Syndicated Loans From Foreign Banks Syndicated loans from foreign banks as at March 31, 1998 represent loans in US dollars under four loan agreements. Loan under the first agreement represents loan obtained by a subsidiary from eight banks and are repayable in a lump sum on September 5, 1998, while interest rate and interest payments under the said loan agreement are to be mutually agreed with the lenders at the 1 month SIBOR or 3 month SIBOR or 6 month SIBOR plus the rate as prescribed in the said agreement. Repayment of the first agreement was fully made by the subsidiary in the third quarter of 1998. Loan under the second agreement obtained by the Company from fourteen banks and are repayable in five equal semi-annual installments commencing April 9, 1998, while interest rate and interest payments under the said loan agreement are to be mutually agreed with the lenders at the 1 month LIBOR or 3 month LIBOR or 6 month LIBOR plus the rate as prescribed in the said agreement. Loans under the third agreement and fourth agreement are obtained by the Company from twelve banks and three banks, respectively. Both loan agreements are repayable in four equal semi-annual installments commencing March 30, 1999 and April 2, 1999, respectively. Interest rates and interest payments under both loan agreements are to be mutually agreed with the lenders at the 3 month LIBOR or 6 month LIBOR plus the rate as prescribed in both loan agreements. Repayments of the second and fourth agreement were fully made by the Company in the first quarter of 1999. Syndicated loans from foreign banks as at March 31, 1999 represent loan in US dollars under a loan agreement obtained by the Company from the same lender and under the same third loan agreement as at March 31, 1998. As at March 31, 1999 and 1998 outstanding loan balances under syndicated loan agreements in the consolidated balance sheets amounted to approximately Baht 1,998.22 million and Baht 8,363.27 million, respectively. As at March 31, 1999 and 1998 outstanding loan balances under syndicated loan agreements in the Company's separate balance sheets amounted to approximately Baht 1,998.22 million and Baht 7,347.17 million, respectively. Loans From Foreign Finance Companies Loans from foreign finance companies as at March 31, 1998 represent loans in US dollars obtained by the Company from two finance companies under seven loan agreements. Loans obtained from the first finance company comprise six loan agreements. Loans under the first and second agreement are repayable in fifteen equal semi-annual installments commencing March 15, 1993 and June 23, 1993, respectively. Interest under the said two loan agreements are payable semi-annually at the rates ranging from 6.78% - 7.40% per annum. Loan under the third agreement is repayable in four equal semi-annual installments commencing January 15, 1997. Interest rate and interest payments are at the 6 month LIBOR plus the rates as prescribed in the said agreement. Repayment of the third agreement was fully made by the Company in the third quarter of 1998. Loan under the fourth agreement is repayable in ten equal semi-annual installments commencing July 15, 1996. Interest under the said loan agreement is payable semi-annually at the rate of 6.88% per annum. Loan under the fifth agreement is repayable in nine equal semi-annual installments commencing January 15, 1997. Interest under the said loan agreement is payable semi-annually at the rate of 6.10% per annum. On June 22, 1998, the Company and the said finance company mutually agreed to change the interest rate prescribed in the said loan agreement to be 6.32% per annum. Loan under the sixth agreement is repayable in six equal semi-annual installments commencing September 15, 1999, while interest rate and interest payments under the said loan agreement are at the 6 month LIBOR plus the rate as prescribed in the said agreement. Loan under the seventh agreement represents loan in US dollars obtained from the second finance company and is repayable in six equal semi-annual installments commencing March 15, 2000. Interest rate and interest payments are at the 6 month LIBOR. Loans from foreign finance companies as at March 31, 1999 represent loans obtained by the Company from three finance companies under seven loan agreements. Loans in US dollars under first five loan agreements obtained from the first finance company represent the remaining loan balances under the first six loan agreements as at March 31, 1998. Loan under the sixth agreement represents additional loan in US dollars obtained from the second finance company represents the same loan under the same seventh loan agreement as at March 31, 1998. Loan under the seventh agreement represents loan in US dollars equivalent Deutschmark obtained from the third finance company and is repayable in ten equal semi-annual installments commencing March 31, 2000. Interest rate and interest payments are at the 6 month LIBOR plus the rate as prescribed in the said agreement. As at March 31, 1999 and 1998, outstanding loan balances obtained from those three finance companies amounted to approximately Baht 2,230.32 million and Baht 1,427.05 million, respectively. Loans From a Foreign Company Loans from a foreign company as at March 31, 1998 represent loans in US dollars obtained by the Company from a foreign company under two loan agreements. Both loan agreements are repayable in ten equal semi-annual installments commencing January 31, 1994 and April 29, 1994, respectively. Interest under the first loan agreement is payable semi-annually at the rate of 5.97% per annum, while interest rates and interest payments under the second loan agreement are at the 6 month LIBOR plus the rate as prescribed in the said agreements. Repayments of both loan agreements were fully made by the Company in the fourth quarter of 1998. As at March 31, 1998, outstanding balances under the aforesaid two loan agreements amounted to approximately Baht 45.03 million. Other information According to the aforesaid loan agreements made with financial institutions and foreign companies, there are certain terms and conditions for the Company and a subsidiary to comply. Liabilities Under Financial Leases The Company has entered into six financial lease agreements with a related company to obtain vehicles for its business operations. The financial