000 5,000 6,451 6,188 10. BANGKOK TELEVISION CO., LTD. (FORMER NAME : BANGKOK CABLE TELEVISION SYSTEMS CO., LTD.) 99.99 99.99 5,000 5,000 (51,514) (68,724) 11. BANGKOK SATELLITE & TELECOMMUNICATION CO., LTD. 99.99 99.99 25,000 25,000 33,312 31,806 -7- (THOUSAND BAHT) % HOLDING COST METHOD EQUITY METHOD 1999 1998 1999 1998 1999 1998 12. SATELLITE BROADCASTING SYSTEM CO., LTD. 99.99 99.99 1,000 1,000 1,155 1,128 13. SATELLITE TV BROADCASTING CO., LTD. 99.99 99.99 1,000 1,000 714 733 14. BEC-TERO ENTERTAINMENT CO., LTD. 59.99 59.99 8,116 8,116 (4,564) 2,241 TOTAL INVESTMENTS IN SUBSIDIARIES 558,110 558,110 4,183,766 3,587,095 TOTAL INVESTMENTS DEFICIENCY - - (191,680) (114,830) ASSOCIATE 1. CVD ENTERTAINMENT PUBLIC COMPANY LIMITED 20.00 20.00 328,847 328,847 221,026 285,805 TOTAL INVESTMENTS IN SUBSIDIARIES AND ASSOCIATE 886,957 886,957 4,404,792 3,872,900 TOTAL INVESTMENTS DEFICIENCY - - (191,680) (114,830) Due to some subsidiary companies have capital deficiency on September 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 for 1999 are based on financial statements reviewed by other auditor of such company and financial statements of 1998 are based on the data prepared by the management of associate company without any review by auditors. The Company's portion of amount recorded in the consolidated financial statements and the Company only is immaterial. The Company amortized deferred goodwill in the investments in associate as at September 30, 1999, amount of Baht 31.78 million from the total amount of investment. Due to it is expected there will be no economic benefit in the future, therefore, it was shown in the expenses under "Loss on impaired assets" 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 September 30, 1999 and 1998 are equal to Baht 59.04 million and Baht 36.72 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. -8- 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 nine - month periods ended September 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. (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 and shareholders/ radio 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, and directors sell air time 4. ARIYAWATANA CO., LTD. Sourcing and common 1,000 1,000 - - producing shareholders/ TV Programs, and 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- 9. BEC NEWS BUREAU CO., LTD. (*) Producing news common 5,000 5,000 - - programs shareholders/ directors 10. BANGKOK TELEVISION CO., LTD. Sourcing and common 5,000 5,000 - - (FORMER NAME : BANGKOK CABLE producing TV program shareholders/ TELEVISION SYSTEMS sell air time and pay directors CO., LTD. ) TV operator 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 13. SATELLITE TV BROADCASTING Satellite Uplink- common 1,000 1,000 - - CO., LTD. ( * ) Downlink services shareholders/ directors 14. BEC-TERO ENTERTAINMENT Sourcing and pro- common 10,000 10,000 - - CO., LTD. ducing TV programs shareholders/ and sell air time for directors TV advertising. Pro- ducing and promoting songs for concert ASSOCIATE 1. CVD ENTERTAINMENT PUBLIC Producing video tape common 360,000 360,000 - 3,240 COMPANY LIMITED and lazer disc, shareholders/ distributing and directors renting video tape * NOT YET OPERATING 6. DIVIDENDS PAYMENT AND DIRECTORS' REMUNERATION On March 16, 1999, the Board of Directors' Meeting was held and approved to pay dividends at Baht 6.50 per share to the shareholders of 200 million shares, totalling Baht 1,300 million. On April 29, 1999, the Ordinary General Shareholders' Meeting for 1999 was held and approved to pay such proposed dividends and directors' remuneration amounting to Baht 12 million by fixing the payment date for dividends on May 11, 1999. On February 25, 1998, the Board of Directors' Meeting was held and approved to pay dividends at Baht 6.00 per share to the shareholders of 200 million shares, totalling Baht 1,200 million. On April 29, 1998, the Ordinary General Shareholders' Meeting for 1998 was held and -10- approved to pay such proposed dividends and directors' remuneration amounting to Baht 12 million by fixing the payment date for dividends on May 20, 1998. 7. THE CHANGE OF SUBSIDIARY S NAME On July 9, 1999, the Extraordinary Shareholders' Meeting of the subsidiary was held and has a special resolution to confirm the resolution of the Extraordinary Shareholders' Meeting held on June 23, 1999 to change its name from Bangkok Cable Television Systems Co., Ltd. to Bangkok Television Co., Ltd. and the subsidiary company registered the resolution with the Ministry of Commerce on July 9, 1999. 8. TRANSACTIONS WITH RELATED PARTIES The Company and subsidiaries have certain transactions of assets, liabilities, revenues and expenses arose from transactions with the related parties which are related through the common shareholders and/or directors. Such transactions incur in normal business at market price which are comparable to the business transactions with others. The effects of these transactions were reflected in the accompanying financial statements on the bases mutually determined by the Company and subsidiaries and parties concerned. The significant transactions with related parties for the nine-month periods are as follows: (THOUSAND BAHT) 1999 1998 Trade accounts receivable 5,578 3,129 Loans extended 54,478 53,475 Interest receivable 1,404 2,455 Other current assets - 478 Advance 463 - Purchase of