REVIEWED QUARTER-1 F/S AND CONSOLIDATED F/S

Auditors' report to the shareholders of Siam Makro Public Company Limited We have performed a review of the balance sheets of Siam Makro Public Company Limited as at March 31, 1998 and 1997, and the consolidated balance sheets of Siam Makro Public Company Limited and its subsidiaries as at March 31, 1998 and 1997, and the related statements of income, retained earnings and statements of change in shareholders' equity for the first quarters then ended, and the related consolidated statements of income, retained earnings and consolidated statements of change in shareholders' equity for the first quarters then ended, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It 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 and the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the aforementioned financial statements and consolidated financial statements for them to be in conformity with generally accepted accounting principles. PRASAN CHUAPHANICH Certified Public Accountant (Thailand) No. 3051 COOPERS & LYBRAND April 28, 1998 Siam Makro Public Company Limited Balance sheets and consolidated balance sheets as at March 31, 1998 and 1997 The company only The consolidation Notes 1998 1997 1998 1997 (Baht'000) (Baht'000) (Baht'000) (Baht'000) ASSETS Current assets Cash in hand and at banks 3 903,609 737,189 983,238 756,668 Short-term investments 4 Bill of exchange 1,137,000 - 1,137,000 - Other 220,000 680,000 220,000 818,001 Accounts receivable-trade 2,577 - 3,430 - Amounts due from and loans to subsidiary and affiliated companies 5 957,495 769,133 4,874 31,155 Inventories, net 6 2,188,042 2,176,035 2,391,068 2,405,929 Other current assets VAT receivable - 32,366 - 63,287 Purchase discount receivable 16,000 1,638 22,611 2,309 Prepaid expenses 25,210 13,549 31,807 14,430 Other 46,829 66,299 56,781 70,597 Total current assets 5,496,762 4,476,209 4,850,809 4,162,376 Loans to a subsidiary company 5 1,178,400 1,178,400 - - Investments in subsidiary and associated companies 7 1,063,803 1,029,933 - 11,102 Property, plant and equipment, net 8 5,248,612 4,944,640 8,579,945 7,767,427 Other assets Deferred development rights, net 9 - - 43,524 53,021 Pre-opening and start-up expenses, net 10 166,533 174,975 182,728 175,160 Deposits 5 311,271 245,962 54,750 26,361 TOTAL ASSETS 13,465,381 12,050,119 13,711,756 12,195,447 The notes on pages 5 to 20 form an integral part of the financial statements and consolidated financial statements. Auditors' report page 1. The company only The consolidation Notes 1998 1997 1998 1997 (Baht'000) (Baht'000) (Baht'000) (Baht'000) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Loans from bank 11 506,700 390,300 506,700 390,300 Accounts payable-trade 4,799,378 3,484,297 5,003,599 3,592,161 Current portion of long-term loans - 33,330 - 33,330 Amounts due to subsidiary and affiliated companies 5 34,226 36,675 30,485 36,675 Other current liabilities VAT payable 48,626 - 2,628 - Accounts payable - other 75,145 218,575 97,662 225,937 Accrued income tax 137,105 225,631 165,495 244,889 Accrued expenses 158,191 134,875 184,350 139,920 Other 60,510 53,407 68,705 58,635 Total current liabilities 5,819,881 4,577,090 6,059,624 4,721,847 Other liabilities Provision for retirement benefits 124,587 95,252 130,435 95,823 Other - - 784 - TOTAL LIABILITIES 5,944,468 4,672,342 6,190,843 4,817,670 Shareholders' equity Share capital 12 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 138,910 113,627 138,910 113,627 Retained earnings 1,691,851 1,573,998 1,691,851 1,573,998 TOTAL SHAREHOLDERS' EQUITY 7,520,913 7,377,777 7,520,913 7,377,777 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 13,465,381 12,050,119 13,711,756 12,195,447 Director . Director . Date April 28, 1998 Unaudited Reviewed Siam Makro Public Company Limited Page 3 Statements of income and consolidated statements of income for the first quarters ended March 31, 1998 and 