CONSOLIDATED AND COMPANY F/S FOR THE YEAR 2000

AUDITORS REPORT To the Shareholders of Siam Makro Public Company Limited I have audited the accompanying consolidated and company balance sheets of Siam Makro Public Company Limited as at 31 December 2000 and 1999, and the related consolidated and company statements of income, changes in shareholders' equity, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Siam Makro Public Company Limited as at 31 December 2000 and 1999, and the results of its operations and its cash flows for the years then ended in accordance with generally accepted accounting principles. As explained in Note 2, in 1999, the Group changed its accounting policy in respect of capitalisation of certain intangible assets including Deferred development rights and Pre-opening and start-up expenses. The Group accounted for this change retrospectively by adjustments to the opening balance of retained earnings as at 1 January 1999. PRASAN CHUAPHANICH Certified Public Accountant (Thailand) No. 3051 PricewaterhouseCoopers ABAS Limited Bangkok 2 February 2001 Siam Makro Public Company Limited Balance Sheets As at 31 December 2000 and 1999 Consolidated Company Notes 2000 1999 2000 1999 Baht Baht Baht Baht ASSETS Current Assets Cash on hand and at banks 3 1,607,663,694 3,102,404,609 1,529,474,002 3,016,732,921 Short-term investments 4 2,804,426,289 891,142,755 2,749,666,057 869,252,074 Trade accounts receivable, net 5 11,091,911 4,055,108 5,731,642 423,674 Amounts due from related parties 14 38,360 121,490 9,437,174 161,239,232 Short-term loans to related parties 14 - - 226,600,000 86,200,000 Inventories, net 6 2,870,585,413 2,771,159,192 2,630,760,591 2,565,046,378 Other current assets VAT receivable 13,470,190 22,451,507 - - Purchase discount receivable 252,702,504 159,548,871 215,160,000 138,000,000 Prepayment 14,213,013 4,990,222 10,797,338 2,228,777 Other 60,160,421 26,255,071 57,288,344 23,429,827 Total Current Assets 7,634,351,795 6,982,128,825 7,434,915,148 6,862,552,883 Non-Current Assets Investments in subsidiaries 7 - - 1,922,755,128 1,542,947,650 Loans to a related party 14 - - 1,111,400,000 1,126,400,000 Property, plant and equipment, net 8 9,644,031,761 8,979,058,301 6,294,305,484 5,782,222,487 Deposits 14 44,229,241 39,094,446 170,171,352 291,290,911 Total Non-Current Assets 9,688,261,002 9,018,152,747 9,498,631,964 8,742,861,048 Total Assets 17,322,612,797 16,000,281,572 16,933,547,112 15,605,413,931 Director Director The notes to the consolidated and company financial statements on pages 9 to 22 form an integral part of these financial statements. Siam Makro Public Company Limited Balance Sheets As at 31 December 2000 and 1999 Consolidated Company Notes 2000 1999 2000 1999 Baht Baht Baht Baht LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Trade accounts payable 7,368,030,767 6,923,165,474 7,102,741,071 6,660,555,910 Amounts due to related parties 14 86,842,580 94,900,111 80,742,413 89,940,224 Other current liabilities Non-trade accounts payable 484,037,625 328,336,744 447,043,560 291,927,242 Current tax liabilities 197,872,981 295,017,130 172,519,217 248,103,035 Accrued expenses 251,869,521 205,882,303 228,020,901 182,015,902 VAT payable 57,192,732 36,998,404 55,459,244 36,998,404 Other 85,803,553 80,987,248 74,983,918 74,628,559 Total Current Liabilities 8,531,649,759 7,965,287,414 8,161,510,324 7,584,169,276 Non-Current Liabilities Provision for retirement indemnity 206,050,862 177,657,555 187,552,844 164,258,811 Other liabilities 428,232 350,759 - - Total Non-Current Liabilities 206,479,094 178,008,314 187,552,844 164,258,811 Total Liabilities 8,738,128,853 8,143,295,728 8,349,063,168 7,748,428,087 Shareholders' Equity Share capital 9 Authorised share capital 2,400,000,000 2,400,000,000 2,400,000,000 2,400,000,000 Issued and paid-up share capital 2,400,000,000 2,400,000,000 2,400,000,000 2,400,000,000 