As at June 30, 1998, outstanding loan balances under syndicated loan agreements in the consolidated balance sheets amounted to approximately Baht 8,560.53 million, and outstanding loan balances under syndicated loan agreements in the Company's separate balance sheets amounted to approximately Baht 7,453.20 million. Loans From Foreign Finance Companies Loans from foreign finance companies as at June 30, 1998 represent loans in US dollars obtained by the Company from three finance companies under eight 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 loan under 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. Repayment of loan under the fourth agreement was fully made by the Company in the second quarter of 1999. 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 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. Loan under the eighth 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. Loans from foreign finance companies as at June 30, 1999 represent loans obtained by the Company from three finance companies under seven loan agreements. Loans in US dollars under first four loan agreements obtained from the first finance company represent the remaining loan balances under the first six loan agreements as at June 30, 1998. Loan under the fifth 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 June 30, 1998. Loan under the sixth and seventh agreements represent loans in US dollars equivalent Deutschmark obtained from the third finance company. Loan under the sixth agreement represents the same loan under the same eighth loan agreement as at June 30, 1998. Loan under the seventh agreement is repayable in fourteen equal semi-annual installments commencing June 30, 1999. Interest rate and interest payment are at the 6 month LIBOR plus the rate as prescribed in the said agreement. As at June 30, 1999 and 1998, outstanding loan balances obtained from those three finance companies amounted to approximately Baht 3,506.63 million and Baht 2,140.60 million, respectively. Loans From a Foreign Company Loans from a foreign company as at June 30, 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 agreement. Repayments of loans under both loan agreements were fully made by the Company in the fourth quarter of 1998. As at June 30, 1998, outstanding balances under the aforesaid two loan agreements amounted to approximately Baht 35.77 million. Other information According to the aforesaid loans obtained from financial institutions and foreign companies, there are certain terms and conditions stipulated in loan agreements for the Company 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 June 30, 1998 and June 30, 1999, future payments which due within one year until June 30, 1999 and June 30, 2000, respectively, are classified as current portion of long-term liabilities. NOTE 18 - OTHER LIABILITIES Other liabilities at June 30, comprise: Million Baht Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 Deposits received from customers - Related parties (Note 3) 129.27 252.24 477.88 252.24 - Other customers 3,100.05 3,099.29 3,051.53 3,008.07 3,229.32 3,351.53 3,529.41 3,260.31 Excess of book value of investment in subsidiary over cost (Note 4) 19.79 - - - Total 3,249.11 3,351.53 3,529.41 3,260.31 NOTE 19 - OTHER INCOME Other income for the three-month periods ended June 30, comprise: Million Baht Consolidated Company's Separate Statements of Income Statements of Income 1999 1998 1999 1998 Interest income 60.02 78.49 50.73 55.72 Interest income derived from held-to-maturity securities 7.09 21.83 7.09 17.77 Cash discount received from suppliers and service providers 29.54 12.81 29.54 12.81 Bad debt recovered 20.22 7.59 24.05 7.02 Others 5.19 4.95 0.28 4.15 Total 122.06 125.67 111.69 97.47 Other income for the six-month periods ended June 30, comprise: Million Baht Consolidated Company's Separate Statements of Income Statements of Income 1999 1998 1999 1998 Interest income 131.74 150.99 115.70 121.62 Interest income derived from held-to-maturity securities 12.60 92.84 12.60 77.40 Cash discount received from suppliers and service providers 50.65 20.07 50.65 20.07 Bad debt recovered 46.65 11.47 42.04 10.89 Others 9.71 21.56 1.34 19.78 Total 251.35 296.93 222.33 249.76 NOTE 20 - DIRECTORS' REMUNERATION Directors' remuneration represents meeting fees and gratuities which have been approved by the shareholders of the Company and a subsidiary in their Annual Shareholders' General Meetings. Directors' remuneration of the Company and a subsidiary as shown in the statements of income for the three-month and six-month periods ended June 30, 1999 and 1998 do not exceed amounts which have been approved by the Annual Shareholders' General Meetings of the Company and the said subsidiary. NOTE 21 - OTHER EXPENSES Other expenses for the three-month periods ended June 30, comprise: Million Baht Consolidated Company's Separate Statements of Income Statements of Income 1999 1998 1999 1998 Amortization of goodwill (Note 4) 26.11 9.15 - - Losses on disposal of assets 8.63 10.84 3.66 - Total 34.74 19.99 3.66 - Other expenses for the six-month periods ended June 30, comprise: Million Baht Consolidated Company's Separate Statements of Income Statements of Income 1999 1998 1999 1998 Amortization of goodwill (Note 4) 40.91 18.30 - - Losses on disposal of assets 8.62 12.80 3.60 1.96 Total 49.53 31.10 3.60 1.96 NOTE 22 - 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 23 - OUTSTANDING FOREIGN CURRENCY ASSETS AND LIABILITIES As at June 30, 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 54.98 54.98 Liabilities by type of currencies US dollar 130.09 127.33 Deutschmark 16.03 16.03 Japanese yen 1,152.18 1,152.18 Norway krone 1.14 1.14 From the foreign currency liabilities as shown above, payment periods are categorised as follows: Million Consolidated Company's Separate Balance Sheets Balance Sheets Within June 30, 2000 US dollar 59.69 56.93 Deutschmark 16.03 16.03 Japanese yen 1,152.18 1,152.18 Norway krone 1.14 1.14 After June 30, 2000 US dollar 70.40 70.40 Foreign currency assets as shown above mainly represent foreign currency deposits with foreign banks and related accrued interest income and receivables from network operators, while foreign currency liabilities mainly represent long-term loans and related accrued interest expense and foreign trade accounts payable. 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 17, while foreign trade accounts payable are payable within June 30, 2000. From the foreign currency liabilities as shown above, a total amount of US$ 89.67 million in the book of the Company and its subsidiaries have been hedged against the risk of currency losses on future repayments and payments. Effects derived from the change in exchange rates, incurred between July 1, 1999 and July 23, 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 June 30, 1999 are as follows : Million Consolidated Company's Separate Financial Statements Financial Statements Increase in assets 29.83 29.83 Increase in liabilities 47.24 45.80 Loss on exchange 17.41 15.97 NOTE 24 - CHANGE IN SHARE CAPITAL OF ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED On February 10, 1999, the shareholders of Advanced Info Service Public Company Limited at the Extraordinary Meeting 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 25 - APPROPRIATION OF EARNINGS OF ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED The shareholders of Advanced Info Service Public Company Limited at the Annual General Meeting held on April 29, 1998 approved the interim dividend during 1997 of Baht 702 million. Additional dividend and legal reserve for 1997 of Baht 257.40 million and Baht 15.30 million, respectively, were also approved by such meeting. 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)