leases are irrevocable and payable monthly in 60 installments with interest at the rates ranging from 19.81 - 23.648% per annum. The said lease agreements stipulate that the Company has the right to buy those vehicles, after fully paid up those leases, at the price of 10% of the vehicles' costs or of the prices purchased by the lessor from car agency. At March 31, 1999, the Company was committed to future payments under financial leases shown in present value, using the discount rates ranging from 19.81 - 23.648% per annum, as follows: Date Amount (Baht) March 31, 2000 923,632.56 March 31, 2001 1,141,460.66 December 31, 2001 611,937.63 Total 2,677,030.85 Payment commitments as of March 31, 2000 are included in current portion of long-term liabilities as shown in the schedule of long-term liabilities. NOTE 19 - OTHER LIABILITIES Other liabilities at March 31, comprise: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 Deposits received from customers - Related parties (Note 3) 129.27 76.29 460.07 76.29 - Other customers 2,982.08 3,144.05 2,928.79 3,048.51 3,111.35 3,220.34 3,388.86 3,124.80 Excess of book value of investment in subsidiary over cost (Note 4) 20.89 - - - Total 3,132.24 3,220.34 3,388.86 3,124.80 NOTE 20 - OTHER INCOME Other income for the three-month periods ended March 31, comprise: Million Baht Consolidated Company's Separate Statements of Income Statements of Income 1999 1998 1999 1998 Interest income 71.98 72.50 64.97 54.52 Interest income derived from held-to-maturily securities 5.51 71.01 5.51 71.01 Cash discount received from suppliers and service providers 21.11 7.26 21.11 7.26 Others 31.59 20.49 19.11 19.49 Total 130.19 171.26 110.70 152.28 NOTE 21 - DIRECTORS' REMUNERATION Directors' remuneration represents meeting fees and gratuities as approved by the shareholders of the Company and its subsidiary in their Annual General Meetings. NOTE 22 - OTHER EXPENSES Other expenses for the three-month periods ended March 31, comprise: Million Baht Consolidated Company's Separate Statements of Income Statements of Income 1999 1998 1999 1998 Amortization of goodwill (Note 4) 14.80 9.15 - - Provision for obsolete inventories (Notes 4) 86.26 - - - Others 0.61 1.96 - 1.96 Total 101.67 11.11 - 1.96 NOTE 23 - FOREIGN CURRENCY RISK MANAGEMENT The Company and its subsidiaries enter into various types of foreign exchange contracts to hedge their transaction risk both in short-term and long-term foreign currency exposures. Short-term foreign currency exposures are related to trade import, short-term foreign borrowings and interest flows on long-term foreign borrowings. Long-term foreign currency exposure is related to long-term foreign borrowings. The currency risks of the Company and its subsidiaries occur in various currency combinations, but mostly in the United States dollars, due to the fact that the Company and its subsidiaries involves in transactions with different countries. The Company and its subsidiaries hedging policy is to hedge currency risk mostly based on their net exposure and the structure of their revenues. The Company and its subsidiaries focus more on hedging when their revenues are on local currency base whereas it will do less when their revenues are on foreign currency base due to the natural hedge phenomenon. The senior executives meet on a monthly basis to analyze currency exposures and re-evaluate forex management strategies against revised currency forecasts. NOTE 24 - OUTSTANDING FOREIGN CURRENCY ASSETS AND LIABILITIES As at March 31, 1999, the Company and its subsidiaries had significant outstanding assets and liabilities in foreign currencies as follows: Million Consolidated Company's Separate Balance Sheets Balance Sheets Assets by type of currency US dollar 50.25 50.25 Liabilities by type of currencies US dollar 218.58 208.46 Deutschmark 16.90 16.89 Japanese yen 306.41 306.41 Norway krone 2.22 2.22 From the foreign currency liabilities as shown above, periods of their settlement are categorised as follows: Million Consolidated Company's Separate Financial Statements Financial Statements Payment periods Within March 31, 2000 US dollar 155.96 145.84 Deutschmark 16.90 16.89 Japanese yen 306.41 306.41 Norway krone 2.22 2.22 After March 31, 2000 US dollar 62.62 62.62 Foreign currency assets as shown above represent foreign currency deposits with foreign banks and receivables from network operators, while foreign currency liabilities represent short-term loans, long-term loans and related accrued interest expense, notes payable to a foreign supplier, foreign trade accounts payable and liabilities under trust receipts. Long-term loans and related accrued interest in US dollars are repayable and payable in accordance with conditions in loan agreements as described in Note 18, while short-term loans, foreign notes payable to foreign supplier and foreign trade accounts payable are payable within March 31, 2000. From the foreign currency liabilities as shown above, a total amount of US$ 87.81 million in the book of the Company and its subsidiary have been hedged against the risk of currency losses on future repayments and payments. Effects derived from the change in exchange rates, incurred between April 1, 1999 and April 26, 1999, to the financial position and results of operations of the Company and its subsidiaries based on their outstanding unhedged foreign currency assets and liabilities as at March 31, 1999 are not significant. NOTE 25 - CHANGE IN SHARE CAPITAL OF ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED 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 new common shares to sell specifically to Singapore Telecom International group at Baht 230 per share. The issuance of the said new shares was registered with the Ministry of Commerce on February 19, 1999. NOTE 26 - LEGAL RESERVE Legal reserve of the Company was established in accordance with the provision of the Public Limited Company Act B.E. 2535, which requires the appropriation as legal reserve of at least 5% of net income each year until the reserve reaches 10% of the authorized share capital. This reserve is not available for dividend distribution. NOTE 27 - PROVIDENT FUND The provident fund of the Company and its subsidiaries complies with the Provident Fund Act B.E. 2530. The fund is independently maintained and therefore does not appear in the balance sheets. (More)