AUDITORS REPORT To the Shareholders of Advanced Info Service Public Company Limited I have audited the accompanying consolidated and company balance sheets of Advanced Info Service Public Company Limited as at 31 December 2000 and 1999, and the related consolidated and company statements of income, changes in shareholders equity, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Companys management. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the consolidated and company financial statements referred to above present fairly, in all material respects, the consolidated and company financial position of Advanced Info Service Public Company Limited as at 31 December 2000 and 1999 and the consolidated and company results of operations, and cash flows for the years then ended in accordance with generally accepted accounting principles. PRASAN CHUAPHANICH Certified Public Accountant (Thailand) No. 3051 PricewaterhouseCoopers ABAS Limited Bangkok 9 February 2001 Advanced Info Service Public Company Limited Balance sheets As at 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht ASSETS Current Assets Cash on hand and at banks 4 1,497,298,297 839,647,271 816,501,508 525,850,888 Short-term investments 5 10,869,043,966 2,851,465,387 9,190,105,826 2,352,919,560 Trade accounts receivable, net 6 5,445,307,017 3,848,345,836 4,935,723,154 3,430,142,410 Amounts due from and loans to related companies, net 7 4,196,342 548,159 74,147 2,093,329 Inventories, net 8 1,970,365,783 939,472,853 - - Forward and swap contracts receivable, net 17 220,712,133 - 205,435,829 - Advances to suppliers 988,651,337 - 988,651,337 - Other current assets 9 991,855,529 1,090,625,816 838,669,235 1,028,222,526 Total Current Assets 21,987,430,404 9,570,105,322 16,975,161,036 7,339,228,713 Non-Current Assets Long-term investments, net 10 - - 4,453,254,896 3,825,617,841 Property and equipment, net 11 2,340,188,930 1,974,811,317 2,096,873,341 1,778,747,098 Cost of mobile phone and pager service networks and Datanet tools and equipment under concession agreements, net 12 33,947,149,419 26,812,222,245 32,800,912,318 25,720,430,223 Other assets, net 13 895,194,438 1,507,022,850 365,034,898 475,145,345 Total Non-Current Assets 37,182,532,787 30,294,056,412 39,716,075,453 31,799,940,507 Total Assets 59,169,963,191 39,864,161,734 56,691,236,489 39,139,169,220 The notes to the consolidated and company financial statements on pages 10 to 50 are an integral part of these financial statements. Advanced Info Service Public Company Limited Balance sheets As at 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities Short-term loans from banks 14 2,049,960,000 1,950,000,000 2,029,960,000 1,950,000,000 Trade accounts payable 15 4,602,483,754 2,324,113,183 3,102,258,023 1,683,336,062 Current portion of long-term debenture 19 2,301,266,964 - 2,301,266,964 - Current portion of long-term liabilities 20 782,784 1,033,126,793 782,784 1,033,126,793 Amounts due to and loans from related companies 16 294,207,094 135,046,813 64,774,782 693,480,365 Forward and swap contracts payable, net 17 - 57,450,350 - 57,227,095 Accrued concession fee 1,813,905,026 953,231,105 1,813,905,026 953,231,105 Other current liabilities 18 6,983,269,838 4,518,768,739 6,039,398,991 3,614,101,988 Total Current Liabilities 18,045,875,460 10,971,736,983 15,352,346,570 9,984,503,408 Non-Current Liabilities Long-term forward and swap contracts payable, net 17 - 24,564,860 - 24,564,860 Long-term debentures 19 8,834,718,720 1,500,000,000 8,834,718,720 1,500,000,000 Long-term liabilities 20 250,000,000 2,391,868,726 - 2,391,868,726 Deposits from customers 21 3,914,581,087 3,450,606,377 4,538,801,435 3,871,811,093 Total Non-Current Liabilities 12,999,299,807 7,367,039,963 13,373,520,155 7,788,244,679 Total Liabilities 31,045,175,267 18,338,776,946 28,725,866,725 17,772,748,087 Shareholders