CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER 1/2000

AUDITOR'S REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS To the Shareholders and the Board of Directors of Siam Makro Public Company Limited I have reviewed the accompanying consolidated and company balance sheets of Siam Makro Public Company Limited as at 31 March 2000, and the related consolidated and company statements of income, changes in shareholders' equity, retained earnings and cash flows for the three-month period ended 31 March 2000 and 1999. 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 the generally accepted auditing standard applicable to review engagements. This standard requires that I plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. I have not performed an audit, and, accordingly, I do not express an audit opinion. Based on my review, nothing has come to my attention that causes me to believe that the consolidated and company financial statements referred to above are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. As explained in note 1 to the interim consolidated and company financial statements, in the third quarter ended 30 Septembers 1999, the Group has changed its accounting policy in respect of capitalisation of certain intangible assets including Deferred development rights and Pre-operating and start-up expenses. The Group has accounted for this changed retrospectively. Accordingly, the consolidated and company financial statements for the three-month period ended 31 March 1999 have been restated. I have audited the consolidated and company financial statements for the year ended 31 December 1999 of Siam Makro Public Company Limited in accordance with generally accepted auditing standards and expressed an unqualified opinion on those statements in my report dated 28 January 2000. The consolidated and company balance sheets as at 31 December 1999, presented for comparative purpose, are part of the audited financial statements which I have audited and issued a report thereon as stated above, and I have not performed any other auditing procedures subsequent to the date of that report. PRASAN CHUAPHANICH Certified Public Accountant (Thailand) No. 3051 PricewaterhouseCoopers ABAS Limited Bangkok 26 April 2000 Siam Makro Public Company Limited Balance Sheets As at 31 March 2000 and 31 December 1999 Consolidated Company Notes UNAUDITED AUDITED UNAUDITED AUDITED 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 ASSETS Current Assets Cash on hand and at banks 1,914,656 3,102,405 1,843,728 3,016,733 Short-term investments 1,340,000 892,000 1,300,000 870,000 Trade accounts receivable, net 3,953 4,055 154 424 Amounts due from subsidiaries and affiliated companies 6 552 121 9,239 161,239 Short-term loans to subsidiaries 6 - - 42,800 86,200 Inventories, net 2,568,868 2,771,159 2,364,690 2,565,046 Other current assets VAT receivable 18,566 22,452 - - Purchase discount receivable 81,037 159,549 67,000 138,000 Prepayment 16,022 4,990 10,387 2,229 Other 29,766 26,255 27,286 23,430 Total Current Assets 5,973,420 6,982,986 5,665,284 6,863,301 Non-Current Assets Investments in subsidiaries 6 - - 1,785,139 1,542,948 Loan to a subsidiary 6 - - 1,119,400 1,126,400 Property, plant and equipment, net 4 9,133,681 8,979,058 5,944,922 5,782,222 Deposits 6 42,962 39,095 291,556 291,291 Total Non-Current Assets 9,176,643 9,018,153 9,141,017 8,742,861 Total Assets 15,150,063 16,001,139 14,806,301 15,606,162 Director Director The notes to the interim consolidated and company financial statements on pages 9 to 16 are an integral part of these interim financial statements. Consolidated Company Notes UNAUDITED AUDITED UNAUDITED AUDITED 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Trade accounts payable 5,884,749 6,940,169 5,633,106 6,677,559 Amounts due to subsidiaries and affiliated companies 6 30,866 77,897 46,666 72,937 Other current liabilities Non-trade accounts payable 324,419 328,337 299,013 291,927 Current tax liabilities 272,311 295,017 234,996 248,103 Accrued expenses 256,824 205,882 230,752 182,016 VAT payable 50,659 36,998 50,659 36,998 Other current liabilities 63,791 81,845 59,023 75,377 Total Current Liabilities 6,883,619 7,966,145 6,554,215 7,584,917 Non-Current Liabilities Provision for retirement indemnity 183,045 177,657 169,055 164,259 Other liabilities 368 351 - - Total Non-Current Liabilities 183,413 178,008 169,055 164,259 Total Liabilities 7,067,032 8,144,153 6,723,270 7,749,176 Shareholders' Equity Share capital 5 Authorised share capital 2,400,000 2,400,000 2,400,000 2,400,000 Issued and paid-up share capital 2,400,000 2,400,000 2,400,000 2,400,000 Premium on share capital 3,290,152 3,290,152 3,290,152 3,290,152 Retained earnings Appropriated Legal reserve 192,500 192,500 192,500 192,500 Unappropriated 2,200,379 1,974,334 2,200,379 1,974,334 Total Shareholders' Equity 8,083,031 7,856,986 8,083,031 7,856,986 Total Liabilities and Shareholders' Equity 15,150,063 16,001,139 14,806,301 15,606,162 The notes to the interim consolidated and company