ONSOLIDATED AND COMPANY FINANCIAL STATEMENTS Q2/2000

Net cash used in financing activities (300,000) (833,175) (300,000) (833,175) Net decrease in cash and cash equivalents (692,600) (1,026,790) (705,840) (1,026,683) Cash and cash equivalent, beginning balance 3,994,405 3,624,026 3,886,733 3,508,056 Cash and cash equivalents, ending balance 3,301,805 2,597,236 3,180,893 2,481,373 Cash and cash equivalents: Cash on hand and at banks 2,167,652 2,074,236 2,079,503 1,991,373 Short-term investments 1,134,153 523,000 1,101,390 490,000 3,301,805 2,597,236 3,180,893 2,481,373 Supplementary information for cash flows: Interest paid - 5,306 - 5,306 Income tax paid 452,577 238,630 367,822 197,389 The notes to the interim consolidated and company financial statements on pages 10 to 19 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 six-month period ended 30 June 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 and 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, where appropriate, 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 for the three-month and six-month periods ended 30 June 1999, the related consolidated and company statements of changes in shareholders' equity, retained earnings, and cash flows for the six-month period ended 30 June 1999 have been restated. The effects of the change are presented in Note 10. Costs that incur unevenly during the financial year are recognised as expense or deferred in the interim report only if it would be also appropriate to recognise 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 Financial information by business segments - Group 30 June 2000 30 June 1999 For the three-month Wholesale Service Land Elimination Group Wholesale Service Land Elimination Group period ended and Retail Business Rental and Retail Business Rental Business Business Business Business Million Million Million Million Million Million Million Million Million Million Baht Baht Baht Baht Baht Baht Baht Baht Baht Baht Sale and services income 8,933 290 65 (66) 9,222 8,076 274 65 (66) 8,349 Operating profit 284 3 51 - 338 233 1 (114) - 120 Income tax (87) (86) Net profit 251 34 30 June 2000 30 June 1999 For the six-month Wholesale Service Land Elimination Group Wholesale Service Land Elimination Group period ended and Retail Business Rental and Retail Business Rental Business Business Business Business Million Million Million Million Million Million Million Million Million Million Baht Baht Baht Baht Baht Baht Baht Baht Baht Baht Sale and services income 17,425 567 131 (133) 17,990 15,455 497 131 (133) 15,950 Operating profit 574 5 103 - 682 392 (6) (64) - 322 Income tax (204) (149) Net profit 478 173 The Company and its subsidiaries operate 3 major businesses as follows : - Cash and carry wholesale business of merchandise and retail business of office supplies. - Automotive service centers and gas stations. - Land investment and property leasing to affiliated companies. 3 Significant Unusual Item Charged to Operating Profit The following unusual item has been charged to the operating profit during the interim period. Consolidated Company For the three-month and six-month 30 June 30 June 30 June 30 June periods ended 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Impairment charge relating to property of subsidiary - 164,909 - 164,909 A subsidiary has recognised a provision for impairment of a property. Subsequent to the original purchase of this site, the Group has now determined that the site will not be used for the purpose for which it was originally acquired. It has therefore identified the asset as being an asset held for sale or future development and has provided for impairment to carry the site at market value in current economic conditions. The market value of this site has been assessed by an independent valuer on the basis of market prices for comparable sites in that location including other relevant factors. 4 Basic Earnings Per Share Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period that is 240,000,000 shares (1999: 240,000,000 shares). 