UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 2)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year Ended December 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NUMBER 0-16560
VANGUARD CELLULAR SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
North Carolina 56-1549590
(STATE OR OTHER JURISDICTION OF INCORPORATION ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
2002 Pisgah Church Road, Suite 300,
Greensboro, North Carolina 27455-3314
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (910) 282-3690
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $.01 per share
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the registrant's Common Stock held by those
other than executive officers and directors at March 17, 1997, based on the
NASDAQ closing sale price for the Registrant's Common Stock as of such date, was
approximately $446,510,000.
The number of shares outstanding of the issuer's common stock as of March
17, 1997 was 40,764,522.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement relating to its
1997 annual meeting of stockholders are incorporated by reference into Part III
as set forth herein. Such proxy statement will be filed with the Securities and
Exchange Commission not later than 120 days after the registrant's fiscal year
ended December 31, 1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) and (2) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES. The financial statements and supplemental schedules
listed in the accompanying Index to Financial Statements and Schedules are filed as a part of this report.
(3) EXHIBITS. Exhibits to this report are listed in the accompanying Index to Exhibits.
(b) REPORTS ON FORM 8-K. There were no reports filed on Form 8-K during the fourth quarter of 1996.
2
SIGNATURES
Pursuant to the requirements of the Section 13 and 15(d) of the Securities
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ STEPHEN L. HOLCOMBE
STEPHEN L. HOLCOMBE
CHIEF FINANCIAL OFFICER
(PRINCIPAL ACCOUNTING AND
PRINCIPAL FINANCIAL OFFICER)
Date: June 30, 1997
3
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
PAGE
Vanguard Cellular Systems, Inc. and Subsidiaries
Consolidated Balance Sheets, December 31, 1996 and 1995.............................................................. *
Consolidated Statements of Operations for the Years ended December 31, 1996, 1995 and 1994........................... *
Consolidated Statements of Changes in Shareholders' Equity for the Years ended
December 31, 1996, 1995 and 1994.................................................................................. *
Consolidated Statements of Cash Flows for the Years ended December 31, 1996, 1995 and 1994........................... *
Notes to Consolidated Financial Statements........................................................................... *
Report of Independent Public Accountants............................................................................. *
Schedule I -- Condensed Financial Information of the Registrant...................................................... *
Schedule II -- Valuation and Qualifying Accounts..................................................................... *
Financial Statements of Certain Significant 50% or less Owned Persons.................................................. F-2**
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.
* Previously filed as Financial Statements and Schedules of Form 10-K.
** Financial Statements for Syarikat Telefon Wireless (M) Sdn Bhd and its
subsidiary, a foreign business, are filed herein as permitted by Rule 3-09.
All other Financial Statements of Certain Significant 50% or less Owned
Persons were previously filed as Financial Statements and Schedules of Form
10-K.
F-1
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Syarikat Telefon Wireless (M) Sdn Bhd
We have audited the consolidated balance sheets of Syarikat Telefon Wireless (M)
Sdn Bhd ("STW") and its subsidiary as at 31 December 1996 and 1995 and the
related consolidated profit and loss accounts, statements of shareholders'
equity and cash flow for the three years ended 31 December 1996 together with
the notes, set out on pages F-7 to F-13. These Consolidated Financial Statements
are the responsibility of STW's management. Our responsibility is to express an
opinion on these Consolidated Financial Statements based on our audits.
We conducted our audits in accordance with registrant's local standards that are
substantially equivalent to auditing standards in the United States. Those
standards require that we 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.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the Consolidated Financial Statements referred to above present
fairly, in all material respects the financial position of STW and its
subsidiary as of 31 December 1996 and 1995, and of the results of their
operations and cash flows for each of the years in the three year period ended
31 December 1996, in conformity with generally accepted accounting principles in
Malaysia.
The accompanying financial statements have been prepared assuming that STW will
continue as a going concern. As reflected in the financial statements, STW has
suffered recurring losses from operations and has net current liabilities that
raise doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Generally accepted accounting principles in Malaysia vary in certain significant
respects from generally accepted accounting principles in the United States.
Application of generally accepted accounting principles in the United States
would have affected stockholders' equity as of 31 December 1996 and 1995, and
results of operations for each of the years in the three year period ended 31
December 1996 to the extent summarised in Note 19 to the Consolidated Financial
Statements.
