FINANCIAL STATEMENTS AND ACCOUNTANTS' REVIEW REPORT ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES FIRST QUARTER ENDED MARCH 31, 1999 AND 1998 Accountants' Review Report To the Shareholders Advanced Info Service Public Company Limited: We have made a review of the consolidated balance sheet of Advanced Info Service Public Company Limited and subsidiaries as at March 31, 1999, and the related consolidated statements of income, changes in shareholders' equity, retained earnings and cash flows for the three- month period then ended, and the separate financial statements of Advanced Info Service Public Company Limited for the same period, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. The consolidated financial statements of Advanced Info Service Public Company Limited and subsidiary and the separate financial statements of Advanced Info Service Public Company Limited for the three-month period ended March 31, 1998 were reviewed by other auditors of the same office whose report dated April 29, 1998 stated that they were not aware of any material modifications that should be made to those statements in order for them to be in conformity with generally accepted accounting principles. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. We draw attention to Note 1 to the financial statements. The operations of Advanced Info Service Public Company Limited and its subsidiaries since 1997 have been affected and may continue to be influenced for the foreseeable future by the economic conditions in Thailand and the Asia Pacific Region in general. The ultimate effect that these uncertainties will have on stated values or classifications of assets and liabilities at the balance sheet date cannot presently be determined. Nirand Lilamethwat Certified Public Accountant Registration Number 2316 KPMG Audit (Thailand) Limited Bangkok, April 26, 1999 The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Thailand. The standards, procedures and practices to review these financial statements are those generally accepted and applied in Thailand. ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT MARCH 31, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 ASSETS CURRENT ASSETS Cash in hand and at banks 1,665,606 413,474 1,178,001 363,664 Short-term investments (Notes 6 & 7) 5,909,714 4,870,473 5,644,087 4,286,027 Accounts and notes receivable - net (Notes 3, 4 & 8) 2,773,622 3,327,943 2,311,708 3,198,349 Short-term loans and advances to related parties - net (Note 3) 15,519 201,379 76,301 145,822 Inventories - net (Note 4) 747,315 47,028 - - Other current assets (Note 9) 895,299 900,730 825,440 884,941 Total Current Assets 12,007,075 9,761,027 10,035,537 8,878,803 INVESTMENTS (Notes 4 & 10) Related Parties 125,702 65,905 2,761,338 860,295 Others - - - - Total Investments 125,702 65,905 2,761,338 860,295 PROPERTY AND EQUIPMENT - net (Notes 4 & 11) 1,916,158 1,766,495 1,719,931 1,625,576 OTHER ASSETS Costs of mobile phone and pager service networks under concession agreements - net (Notes 2, 3 & 4) 29,779,708 25,419,002 29,018,978 24,582,862 Deferred charges - net (Note 4) 422,900 330,791 365,321 330,613 Goodwill - net (Note 4) 809,391 320,240 - - Others 170,332 161,473 140,637 142,732 Total Other Assets 31,182,331 26,231,506 29,524,936 25,056,207 Total Assets 45,231,266 37,824,933 44,041,742 36,420,881 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT MARCH 31, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Company's Separate Balance Sheets Balance Sheets 1999 1998 1999 1998 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Loans from banks (Notes 12 & 14) 262,845 - 186,800 - Accounts and notes payable and accrued expenses (Notes 3 & 13) 8,609,998 8,344,542 7,597,443 8,226,280 Current portion of long-term liabilities (Notes 14 & 18) 2,146,239 2,734,549 2,146,239 2,071,549 Advances from related parties (Note 3) 21,188 87,259 16,885 1,253 Short-term bonds (Notes 3 & 15) 2,000,000 20,000 2,000,000 20,000 Other current liabilities (Note 17) 1,697,335 1,428,939 1,344,097 1,303,792 Total Current