Premium on share capital 3,290,152,068 3,290,152,068 3,290,152,068 3,290,152,068 Retained earnings Appropriated Legal reserve 10 240,000,000 192,500,365 240,000,000 192,500,365 Unappropriated 2,654,331,876 1,974,333,411 2,654,331,876 1,974,333,411 Total Shareholders' Equity 8,584,483,944 7,856,985,844 8,584,483,944 7,856,985,844 Total Liabilities and Shareholders' Equity 17,322,612,797 16,000,281,572 16,933,547,112 15,605,413,931 The notes to the consolidated and company financial statements on pages 9 to 22 form an integral part of these financial statements. Siam Makro Public Company Limited Statements of Income For the years ended 31 December 2000 and 1999 Consolidated Company Notes 2000 1999 2000 1999 Baht Baht Baht Baht Revenues Sales 37,807,609,532 34,493,283,746 35,765,119,248 32,706,598,888 Other operating income Interest Income 54,824,351 86,711,785 122,898,011 158,322,684 Services Income 785,501,335 609,218,471 765,408,329 594,798,544 Other 236,290,335 178,461,174 263,690,561 206,736,800 Total Revenues 38,884,225,553 35,367,675,176 36,917,116,149 33,666,456,916 Expenses Cost of sales 34,445,097,480 31,578,741,765 32,868,613,628 30,175,604,286 Selling and administrative expenses 2,990,215,835 2,720,386,726 2,848,317,374 2,639,662,627 Impairment charge relating to property 8 - 164,908,861 - - Interest expenses 46,716 5,311,193 - 5,307,181 Directors' remuneration 3,344,000 1,440,000 3,344,000 1,440,000 Total Expenses 37,438,704,031 34,470,788,545 35,720,275,002 32,822,014,094 Profit before tax 1,445,521,522 896,886,631 1,196,841,147 844,442,822 Income tax (418,023,422) (325,823,745) (349,150,525) (265,829,190) Profit from ordinary activities 1,027,498,100 571,062,886 847,690,622 578,613,632 Share of profit from subsidiaries, net of income tax - - 179,807,478 (7,550,746) Net profit for the year 1,027,498,100 571,062,886 1,027,498,100 571,062,886 Basic earnings per share 11 Net profit before impairment charge relating to property 4.28 3.07 4.28 3.07 Net profit for the year 4.28 2.38 4.28 2.38 The notes to the consolidated and company financial statements on pages 9 to 22 form an integral part of these financial statements. Siam Makro Public Company Limited Statements of Changes in Shareholders' Equity For the years ended 31 December 2000 and 1999 Consolidated Company Notes 2000 1999 2000 1999 Baht Baht Baht Baht Share Captial Common share Beginning balance 2,400,000,000 2,400,000,000 2,400,000,000 2,400,000,000 Increase during the year - - - - Decrease during the year - - - - Ending balance 2,400,000,000 2,400,000,000 2,400,000,000 2,400,000,000 Premium on Share Capital Beginning balance 3,290,152,068 3,290,152,068 3,290,152,068 3,290,152,068 Increase during the year - - - - Decrease during the year - - - - Ending balance 3,290,152,068 3,290,152,068 3,290,152,068 3,290,152,068 Appropriated retained earnings: Legal reserve 10 Beginning balance 192,500,365 163,947,221 192,500,365 163,947,221 Increase during the year 47,499,635 28,553,144 47,499,635 28,553,144 Decrease during the year - - - - Ending balance 240,000,000 192,500,365 240,000,000 192,500,365 Unappropriated retained earnings: Beginning balance - as previously reported 1,974,333,411 1,825,576,340 1,974,333,411 1,825,576,340 - adjustment resulting from change in accounting policy with respect to the capitalization of Deferred development rights and Pre-opening and start-up expenses 2 - (189,752,671) - (189,752,671) - as restated 1,974,333,411 1,635,823,669 1,974,333,411 1,635,823,669 Legal reserve 10 (47,499,635) (28,553,144) (47,499,635) (28,553,144) Dividends 12 (300,000,000) (204,000,000) (300,000,000) (204,000,000) Net profit for the year 1,027,498,100 571,062,886 1,027,498,100 571,062,886 Ending balance 2,654,331,876 1,974,333,411 2,654,331,876 1,974,333,411 Total Shareholders' Equity 8,584,483,944 7,856,985,844 8,584,483,944 7,856,985,844 The notes to the consolidated