Consolidated The Company 1999 1998 1999 1998 Million Baht Million Baht Million Baht Million Baht Loans from finance companies - denominated in US Dollars 3,701.15 2,013.77 3,701.15 2,013.77 Loans from banks - denominated in US Dollars 534.74 7,421.06 534.74 7,421.06 Loans from overseas company - denominated in US Dollars - 12.33 - 12.33 Total long-term loans 4,235.89 9,447.16 4,235.89 9,447.16 The maturity of long-term loans (excluding obligations under finance leases) is: Consolidated The Company 1999 1998 1999 1998 Million Baht Million Baht Million Baht Million Baht Due within 1 year 1,645.16 3,487.13 1,645.16 3,487.13 Due within 2 to 3 years 1,110.42 4,580.11 1,110.42 4,580.11 Due within 3 to 5 years 1,103.74 1,101.49 1,103.74 1,101.49 Due after 5 years 376.57 278.43 376.57 278.43 2,590.73 5,960.03 2,590.73 5,960.03 Total long-term loans 4,235.89 9,447.16 4,235.89 9,447.16 Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 16. Long-term liabilities (continued) Long-term loans represent loans from foreign finance companies, foreign banks and a foreign company, equivalent to US$ 102.98 million (1998 : US$ 239.33 million), carrying interest at rates between LIBOR (London Inter Bank Offer Rate) and LIBOR plus 1.25% per annum (1998 : LIBOR - LIBOR plus 1.25% per annum). The company is required to comply with certain terms and conditions as specified in the loan agreements. The Group has in place certain forward exchange contracts to cover these loans. The Group's long-term loans are unsecured. Undrawn committed borrowing facilities As at 30 September, the Group has unused credit facilities as follows: Consolidated The Company 1999 1998 1999 1998 Million Million Million Million Short-term loans Local banks in Baht 811.00 788.12 511.00 788.12 Foreign bank in US Dollars 5.00 11.92 5.00 11.92 Long-term loans Foreign finance company in US Dollars 1.96 42.65 1.96 42.65 Foreign finance companies in Deutsche Marks 47.84 86.24 47.84 86.24 17. Deposits from customers Deposits from customers as at 30 September comprise: Consolidated The Company 1999 1998 1999 1998 Million Baht Million Baht Million Baht Million Baht Deposits from customers - Related companies 116.70 356.44 528.50 356.44 - Third parties 3,209.80 3,055.35 3,163.97 2,982.35 Total deposits from customers 3,326.50 3,411.79 3,692.47 3,338.79 Deposits from customers - related companies as at 30 September comprise: Consolidated The Company 1999 1998 1999 1998 Million Baht Million Baht Million Baht Million Baht Parent company - 129.27 - 129.27 Subsidiary - - 411.80 - Other related company 116.70 227.17 116.70 227.17 Total deposits from customers - related companies 116.70 356.44 528.50 356.44 Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 18. Share capital and premium Number of Share Share Total shares capital premium Million Million Baht Million Baht Million Baht 1 January 1998 234 2,340.00 2,295.00 4,635.00 30 September 1998 234 2,340.00 2,295.00 4,635.00 1 January 1999 234 2,340.00 2,295.00 4,635.00 Issued, registered on 19 February 1999 36 360.00 7,920.00 8,280.00 30 September 1999 270 2,700.00 10,215.00 12,915.00 At the extraordinary meeting of the company's shareholders held on 10 February 1999, the shareholders passed a resolution to approve the issuance of 36,000,000 ordinary shares to sell specifically to Singapore Telecom International at Baht 230 per share. The issuance of the new shares was registered with the Ministry of Commerce on 19 February 1999. 19. Cost of services and equipment rentals Included in cost of services and equipment rentals for the nine-month period ended 30 September 1998 was transmission expense for the periods prior to 1 January 1998 charged from the Telephone Organisation of Thailand in the amount of Baht 492.5 million. 20. Directors' remuneration During this nine-month period ended 30 September 1999 the remuneration of the directors amounted to Baht 3.73 million (1998 : Baht 3.92 million), which did not exceed amounts which had been approved by the annual general meetings of the shareholders of the company and the subsidiaries. The directors' remuneration represents meeting fees and gratuities. 21. Dividend At the annual general meeting of the company's shareholders held on 29 April 1998, the shareholders resolved to declare a dividend for the year ended 31 December 1997 of Baht 1.10 per share, totalling Baht 257.4 million. The dividend was distributed to the shareholders on 25 May 1998. 22. Legal reserve The company allocates not less than 5% of its annual net income less the accumulated losses brought forward (if any) to a reserve fund until this fund attains an amount not less than 10% of the registered capital. 23. Provident fund The company has established a contributory registered provident fund, in accordance with the Provident Fund Act B.E. 2530. The registered provident fund plan was approved by the Ministry of Finance on 23 July 1990 and subsequently amended the provident fund's name on 21 January 1993. Under the plan, the employees must contribute 3 - 7% of their basic salaries, to be matched by the company. The company appointed a fund manager to manage the fund in accordance with the terms and conditions prescribed in the Ministerial Regulation No. 2 (B.E. 2532) issued under the Provident Fund Act B.E. 2530. Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 24. Acquisition On 31 December 1998, the Group acquired 99.99% of the share capital of Advanced Wireless Marketing Co., Ltd. Consolidated 1998 Million Baht Purchase consideration 600.00 Net assets acquired (621.99) Negative goodwill (21.99) No fair value adjustments were made to the book value of net assets acquired. The Group's management is of the opinion that the book value approximated fair value at the date of acquisition. The book value of assets and liabilities acquired on the acquisition of Advanced Wireless Marketing Co., Ltd. were as follows: Million Baht Cash on hand and at banks 327.32 Short-term investments 0.52 Trade accounts receivable, net 234.39 Amounts due from related companies 1.80 Inventories, net 637.54 Other current assets 93.23 Equipment, net 87.24 Deferred charges, net 59.05 Other assets 311.52 Loans from banks (187.56) Trade accounts payable and accrued expenses (638.77) Short-term loans and advances from related companies (213.74) Other current liabilities (90.55) Fair value of net assets acquired 621.99 Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 24. Acquisition (continued) In February 1999 the Group acquired an additional 40% of the share capital of Advanced Paging Co., Ltd. Consolidated 1999 Million Baht Purchase consideration 949.60 Net assets acquired (418.20) Positive goodwill 531.40 No fair value adjustments were made to the book value of net assets acquired. The Group's management is of opinion that the book value approximated fair value at the date of acquisition. The book value of assets and liabilities acquired on the acquisition of Advanced Paging Co., Ltd. were as follows: Million Baht Cash on hand and at banks 42.83 Short-term investments 220.00 Trade accounts receivable, net 130.47 Amounts due from related companies 11.97 Inventories, net 43.28 Other current assets 54.14 Equipment, net 514.58 Others assets 360.17 Trade accounts payable (25.39) Amounts due to related companies (4.68) Deposits from customers (56.07) Accrued expenses (117.12) Other current liabilities (128.69) Fair value of net assets 1,045.49 Interest acquired 40% Fair value of net assets acquired 418.20 Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 25. Commitments 25.1 As at 30 September 1999 the Group and the company have commitments in respect of the construction and installation of mobile phone networks, which have not been completed, and purchases of property and equipment as follows: Consolidated The Company 1999 1999 Million Million Construction and installation of mobile phone network Thai Baht 1,408.22 1,401.74 US Dollars 50.95 50.95 Japanese Yen 857.24 857.24 Deutsche Marks 29.19 29.19 Property and equipment Thai Baht 37.34 36.89 25.2 The Group has commitments under letters of credit with overseas suppliers amounting to approximately Baht 137.25 million (1998 : Baht 121.66 million) on a consolidated basis and Baht 76.67 million (1998 : Baht 103.70 million) on a company basis. 25.3 The Group has entered into lease and related service agreements for office spaces, cars, and base stations for periods ranging from 4 months to 17 years with options to renew. As at 30 September 1999 the Group is committed to pay for rental and related services in respect of the agreements as follows: Consolidated The Company Million Baht Million Baht Payment due - within 1 year - Third parties 156.25 152.80 - Related companies 189.46 183.92 - within 2 to 5 years - Third parties 107.38 103.28 - Related companies 258.78 258.78 - over 5 years - Third parties 0.07 0.07 - Related companies 485.40 485.40 25.4 The company's subsidiary has entered into a Data Broadcast via Satellite agreement with the Telephone Organisation of Thailand for a period of 5 years with option to renew. The subsidiary is committed to pay rental cost at Baht 35,000 per site per month for the master network and Baht 6,000 per site per month for the remote network as set out in the agreement. 25.5 The company has entered into agreements with a related company under which the related company provides consulting and management services and other central services for a twelve-month period. The company is committed to pay for such services under these agreements amounting to approximately Baht 6.25 million per month (1998 : Baht 10.32 million per month). Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 26. Bank guarantees As at 30 September 1999 the Group has commitments with local banks relating to letters of guarantee issued by the banks in respect of custom duties, electricity use and other transactions in the ordinary course of business amounting to approximately Baht 3,986.01 million (1998 : Baht 3,709.12 million) on a consolidated basis and Baht 3,814.00 million (1998 : Baht 3,538.00 million) on a company basis. 