KPMG PEAT MARWICK
Public Accountants
Kuala Lumpur
Date: 17 April 1997
F-2
SYARIKAT TELEFON WIRELESS (M) SDN. BHD. AND ITS SUBSIDIARY
(INCORPORATED IN MALAYSIA)
CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 1996 AND 31 DECEMBER 1995
1996 1996 1995
USD RM RM
ASSETS
CURRENT ASSETS
Cash and cash equivalent (Note 3).............................................. 80,038 200,094 3,067,969
Trade debtors, net of allowance for doubtful debts of RM500,000 (1996) and nil
(1995)...................................................................... 363,258 908,146 334,409
Interconnect debtor -- net (Note 4)............................................ 35,899 89,748 --
Other debtors.................................................................. 69,996 174,990 439,274
Deposits & prepayments......................................................... 294,280 735,699 471,918
Total current assets............................................................. 843,471 2,108,677 4,313,570
Fixed assets, net of accumulated depreciation of RM14,460,521 (1996) and
RM5,993,049 (1995)( Note 6).................................................... 40,221,566 100,553,915 80,383,813
License fee and related costs, net of accumulated amortisation of RM938,600
(1996) and RM30,000 (1995) (Note 7)............................................ 638,160 1,595,400 2,504,000
Fixed deposit (Note 3)........................................................... 400,000 1,000,000 1,000,000
Total assets..................................................................... 42,103,197 105,257,992 88,201,383
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable............................................................... 37,856 94,640 --
Interconnect creditor -- net (Note 4).......................................... -- -- 531,499
Customers deposits............................................................. 242,912 607,279 233,471
Other creditors and accruals................................................... 1,212,158 3,030,395 257,381
Equipment supplier creditor.................................................... 2,747,196 6,867,991 3,926,233
Consultancy fees payable....................................................... -- -- 392,573
Provision for compensation to former shareholder............................... -- -- 2,000,000
Current portion of term loan (secured) (Note 8)................................ 2,600,000 6,500,000 --
Hire purchase creditors (Note 9)............................................... 55,316 138,290 108,398
Taxes payable.................................................................. 109,708 274,270 43,550
Total current liabilities........................................................ 7,005,146 17,512,865 7,493,105
Term loan (secured) less current position (Note 8)............................... 33,778,689 84,446,722 54,639,164
Hire purchase creditors (Note 9)................................................. 149,632 374,080 349,477
SHAREHOLDERS' EQUITY:
Common stock -- RM1.00 par value, authorised 50,000,000 shares;
issued and fully paid-up 50,000,000 (1996) and 46,418,000 (1995)
shares (Note 10)............................................................ 20,000,000 50,000,000 46,418,000
Common stock subscription monies (Note 11)..................................... 1,600,000 4,000,000 --
Revaluation reserve (Note 12).................................................. 1,188,573 2,971,432 2,971,432
Accumulated deficit............................................................ (21,618,843) (54,047,107) (23,669,795)
Total shareholders' equity....................................................... 1,169,730 2,924,325 25,719,637
Total liabilities and shareholders' equity....................................... 42,103,197 105,257,992 88,201,383
The notes set out on pages F-7 to F-13 form an integral part of, and should be
read in conjunction with, these accounts.
F-3
SYARIKAT TELEFON WIRELESS (M) SDN. BHD. AND ITS SUBSIDIARY
(INCORPORATED IN MALAYSIA)
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
FOR THE THREE YEARS ENDED 31 DECEMBER 1996
1996 1996 1995 1994
USD RM RM RM
REVENUE
Telecommunication revenues....................................... 1,491,917 3,729,792 934,808 43,240
Income from property rentals..................................... 381,034 952,584 944,485 191,258
Total revenue...................................................... 1,872,951 4,682,376 1,879,293 234,498
OPERATING EXPENSES
Cost of telecommunication revenues............................... 1,833,304 4,583,260 1,481,697 288,959
Depreciation..................................................... 3,658,315 9,145,787 5,669,938 662,039
Loss on return of fixed assets to a vendor....................... 986,574 2,466,435 -- --
Loss on disposal of fixed assets................................. -- -- 36,700 --
Fixed assets written off......................................... 318,504 796,261 -- --
Amortisation of licence fee and related costs.................... 363,440 908,600 15,000 15,000
General and administrative expenses.............................. 2,999,740 7,499,350 9,747,688 3,772,420
Preliminary and pre-operating expenses........................... -- -- -- 406,500
Total operating expenses........................................... 10,159,877 25,399,693 16,951,023 5,144,918
Operating loss..................................................... (8,286,926) (20,717,317) (15,071,730) (4,910,420)
OTHER INCOME/(EXPENSE)
Provision for compensation to former shareholder................. -- -- (2,000,000) --
Interest income.................................................. 76,646 191,614 27,466 102,923
Interest expense................................................. (3,848,644) (9,621,609) (1,661,690) (105,117)
Net loss before income taxes....................................... (12,058,924) (30,147,312) (18,705,954) (4,912,614)
Income taxes (Note 15)............................................. (92,000) (230,000) (17,000) (26,753)
Net loss........................................................... (12,150,924) (30,377,312) (18,722,954) (4,939,367)
The notes set out on pages F-7 to F-13 form an integral part of, and should be
read in conjunction with, these accounts.