Equity Share capital Authorised share capital 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000 Issued and fully paid-up share capital 22 2,700,000,000 2,700,000,000 2,700,000,000 2,700,000,000 Premium on share capital 22 10,215,000,000 10,215,000,000 10,215,000,000 10,215,000,000 Retained earnings Appropriated - Legal reserve 23 500,000,000 500,000,000 500,000,000 500,000,000 Unappropriated 14,550,369,764 7,951,421,133 14,550,369,764 7,951,421,133 Minority interests 24 159,418,160 158,963,655 - - Total Shareholders Equity 28,124,787,924 21,525,384,788 27,965,369,764 21,366,421,133 Total Liabilities and Shareholders Equity 59,169,963,191 39,864,161,734 56,691,236,489 39,139,169,220 The notes to the consolidated and company financial statements on pages 10 to 50 are an integral part of these financial statements. Advanced Info Service Public Company Limited Statements of Income For the years ended 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht Revenues Revenues from services and equipment rentals 26,196,886,675 18,327,768,540 24,637,870,884 16,701,245,081 Sales 10,761,757,882 6,885,884,121 - - Net gain on exchange 760,640,485 - 699,581,159 - Compensation income 25 1,031,569,923 - 1,031,569,923 - Other operating income 26 978,788,559 659,034,636 726,860,682 506,666,477 Total Revenues 39,729,643,524 25,872,687,297 27,095,882,648 17,207,911,558 Expenses Cost of services and equipment rentals 14,940,630,368 11,385,272,325 14,184,320,193 10,750,141,776 Cost of sales 7,471,907,851 4,708,594,735 - - Selling and administrative expenses 5,703,519,403 4,181,786,277 2,986,592,550 2,396,658,719 Net loss on exchange - 108,653,881 - 118,993,916 Interest expenses 27 729,440,455 718,286,932 733,037,369 717,647,239 Directors remuneration 28 1,658,629 5,060,000 1,590,791 5,000,000 Total Expenses 28,847,156,706 21,107,654,150 17,905,540,903 13,988,441,650 Operating income 29 10,882,486,818 4,765,033,147 9,190,341,745 3,219,469,908 Share of net profit in subsidiaries, net of Baht 300 million loss on impairment for investment in subsidiary (Note 10) - - 977,636,995 987,568,785 Income before tax 10,882,486,818 4,765,033,147 10,167,978,740 4,207,038,693 Income tax 30 4,283,083,622 1,995,711,939 3,569,030,109 1,456,977,126 Income before minority interests 6,599,403,196 2,769,321,208 6,598,948,631 2,750,061,567 Share of net profit in subsidiaries to minority interests 24 454,565 19,259,641 - - Net income for the year 6,598,948,631 2,750,061,567 6,598,948,631 2,750,061,567 Basic earnings per share 31 Income before minority interests 24.44 10.44 24.44 10.37 Share of net profit in subsidiaries to minority interests - (0.07) - - Net income for the year 24.44 10.37 24.44 10.37 The notes to the consolidated and company financial statements on pages 10 to 50 are an integral part of these financial statements. Advanced Info Service Public Company Limited Statements of Changes in Shareholders' Equity For the years ended 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht Share Capital Beginning balance 2,700,000,000 2,340,000,000 2,700,000,000 2,340,000,000 Increase during the year 22 - 360,000,000 - 360,000,000 Decrease during the year - - - - Ending balance 2,700,000,000 2,700,000,000 2,700,000,000 2,700,000,000 Premium on Share Capital Beginning balance 10,215,000,000 2,295,000,000 10,215,000,000 2,295,000,000 Increase during the year 22 - 7,920,000,000 - 7,920,000,000 Decrease during the year - - - - Ending balance 10,215,000,000 10,215,000,000 10,215,000,000 10,215,000,000 Retained Earnings Appropriated retained earnings Legal reserve 23 Beginning balance 500,000,000 500,000,000 500,000,000 500,000,000 Increase during the year - - - - Decrease during the year - - - - Ending balance 500,000,000 500,000,000 500,000,000 500,000,000 Unappropriated retained earnings Beginning balance-as restated - 5,201,359,566 - 5,201,359,566 