Liabilities 14,737,605 12,615,289 13,291,464 11,622,874 LONG-TERM BONDS (Notes 3 & 16) 1,500,000 2,000,000 1,500,000 2,000,000 LONG-TERM LIABILITIES - net (Notes 14 & 18) 2,333,000 6,262,171 2,333,000 6,262,171 OTHER LIABILITIES (Notes 3 & 19) 3,132,243 3,220,340 3,388,861 3,124,803 Total Liabilities 21,702,848 24,097,800 20,513,325 23,009,848 MINORITY INTERESTS IN SUBSIDIARIES 1 316,100 - - SHAREHOLDERS' EQUITY Share capital (Note 25) Authorized 500,000,000 common shares, Baht 10 par value 5,000,000 5,000,000 5,000,000 5,000,000 Issued 270,000,000 common shares in 1999 and 234,000,000 common shares in 1998, fully paid 2,700,000 2,340,000 2,700,000 2,340,000 Premium on share capital 10,215,000 2,295,000 10,215,000 2,295,000 Retained earnings Appropriated to legal reserve (Note 26) 500,000 500,000 500,000 500,000 Unappropriated 10,113,417 8,276,033 10,113,417 8,276,033 Total Shareholders' Equity 23,528,417 13,411,033 23,528,417 13,411,033 Total Liabilities and Shareholders' Equity 45,231,266 37,824,933 44,041,742 36,420,881 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht Consolidated Company's Separate except basic earnings per share) Statements of income Statements of income 1999 1998 1999 1998 REVENUES Revenues from services and equipment rentals (Note 4) 4,157,698 4,140,555 3,792,710 3,781,710 Sales (Note 4) 1,655,757 59,737 - - Net result of investment in subsidiary and associated companies (Notes 4 & 11) 3,586 1,501 199,273 32,469 Gain on exchange - 1,436,576 - 1,437,928 Other income (Note 20) 130,190 171,265 110,698 152,285 Total Revenues 5,947,231 5,809,634 4,102,681 5,404,392 EXPENSES Costs of services and equipment rentals (Note 4) 2,080,268 1,918,206 1,994,971 1,848,305 Cost of sales (Note 4) 1,130,425 59,774 - - Selling and administrative expenses 927,653 910,520 581,561 729,519 Loss on exchange 72,115 - 70,923 - Interest expense 276,955 326,669 273,816 308,470 Directors' remuneration (Note 21) 285 1,005 270 990 Other expenses (Note 22) 101,675 11,114 - 1,964 Total Expenses 4,589,376 3,227,288 2,921,541 2,889,248 Net income before income tax 1,357,855 2,582,346 1,181,140 2,515,144 Income tax (466,407) (812,970) (309,497) (772,513) Net income before considering minority interests in subsidiaries 891,448 1,769,376 871,643 1,742,631 Less Share of net income of subsidiaries to minority interests 19,805 26,745 - - Net income 871,643 1,742,631 871,643 1,742,631 Basic earnings per share (Baht) (Note 4) 3.48 7.45 3.48 7.45 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Amounts in thousand Baht) Three Months Ended March 31 1999 1998 Share capital Common shares Balance at beginning of period 2,340,000 2,340,000 Increase during the period 360,000 - Decrease during the period - - Balance at end of period 2,700,000 2,340,000 Premium on share capital Balance at beginning of period 2,295,000 2,295,000 Increase during the period 7,920,000 - Decrease during the period - - Balance at end of period 10,215,000 2,295,000 Retained earnings Appropriated to legal reserve Balance at beginning of period 500,000 500,000 Increase during the period - - Decrease during the period - - Balance at end of period 500,000 500,000 Unappropriated Balance at beginning of period 9,241,774 6,531,364 Increase during the period 871,643 1,744,669 Decrease during the period - - Balance at end of period 10,113,417 8,276,033 Total Shareholders' Equity 23,528,417 13,411,033 See notes to financial statements ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF RETAINED EARNINGS (UNAUDITED) (Amounts in thousand Baht) Three Months Ended March 31 1999 1998 Unappropriated retained earnings Balance at beginning of period 9,241,774 6,531,364 Cumulative effect of adjustment derived from the change of status of investment in other company to be investment in associated company (Note 10) - 2,038 Net income for the period 871,643 1,742,631 Balance at end of period 10,113,417 8,276,033 Appropriated retained earnings Legal reserve (Note 26) 500,000 500,000 Total Retained Earnings 10,613,417 8,776,033 See notes to financial statements (More)