27. Related company transactions During the period, the company has entered into a number of transactions with related companies. The terms of such transactions are negotiated on an arms length market value basis in the ordinary course of business and according to normal trade conditions. Significant related company transactions are summarised as follows: For the three-month periods ended 30 September Consolidated The Company 1999 1998 1999 1998 Million Baht Million Baht Million Baht Million Baht With parent company Revenue Service income - 0.68 - 0.48 Expenses Rental and other services - 25.76 - 25.76 Consulting and management services - 33.50 - 33.50 With subsidiaries Revenue Service income - - 4.05 0.08 Expenses Rental and other services - - 11.65 0.57 On 19 February 1999 Shin Corporation Public Company Limited ceased to hold in excess of 50% of the share capital of the company. Therefore, Shin Corporation Public Company Limited ceased to be treated as the parent company in the first quarter ended 31 March 1999. Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 27. Related company transactions (continued) For the three-month periods ended 30 September Consolidated The Company 1999 1998 1999 1998 Million Baht Million Baht Million Baht Million Baht With other related companies Revenues Service income 115.34 2.89 113.05 2.46 Sale of land and buildings 7.30 - 7.30 - Expenses Rental and other services 155.91 165.13 97.73 151.67 Advertising 195.13 5.42 30.07 0.80 Consulting and management services 16.07 2.50 21.07 - Interest expense on debentures 27.50 - 27.50 - Purchase of fixed assets 11.81 20.48 6.26 18.86 With major shareholder of parent company Expense Interest expense on debentures - 96.97 - 96.97 With major shareholder of other related company Expense Interest expense on debentures 8.22 - 8.22 - For the nine-month periods ended 30 September Consolidated The Company 1999 1998 1999 1998 Million Baht Million Baht Million Baht Million Baht With parent company Revenue Service income - 2.45 - 1.83 Expenses Rental and other services - 76.48 - 76.48 Consulting and management services - 116.02 - 116.02 Interest expense on debentures - 13.84 - 13.84 Purchase of fixed assets and computer software - 65.00 - 65.00 Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 27. Related company transactions (continued) For the nine-month periods ended 30 September Consolidated The Company 1999 1998 1999 1998 Million Baht Million Baht Million Baht Million Baht With subsidiaries Revenue Service income - - 9.72 0.25 Expenses Rental and other services - - 42.45 1.74 Purchase of fixed assets - - 5.52 0.04 With other related companies Revenues Service income 119.61 9.56 116.48 8.10 Sale of land and buildings 7.30 - 7.30 - Expenses Rental and other services 433.83 520.59 321.11 476.52 Advertising 358.55 19.00 47.73 7.49 Consulting and management services 62.75 7.50 62.75 - Interest expense on debentures 41.59 - 41.59 - Purchase of fixed assets 18.53 157.53 12.40 155.91 With major shareholder of parent company Expense Interest expense on debentures - 282.18 - 282.18 With major shareholder of other related company Expense Interest expense on debentures 54.47 - 54.47 - 28. Subsequent events 28.1 On 20 October 1999 the company's Board of Directors passed a resolution to approve additional investment in 18,339,386 ordinary shares of Shinawatra Datacom Co., Ltd., at Baht 14.89 per share, totalling approximately Baht 273.1 million, and 49,000 ordinary shares of Data Network Solution Co., Ltd. at Baht 163.15 each, totalling approximately Baht 8 million. 28.2 On 26 October 1999 the company issued a letter of comfort to a local bank to support credits obtained by its subsidiary in the amount of Baht 271 million. Notes to the interim Consolidated and Company financial statements for the three-month and the nine-month periods ended 30 September 1999 and 1998 29. Year 2000 issue The management of the Group has instructed the Management Information System Divisions to study the existing computer systems, applications and hardware to develop a computer plan for the Year 2000. As at 30 September 1999, the computer solutions project for the Group is complete. Expenditure of the computer solutions project is recorded as assets if computer systems are replaced and purchases of applications and hardware, and recorded as period costs when modifications for Year 2000 compliance are made. Total expenses of modifications incurred by the Group for the period ended 30 September 1999 for the Year 2000 project was Baht 29.88 million (1998 : nil). Although the computer solutions project of the Group was completed and implemented before the Year 2000, the Group still faces risks that the parties with which the Group does business may be unsuccessful in their computer remedy projects within the time limit. The Group expects the impact, if any, will not be significant to the operations of the Group. 30. Reclassification Certain items in the interim consolidated and company financial statements for the three-month and nine-month periods ended 30 September 1998 have been reclassified for comparative purposes and to coincide with the classification presented in the 1999 financial statements. 15 Advanced Info Service Public Company Limited Unaudited Interim Consolidated and Company financial statements for the periods ended Reviewed 30 September 1999 and 1998 39 Advanced Info Service Public Company Limited Unaudited Interim Consolidated and Company financial statements for the periods ended Reviewed 30 September 1999 and 1998 31 Advanced Info Service Public Company Limited Unaudited Interim Consolidated and Company financial statements for the periods ended Reviewed 30 September 1999 and 1998 19 53