Beginning balance 7,951,421,133 - 7,951,421,133 - Net income for the year 6,598,948,631 2,750,061,567 6,598,948,631 2,750,061,567 Ending balance 14,550,369,764 7,951,421,133 14,550,369,764 7,951,421,133 Minority interests 24 159,418,160 158,963,655 - - Total Shareholders Equity 28,124,787,924 21,525,384,788 27,965,369,764 21,366,421,133 The notes to the consolidated and company financial statements on pages 10 to 50 are an integral part of these financial statements. Advanced Info Service Public Company Limited Statements of Retained Earnings For the years ended 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Note Baht Baht Baht Baht Unappropriated retained earnings: Beginning balance-as restated - 5,201,359,566 - 5,201,359,566 Beginning balance 7,951,421,133 - 7,951,421,133 - Net income for the year 6,598,948,631 2,750,061,567 6,598,948,631 2,750,061,567 Unappropriated retained earnings at end of the year 14,550,369,764 7,951,421,133 14,550,369,764 7,951,421,133 Appropriated retained earnings: Legal reserve 23 500,000,000 500,000,000 500,000,000 500,000,000 Retained earnings at end of the year 15,050,369,764 8,451,421,133 15,050,369,764 8,451,421,133 The notes to the consolidated and company financial statements on pages 10 to 50 are an integral part of these financial statements. Advanced Info Service Public Company Limited Statements of Cash Flows For the years ended 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht Cash flows from operating activities : Net income for the year 6,598,948,631 2,750,061,567 6,598,948,631 2,750,061,567 Adjusted by : Depreciation charge 11 676,206,227 599,236,020 596,301,341 515,801,518 Provision for obsolete fixed assets 11 - 10,446,194 - - Amortisation of costs of mobile phone and pager service networks and Datanet tools and equipment under concession agreements 12 4,386,992,002 3,716,634,027 4,183,248,178 3,537,661,087 Amortisation of deferred charges 13 90,342,076 103,337,347 48,444,545 90,534,804 Doubtful accounts and bad debts 553,117,078 611,086,487 420,646,985 485,160,365 Loss on write-off inventories and provisions for obsolete inventories and diminution in value of finished goods 119,215,638 89,758,720 - - Amortisation forward and swap premiums 15,261,428 86,523,094 63,871,320 87,460,396 Loss (gain) on disposals of fixed assets 9,563,700 2,909,857 7,350,818 5,662,358 Loss (gain) on disposals of cost of mobile phone service networks and Datanet tools and equipment (18,680,335) - (18,650,659) - Loss (gain) on write-off deferred charges 13 125,539,692 - 125,539,692 - Loss (gain) on write-off fixed assets 158,944,953 - 168,762,728 - Loss (gain) on write-off cost of mobile phone and pager service networks 71,399,189 170,000,000 20,556,388 170,000,000 Unrealised loss (gain) on foreign exchange rate 15,448,958 38,670,393 2,674,501 45,549,824 Realised loss (gain) on foreign exchange for loans 33,679,281 119,471,369 33,679,281 119,471,369 Amortisation of goodwill 13 113,362,720 95,371,246 - - Provision for impairment of goodwill 300,000,000 - - - Write-down of negative goodwill to be other operating income - (37,110,360) - - Share of net profit in subsidiaries - - (977,636,995) (987,568,785) Amortisation of bond issuing cost 14,236,947 - 14,236,947 - Share of net profit in subsidiaries to minority interests 454,505 19,259,641 - - Net income before changes in operating assets and liabilities 13,264,032,690 8,375,655,602 11,287,973,701 6,819,794,503 Changes in operating assets and liabilities (excluding the effects of acquisition and disposal) Decrease (increase) in short-term investments have been pledged with bank 27,605,322 (23,769,046) - - (Increase) in trade accounts receivable (2,150,831,405) (1,397,702,852) (1,926,980,875) (1,181,183,550) Decrease (increase) in amounts due from related companies (3,648,183) 17,100,205 2,019,182 212,183,989 Decrease (increase) in forward and swap contracts receivable (220,712,133) 145,460,396 (205,435,829) 146,287,928 (Increase) in inventories (1,148,449,375) (345,324,549) - - (Increase) in advances to suppliers (988,651,337) - (988,651,337) - Decrease (increase) in other current assets (70,043,871) (698,075,011) 30,992,675 (745,212,756) Increase (decrease) in trade accounts payable 1,193,478,632 (1,630,262,838) 334,950,103 (1,468,799,524) Increase in amounts due to related companies 159,160,280 104,159,234 21,294,417 29,120,263 Increase (decrease) in forward and swap contracts payable (68,255,319) 5,309,096 (56,177,689) 5,085,840 Increase in accrued concession fee 860,673,921 298,118,906 860,673,921 298,118,906 Increase in other current liabilities 2,648,013,830 1,661,334,480 2,549,946,297 1,034,927,302 (Increase) in other assets (16,246,565) (133,241,285) (62,704,277) (108,588,618) Increase in deposits from customers 463,974,711 362,752,809 666,990,343 571,402,530 Cash flows from operating activities 13,950,101,198 6,741,515,147 12,514,890,632 5,613,136,813 The notes to the consolidated and company financial statements on pages 10 to 50 are an integral part of these financial statements. Advanced Info Service Public Company Limited Statements of Cash Flows (continued) For the years ended 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht Cash flows from operating activities 13,950,101,198 6,741,515,147 12,514,890,632 5,613,136,813 Cash flows from investing activities Increase in loans from related companies - - - 650,000,000 Dividend received from a subsidiary - - 349,999,940 - Cash invested in long-term investments in subsidiaries, net of cash acquired 37 - (1,228,037,858) - (1,230,600,000) Proceeds from disposals of fixed assets 7,071,940 27,214,866 2,137,870 18,023,766 Purchases of property and equipment (1,675,142,418) (957,260,994) (1,548,789,127) (871,299,855) Cash invested in cost of mobile phone and pager service networks and Datanet tools and equipment under concession agreements (10,063,052,515) (7,057,909,344) (9,754,259,151) (6,899,046,147) Net cash payments to investing activities (11,731,122,993) (9,215,993,330) (10,950,910,468) (8,332,922,236) Cash flows from financing activities Receipts from short-term loans from banks 2,020,000,000 1,950,000,000 2,000,000,000 1,950,000,000 Repayment in short-term loans from banks (1,950,000,000) (881,658,647) (1,950,000,000) (694,100,000) Repayments of loans from related companies - - (650,000,000) - Receipts from long-term debentures 9,956,298,737 1,500,000,000 9,956,298,737 1,500,000,000 Receipts from long-term liabilities 250,000,000 2,084,293,871 - 2,084,293,871 Proceeds from capital increase 22 - 8,280,000,000 - 8,280,000,000 Repayments of short-term debentures - (2,000,000,000) - (2,000,000,000) Repayments of long-term debentures (334,550,000) (2,000,000,000) (334,550,000) (2,000,000,000) Repayments of long-term liabilities (3,457,892,015) (7,378,560,827) (3,457,892,015) (7,378,560,827) Net cash receipts from financing activities 6,483,856,722 1,554,074,397 5,563,856,722 1,741,633,044 Net increase (decrease) in cash and cash equivalents 8,702,834,927 (920,403,786) 7,127,836,886 (978,152,379) Cash and cash equivalents beginning balance 3,649,188,465 4,569,592,251 2,878,770,448 3,856,922,827 Cash and cash equivalents ending balance 12,352,023,392 3,649,188,465 10,006,607,334 2,878,770,448 The notes to the consolidated and company financial statements on pages 10 to 50 are an integral part of these financial statements. Advanced Info Service Public Company Limited Statements of Cash Flows (continued) For the years ended 31 December 2000 and 1999 Supplemental disclosures of cash flow information Cash and cash equivalents Cash and cash equivalents included in statements of cash flows for the years ended 31 December 2000 and 1999 comprise: Consolidated Company (more)