F-4
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
CONSOLIDATED CASH FLOW STATEMENTS
FOR THE THREE YEARS ENDED 31 DECEMBER 1996
1996 1996 1995 1994
USD RM RM RM
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss........................................................ (12,150,924) (30,377,312) (18,722,954) (4,939,367)
Adjustments to reconcile net loss to cash used in operating
activities
Depreciation.................................................... 3,658,315 9,145,787 5,669,938 662,039
Loss on return of fixed assets to a vendor...................... 986,574 2,466,435 -- --
Loss on disposal of fixed assets................................ -- -- 36,700 --
Provision for compensation to former shareholder................ -- -- 2,000,000 --
Amortisation of license fee and related costs................... 363,440 908,600 15,000 15,000
(Increase)/decrease in interconnect, trade and other debtors.... (372,280) (930,700) (157,527) --
Increase/(decrease) in other current liabilities................ 1,231,555 3,078,887 (72,346) 1,454,381
Increase in fixed deposits...................................... -- -- (1,000,000) --
Increase in licence fee and related costs....................... -- -- (2,234,000) (300,000)
Decrease in deferred expenses................................... -- -- -- 404,000
Fixed assets written off........................................ 318,504 796,261 -- --
Payment of compensation to former shareholder................... (800,000) (2,000,000) -- --
Tax refund...................................................... 288 720 -- --
Net cash used in operating activities........................... (6,764,528) (16,911,322) (14,465,189) (2,703,947)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets........................................ (16,881,540) (42,203,849) (54,169,326) (29,690,572)
Proceeds from return of fixed assets to a vendor................ 3,850,106 9,625,266 -- --
Proceeds from disposal of fixed assets.......................... -- -- 96,500 8,363
Increase in deposits and prepayments............................ (105,512) (263,781) (346,672) (604,399)
Increase in equipment supplier creditor......................... 1,176,703 2,941,758 3,926,233 (125,246)
Net cash used in investing activities........................... (11,960,243) (29,900,606) (50,493,265) (30,411,854)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from term loan......................................... 14,523,023 36,307,558 54,639,164 6,245,498
Repayment of term loan.......................................... -- -- (6,245,498) --
Loan (to)/from shareholders..................................... -- -- (13,670,700) 13,670,700
Common stock subscription monies................................ 1,600,000 4,000,000 -- --
Proceeds from issue of shares................................... 1,432,800 3,582,000 30,138,000 13,780,000
Increase in hire purchase....................................... 21,798 54,495 345,894 111,981
Net cash from financing activities.............................. 17,577,621 43,944,053 65,206,860 33,808,179
Net (decrease)/increase in cash and cash equivalents.............. (1,147,150) (2,867,875) 248,406 692,378
Cash and cash equivalents at beginning of year.................... 1,227,188 3,067,969 2,819,563 2,127,185
Cash and cash equivalents at end of year.......................... 80,038 200,094 3,067,969 2,819,563
Supplemental information:
(i) Cash paid for:
Interest................................................... 2,648,033 6,620,082 1,661,690 106,048
Income taxes............................................... -- -- 450 753
(ii) Supplemental schedules on non-cash investing activities:
Revaluation of fixed assets................................ -- -- 2,971,432 --
The notes set out on pages F-7 to F-13 form an integral part of, and should be
read in conjunction with, these accounts.
F-5
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE THREE YEARS ENDED 31 DECEMBER 1996
ORDINARY SHARES SUBSCRIPTION REVALUATION
OF RM1 EACH MONIES DEFICIT RESERVE TOTAL
RM RM RM RM RM
BALANCE AT 31 December 1993........................ 2,500,000 -- (7,474) -- 2,492,526
1994
Ordinary shares issued............................. 13,780,000 -- -- -- 13,780,000
Net loss for the year ended 31 December 1995....... -- -- (4,939,367) -- (4,939,367)
BALANCE AT 31 DECEMBER 1994........................ 16,280,000 -- (4,946,841) -- 11,331,159
1995
Ordinary shares issued............................. 30,138,000 -- -- -- 30,138,000
Revaluation reserve................................ -- -- -- 2,971,432 2,971,432
Net loss for the year ended 31 December 1995....... -- -- (18,722,954) -- (18,722,954)
BALANCE AT 31 DECEMBER 1995........................ 46,418,000 -- (23,669,795) 2,971,432 25,719,637
1996
Ordinary shares issued............................. 3,582,000 -- -- -- 3,582,000
Common stock subscription monies................... -- 4,000,000 -- -- 4,000,000
Net loss for the year ended 31 December 1996....... -- -- (30,377,312) -- (30,377,312)
BALANCE AT 31 DECEMBER 1996........................ 50,000,000 4,000,000 (54,047,107) 2,971,432 2,924,325
The notes set out on pages F-7 to F-13 form an integral part of, and should be
read in conjunction with, these accounts.
F-6
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
NOTES TO THE ACCOUNTS
1. PRINCIPAL ACTIVITIES
The principal activity of the Company is provision of telecommunication
services. The principal activities of the subsidiary is disclosed in Note 5.
These activities have remained unchanged during the period.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 BASIS OF PREPARATION
The accounts of the Company and its subsidiary have been prepared under the
historical cost convention modified to include the revaluation of certain
properties and in compliance with approved Malaysian accounting standards, and
on a going concern basis on the assumption that the shareholders and/or lender
banks will continue to provide the necessary financial support to enable the
Company to continue its operations.
Certain comparative figures have been reclassified to conform with the
current year's presentation.
2.2 BASIS OF CONSOLIDATION
The consolidated accounts incorporate the audited accounts of the Company
and its subsidiary.
Inter-company transactions are eliminated on consolidation and the
consolidated accounts reflect external transactions only.
2.3 FIXED ASSETS AND DEPRECIATION
Leasehold land and building will be amortised over the period of the lease.
Other fixed assets are stated at cost less accumulated depreciation.
Depreciation of fixed assets is calculated on the straight lines basis to
write off the cost of the assets over their expected useful lives.
The principal annual rates used are as follows:
Leasehold land and building Over the period of the lease of 80 years
Furniture and fittings 15%
Office equipment 15%
Telecommunication network equipment 5%-15%
Plant and machinery 20%
Motor vehicles 20%
Renovation 15%
2.4 DEFERRED TAXATION
Provision for deferred taxation is made on the liability method for all
timing differences except where no liability is expected to arise in the
foreseeable future. Deferred tax benefits are only recognised when there is a
reasonable expectation of realisation in the near future.
2.5 FOREIGN CURRENCY
Assets and liabilities in foreign currencies are translated into Ringgit
Malaysia at rates of exchange ruling at the balance sheet date and items in the
profit and loss account are converted at rates ruling on the transaction dates.
Exchange differences are dealt with in the profit and loss account. There were
no significant exchange differences during the three years ended 31 December
1996.
F-7
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
NOTES TO THE ACCOUNTS -- CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES -- Continued
2.6 HIRE PURCHASE
Fixed assets acquired under hire purchase agreements are capitalised in the
accounts and the corresponding obligation treated as a liability. Finance
charges are allocated to the profit and loss account over the lease periods to
give a constant periodic rate of interest on the remaining hire purchase
liabilities.
