ONSOLIDATED FINANCIAL STATEMENTS QUARTER 1/1999

4. A portion of the company's transactions has been made with subsidiary and affiliated companies. A summary of significant transactions is set out below : Unaudited Reviewed Siam Makro Public Company Limited Page 11 Notes to the financial statements and consolidated financial statements 31 March 1999 continued The company only 1999 1998 (Million Baht) (Million Baht) Transactions during the period : With subsidiary companies Revenues : - Sales of inventory 0.2 - - Disposal of fixed assets - 0.6 - Interest income 19.6 28.1 - Rental income 18.7 18.1 - Management fee 0.4 0.4 Expenses : - Land rental expenses 65.4 65.4 - Royalty and service fee 4.1 2.8 - Purchase of office supplies 0.1 0.1 - Purchase of fixed assets - 0.1 - Motor vehicle expenses 0.3 - With an affiliated company Royalty fee 25.7 28.5 The consolidation 1999 1998 (Million Baht) (Million Baht) Transaction during the period : With an affiliated company Royalty fee 27.7 30.5 Purchases or sales of inventory with subsidiary companies are presented at market price. The rental charges in respect of land and building as specified in the agreements between the company and subsidiary companies are based on the cost of land and fixed assets plus the related expenses. General services provided by company are charged at cost to a subsidiary company on the basis of an agreed annual fee. The company has entered into the agreements with an overseas affiliated company and a subsidiary company to use their trade marks. The royalty fee for the use of the trade marks represents a percentage of the companys net sales. Unaudited Reviewed Siam Makro Public Company Limited Page 12 Notes to the financial statements and consolidated financial statements 31 March 1999 continued The company only Notes 1999 1998 (Million Baht) (Million Baht) Balance as at 31 March 1999 and 1998 Amounts due from subsidiary companies 163.2 499.8 Amounts due from affiliated Companies 0.4 5.2 Amount due from an associated Company - 5.1 Less : Allowance for doubtful account 4.2 - (5.5) 163.6 504.6 Short-term loans to subsidiary Companies 4.1 (interest at 5% per annum) - Makro Properties Ltd. 83.8 209.8 - Makro Auto Care Co.,Ltd. 56.8 243.0 140.6 452.8 Short-term loan to an associated Company (interest at minimum overdraft rate) - Peoples Health Care Company Limited - 22.5 Less : Allowance for doubtful account 4.2 - (22.5) 140.6 452.8 Amount due to a subsidiary Company 18.3 5.7 Amounts due to an affiliated Company 26.6 28.5 44.9 34.2 Long-term loans to a subsidiary Company (interest at 6% per Annum) 4.3 1,178.4 1,178.4 Deposits for land lease paid to a subsidiary company 261.6 261.6 The consolidation Notes 1999 1998 (Million Baht) (Million Baht) Balance as at 31 March 1999 and 1998 Amounts due from subsidiary companies - - Amounts due from affiliated Companies 0.5 5.2 Amount due from an associated Company - 5.1 Less : Allowance for doubtful account 4.2 - (5.5) 0.5 4.8 Short-term loans to subsidiary Companies 4.1 (interest at 5% per annum) - Makro Properties Ltd. - - - Makro Auto Care Co.,Ltd. - - - - Short-term loan to an associated Company (interest at minimum overdraft rate) - Peoples Health Care Company Limited - 22.5 Less : Allowance for doubtful account 4.2 - (22.5) - - Amount due to a subsidiary Company - - Amounts due to an affiliated Company 28.7 30.4 28.7 30.4 Long-term loans to a subsidiary Company (interest at 6% per Annum) 4.3 - - Deposits for land lease paid to a subsidiary company - - 4.1 Short-term loans to subsidiary companies, being in the form of promissory notes, are due at call. Unaudited Reviewed Siam Makro Public Company Limited Page 13 Notes to the financial statements and consolidated financial statements 31 March 1999 continued 4.2 Allowance for doubtful account in 1998 was reserved for an amount due from and loan to an associated company amounting to Baht 28 million .The company has disinvested its interest in this associated company on 5 February 1998 due to its continued financial losses. 4.3 Long-term loans to a subsidiary company are due for repayment as follows : Contract Date Amount Due date (Million Baht) 1 January 1993 40.5 31 December 2002 1 March 1993 137.0 28 February 2003 1 November 1995 720.9 31 October 2005 23 November 1995 280.0 22 November 2005 1,178.4 Inventories , net 5. Inventories are made up as follows : The company only 1999 1998 (Baht' 000) (Baht' 000) Finished goods 2,154,965 2,310,201 Goods in transit 1,100 828 2,156,065 2,311,029 Less : Provision for obsolete and shrinkage inventories (129,852) (122,987) Inventories , net 2,026,213 2,188,042 The consolidation 1999 1998 (Baht' 000) (Baht' 000) Finished goods 2,346,221 2,532,626 Goods in transit 1,100 828 2,347,321 2,533,454 Less : Provision for obsolete and shrinkage inventories (162,594) (142,386) Inventories , net 2,184,727 2,391,068 Unaudited Reviewed Siam Makro Public Company Limited Page 14 Notes to the financial statements and consolidated financial statements 31 March 1999 continued Investments 6. Investments in subsidiary companies are accounted for under the equity method. Investments comprise : Subsidiary companies : Business activity Makro Properties Limited - Land investment & property leasing Makro Auto Care - Automotive service Company Limited centers, automated car wash and gas stations Makro Office Centre - Retail business of Company Limited office supplies, office equipment, office furniture and business service center Subsidiary companies : Relationship Makro Properties Limited - Being shareholder and under the same management control Makro Auto Care - Being shareholder and management Company Limited participation Makro Office Centre - Being shareholder and management Company Limited participation Issued & paid up Share capital Holding 1999 1998 1999 1998 (Baht'000) (Baht'000) (%) (%) Subsidiary companies : Makro Properties Limited 700,000 700,000 99.99 99.99 Makro Auto Care Company Limited 300,000 10,000 99.99 99.99 Makro Office Centre Company Limited 200,000 10,000 99.99 99.99 (More)