and company financial statements on pages 9 to 22 form an integral part of these financial statements. Siam Makro Public Company Limited Statements of Retained Earnings For the years ended 31 December 2000 and 1999 Consolidated Company Notes 2000 1999 2000 1999 Baht Baht Baht Baht Appropriated retained earnings Legal reserve 240,000,000 192,500,365 240,000,000 192,500,365 Appropriated retained earnings at the end of the year 240,000,000 192,500,365 240,000,000 192,500,365 Unappropriated retained earnings Beginning balance - as previously reported 1,974,333,411 1,825,576,340 1,974,333,411 1,825,576,340 - adjustment resulting from change in accounting policy with respect to the capitalization of Deferred development rights and Pre-opening and start-up expenses 2 - (189,752,671) - (189,752,671) - as restated 1,974,333,411 1,635,823,669 1,974,333,411 1,635,823,669 Legal reserve 10 (47,499,635) (28,553,144) (47,499,635) (28,553,144) Dividends 12 (300,000,000) (204,000,000) (300,000,000) (204,000,000) Net profit for the year 1,027,498,100 571,062,886 1,027,498,100 571,062,886 Unappropriated retained earnings at the end of the year 2,654,331,876 1,974,333,411 2,654,331,876 1,974,333,411 Ending Balance 2,894,331,876 2,166,833,776 2,894,331,876 2,166,833,776 The notes to the consolidated and company financial statements on pages 9 to 22 form an integral part of these financial statements. Siam Makro Public Company Limited Statements of Cash Flows For the years ended 31 December 2000 and 1999 Consolidated Company Notes 2000 1999 2000 1999 Baht Baht Baht Baht Cash flows from operating activities Net profit 1,027,498,100 571,062,886 1,027,498,100 571,062,886 Adjustments for: Depreciation 8 733,936,069 700,901,977 628,575,673 619,341,775 Write back of provision for loss on disposal of equipment (9,802,091) - (9,802,091) - Impairment charge relating to property 8 - 164,908,861 - - Gain on disposal of equipment (1,192,514) (6,640,534) (949,404) (6,640,534) Share of (profit) loss from subsidiaries - - (179,807,478) 7,550,746 Provision for obsolete and shrinkage inventories 9,853,985 16,919,511 5,643,555 16,675,729 Provision for retirement indemnity 28,393,307 26,610,629 23,294,033 22,856,378 Others (1,925,568) (93,443) (2,003,041) (455,264) Changes in operating assets and liabilities Trade accounts receivable (7,036,803) 5,010,473 (5,307,968) 3,929,462 Amounts due from related parties 83,130 695,779 151,802,058 5,873,906 Inventories (109,280,206) (515,908,994) (71,357,768) (487,091,229) VAT receivable 8,981,317 9,595,013 - - Purchase discount receivable (93,153,634) (55,381,907) (77,160,000) (47,873,567) Prepayment (9,222,791) 2,284,977 (8,568,560) 2,824,208 Other current assets (33,495,350) 8,002,700 (33,448,518) 8,695,669 Trade accounts payable 465,585,242 1,173,527,511 462,905,110 1,143,901,360 Amounts due to related parties (3,374,818) 35,095,450 (4,515,099) 34,043,072 Non-trade accounts payable 130,298,219 (32,947,376) 129,713,656 (51,098,821) Current tax liabilities (97,144,149) 59,648,659 (75,583,818) 53,975,896 Accrued expenses 45,987,218 27,460,461 46,004,999 21,639,401 VAT payable 20,194,328 (41,634,993) 18,460,840 (41,634,993) Other current liabilities 4,816,305 36,251,629 355,358 32,972,024 Net cash receipts from operating activities 2,109,999,296 2,185,369,269 2,025,749,637 1,910,548,104 The notes to the consolidated and company financial statements on pages 9 to 22 form an integral part of these financial statements. Siam Makro Public Company Limited Statements of Cash Flows For the years ended 31 December 2000 and 1999 Consolidated Company Notes 2000 1999 2000 1999 Baht Baht Baht Baht Cash flows from investing activities Purchases of short-term investments (200,000,000) - (200,000,000) - Acquisition of property, plant and equipment (1,391,492,652) (989,609,038) (1,130,769,615) (838,978,194) Proceed from disposals of equipment 