2.7 CAPITALISATION OF BORROWING COSTS
Borrowing costs which relate to fixed assets have not been capitalised as
the time taken to install and to bring the fixed assets to their present
location and condition, and ready for their intended use, is insignificant.
2.8 TRANSLATIONS OF MALAYSIAN RINGGIT AMOUNT INTO UNITED STATES DOLLAR AMOUNTS
The financial statements are stated in Ringgit Malaysia (RM). The
translations of the RM amounts into United States dollars (USD) are included
solely for the convenience of the readers, using the standard average buying and
selling rates used by the Group for 31 December 1996 of RM2.50 to USD1. The
convenience translations should not be construed as representations that the RM
amounts have been, could have been, or could in the future be, converted into
USD at this or any other rate of exchange.
3. CASH AND CASH EQUIVALENTS AND DEPOSITS
1996 1995
RM RM
Cash and bank balances................................................................. 200,094 267,969
Deposits with licenced banks........................................................... 1,000,000 3,800,000
1,200,094 4,067,969
Non-current deposits................................................................... (1,000,000) (1,000,000)
Cash and cash equivalents.............................................................. 200,094 3,067,969
Non-current deposits with licenced banks comprise RM1,000,000
(1995-RM1,000,000) pledged as security for a syndicated term loan granted to the
Company.
4. INTERCONNECT DEBTOR/(CREDITOR) -- NET
1996 1995
RM RM
Interconnect debtor...................................................................... 1,660,468 --
Interconnect creditor.................................................................... (1,570,720) (531,499)
Net debtor/(creditor).................................................................... 89,748 (531,499)
These amounts arise from interconnect charges between the Company and the
largest telephone operator in Malaysia.
5. SUBSIDIARY COMPANY
The subsidiary company, incorporated in Malaysia, is as follows:
PERCENTAGE OF
EQUITY HELD
NAME OF COMPANY PRINCIPAL ACTIVITIES 1996 1995
Segar Kasturi Sdn Bhd Investment in property 100% 100%
The investment in the subsidiary was acquired in 1994.
F-8
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
NOTES TO THE ACCOUNTS -- CONTINUED
6. FIXED ASSETS
DEPRECIATION
COST/ ACCUMULATED NET BOOK CHARGE FOR
VALUATION DEPRECIATION VALUE THE YEAR
1996 RM RM RM RM
Freehold land -- at cost.............................. 104,755 -- 104,755 --
Leasehold land and building -- at valuation
and cost............................................ 15,070,000 137,396 14,932,604 137,396
Telecommunication network equipment................... 90,594,407 12,223,274 78,371,133 7,628,091
Renovation............................................ 2,439,547 617,305 1,822,242 365,927
Furniture and fittings................................ 455,061 136,805 318,256 68,253
Office equipment...................................... 4,578,373 817,480 3,760,893 670,875
Plant and machinery................................... 325,170 125,487 199,683 65,033
Motor vehicles........................................ 1,056,860 402,774 654,086 210,212
Equipment in suspense................................. 390,263 -- 390,263 --
115,014,436 14,460,521 100,553,915 9,145,787
DEPRECIATION
COST/ ACCUMULATED NET BOOK CHARGE FOR
VALUATION DEPRECIATION VALUE THE YEAR
1995 RM RM RM RM
Freehold land -- at cost.............................. 104,755 -- 104,755 --
Leasehold land and building -- at valuation........... 15,070,000 -- 15,070,000 155,110
Telecommunication network equipment................... 67,358,973 5,273,497 62,085,476 4,882,949
Renovation............................................ 1,582,727 251,379 1,331,348 237,409
Furniture and fittings................................ 380,322 68,552 311,770 57,049
Office equipment...................................... 771,929 146,605 625,324 115,790
Plant and machinery................................... 302,270 60,454 241,816 60,454
Motor vehicles........................................ 805,886 192,562 613,324 161,177
86,376,862 5,993,049 80,383,813 5,669,938
Certain telecommunication network equipment with net book value of
approximately RM41.1 million (1995 -- RM25.5 million) have not commenced
utilisation for operations [see Note 18 (iii)].
During the year ended 31 December 1995, the leasehold land and building of
a subsidiary company was revalued by a firm of professional valuers on a fair
market value basis (refer note 12). Subsequent additions are stated at cost.
The leasehold land and building are charged to a financial institution as
security for a syndicated term loan granted to the Company (refer note 8).
Motor vehicles include amounts acquired under hire purchase agreements
amounting to RM918,949 (1995 -- RM667,977) at cost.
7. LICENCE FEE AND RELATED COSTS
This represents licence fee (RM300,000) and other related costs
(RM2,234,000) and is amortised over a period of 5 years.
The 1996 results of operations include amortisation charge for 1995 and
1996 since the other related costs were treated as amount due from a director in
1995. The impact of this change is not material on the Company's consolidated
financial statements.
F-9
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
NOTES TO THE ACCOUNTS -- CONTINUED
8. TERM LOAN (SECURED)
1996 1995
RM RM
Amount outstanding........................................................ 90,946,722 54,639,164
Less: Amount due and repayable and due within twelve months............... 6,500,000 --
84,446,722 54,639,164
The term loan facility of RM91.0 million has been almost fully drawn down
during the year and is secured by way of fixed and floating amounts of certain
assets of the Group including leasehold land and building and fixed deposits
with licenced bank and are jointly and severally guaranteed by certain directors
of the Company and a corporate guarantee from a majority shareholder. The loans
are subject to interest at 2.5% above the base lending rates of the
participating financial institutions. The loans are repayable in eleven
instalments, the first instalment of which is due on 8 October 1997 and
subsequent instalments due on six monthly intervals thereafter.
