NOTE 30 - COMMITMENTS Lease Agreements Other than those commitments under lease agreements as described in Note 3 to the financial statements, the Company and its subsidiaries have entered into lease agreements covering spaces for branch offices, base stations, cars and others for periods ranging from 2 months to 20 years with options to renew. The Company and its subsidiaries are committed to pay for rental in respect of the said agreements as follows: Million Baht Per Month Advanced Info Service Public Company Limited 16.12 Advanced Info Service Public Company Limited and subsidiaries 20.80 Bank Guarantees At December 31, 1998, the Company and its subsidiaries had commitments with banks whereby the latter issued letters for guaranteeing the Company and its subsidiaries in respect of business contracts, electricity use, customs duties and others in the following amounts: Million Baht For Advanced Info Service Public Company Limited 3,964.82 For Advanced Info Service Public Company Limited and subsidiaries 4,136.16 Contracts for Construction and Equipment Installation of Mobile Phone Network At December 31, 1998, the Company had outstanding commitments under contracts relating to the construction and installation of equipment for the operations of mobile phone network amounting to approximately Baht 1,431.67 million. Data Broadcast Via Satellite Agreement The Company's subsidiary has entered into a Data Broadcast via Satellite agreement with the Telephone Organization of Thailand for a period of 5 years with option to renew. The subsidiary is committed to pay for rental in respect of the said agreement in the amount of Baht 35,000 per site per month for master network and Baht 6,000 per site per month for remote network. Interest Rate and Currency Exchange Agreements In order to hedge against the risk of possible losses from future repayments of loans and the payments of related interest, deriving from exchange rates and interest rates under loans in foreign currencies, the Company has entered into six interest rate and currency exchange agreements to exchange the US dollar loan principals from US$ 76,824,731.97 to Baht 1,990,740,460.80, and to exchange the related loan interest rates on US dollar principals (comprise a fixed rate of 6.88% per annum and 6 month LIBOR plus the rate per annum as prescribed in each agreement) to the fixed rates on Baht principals ranging from 9.68 - 10.935% per annum. Value dates of those six agreements are covering from January 15, 1997 to January 15, 2001. As of December 31, 1998, outstanding loan principals under those agreements amounted to US$ 50,680,406.65, and their value dates are covering from January 15, 1999 to January 15, 2001. Forward Exchange Contracts In order to hedge against the risk of exchange losses from future repayments of foreign currency loans and the payments of related interest, notes payable to foreign supplier and foreign trade accounts payable, the Company has entered into twenty-three currency exchange agreements to exchange loans, interest, notes payable to foreign supplier and trade accounts payable from a total amount of US$ 76,788,667.54 to Baht 3,218,013,366.48. Value dates of these twenty-three agreements are covering from January 4, 1999 to December 30, 1999. Principal Only Swap Contracts In order to hedge against the risk of exchange losses from future repayments of foreign currency loans and the payments of related interest, the Company has entered into ten currency exchange agreements to exchange loans, and interest from a total amount of US$ 64,500,000 to Baht 2,445,650,000. Value dates of these ten agreements are covering from January 1, 1999 to March 30, 2000. Interest Rate Exchange Agreements In order to hedge against the risk of losses from interest payments, which may derive from the fluctuation of interest rates under foreign loans, the Company has entered into eleven interest rate exchange agreements, to exchange the related interest rates on US dollar loan principals of US$ 153,635,790 (comprise 6 month LIBOR plus the rate per annum as prescribed in each agreement) to the fixed rates on US dollar loan principals ranging from 5.43 - 6.34% per annum. Periods of those eleven agreements are covering from October 9, 1997 to September 15, 2002. As of December 31, 1998, outstanding loan balances relating to those interest rate agreements amounted to US$ 147,635,790, and are covering from September 15, 1998 to September 15, 2002. Letters of Credit At December 31, 1998, the Company's subsidiary had commitments under letters of credit with overseas suppliers amounting to approximately Baht 20.37 million. Purchase Orders As at December 31, 1998, the Company had purchase commitments with respect to the construction and installation of equipment for the operations of mobile phone network amounting to approximately Baht 79.03 million. NOTE 31 - COMPUTER REMEDY PLAN FOR THE YEAR 2000 (UNAUDITED BY THE AUDITORS) The Year 2000 problem arises because many computerized systems use two digits rather than four to identify year. Date-sensitive systems may recognize the year 2000 as some other dates, resulting in errors when information using year 2000 dates is processed. Entities may experience the effects of Year 2000 problem before, on, or after January 1, 2000, and that the effects on operations and financial reporting, if not addressed and repaired properly and timely, may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. In addition, it is not possible to be certain that all aspects of the Year 2000 problem affecting the entity, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. The management of the Company and subsidiaries have instructed their Management Information System Divisions to study the existing computer systems, applications and hardware to develop a computer remediation plan for the year 2000. As of December 31, 1998, the computer remedy projects of the Company and its subsidiaries had not been completed. Estimated expenditure of the computer remedy projects for the Company and its subsidiaries amount to approximately Baht 55 million. Expenses incurred in the current year relating to Year 2000 projects for the Company and its subsidiaries amounted to approximately Baht 1.68 million. Expenditure of the computer remedy projects will be recorded as assets if the replacement of computer systems, applications and hardware are made; and will be recorded as period costs when incurred if the modifications for year 2000 compliance are made. Although computer remedy projects of the Company and its subsidiaries are expected to be completed and can be implemented before the year 2000, the Company and its subsidiaries still face risks that other parties with which the Company and its subsidiaries do business may be unsuccessful in their computer remedy projects within the time limit. However, the Company and its subsidiaries expect that the impact, if any, will not be significant to the operations of the Company and its subsidiaries. NOTE 32 - SUBSEQUENT EVENT On January 6, 1999, the Board of Directors of Advanced Info Service Public Company Limited passed a resolution to approve additional investment in 14,000,000 common shares of Shinawatra Paging Company Limited, Baht 67.83 per share. On February 10, 1999, the Extraordinary Shareholders' Meeting of Advanced Info Service Public Company Limited passed a resolution to approve the issuance of 36,000,000 common shares to sell specifically to Singapore Telecom International at Baht 230 per share. NOTE 33 - RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1997 financial statements have been reclassified to conform with the 1998 presentation.