3,577,729 13,782,364 862,442 13,782,364 Investments in subsidiaries - - (200,000,000) - Net repayments from (loans made to) related parties - - (125,400,000) 128,900,000 Net deposits received (paid) (5,134,795) (6,754,530) 121,119,559 (3,055,640) Net cash payments to investing activities (1,593,049,718) (982,581,204) (1,534,187,614) (699,351,470) Cash flows from financing activities Dividends paid to shareholders 12 (300,000,000) (204,000,000) (300,000,000) (204,000,000) Forward exchange contract payable - (72,978,000) - (72,978,000) Repayment of long-term loan from bank - (553,350,000) - (553,350,000) Deferred hedging cost - (2,939,000) - (2,939,000) Net cash payments to financing activities (300,000,000) (833,267,000) (300,000,000) (833,267,000) Net increase in cash and cash equivalents 216,949,578 369,521,065 191,562,023 377,929,634 Cash and cash equivalents, beginning balance 3,993,547,364 3,624,026,299 3,885,984,995 3,508,055,361 Cash and cash equivalents, ending balance 4,210,496,942 3,993,547,364 4,077,547,018 3,885,984,995 Supplementary information for cash flows Cash and cash equivalents Cash on hand and at banks 1,607,663,694 3,102,404,609 1,529,474,002 3,016,732,921 Short-term investments (cash equivalents) 2,602,833,248 891,142,755 2,548,073,016 869,252,074 4,210,496,942 3,993,547,364 4,077,547,018 3,885,984,995 Short-term investments Cash equivalents 2,602,833,248 891,142,755 2,548,073,016 869,252,074 Non-cash equivalents 201,593,041 - 201,593,041 - 2,804,426,289 891,142,755 2,749,666,057 869,252,074 Interest expenses and income tax paid during the year Interest paid 46,716 5,311,193 - 5,307,181 Income tax paid 482,774,382 238,630,334 406,212,886 197,389,002 The notes to the consolidated and company financial statements on pages 9 to 22 form an integral part of these financial statements. Siam Makro Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2000 and 1999 1 Significant Accounting Policies The principle accounting policies adopted in the preparation of these consolidated and company financial statements which have been applied consistently, are set out below: 1.1 Basis of preparation The consolidated and company financial statements are prepared in accordance with and complied with accounting principles generally accepted in Thailand. The consolidated and company financial statements are prepared under the historical cost convention as modified by the revaluation of certain property, plant and equipment. 1.2 Consolidation Subsidiary undertakings are those companies in which the Group, directly, has an interest of more than one half of the voting rights or otherwise has power to exercise control over the financial and operating policies, have been consolidated. Subsidiaries are consolidated from the date on which effective control transferred to the Group. Significant inter-company transactions and balances have been eliminated in the consolidated financial statements. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group. The minority interest is immaterial and not, therefore, shown separately in the consolidated financial statements. 1.3 Investments Investments in marketable equity securities are classified as available-for-sale securities and are carried at fair value which is calculated by reference to net asset value as at the balance sheet date, as announced by the Mutual Fund Management Company to the public. Adjustments in the carrying amount are recorded as unrealised gains or losses in the shareholders' equity. Investments in debt securities which are classified as held-to-maturity securities are carried at amortised cost. A test for impairment is carried out when factors indicating that impairment are evident. If the carrying value of the investment is greater than its recoverable amount, the impairment loss is charged to the income statement. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is (more)