9. HIRE PURCHASE CREDITORS
1996 1995
RM RM
Amount outstanding.............................................................. 680,799 603,361
Less: Unearned interest......................................................... 168,429 145,486
512,370 457,875
Amount due within twelve months................................................. 138,290 108,398
Amount due after twelve months.................................................. 374,080 349,477
512,370 457,875
The hire purchase agreements are unsecured, bear interest rates ranging
from 5.8% to 7.5% and are repayable at equal instalments on a monthly basis over
a maximum period of 60 months.
10. SHARE CAPITAL (COMMON STOCK)
1996 1995 1994
RM RM RM
Authorised -- Ordinary shares of RM1 each
At 1 January.............................................. 50,000,000 50,000,000 5,000,000
Increase during the year.................................. -- -- 45,000,000
At 31 December............................................ 50,000,000 50,000,000 50,000,000
Issued and fully paid -- Ordinary shares of RM1 each
At 1 January.............................................. 46,418,000 16,280,000 2,500,000
Add: Issue of ordinary shares at par...................... 3,582,000 30,138,000 13,780,000
At 31 December............................................ 50,000,000 46,418,000 16,280,000
11. COMMON STOCK SUBSCRIPTION MONIES
These are amounts paid by existing shareholders for the purpose of
conversion into issued and paid-up share capital. These amounts were fully
converted into issued and paid-up capital subsequent to the year end as
disclosed in Note 18 (i).
F-10
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
NOTES TO THE ACCOUNTS -- CONTINUED
12. REVALUATION RESERVE
In 1995, leasehold land and building were re-appraised to give a valuation
of RM15,070,000 based on open market value by an independent firm of
professional valuers. This revaluation was incorporated in the accounts at 31
December 1995.
13. HOLDING COMPANY
The holding company (majority shareholder) is Shubila Holdings Sdn. Bhd., a
company incorporated in Malaysia.
14. TURNOVER
Turnover comprises gross billings in the provision of telecommunication
services and rental of office block.
15. INCOME TAXES
1996 1995 1994
RM RM RM
Current taxation........................................................ 230,000 17,000 27,000
Overprovision of income taxes in the prior years........................ -- -- (247)
230,000 17,000 26,753
The income taxes of the Group mainly relates to rental income of the
subsidiary.
16. DEFERRED TAXATION
Subject to agreement by the Inland Revenue Board, the Group has potential
deferred tax benefit at 30% amounting to RM12,811,000 (1995 -- RM6,089,000;
1994 -- 1,250,000) not taken up in the accounts as calculated under the
liability method in respect of the following items:
1996 1995 1994
RM RM RM
Unabsorbed capital allowances.............................. 36,707,000 22,524,000 5,128,000
Excess of net book value on book basis over tax
basis of fixed assets.................................... (23,310,000) (16,834,000) (4,652,000)
13,397,000 5,690,000 476,000
Unabsorbed tax losses...................................... 28,807,000 14,606,000 3,691,000
Other timing differences................................... 500,000 -- --
42,704,000 20,296,000 4,167,000
17. CONTRACTUAL COMMITMENT
The Company has contracted with an equipment supplier that purchases of
telecommunication equipment for 500,000 lines will be from this supplier. The
Company is currently negotiating to terminate this agreement and the directors
are of the opinion that the outcome will be successful and there will be no
further financial obligation arising from this termination.
18. EVENTS SUBSEQUENT TO BALANCE SHEET DATE
The following events occurred subsequent to the balance sheet date:
(i) There was an increase in the issued and paid-up capital by
RM10,000,000 comprising RM4,000,000 conversion of subscription monies and a
further capital injection of RM6,000,000 by existing shareholders.
F-11
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
NOTES TO THE ACCOUNTS -- CONTINUED
18. EVENTS SUBSEQUENT TO BALANCE SHEET DATE -- Continued
(ii) The Company has finalised the terms of the Interconnect Agreement
with Telekom Malaysia Bhd which shall apply nationwide and the said
agreement is expected to be signed shortly.
(iii) Consequent to signing of the Interconnect Agreement as stated
above, the Company will be positioned to commence services in the Klang
Valley where STW's telecommunication equipment which have been installed
are ready for commencement of operations.
(iv) The Company has approved to enter into contract to purchase
Wireless Local Loop telecommunication equipment on long term credit basis
from Lucent Technology Sdn Bhd and the contract is likely to be signed in
late April 1997.
19. RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(GAAP)
The accompanying financial statements are prepared in accordance with GAAP
in Malaysia, which differ in certain significant respects to the GAAP in the
United States (US). The significant differences are described below. Other
differences do not have a significant effect on the consolidated net loss after
tax or shareholders' equity.