financial statements on pages 9 to 16 are an integral part of these interim financial statements. Siam Makro Public Company Limited Statements of Income For the three-month period ended 31 March 2000 and 1999 Consolidated Company Notes UNAUDITED UNAUDITED 31 March 31 March 31 March 31 March 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Revenues Sales 8,767,424 7,601,414 8,273,631 7,202,422 Other operating income Interest income 13,781 31,686 30,802 50,001 Services income 171,216 108,837 165,751 103,719 Other 62,476 47,255 70,990 58,668 Total revenues 9,014,897 7,789,192 8,541,174 7,414,810 Expenses Cost of sales 7,955,876 6,956,960 7,572,795 6,635,181 Selling and administrative expenses 714,989 623,813 683,880 615,370 Interest expenses - 5,305 - 5,305 Directors' remuneration 644 360 644 360 Total Expenses 8,671,509 7,586,438 8,257,319 7,256,216 Operating profit 343,388 202,754 283,855 158,594 Income tax (117,342) (63,059) (100,000) (48,000) Profit from ordinary activities 226,046 139,695 183,855 110,594 Share of profit from subsidiaries, net of income tax - - 42,191 29,101 Net profit for the period 226,046 139,695 226,046 139,695 Basic earnings per share (Baht) 3 Net profit for the period 0.94 0.58 0.94 0.58 The notes to the interim consolidated and company financial statements on pages 9 to 16 are an integral part of these interim financial statements. Siam Makro Public Company Limited Statements of Changes in Shareholders' Equity For the three-month period ended 31 March 2000 and 1999 Consolidated Company Notes UNAUDITED UNAUDITED 31 March 31 March 31 March 31 March 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Share Capital Common share Beginning balance 2,400,000 2,400,000 2,400,000 2,400,000 Increase during the period - - - - Decrease during the period - - - - Ending balance 2,400,000 2,400,000 2,400,000 2,400,000 Premium on Share Capital Beginning balance 3,290,152 3,290,152 3,290,152 3,290,152 Increase during the period - - - - Decrease during the period - - - - Ending balance 3,290,152 3,290,152 3,290,152 3,290,152 Unappropriated retained earnings: Beginning balance - as previously reported 1,974,333 1,825,576 1,974,333 1,825,576 - adjustment resulting from change in accounting policy with respect to the capitalization of deferred development right and pre-opening and start-up expenses 1 - (189,752) - (189,752) - as restated 1,974,333 1,635,824 1,974,333 1,635,824 Net profit for the period 226,046 139,695 226,046 139,695 Unappropriated retained earnings at end of the period 2,200,379 1,775,519 2,200,379 1,775,519 Appropriated retained earnings: Legal reserve Beginning balance 192,500 163,947 192,500 163,947 Increase during the period - - - - Decrease during the period - - - - Appropriated retained earnings at end of the period 192,500 163,947 192,500 163,947 Total shareholders' equity 8,083,031 7,629,618 8,083,031 7,629,618 The notes to the interim consolidated and company financial statements on pages 9 to 16 are an integral part of these interim financial statements. Siam Makro Public Company Limited Statements of Retained Earnings For the three-month period ended 31 March 2000 and 1999 Consolidated Company Notes UNAUDITED UNAUDITED 31 March 31 March 31 March 31 March 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Unappropriated retained earnings: Beginning balance - as previously reported 1,974,333 1,825,576 1,974,333 1,825,576 - adjustment resulting from change in accounting policy with respect to the capitalization of deferred development right and pre-opening and start-up expenses 1 - (189,752) - (189,752) - as restated 1,974,333 1,635,824 1,974,333 1,635,824 Net profit for the period 226,046 139,695 226,046 139,695 Unappropriated retained earnings at end of the period 2,200,379 1,775,519 2,200,379 1,775,519 Appropriated retained earnings: Legal reserve 192,500 163,947 192,500 163,947 Retained earnings at end of the period 2,392,879 1,939,466 2,392,879 1,939,466 The notes to the interim consolidated and company financial statements on pages 9 to 16 are an integral part of these interim financial statements. Siam Makro Public Company Limited Statements of Cash Flows For the three-month period ended 31 March 2000 and 1999 Consolidated Company Notes UNAUDITED UNAUDITED 31 March 31 March 31 March 31 March 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Cash flows from operating activities: Net profit 226,046 139,695 226,046 139,695 Adjustments for: Depreciation 175,770 172,048 151,330 150,859 Gain on disposal of equipment - (1,727) - (1,727) Share of profit from subsidiaries, net of income tax - - (42,191) (29,101) Allowance for doubtful accounts accounts receivable, other (410) 50 (410) - Provision for obsolete and shrinkage inventories 28,872 7,338 25,550 3,786 Provision for warranty claim 17 (25) - - Provision for retirement indemnity 5,387 10,891 4,796 9,036 Amortization of deferred hedging cost - 2,939 - 2,939 Provision for fixed assets written off - 4,602 - 4,602 Changes in operating assets and liabilities: Trade accounts