5 Capital Expenditure and Commitments Consolidated Company property, property, plant and plant and equipment equipment Baht'000 Baht'000 For the six-month period ended 30 June 2000 Opening net book amount 8,979,058 5,782,222 Additions 528,439 370,499 Disposal (451) (451) Provision for fixed assets written off 9,802 9,802 Depreciation (362,698) (311,979) Closing net book amount 9,154,150 5,850,093 Capital commitments as at 30 June 2000 468,060 402,253 Capital commitments as at 31 December 1999 388,268 370,024 6 Share Capital and Premium on Share Capital Number of Ordinary Share Shares Shares Premium Total Baht'000 Baht'000 Baht'000 Opening balance 240,000,000 2,400,000 3,290,152 5,690,152 Issue of shares - - - - Closing balance 240,000,000 2,400,000 3,290,152 5,690,152 As at 30 June 2000, the total authorised number of ordinary shares is 240,000,000 shares (31 December 1999: 240,000,000 shares) with a par value of Baht 10 per share (31 December 1999: Baht 10 per share). All issued shares are fully paid. 7 Related Party Transactions Orkam Holding Asia N.V. incorporated in the Netherlands owns 5.80% of the Company's shares. Although, the equity is less than one half of ownership, this company has significant influence over financial and operating policies. The following material transactions were carried out with related parties: i) Sale of goods and services income Consolidated Company For the three-month period ended 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Sale of goods: Makro Auto Care Company Limited - - 0.3 0.2 - - 0.3 0.2 Services income: Makro Properties Limited - - 17.4 18.9 Makro Auto Care Company Limited - - 7.0 7.2 Makro Office Centre Company Limited - - 9.7 11.8 - - 34.1 37.9 7 Related Party Transactions (Continued) Consolidated Company For the six-month period ended 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Sale of goods: Makro Auto Care Company Limited - - 0.6 0.4 - - 0.6 0.4 Services income: Makro Properties Limited - - 34.6 38.2 Makro Auto Care Company Limited - - 14.2 14.8 Makro Office Centre Company Limited - - 19.4 23.6 - - 68.2 76.6 Sales of goods above were carried out on commercial terms and conditions and at market prices. Service incomes are charged on the basis of the agreed rates. ii) Purchases of goods and service expenses Consolidated Company For the three-month period ended 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Purchases of goods: Makro Auto Care Company Limited - - 0.2 0.4 Makro Office Centre Company Limited - - 0.1 0.1 Charoen Pokphand Group 26.2 27.0 26.2 27.0 26.2 27.0 26.5 27.5 Service expenses: Makro Properties Limited - - 68.9 69.8 Makro Auto Care Company Limited - - 0.1 0.1 Makro Systems Far East Limited 30.7 29.9 28.3 27.7 30.7 29.9 97.3 97.6 7 Related Party Transactions (Continued) Consolidated Company For the six-month period ended 30 June 30 June 30 June 30 June 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Purchases of goods: Makro Auto Care Company Limited - - 0.4 0.6 Makro Office Centre Company Limited - - 0.3 0.3 Charoen Pokphand Group 51.8 51.9 51.8 51.9 51.8 51.9 52.5 52.8 Service expenses: Makro Properties Limited - - 137.8 139.4 Makro Auto Care Company Limited - - 0.3 0.3 Makro Systems Far East Limited 61.6 57.6 56.7 53.4 61.6 57.6 194.8 193.1 Purchases of goods above were carried out on commercial terms and conditions and at market prices. Service expenses are charged on the basis of the agreed rates. iii) Outstanding balances arising from sale, purchases of goods and services Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Receivables from related parties Makro Auto Care Company Limited - - 4.6 156.1 Makro Office Centre Company Limited - - 4.8 5.1 Makro Asia Management Limited 0.7 0.1 0.6 - 0.7 0.1 10.0 161.2 Payables to related parties: Makro Properties Limited - - 34.2 0.5 Makro Systems Far East Limited 61.6 75.8 56.7 70.3 Orkam Asia Management AG - 2.1 - 2.1 Total amounts due to subsidiaries and affiliated companies 61.6 77.9 90.9 72.9 Charoen Pokphand Group 16.8 16.2 16.8 16.2 78.4 94.1 107.7 89.1 7 Related Party Transactions (Continued) iv) Loans to subsidiaries Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Short-term loans to Makro Properties Limited - - 123.5 - Makro Auto Care Company Limited - - 39.5 86.2 - - 163.0 86.2 Long-term loans to Makro Properties Limited - - 1,111.4 1,126.4 - - 1,111.4 1,126.4 - - 1,274.4 1,212.6 Short-term loans to subsidiaries, being in the form of promissory notes, are due at call. Long-term loans to a subsidiary are due for repayment as follows: Contract Date 30 June 31 December Due Date 2000 1999 Million Baht Million Baht 1 March 1993 110.5 125.5 28 February 2003 1 November 1995 720.9 720.9 31 October 2005 23 November 1995 280.0 280.0 22 November 2005 1,111.4 1,126.4 v) Deposits for land lease paid to a subsidiary Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Deposits for land lease paid to Makro Properties Limited - - 261.6 261.6 - - 261.6 261.6 7 Related Party Transactions (Continued) vi) Investments in subsidiaries Company 30 June 2000 Subsidiaries Business Relationship Paid up % Carrying Capital Ownership Value Dividend Baht'000 Interest Baht'000 Baht'000 Makro Properties Land investment & property Being shareholder and under the 700,000 99.99 1,263,171 - Limited Leasing same management Makro Auto Care Automotive service centers, Being shareholder and management 500,000 99.99 410,880 - Company Limited automated car wash and gas participation stations Makro Office Retail business of office supplies, Being shareholder and management 200,000 99.99 151,739 - Centre Company office equipments, office furniture participation Limited and business service center. 1,825,790 Company 31 December 1999 Subsidiaries Business Relationship Paid up % Carrying Capital Ownership Value Dividend Baht'000 Interest Baht'000 Baht'000 Makro Properties Land investment & property Being shareholder and under the 700,000 99.99 1,191,240 - Limited leasing same management Makro Auto Care Automotive service centers, Being shareholder and management 300,000 99.99 205,870 - Company Limited automated car wash and gas participation stations Makro Office Retail business of office supplies, Being shareholder and management 200,000 99.99 145,838 - Centre Company office equipments, office furniture participation Limited and business service center. 1,542,948 As at 31 March 2000, Makro Auto Care Company Limited increased its share capital from Baht 300 million to Baht 500 million. The Company increased the investment in this subsidiary at the prior level at 99.99 percent of ownership interest. 8 Contingencies As at 30 June 2000 and 31 December 1999, the Group has contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business from which it is anticipated that no material liabilities will arise. In the ordinary course of business, the Company and its subsidiaries have given guarantees to third parties as follows: Bank guarantees As at 30 June 2000 and 31 December 1999 the banks have given guarantees on behalf of the Company and its subsidiaries as follows: Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Electricity 42,120 39,335 40,075 37,322 Sales of liquor and cigarettes 2,037 2,132 2,002 2,097 Others 1,047 950 547 450 45,204 42,417 42,624 39,869 Letter of awareness As at 30 June 2000 and 31 December 1999 the Company has issued letters of awareness to a bank for a bank overdraft facility of subsidiaries amounting to Baht 70 million. Operating lease agreements - where the group is the lessee The future minimum lease payments under operating lease are as follows: Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Not later than 1 year 92,794 82,617 321,749 299,047 Later than 1 year and not later than 5 years 290,874 291,990 544,073 486,660 Later than 5 years 833,046 867,095 671,787 692,628 1,216,714 1,241,702 1,537,609 1,478,335 9 Dividend A dividend in respect of 1999 of Baht 1.25 per share (amounting to a total of Baht 300 million) was approved at the annual shareholders' meeting on 12 April 2000 and fully paid in this quarter. 10 Comparative Figures The effect of the change in accounting policy of Deferred development rights and Pre-opening and start-up expenses as explained in Note 1, reduced previously reported balances included in the consolidated balance sheet and company balance sheet as at 1 January 1999 as follows : (more)