FINANCIAL STATEMENTS AND ACCOUNTANTS' REVIEW REPORT ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARY FIRST QUARTER ENDED MARCH 31, 1998 AND 1997 Accountants' Review Report To the Shareholders Advanced Info Service Public Company Limited: We have made a review of the consolidated balance sheets of Advanced Info Service Public Company Limited and subsidiary as at March 31, 1998 and 1997, and the related consolidated statements of income, statements of changes in shareholders' equity and statements of retained earnings for the three month periods then ended, and the separate financial statements of Advanced Info Service Public Company Limited for the same periods, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We draw attention to Note 1 to the financial statements. The operations of the Company and its subsidiary since July 1997 have been affected and may continue to be influenced for the foreseeable future by the economic conditions in Thailand and the Asia Pacific Region in general. The ultimate effect that these uncertainties will have on stated values or classifications of assets and liabilities at the balance sheet date cannot presently be determined. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. Dr. Payom Singhasaneh Certified Public Accountant Peat Marwick Suthee Limited Bangkok, April 29, 1998 ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARY BALANCE SHEETS AS AT MARCH 31, 1998 AND 1997 (UNAUDITED) (Amounts in thousand baht) Consolidated Company's Separate Balance Sheets Balance Sheets 1998 1997 1998 1997 ASSETS CURRENT ASSETS Cash in hand and at banks 413,474 395,660 363,664 372,233 Short-term investments (Notes 6 & 9) 4,870,473 2,388,449 4,286,027 1,913,788 Accounts and notes receivable - net (Notes 3, 4 & 7) 3,327,943 2,134,640 3,198,349 1,977,838 Short-term loans and advances to related parties - net (Note 3) 201,379 432,557 145,822 226,330 Inventories - net (Note 4) 47,028 - - - Other current assets (Note 8) 900,730 485,416 884,941 427,762 Total Current Assets 9,761,027 5,836,722 8,878,803 4,917,951 INVESTMENTS (Notes 4 & 10) Related Parties 62,366 63,866 856,756 856,361 Others - - - - Total Investments 62,366 63,866 856,756 856,361 PROPERTY AND EQUIPMENT - net (Notes 4 & 11) 1,766,495 810,819 1,625,576 718,063 OTHER ASSETS Costs of mobile phone and pager networks under concession agreements - net (Notes 2, 3 & 4) 25,419,002 16,676,049 24,582,862 15,861,700 Deferred charges - net (Note 4) 330,791 99,617 330,613 99,186 Goodwill - net (Note 4) 320,240 356,839 - - Others 161,473 71,043 142,732 51,338 Total Other Assets 26,231,506 17,203,548 25,056,207 16,012,224 Total Assets 37,821,394 23,914,955 36,417,342 22,504,599 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARY BALANCE SHEETS AS AT MARCH 31, 1998 AND 1997 (UNAUDITED) (Amounts in thousand baht) Consolidated Company's Separate Balance Sheets Balance Sheets 1998 1997 1998 1997 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Loan from bank - 52,040 - 52,040 Accounts payable and accrued expenses (Notes 3 & 13) 8,344,542 5,527,984 8,226,280 5,325,895 Current portion of long-term liabilities (Notes 12 & 15) 2,734,549 464,560 2,071,549 464,560 Advances from related parties (Note 3) 87,259 36,747 1,253 6,066 Short-term bonds (Note 3) 20,000 - 20,000 - Other current liabilities (Note 14) 1,428,939 1,426,908 1,303,792 1,347,271 Total Current Liabilities 12,615,289 7,508,239 11,622,874 7,195,832 LONG-TERM BONDS (Note 3) 2,000,000 - 2,000,000 - LONG-TERM LIABILITIES - net (Notes 12 & 15) 6,262,171 1,617,268 6,262,171 954,268 DEPOSITS RECEIVED FROM CUSTOMERS (Note 3) 3,220,340 3,043,346 3,124,803 2,898,834 Total Liabilities 24,097,800 12,168,853 23,009,848 11,048,934 MINORITY