CONSOLIDATED FINANCIAL STATEMENTS FOR QUARTER 3/1999

AUDITOR'S REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS To the Shareholders of Siam Makro Public Company Limited I have performed a review of the accompanying consolidated and company balance sheets of Siam Makro Public Company Limited as at 30 September 1999 and 1998 and the related consolidated and company statements of income, retained earnings, changes in shareholders' equity and cash flows for the third quarter and nine-month period then ended. These financial statements are the responsibility of the Company's management. My responsibility is to issue a report on these financial statements based on my review. I conducted my review in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim financial statements consists principally of obtaining an understanding of the system for the preparation of the financial statements, making an analytical review of pertinent financial data, and making inquiries of officials of the Company who have responsibility for financial and accounting matters. This review 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, I express no opinion on the financial statements which I have reviewed. Based on my review, I am not aware of any material modifications that should be made to the aforementioned interim company and consolidated financial statements for them to be in conformity with generally accepted accounting principles. As explained in note 2, in accordance with the recent developments in International Accounting Standards and Thai Generally Accepted Accounting Principles, the Company reviewed its accounting policy in respect of capitalisation of certain intangible assets including Deferred Development Rights and Pre-opening and start-up expenses. As a result of this review, the Company has changed its accounting policy to expense such costs as incurred. The Company therefore has accounted for the change in accounting policy retrospectively by adjustments to the opening balance of retained earnings as at 1 July 1999 and 1998 and as at 1 January 1999 and 1998. PRASAN CHUAPHANICH Certified Public Accountant (Thailand) No.3051 PricewaterhouseCoopers ABAS Limited Bangkok 22 October 1999 The accompanying financial statements are not intended to present the financial position, results of operations, and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Thailand. Unaudited Reviewed Siam Makro Public Company Limited Page 2 Consolidated balance sheets and balance sheets as at 30 September 1999 and 1998 The consolidation The company only Notes 1999 1998 1999 1998 (Baht'000) (Baht'000) (Baht'000) (Baht'000) (Restated) (Restated) ASSETS Current assets Cash in hand and at banks 2,500,203 2,053,777 2,394,516 1,953,572 Short-term investments 3 Fixed deposits 483,000 190,000 450,000 190,000 Other 150,000 50,000 150,000 50,000 Accounts receivable - trade, net 4 6,058 6,026 2,010 4,155 Amounts due from subsidiary and affiliated companies 5 484 7,741 162,477 188,832 Short-term loans to subsidiary companies 5 - - 71,400 255,300 Inventories, net 6 2,166,806 2,138,556 2,003,375 1,948,412 Other current assets VAT receivable 21,379 37,229 - - Purchase discount receivable 136,430 88,571 119,800 81,894 Prepayment 19,029 15,762 14,722 12,234 Other 46,878 70,350 41,627 66,165 Total current assets 5,530,267 4,658,012 5,409,927 4,750,564 Loans to a subsidiary company 5 - - 1,178,400 1,178,400 Investments in subsidiary companies 7 - - 1,494,185 1,519,372 Property, plant and equipment, net 8 8,801,439 8,656,453 5,660,970 5,355,807 Other assets Deposits 5 38,725 32,180 291,258 288,088 TOTAL ASSETS 14,370,431 13,346,645 14,034,740 13,092,231 The consolidation The company only Notes 1999 1998 1999 1998 (Baht'000) (Baht'000) (Baht'000) (Baht'000) (Restated) (Restated) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable - trade 5,833,316 4,600,054 5,598,044 4,390,117 Amounts due to subsidiary and affiliated companies 5 42,349 28,826 40,955 58,827 Other current liabilities Accounts payable - other 175,089 107,297 153,402 98,944 Accrued income tax 196,163 182,667 160,345 150,458 Accrued expenses 196,192 176,272 171,434 154,353 VAT payable 99,015 87,301 99,015 87,301 Forward exchange contract payable 92 - 92 - Other 49,735 49,240 45,936 46,583 Total current liabilities 6,591,951 5,231,657 6,269,223 4,986,583 Long-term loan from bank - 621,900 - 621,900 Other liabilities Provision for retirement benefits 172,250 144,071 159,637 136,151 Provision for warranty claim 350 1,420 - - TOTAL LIABILITIES 6,764,551 5,999,048 