receivable 102 (7) 269 (2,330) Amounts due from subsidiaries and affiliated companies (431) 281 152,000 3,546 Inventories 173,419 80,105 174,807 64,632 VAT receivable 3,885 5,786 - - Purchase discount receivable 78,512 32,661 71,000 25,126 Prepayment (11,032) (5,930) (8,158) (4,647) Other current assets (3,101) (35,055) (3,446) (27,994) Trade accounts payable (1,055,420) (460,738) (1,044,453) (428,834) Amounts due to subsidiaries and affiliated companies (47,031) (31,135) (26,272) (10,978) Non-trade accounts payable (3,917) (157,222) 7,086 (152,294) Current tax liabilities (22,706) (71,570) (13,107) (63,817) Accrued expenses 50,942 (17,392) 48,736 (21,521) VAT payable 13,660 (9,456) 13,660 (9,456) Other current liabilities (18,053) (32,256) (16,353) 5,794 Net cash used in operating activities (405,489) (366,117) (279,110) (342,684) The notes to the interim consolidated and company financial statements on pages 9 to 16 are an integral part of these interim financial statements. Siam Makro Public Company Limited Statements of Cash Flows (Continued) For the three-month period ended 31 March 2000 and 1999 Consolidated Company Notes UNAUDITED UNAUDITED 31 March 31 March 31 March 31 March 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Cash flows from investing activities: Acquisition of property, plant and equipment (330,393) (127,326) (314,030) (153,536) Proceed from disposals of equipments - (30,685) - (30,685) Investment in subsidiaries - - (200,000) - Net repayments of loans made to subsidiaries - - 50,400 22,500 Deposits (3,867) (26,835) (265) (26,618) Net cash used in investing activities (334,260) (184,846) (463,895) (188,339) Cash flows from financing activities: Forward exchange contract payable - (72,886) - (72,886) Payment on long-term loan from bank - (553,350) - (553,350) Deferred hedging cost - (2,939) - (2,939) Net cash used in financing activities - (629,175) - (629,175) Net decrease in cash and cash equivalents (739,749) (1,180,138) (743,005) (1,160,198) Cash and cash equivalents, beginning balance 3,994,405 3,624,026 3,886,733 3,508,056 Cash and cash equivalents, ending balance 3,254,656 2,443,888 3,143,728 2,347,858 Cash and cash equivalents: Cash on hand and at banks 1,914,656 2,082,888 1,843,728 2,007,858 Short-term investments 1,340,000 361,000 1,300,000 340,000 3,254,656 2,443,888 3,143,728 2,347,858 Supplementary information for cash flows: Interest paid - 3,757 - 3,757 Income tax paid 133,667 129,608 108,906 108,976 The notes to the interim consolidated and company financial statements on pages 9 to 16 are an integral part of these interim financial statements. Siam Makro Public Company Limited Notes to the Interim Consolidated and Company Financial Statements (UNAUDITED) For the three-month period ended 31 March 2000 and 1999 1 Accounting Policies The interim consolidated and company financial statements are prepared in accordance with the accounting principles generally accepted in Thailand. However, the primary statements (i.e. balance sheets, statements of income, changes in shareholders' equity, retained earnings an cash flows) are presented in the full format as prescribed by the Ministerial Regulation No. 7 (B.E. 2539) in accordance with the Securities and Exchange Commission's and the Stock Exchange of Thailand's requirements, rather than in the condensed format as required by Thai Accounting Standard No. 41, "Interim Financial Reporting". The accounting policies used in the preparation of the interim financial statements are consistent with those used in the annual financial statements for the year ended 31 December 1999. The Group has implemented the following new Thai Accounting Standards, effective 1 January 2000, in these interim financial statements: TAS 41 Interim Financial Reporting TAS 44 Consolidated Financial Statements and Accounting for Investment in Subsidiaries TAS 45 Accounting for Investment in Associates TAS 47 Related Party Disclosures The comparative figures, if any, have been adjusted or extended to take into account the requirements of those newly effective standards. In addition, in the third quarter ended 30 September 1999, the Group has changed its accounting policy in respect of capitalisation of certain intangible assets including Deferred development rights and Pre-operating and start-up expenses. The Group has accounted for this change retrospectively. Accordingly, the consolidated and company statements of income, changes in shareholders' equity, retained earnings, and cash flows for the three- month period ended 31 March 1999 have been restated. The effects of the change are presented in Note 9. Costs that incur unevenly during the financial year are anticipated or deferred in the interim report only if it would be also appropriate to anticipate or defer such costs at the end of the financial year. Income tax expense is recognised based on the best estimate for the year. These interim financial statements should be read in conjunction with the 1999 annual financial statements. 2 Segment Information (more)