ONSOLIDATED FINANCIAL STATEMENTS FOR QUARTER 3/1999

and equipment (371,717) (640,026) (111,714) (511,795) Proceeds from disposal equipment 357 9,125 4,691 26,036 Deposits 21,278 (6,386) 3,351 20,515 Net cash used in investing activities (350,082) (637,287) (103,672) (465,244) Cash flows from financing activities : Forward exchange contract payable - (72,886) - - Dividend paid - (204,000) - (204,000) Repayment for short-term loan - - (506,700) (506,700) Long-term loan from bank - (553,350) 621,900 621,900 Deferred hedging cost - (2,939) 4,782 (11,805) Net cash provided (used) in financing activities - (833,175) 119,982 (100,605) The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements. Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 9 Consolidated statements of cash flows for the third quarter and nine-month period ended 30 September 1999 and 1998 The consolidation 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) Net increase (decrease) in cash and cash equivalents 535,967 (490,823) 329,918 (136,247) Cash and cash equivalents, beginning of period 2,597,236 3,624,026 1,963,859 2,430,024 Cash and cash equivalents, end of period 3,133,203 3,133,203 2,293,777 2,293,777 Cash and cash equivalents : Cash in hand and at banks 2,500,203 2,500,203 2,053,777 2,053,777 Short-term investments 633,000 633,000 240,000 240,000 3,133,203 3,133,203 2,293,777 2,293,777 Supplementaldisclosure of cash flows information Cash paid during the period Interest expenses 3 5,309 9,891 25,580 Income tax - 238,630 - 97,788 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements . Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 10 Statements of cash flows for the third quarter and nine-month period ended 30 September 1999 and 1998 The company only 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) Cash flows from operating activities : Net income 146,459 319,957 106,485 404,669 Adjustments to reconcile net income to net cash : Depreciation 155,716 465,431 147,007 445,023 Allowance for doubtful accounts 410 1,606 - - Provision for retirement benefits 5,705 18,235 5,322 21,709 Gain on disposal of equipment (175) (1,902) (241) (13,372) Share of loss (profit) from subsidiary companies (40,045) 56,313 (14,881) (39,020) Provision for obsolete and shrinkage inventories 20,300 18,824 800 30,730 Provision for the disposal of obsolete and lost equipment 7 4,609 - - Amortisation of deferred hedging cost - 2,939 (4,783) 11,805 Changes in current assets and liabilities : Accounts receivable trade (2,668) 737 (339) (4,155) Amounts due from subsidiary and affiliated companies (2,915) 4,636 12,482 332,527 Inventories (96,296) 72,432 217,465 419,788 Purchase discount receivable (26,800) (29,674) (29,394) (34,539) Prepayment 6,279 (9,669) 4,943 (5,071) Other current assets (10,299) (12,896) (39,856) (2,296) Accounts payable trade 564,442 81,390 (208,863) (839,961) Amounts due to subsidiary and affiliated companies 13,528 (14,942) (541) (13,178) Accounts payable other (19,384) (189,624) 17,231 (162,999) Accrued income tax 51,851 (33,782) 39,007 68,214 Accrued expenses 31,111 11,058 (6,728) 2,886 VAT payable 7,394 20,382 28,525 60,242 Other current liabilities (17,939) 4,280 4,283 (38,248) Net cash flows provided by operating activities 786,681 790,340 277,924 644,754 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements . Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 11 Statements of cash flows for the third quarter and nine-month period ended 30 September 1999 and 1998 The company only 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) Cash flows from investing activities : Acquisitions of property, plant and equipment (323,653) (568,506) (106,799) (494,948) Proceeds from disposal equipment 357 9,125 2,836 24,061 Loans to subsidiary companies 25,900 91,700 18,000 209,500 Investment in subsidiary companies - - - (480,000) Deposits 23,858 (3,023) 3,718 21,294 Net cash used in investing activities (273,538) (470,704) (82,245) (720,093) Cash flows from financing activities : Forward exchange contract payable - (72,886) - - Dividend paid - (204,000) - (204,000) Repayment for short-term loan - - (506,700) (506,700) Long-term loan from bank - (553,350) 621,900 621,900 Deferred hedging cost - (2,939) 4,782 (11,805) Net cash provided (used) in financing activities - (833,175) 119,982 (100,605) The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements. Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 12 Statements of cash flows for the third quarter and nine-month period ended 30 September 1999 and 1998 The company only 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht' 000) (Baht' 000) (Baht' 000) (Baht' 000) (Restated) (Restated) (Restated) Net increased (decrease) in cash and cash equivalents 513,143 (513,539) 315,661 (175,944) Cash and cash equivalents, beginning of period 2,481,373 3,508,055 1,877,911 2,369,516 Cash and cash equivalents, end of period 2,994,516 2,994,516 2,193,572 2,193,572 Cash and cash equivalents : Cash in hand and at banks 2,394,516 2,394,516 1,953,572 1,953,572 Short-term investments 600,000 600,000 240,000 240,000 2,994,516 2,994,516 2,193,572 2,193,572 Supplemental disclosure of cash flows information Cash paid during the period Interest expenses 1 5,307 9,891 25,580 Income tax - 197,389 - 79,555 The notes to the financial statements on pages 13 to 28 form an integral part of these financial statements . Auditor's report page 1. Unaudited Reviewed Siam Makro Public Company Limited Page 13 Notes to the consolidated financial statements and financial statements 30 September 1999 Accounting policies 1. A summary of the significant accounting policies of the company, which have been applied consistently, is set out below: Basis of preparation The financial statements are prepared in accordance with and comply with accounting principles generally accepted in Thailand.Basis for consolidation The consolidated financial statements include the financial statements of Siam Makro Public Company Limited and its subsidiary companies 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. Property, plant and equipment All property, plant and equipment are stated at cost less depreciation. 