6,428,860 5,744,634 Shareholders' equity Share capital 9 2,400,000 2,400,000 2,400,000 2,400,000 Share premium 3,290,152 3,290,152 3,290,152 3,290,152 Legal reserve 163,947 138,910 163,947 138,910 Retained earnings 1,751,781 1,518,535 1,751,781 1,518,535 TOTAL SHAREHOLDERS' EQUITY 7,605,880 7,347,597 7,605,880 7,347,597 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 14,370,431 13,346,645 14,034,740 13,092,231 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements. Auditor's report page 1. Director Director Date 22 October 1999 Unaudited Reviewed Siam Makro Public Company Limited Page 3 Consolidated statements of income for the third quarter and nine-month period ended 30 September 1999 and 1998 The consolidation Notes 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) REVENUES Sales 9,198,434 25,148,643 7,437,784 23,057,174 Other income Interest income 18,278 75,415 48,236 170,015 Service income 163,760 405,701 118,031 334,002 Other 57,561 153,009 20,963 71,079 TOTAL REVENUES 9,438,033 25,782,768 7,625,014 23,632,270 EXPENSES Cost of sales 8,521,963 23,090,692 6,806,474 21,102,514 Selling and administrative expenses 698,331 1,981,124 646,368 1,899,389 Impairment charge relating to property 10 - 164,909 - - Interest expenses 3 5,309 9,891 27,510 Director's remuneration 360 1,080 360 1,080 TOTAL EXPENSES 9,220,657 25,243,114 7,463,093 23,030,493 Net income before tax 217,376 539,654 161,921 601,777 Income tax (70,917) (219,697) (55,436) (197,108) NET INCOME FOR THE PERIOD 146,459 319,957 106,485 404,669 STATEMENTS OF RETAINED EARNINGS Opening retained earnings as previously reported 1,773,519 1,825,576 1,627,476 1,553,868 Change in accounting policy with respect to the capitalization of deferred development rights and pre-opening and start-up expenses 2 (168,197) (189,752) (215,426) (236,002) Opening retained earnings as restated 1,605,322 1,635,824 1,412,050 1,317,866 Net income for the period 146,459 319,957 106,485 404,669 Dividends 11 - (204,000) - (204,000) Closing retained earnings 1,751,781 1,751,781 1,518,535 1,518,535 EARNINGS PER SHARE Net income Before impairment 12 charge relating to property 0.61 2.02 0.44 1.69 Net income 0.61 1.33 0.44 1.69 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements. Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 4 Statements of income for the third quarter and nine-month period ended 30 September 1999 and 1998 The company only Notes 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) REVENUES Sales 8,735,718 23,840,031 7,060,554 21,906,131 Other income Interest income 35,984 129,284 69,320 241,841 Service income 160,323 394,622 112,254 321,870 Other 65,404 177,359 38,493 114,464 TOTAL REVENUES 8,997,429 24,541,296 7,280,621 22,584,306 EXPENSES Cost of sales 8,158,092 22,050,301 6,495,857 20,160,465 Selling and administrative expenses 677,062 1,934,269 641,230 1,873,423 Interest expenses 1 5,307 9,891 27,510 Directors' remuneration 360 1,080 360 1,080 TOTAL EXPENSES 8,835,515 23,990,957 7,147,338 22,062,478 Net income before tax 161,914 550,339 133,283 521,828 Income tax (55,500) (174,069) (41,679) (156,179) Net income before share of profit from subsidiary companies 106,414 376,270 91,604 365,649 Share of profit(loss) from subsidiary companies 40,045 (56,313) 14,881 39,020 NET INCOME FOR THE PERIOD 146,459 319,957 106,485 404,669 STATEMENTS OF RETAINED EARNINGS Opening retained earnings as previously reported 1,773,519 1,825,576 1,627,476 1,553,868 Change in accounting policy with respect to the capitalization of deferred development rights and pre-opening and start-up expenses 2 (168,197) (189,752) (215,426) (236,002) Opening retained earnings as restated 1,605,322 1,635,824 1,412,050 1,317,866 Net income for the period 146,459 319,957 106,485 404,669 Dividends 11 - (204,000) - (204,000) Closing retained earnings 1,751,781 1,751,781 1,518,535 1,518,535 EARNINGS PER SHARE Net income before impairment charge 12 relating to property 0.61 2.02 0.44 1.69 Net income 0.61 1.33 0.44 1.69 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements. Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 5 Consolidated statements of changes in shareholders' equity for the third quarter and nine-month period ended 30 September 1999 and 1998 The consolidation Notes 1999 1998 Third Nine-month Third Nine-month querter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) SHARE CAPITAL Common share Brought forward 2,400,000 2,400,000 2,400,000 2,400,000 Increase during the period - - - - Carried forward 2,400,000 2,400,000 2,400,000 2,400,000 SHARE PREMIUM Brought forward 3,290,152 3,290,152 3,290,152 3,290,152 Increase during the period - - - - Carried forward 3,290,152 3,290,152 3,290,152 3,290,152 RETAINED EARNINGS Appropriated Legal reserve Brought forward 163,947 163,947 138,910 138,910 Increase during the period - - - - Carried forward 163,947 163,947 138,910 138,910 UNAPPROPRIATED Opening retained earnings as previously reported 1,773,519 1,825,576 1,627,476 1,553,868 Change in accounting policy with respect to the capitalization of deferred development rights and pre-opening and start-up expenses 2 (168,197) (189,752) (215,426) (236,002) Opening retained earnings as restated 1,605,322 1,635,824 1,412,050 1,317,866 Increase during the period 146,459 319,957 106,485 404,669 Dividends 11 - (204,000) - (204,000) Closing retained earnings 1,751,781 1,751,781 1,518,535 1,518,535 SHAREHOLDERS'EQUITY 7,605,880 7,605,880 7,347,597 7,347,597 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements . Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 6 Statements of changes in shareholders' equity for the third quarter and nine-month period ended 30 September 1999 and 1998 The company only Notes 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) SHARE CAPITAL Common share Brought forward 2,400,000 2,400,000 2,400,000 2,400,000 Increase during the period - - - - Carried forward 2,400,000 2,400,000 2,400,000 2,400,000 SHARE PREMIUM Brought forward 3,290,152 3,290,152 3,290,152 3,290,152 Increase during the period - - - - Carried forward 3,290,152 3,290,152 3,290,152 3,290,152 RETAINED EARNINGS Appropriated Legal reserve Brought forward 163,947 163,947 138,910 138,910 Increase during the period - - - - Carried forward 163,947 163,947 138,910 138,910 UNAPPROPRIATED Opening retained earnings as previously reported 1,773,519 1,825,576 1,627,476 1,553,868 Change in accounting policy with respect to the capitalization of deferred development rights and pre-opening and start-up expenses 2 (168,197) (189,752) (215,426) (236,002) Opening retained earnings as restated 1,605,322 1,635,824 1,412,050 1,317,866 Increase during the period 146,459 319,957 106,485 404,669 Dividends 11 - (204,000) - (204,000) Closing retained earnings 1,751,781 1,751,781 1,518,535 1,518,535 SHAREHOLDERS' EQUITY 7,605,880 7,605,880 7,347,597 7,347,597 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements . 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Unaudited Reviewed Siam Makro Public Company Limited Page 7 Consolidated statements of cash flows for the third quarter and nine-month period ended 30 September 1999 and 1998 The consolidation 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) Cash flows from operating activities : Net income 146,459 319,957 106,485 404,669 Adjustments to reconcile net income to net cash : Depreciation 176,715 524,247 165,345 499,194 Impairment charge relating to property - 164,909 - - Allowance for doubtful accounts 710 1,956 - 500 Provision for retirement benefits 6,163 21,204 6,531 25,431 Provision for warranty claim 5 11 313 1,419 Loss (gain) on disposal of equipment 132 2,708 (369) (13,516) Provision for obsolete and shrinkage inventories 22,804 19,973 4,397 38,908 Amortisation of deferred hedging cost - 2,939 (4,783) 11,805 Changes in current assets and liabilities : Accounts receivable - trade (4,148) 1,052 (387) (6,526) Amounts due from subsidiary and affiliated companies 148 333 (950) (2,208) Inventories (118,442) 85,391 222,180 455,284 VAT receivable 148 10,668 4,476 (13,635) Purchase discount receivable (31,285) (32,263) (29,040) (39,431) Prepayment 6,626 (11,754) 6,262 (5,806) Other current assets (10,249) (15,664) (28,212) 13,494 Accounts payable - trade 586,292 83,678 (189,069) (817,314) Amounts due to subsidiary and affiliated companies 32,847 (17,455) (31,100) (38,311) Accounts payable - other (13,814) (186,195) 12,238 (219,614) Accrued income tax 62,908 (39,206) 44,044 82,190 Accrued expenses 32,851 17,770 (8,193) 4,918 VAT payable 7,394 20,381 28,525 87,301 Other current liabilities (18,215) 4,999 4,915 (39,150) Net cash flows provided by operating activities 886,049 979,639 313,608 429,602 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements . Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 8 Consolidated statements of cash flows for the third quarter and nine-month period ended 30 September 1999 and 1998 The consolidation 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) Cash flows from investing activities : Acquisitions of property, plant (more)