office equipments 5,717 5,068 Trade accounts payable 173 965 Other current liabilities - 51 Revenues 5,214 4,247 Interest income 4,454 4,945 Cost of sales 457 1,649 Expenses 10,631 11,899 -11- 9. FINANCIAL INFORMATION BY SEGMENT The Company and its subsidiaries are engaged in the business of procurement of moving pictures, plays, producing television programmes and selling air time for advertisement through channel 3 color Thai TV station. Besides these, some subsidiaries are granted the right for operation through TV and radio stations, and generated income from selling of advertisement and services, selling of video wall equipment and producing pictures. As mentioned in the preceding paragraph, the Company and its subsidiaries operate in one industrial segment, that is business of entertainment and one geographical area, Thailand. All revenues, income and assets shown in the financial statements are related to the aforementioned industrial segment and geographical area. 10. COMMITMENTS AND CONTINGENT LIABILITIES As at September 30, 1999 and 1998, the Company and its subsidiaries have commitments and contingent liabilities as follows: (MILLION BAHT) THE GROUP THE COMPANY PARTICULAR ONLY 1999 1998 1999 1998 Letter of guarantee issued by commercial banks 19.23 21.65 - - Liabilities which may arise from opening letter of credit 6.18 - - - Copyright charges of pictures under forward purchase contract - Current portion 145.69 58.27 84.67 58.27 - Portion due after one year 39.16 0.66 8.00 0.66 11. GENERAL DATA 11.1 A subsidiary has made an agreement for joint operation of color TV transmission with the Mass Communication Organization of Thailand dated April 28, 1978 as amended the first time on September 13, 1982, the second time on July 16, 1987 and the third time on May 2, 1989. The -12- subsidiary is granted the right for joint operation of Channel 3 color Thai TV station's transmission until March 25, 2020. All property created or procured for the operation under this agreement shall be transferred to the Mass Communication Organization of Thailand on the date the subsidiary creates or procures. The subsidiary has the right to use such property. Under the above agreement, the subsidiary has to pay annual compensation to the Mass Communication Organization of Thailand as specified in the agreement. 11.2 A subsidiary has made an agreement to lease air time for program and advertisement with the Mass Communication Organization of Thailand dated January 25, 1990 as amended on September 22, 1994. The subsidiary is granted the right to operate program and advertise through an MCOT FM radio station, at 105.5 MH frequency in Bangkok until January 31, 2020. To be consistent with the term of the agreement for joint operation of color TV transmission as amended, it is agreed that if the agreement for joint operation of color TV transmission is terminated before its term for whatever reason, this agreement shall be deemed terminated. Under the above agreement, the subsidiary has to pay the monthly air time and other expenses to the Mass Communication Organization of Thailand as specified in the agreement. 12. RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1998 financial statements have been reclassified to conform with the presentation of 1999 financial statements. -13- 13. THE PREPARATION TO SOLVE THE YEAR 2000 PROBLEM (UNREVIEWED - NOT INCLUDED IN THE AUDITOR'S REPORT) The Company and its subsidiaries have analysed and evaluated the effect of the Year 2000 problem which may arise to the Company and its subsidiaries for both transmission system, operation system and management information system, by hiring outside expert to check computer systems and preparing computer transactions, connected equipments and total network system applied in the organization. Such expert co-operated with the vendor of main equipment examine, analyze and evaluate the effect of the Year 2000 problem of total computer systems, both HARDWARE and SOFTWARE under the supervision of one administrative director. Such aforementioned checking and evaluation are completed. From the aforementioned checking and evaluation, the Company found that the problem is at the operating system of the main CPU (Mini-computer of IBM AS/400) which is non-Y2K compliant. The working system fixed six digits for date in the form of YYMMDD which have to be adjusted. Besides, some personal computers (PC) acquired before 1996 must be replaced. In order to solve the Y2K problem, the Company and its subsidiaries start to upgrade the computer systems or programmes by planning to purchase mainframe computer and operating system in new version of Y2K compliance and hiring outside expert to upgrade the operating system of BACK OFFICE including replace the obsoleted PC. On September 10, 1999, the Company has finished its remediation activities including system testing and pararellel run with total expenses of Baht 9,748,419.50. The Company expects no significant effects to its operation or even financial status. Although the Company and its subsidiaries expect that the computer systems or programmes can be upgraded in time before the year 2000, they may have some risk due to other enterprises which they deals with are unable to upgrade their computer systems in time. However, the Company expects that such affection is immaterial to the operation of the Company and its subsidiaries.