The estimated effects of the significant adjustments to the consolidated
net loss after tax and shareholders' equity which would be required if US GAAP
were applied instead of Malaysian GAAP are summarised as follows:
1996 1995 1994
NOTE RM RM RM
Net loss after tax -- Malaysian GAAP............... (30,377,312) (18,722,954) (4,939,367)
Adjustments:
Preliminary expenditure.......................... (i) -- -- 6,591
Pre-operating expenditure........................ (i) -- -- 397,409
Consultants fees................................. 1,332,769 2,124,087 1,110,705
Amortisation of consultants fees................. (ii) (228,378) (106,205) (55,535)
Debt issuance costs.............................. 114,947 2,413,712 --
Amortisation of debt issuance costs.............. (iii) (361,237) (344,816) --
Depreciation of leasehold land & building........ (iv) (172,824) (155,110) (155,110)
Net loss after tax -- US GAAP...................... (29,692,035) (14,791,286) (3,635,307)
1996 1995 1994
NOTE RM RM RM
Total shareholders equity -- Malaysian GAAP........ 2,924,325 25,719,637 11,333,159
Adjustments:
Preliminary expenditure.......................... (i) -- -- 6,591
Pre-operating expenditure........................ (i) -- -- 397,409
Consultants fees -- (cumulative)................. (ii) 4,567,561 3,234,792 1,110,705
Amortisation of consultants fees --
(cumulative).................................. (ii) (390,118) (161,740) (55,535)
Debt issuance costs.............................. (iii) 2,528,659 2,413,712 --
Amortisation of debt issuance costs.............. (iii) (706,053) (344,816) --
Depreciation of leasehold land &
building -- (cumulative)...................... (iv) (483,044) (310,220) (155,110)
Revaluation reserve.............................. (v) (2,971,432) (2,971,432) --
Total shareholders equity -- US GAAP............. 5,469,898 27,579,933 12,637,219
F-12
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
(INCORPORATED IN MALAYSIA)
NOTES TO THE ACCOUNTS -- CONTINUED
19. RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(GAAP) -- Continued
(i) Preliminary and pre-operating expenditure
Preliminary and pre-operating expenditure are deferred for Malaysian GAAP
and written off in the year the company commences operations. However, these
costs are normally expensed as incurred under US GAAP.
(ii) Consultants fees
Consultants fees in relation to the installation of telecommunication has
been written-off as incurred as allowed under Malaysia GAAP. However, these
costs are normally capitalised and amortised under US GAAP.
(iii) Debt issuance costs
Debt issuance costs in relation to the term loan has been written-off as
incurred as allowed under Malaysian GAAP. However, these amounts are normally
capitalised and amortised under US GAAP.
The amortisation rate used is 7 years, consistent with the tenure of the
loan.
(iv) Depreciation of leasehold land and buildings
Leasehold land and building have been depreciated over the lease period of
80 years as allowed under Malaysian GAAP. However, under US GAAP, assets may be
depreciated up to 40 years only.
(v) Revaluation reserve
Revaluation performed by professional valuers of fixed assets are taken up
in the accounts for Malaysian GAAP. However, this is not incorporated in the
accounts under US GAAP.
20. VALUATION AND QUALIFYING ACCOUNTS
Activity in the Group's allowance for doubtful accounts for the years ended
31 December 1995 and 1996 are as follows:
BALANCE AT CHARGED TO WRITE-OFFS BALANCE AT
BEGINNING OF COSTS AND AND END OF
FOR THE YEARS ENDED YEAR EXPENSES DEDUCTIONS YEAR
RM RM RM RM
31 December 1995................................... -- -- -- --
31 December 1996................................... -- 500,000 -- 500,000
F-13
INDEX TO EXHIBITS
SEQUENTIAL
PAGE
EXHIBIT NO. DESCRIPTION NO.
* 3(a) Articles of Incorporation of Registrant as amended through July 25,
1995, filed as Exhibit 1 to the Registrant's Form 8-A/A dated July 25,
1995.
* 3(b) Bylaws of Registrant (compilation of July 25, 1995), filed as Exhibit 2
to the Registrant's Form 8-A/A dated July 25, 1995.
* 4(a) Specimen Common Stock Certificate, filed as Exhibit 4(a) to the
Registrant's Registration Statement on Form S-1 (File No. 33-18067).
* 4(b)(1) Amended and Restated Loan Agreement between the Registrant and various
lenders led by The Bank of New York and The Toronto-Dominion Bank as
agents, dated as of December 23, 1994, filed as Exhibit 2(a) to the
Registrant's Current Report on Form 8-K dated as of December 23, 1994.
* 4(b)(2) Security Agreement between the Registrant and various lenders led by The
Bank of New York and The Toronto-Dominion Bank, as Secured Party, dated
as of December 23, 1994, filed as Exhibit 2(b) to the Registrant's
Current Report on Form 8-K dated as of December 23, 1994.
* 4(b)(3) Master Subsidiary Security Agreement between the Registrant, certain of
its subsidiaries and various lenders led by The Bank of New York and The
Toronto-Dominion Bank, as Secured Party, dated as of December 23, 1994, `
filed as Exhibit 2(c) to the Registrant's Current Report on Form 8-K
dated as of December 23, 1994.
* 4(b)(4) Second Amended and Restated Loan Agreement between Vanguard Cellular
Operating Corp. and various lenders led by The Bank of New York and The
Toronto-Dominion Bank as agents, dated as of April 10, 1996, filed as
Exhibit 4(d)(1) to the Registrant's Form 10-Q/A dated March 31, 1996.
* 4(b)(5) VCOC Security Agreement between Vanguard Cellular Operating Corp. and
various lenders led by The Bank of New York and The Toronto-Dominion
Bank as Secured Party, dated as of April 10, 1996, filed as Exhibit
4(d)(2) to the Registrant's Form 10-Q/A dated March 31, 1996.
* 4(b)(6) Second Amended and Restated Master Subsidiary Security Agreement between
certain subsidiaries of the Registrant and various lenders led by The
Bank of New York and The Toronto-Dominion Bank, as Secured Party, dated
as of April 10, 1996, filed as Exhibit 4(d)(3) to the Registrant's Form
10-Q/A dated March 31, 1996.