INTERESTS IN SUBSIDIARY 316,100 290,437 - - SHAREHOLDERS' EQUITY Share capital Authorized 500,000,000 shares, Baht 10 par value 5,000,000 5,000,000 5,000,000 5,000,000 Issued 234,000,000 shares, fully paid 2,340,000 2,340,000 2,340,000 2,340,000 Premium on share capital 2,295,000 2,295,000 2,295,000 2,295,000 See notes to financial statements (Amounts in thousand baht) Consolidated Company's Separate Balance Sheets Balance Sheets 1998 1997 1998 1997 Retained earnings Appropriated to legal reserve (Note 21) 500,000 484,700 500,000 484,700 Unappropriated 8,272,494 6,335,965 8,272,494 6,335,965 Total Shareholders' Equity 13,407,494 11,455,665 13,407,494 11,455,665 Total Liabilities and Shareholders' Equity 37,821,394 23,914,955 36,417,342 22,504,599 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF INCOME FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED) (Amounts in thousand baht Consolidated Company's Separate except earnings per share) Statements of income Statements of income 1998 1997 1998 1997 REVENUES Revenues from services and equipment rental (Note 4) 4,140,555 3,397,371 3,781,710 3,026,491 Sales (Note 4) 59,737 - - - Net result of investment in subsidiary (Note 4) - - 30,968 11,906 Gain on exchange 1,436,576 - 1,437,928 - Other income (Note 16) 171,265 62,290 152,285 44,118 Total Revenues 5,808,133 3,459,661 5,402,891 3,082,515 EXPENSES Costs of services and equipment rental (Note 4) 1,918,206 1,293,301 1,848,305 1,209,752 Cost of sales (Note 4) 59,774 - - - Selling and administrative expenses 910,520 739,203 729,519 503,355 Interest expense 326,669 52,692 308,470 37,756 Directors' remuneration (Note 17) 1,005 1,375 990 1,360 Other expenses (Note 18) 11,114 14,242 1,964 5,091 Total Expenses 3,227,288 2,100,813 2,889,248 1,757,314 Net income before income tax 2,580,845 1,358,848 2,513,643 1,325,201 Income tax (812,970) (436,431) (772,513) (416,822) Net income before considering minority interests in subsidiary 1,767,875 922,417 1,741,130 908,379 See notes to financial statements (Amounts in thousand baht Consolidated Company's Separate except earnings per share) Statements of income Statements of income 1998 1997 1998 1997 Less Share of net income of subsidiary to minority interests 26,745 14,038 - - Net income 1,741,130 908,379 1,741,130 908,379 Earnings per share (Baht) (Note 4) 7.44 3.88 7.44 3.88 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Amounts in thousand baht) Three Months Ended March 31 1998 1997 Share capital Common shares Balance at beginning of period 2,340,000 2,340,000 Increase during the period - - Decrease during the period - - Balance at end of period 2,340,000 2,340,000 Premium on share capital Balance at beginning of period 2,295,000 2,295,000 Increase during the period - - Decrease during the period - - Balance at end of period 2,295,000 2,295,000 Retained earnings Appropriated to legal reserve Balance at beginning of period 500,000 484,700 Increase during the period - - Decrease during the period - - Balance at end of period 500,000 484,700 Unappropriated Balance at beginning of period 6,531,364 5,427,586 Increase during the period 1,741,130 908,379 Decrease during the period - - Balance at end of period 8,272,494 6,335,965 Total Shareholders' Equity 13,407,494 11,455,665 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF RETAINED EARNINGS (UNAUDITED) (Amounts in thousand baht) Three Months Ended March 31 1998 1997 Unappropriated retained earnings Balance at beginning of period 6,531,364 5,427,586 Net income for the period 1,741,130 908,379 Balance at end of period 8,272,494 6,335,965 Appropriated retained earnings Legal reserve 500,000 484,700 Total Retained Earnings 8,772,494 6,820,665 See notes to financial statements