1997 The company only The consolidation Note 1998 1997 1998 1997 (Baht'000) (Baht'000) (Baht'000) (Baht'000) REVENUES Sales 7,502,567 7,646,062 7,893,871 7,556,522 Other income Interest income 84,113 70,395 58,719 50,771 Service income 92,920 78,825 77,592 78,610 Other 42,690 25,571 48,087 18,309 TOTAL REVENUES 7,722,290 7,820,853 8,078,269 7,704,212 EXPENSES Cost of sales 6,888,655 6,898,843 7,211,029 6,783,315 Selling and administrative expenses 630,812 645,420 648,736 609,206 Interest expenses 9,079 7,160 9,235 7,327 Directors' remuneration 360 360 360 360 TOTAL EXPENSES 7,528,906 7,551,783 7,869,360 7,400,208 Net income before tax 193,384 269,070 208,909 304,004 Income tax (57,500) (97,853) (70,926) (108,730) Net income before share of profit (loss) from subsidiary and associated companies 135,884 171,217 137,983 195,274 Share of profit (loss) from subsidiary and associated companies 2,099 17,292 - (6,765) NET INCOME FOR THE PERIOD 137,983 188,509 137,983 188,509 STATEMENTS OF RETAINED EARNINGS Retained earnings brought forward 1,553,868 1,385,489 1,553,868 1,385,489 Net income for the period 137,983 188,509 137,983 188,509 Retained earnings carried forward 1,691,851 1,573,998 1,691,851 1,573,998 EARNINGS PER SHARE (BAHT) 13 Net income 0.57 0.78 0.57 0.78 The notes on pages 5 to 20 form an integral part of the financial statements and consolidated financial statements. 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Unaudited Reviewed Siam Makro Public Company Limited Page 4 Statements of change in shareholders' equity and consolidated statements of change in shareholders' equity for the first quarters ended March 31, 1998 and 1997 The company only The consolidation 1998 1997 1998 1997 (Baht'000) (Baht'000) (Baht'000) (Baht'000) SHARE CAPITAL Common shares 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 3,290,011 3,290,152 3,290,011 Increase during the period - 141 - 141 Carried forward 3,290,152 3,290,152 3,290,152 3,290,152 RETAINED EARNINGS Appropriated Legal reserve Brought forward 138,910 113,627 138,910 113,627 Increase during the period - - - - Carried forward 138,910 113,627 138,910 113,627 UNAPPROPRIATED Brought forward 1,553,868 1,385,489 1,553,868 1,385,489 Increase during the period 137,983 188,509 137,983 188,509 Carried forward 1,691,851 1,573,998 1,691,851 1,573,998 Shareholders' equity 7,520,913 7,377,777 7,520,913 7,377,777 The notes on pages 5 to 20 form an integral part of the financial statements and consolidated financial statements. Auditors' report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 5 Notes to the financial statements and consolidated financial statements - March 31, 1998 Basis for consolidation 1. The consolidated financial statements include the financial statements of Siam Makro Public Company Limited and its subsidiaries as follows : % of interest Makro Properties Limited 99.99 Makro Auto Care Company Limited 99.99 Makro Office Centre Company Limited 99.99 Significant intercompany transactions have been eliminated in the consolidated financial statements. The minority interest is immaterial and not, therefore, shown separately in the consolidated financial statements. Principal accounting policies 2. A summary of the significant accounting policies of the company, which have been applied consistently, is set out below. (a) Depreciation and amortisation Depreciation is calculated so as to write off the cost of the assets on a straight-line basis over the expected useful economic lives of the assets which range from 5 - 20 years. Leasehold rights are deferred and amortised by the straight-line method over the period of agreement which range from 6 - 20 years. Pre-opening and start-up expenses are deferred and amortised by the straight-line method over a period of 5 years. Unaudited Reviewed Siam Makro Public Company Limited Page 6 Notes to the financial statements and consolidated financial statements - March 31, 1998 continued (More)