* 4(b)(7) Assignment, Bill of Sale and Assumption Agreement by and between
Registrant and Vanguard Cellular Financial Corp., dated as of April 10,
1996, filed as Exhibit 4(d)(4) to the Registrant's Form 10-Q/A dated
March 31, 1996.
* 4(b)(8) Indenture dated as of April 1, 1996 between Registrant and The Bank of
New York as Trustee, filed as Exhibit 4(e)(1) to the Registrant's Form
10-Q/A dated March 31, 1996.
* 4(b)(9) First Supplemental Indenture, dated as of April 1, 1996 between
Registrant and The Bank of New York as Trustee, filed as Exhibit 4(e)(2)
to the Registrant's Form 10-Q/A dated March 31, 1996.
* 10(a)(1) Amended and Restated Stock Compensation Plan of the Registrant approved
April 22, 1987 by the Shareholders of the Registrant, with forms of
stock bonus and stock option agreements attached, filed as Exhibit 10
(a) to the Registrant's Registration Statement, on Form S - 1 (File No.
33 - 18067).
* 10(a)(2) Amendment to Amended and Restated Stock Compensation Plan of the
Registrant approved May 2, 1989 by the Shareholders of the Registrant,
filed as Exhibit 4(h)(2) to the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1989.
SEQUENTIAL
PAGE
EXHIBIT NO. DESCRIPTION NO.
* 10(a)(3) Form of Restricted Stock Bonus Agreements dated March 23, 1987 between
the Registrant and Stuart S. Richardson, Haynes G. Griffin, L.
Richardson Preyer, Jr., Stephen R. Leeolou and Stephen L. Holcombe, and
form of amendments dated October 12, 1987 to agreements with Messrs.
Richardson, Griffin, Preyer and Leeolou, filed as Exhibit 10(a)(3) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988.
* 10(a)(4) Form of Restricted Stock Bonus Agreements dated October 12, 1987 between
the Registrant and Haynes G. Griffin, Stephen R. Leeolou and L.
Richardson Preyer, Jr., filed as Exhibit 10(a)(4) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1988.
* 10(1)(5) Form of Amendment to Restricted Stock Bonus Plan Agreements dated as of
March 1, 1990 by and between Haynes G. Griffin, L. Richardson Preyer,
Jr., Stephen R. Leeolou, and Stephen L. Holcombe and the Registrant,
amending the Restricted Stock Bonus Plan Agreements dated as March 23,
1987, filed as Exhibit 10(a)(5) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990.
* 10(1)(6) Form of Amendment to Restricted Stock Bonus Plan Agreements dated as of
March 1, 1990 by and between Haynes G. Griffin, L. Richardson Preyer,
Jr. and Stephen R. Leeolou and the Registrant, amending the Restricted
Stock Bonus Plan Agreements dated as October 12, 1987, filed as Exhibit
10(a)(6) to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990.
* 10(a)(7) Form of Second Amendment to Restricted Stock Bonus Plan Agreements dated
February 22, 1991 between the Registrant and Haynes G. Griffin, Stephen
R. Leeolou, and L. Richardson Preyer, Jr., amending the Restricted Stock
Bonus Agreements dated October 12, 1987, filed as Exhibit 10(a)(7) to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990.
* 10(a)(8) Form of Third Amendment to Restricted Stock Bonus Plan Agreements dated
February 22, 1991 between the Registrant and Haynes G. Griffin, Stephen
R. Leeolou, L. Richardson Preyer, Jr., and Stephen L. Holcombe, amending
the Restricted Stock Bonus Agreements dated March 23, 1987, filed as
Exhibit 10(a)(8) to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
* 10(a)(9) Form of Third Amendment to Restricted Stock Bonus Plan Agreement dated
February 22, 1991 between the Registrant and Stuart S. Richardson,
amending the Restricted Stock Bonus Plan Agreement dated March 23, 1987,
filed as Exhibit 10(a)(9) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990.
* 10(a)(10) Employment Agreement dated March 1, 1995 by and between the Registrant
and Haynes G. Griffin, filed as Exhibit 10(a)(10) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994.
* 10(a)(11) Employment Agreement dated March 1, 1995 by and between the Registrant
and L. Richardson Preyer, Jr., filed as Exhibit 10(a)(11) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
* 10(a)(12) Employment Agreement dated March 1, 1995 by and between the Registrant
and Stephen R. Leeolou, filed as Exhibit 10(a)(12) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994.
* 10(a)(13) Executive Officer Long-Term Incentive Compensation Plan adopted October
1, 1990 by the Registrant, filed as Exhibit 10(a)(13) to the
Registrant's Annual Report on Form 10-K to the fiscal year ended
December 31, 1990.
SEQUENTIAL
PAGE
EXHIBIT NO. DESCRIPTION NO.
* 10(a)(14) Form on Nonqualified Option Agreements dated October 12, 1987 between
the Registrant and Stephen L. Holcombe, Ralph E. Hiskey, John F. Dille,
Jr., Charles T. Hagel, L. Richardson Preyer, Sr. and Robert A.
Silverberg, filed as Exhibit 10(a)(5) to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1988.
* 10(a)(15) Nonqualified Option Agreements dated October 12, 1987 between the
Registrant and Robert M. DeMichele, John F. Dille, Jr., L. Richardson
Preyer, Sr., Robert A. Silverberg and Thomas I. Storrs, filed as Exhibit
10(a)(8) to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988.
* 10(a)(16) Form of Incentive Stock Option Agreements dated March 3, 1988 between
the Registrant and Stephen L. Holcombe and Richard C. Rowlenson, filed
as Exhibit 10(a)(9) to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988.
* 10(a)(17) Form of Incentive Stock Option Agreements dated June 23, 1988 between
the Registrant and Charles T. Hagel, Haynes G. Griffin, L. Richardson
Preyer, Jr., and Stephen R. Leeolou, filed as Exhibit 10(a)(10) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988.
* *10(a)(18) Amended and restated 1994 Long-Term Incentive Plan, approved by the
Registrant's Board of Directors on February 26, 1997.
* 10(a)(19) Senior Management Severance Plan of the Registrant adopted March 8,
1995, filed as Exhibit 10(a)(19) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994.
* 10(a)(20) Form of Severance Agreement for Senior Management Employees of the
Registrant, filed as Exhibit 10(a)(20) to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994.
* 10(a)(21) Form of Incentive Stock Agreement dated March 7, 1995 between the
Registrant and Haynes G. Griffin, Steven L. Holcombe, Richard C.
Rowlenson and Stuart S. Richardson filed as Exhibit 10(a)(21) to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1995.
* 10(a)(22) Form of Nonqualified Option Agreement dated March 7, 1995 between the
Registrant and Haynes G. Griffin, Stephen R. Leeolou, L. Richardson
Preyer, Jr., Stephen L. Holcombe, Richard C. Rowlenson and Stuart S.
Richardson, filed as Exhibit 10(a)(22) to the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 1995.
* 10(b)(1) Loan Agreement between the Registrant and various lenders led by The
Bank of New York and The Toronto-Dominion Bank as agents, dated as of
December 23, 1994, filed as Exhibit 2(a) to the Registrant's Current
Report on Form 8-K dated as of December 23, 1994.
* 10(b)(2) Security Agreement between the Registrant and various lenders led by The
Bank of New York and The Toronto-Dominion Bank, as Secured Party, dated
as of December 23, 1994, filed as Exhibit 2(b) to the Registrant's
Current Report on Form 8-K dated as of December 23, 1994.
* 10(b)(3) Master Subsidiary Security Agreement between the Registrant, certain of
its subsidiaries and various lenders led by The Bank of New York and The
Toronto-Dominion Bank, as Secured Party, dated as of December 23, 1994
filed as Exhibit 2(c) to the Registrant's Current Report on Form 8-K
dated as of December 23, 1994.
* 10(d)(1) 1989 Stock Option Plan of the Registrant approved by the Board of
Directors of the Registrant on December 21, 1989, and approved by
Shareholders at a meeting held on May 10, 1990, filed as Exhibit
10(h)(1) to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989.
SEQUENTIAL
PAGE
EXHIBIT NO. DESCRIPTION NO.
* 10(d)(2) Form of Nonqualified Stock Option Agreements dated March 1, 1990 between
the Registrant and Haynes G. Griffin, L. Richardson Preyer, Jr., Stephen
R. Leeolou, Stephen L. Holcombe and Stuart S. Richardson, filed as
Exhibit 10(h)(2) to the Registrant's annual Report on Form 10-K for the
fiscal year ended December 31, 1989.
* 10(d)(3) Form of Incentive Stock Option Agreement dated March 1, 1990 between the
Registrant and Richard C. Rowlenson, filed as Exhibit 10(h)(2) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
* 10(d)(4) Form of Incentive Stock Option Agreement dated July 30, 1990 between the
Registrant and Stephen L. Holcombe, Richard C. Rowlenson, Sunir Kochhar
and Timothy G. Biltz, filed as Exhibit 10(f)(4) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
* 10(d)(5) Stock Option Agreement dated November 28, 1990 between the Registrant
and Stuart Smith Richardson, filed as Exhibit 10(f)(5) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990.
* 10(d)(6) Form of Stock Option Agreements dated November 28, 1990 between the
Registrant and Haynes G. Griffin, Stephen R. Leeolou, L. Richardson
Preyer, Jr. and Stephen L. Holcombe, filed as Exhibit 10(f)(6) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990.
* 10(d)(7) Incentive Stock Option Agreements dated November 28, 1990 between the
Registrant and Richard C. Rowlenson, filed as Exhibit 10(f)(7) to the
Registrant's December 31, 1990.
* 10(e)(1) Joint Venture Agreement by and among W&J Metronet, Inc., Vanguard
Cellular Systems of Coastal Carolina, Inc., Providence Journal
Telecommunications and the Registrant dated as of January 19, 1990,
filed as Exhibit 10(j) to the Registrant's Registration Statement on
Form S-4 (File No. 33-35054).
* 10(e)(2) First Amendment and Assumption Agreement dated as of the 28th day of
December, 1990 to Joint Venture Agreement by and among W&J Metronet,
Inc., Vanguard Cellular Systems of Coastal Carolina, Inc., Providence
Journal Telecommunications and the Registrant dated as of January 19,
1990, filed as Exhibit 10(g)(2) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990.
* 10(f)(1) Stockholders Voting Agreement dated as of February 23, 1994, filed as
Exhibit 7 to Amendment 1 of Schedule 13D dated February 23, 1994 with
respect to the Common Stock of Geotek Communications,
* *10(g)(1) Nonqualified Deferred Compensation Plan with Form of Salary Reduction
Agreement.
* *11 Calculation of fully diluted net income per share for the years ended
December 31, 1996, 1995, and 1994.
* *22 Subsidiaries of the Registrant.
* *23(a) Consent of Arthur Andersen LLP
* *23(b) Consent of KPMG Peat Marwick LLP
* *23(c) Consent of Prasetio, Utomo & Co.
23(d) Consent of KPMG Peat Marwick
* *27 Financial Data Schedule.
* Incorporated by reference to the statement or report indicated.
** Previously filed as Exhibits to Form 10-K.