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. Land is not depreciated as it is deemed to have an indefinite life. Leasehold rights are amortised by the straight-line method over the period of agreement, which range from 6 - 26 years. Allowance for doubtful account Allowance for doubtful account is provided according to the estimated losses that may be incurred in the collections from accounts receivable. The estimated losses are determined by the collection experience and the current status of accounts receivable. Inventories Inventories are stated at the lower of cost or net realisable value. Cost is determined on the latest purchase price which is approximate to cost determined on a first-in first-out basis. Net realisable value is the price at which inventories can be sold in the normal course of business after allowing for the costs of realisation. Provision is made where necessary for obsolete, slow-moving and shrinkage inventories. Unaudited Reviewed Siam Makro Public Company Limited Page 14 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Foreign currencies Trading transactions denominated in foreign currencies are translated into Thai Baht at the exchange rates ruling when the transactions are entered into. Monetary assets and liabilities denominated in foreign currencies are translated into Thai Baht at the exchange rates ruling at the balance sheet date and the forward contracted rate. Exchange gains or losses arising from the application of forward contracted rate are deferred and amortised by the straight-line method over the period of forward contracted rate agreements. Exchange gains or losses arising from the application of exchange rates at the balance sheet date are included in the statement of income. Investment Investment in companies in which Siam Makro Public Company Limited holds more than 20% of the share capital and over which the company exercises significant influence are accounted for under the equity method. The investment is initially recorded at cost. The carrying amount of the investment is increased or decreased to recognise the company's share of the profits or losses of the investee after the date of acquisition and to take account of any dividends received. Provision for retirement benefits Provision for retirement benefits is made for employees whose length of service exceeds 3 years and is normally payable on termination of service. The calculation is based on the latest basic salary multiplied by the years of each employee's service as set out in the company's retirement benefits plan. Provision for warranty claim Provision for warranty claim represents the estimated liabilities due under warranties given on products and services of a subsidiary company. This provision is calculated based on claim history and management 's expectation of future claim. Impairment of assets The carrying values of assets are reviewed annually and provisions for impairment loss will be set up whenever it is considered necessary and are recognised in the statement of income. Change in accounting policy 2. In this quarter, in accordance with the recent developments in International Accounting Standards and Thai Generally Accepted Accounting Principles, the company reviewed its accounting policy in respect of capitalisation of certain intangible assets including Deferred Developments Rights and Pre-opening and start-up expenses. As a result of this review, the company has changed its accounting policy to expense such costs as incurred. The company therefore has accounted for the change in accounting policy retrospectively by adjustments to the opening balance of retained earnings as at 1 July 1999 and 1998 and as at 1 January 1999 and 1998. Unaudited Reviewed Siam Makro Public Company Limited Page 15 Notes to the consolidated financial statements and financial statements 30 September 1999 continued The effect of the change reduced previously reported balances included in the consolidated balance sheets and balance sheets as at 1 July 1999 and 1998 and as at 1 January 1999 and 1998 as follows : 1 July 1999 1 July 1998 The The The The consolidation company only consolidation company only (Baht'000) (Baht'000) (Baht'000) (Baht'000) Deferred development rights 29,619 - 40,797 - Pre-opening and start-up expenses 138,578 124,647 174,629 158,140 Investments in subsidiary companies - 43,550 - 57,286 Opening retained earnings 168,197 168,197 215,426 215,426 1 January1999 1 January 1998 The The The The consolidation company only consolidation company only (Baht'000) (Baht'000) (Baht'000) (Baht'000) Deferred development rights 35,162 - 46,273 - Pre-opening and start-up expenses 154,590 139,968 189,729 174,650 Investments in subsidiary companies - 49,784 - 61,352 Opening retained earnings 189,752 189,752 236,002 236,002 In addition, the effect of the change reduced the amortisation expenses resulting in an increase of net profit for the first quarter, the second quarter and the six-month period ended 30 June 1999 and the first quarter, the second quarter, the third quarter and the nine-month period ended 30 September 1998 as follows : The consolidation and the company only of 1999 First Second Six-month quarter quarter period (Baht'000) (Baht'000) (Baht'000) Net profit Net profit before the adjustment 134,566 17,376 151,942 Adjustment of change in accounting policy 5,128 16,427 21,555 Net profit after the adjustment 139,694 33,803 173,497 Unaudited Reviewed Siam Makro Public Company Limited Page 16 Notes to the consolidated financial statements and financial statements 30 September 1999 continued The consolidation and the company only of 1999 First Second Six-month quarter quarter period (Baht) (Baht) (Baht) Earnings per share Earnings per share before the adjustment 0.56 0.07 0.63 Adjustment of change in accounting policy 0.02 0.07 0.09 Earnings per share after the adjustment 0.58 0.14 0.72 The consolidation and the company only of 1998 First Second Third Nine-month quarter quarter quarter Total (Baht'000) (Baht'000) (Baht'000) (Baht'000) Net profit Net profit before the adjustment 137,983 139,625 90,402 368,010 Adjustment of change in accounting policy 9,749 10,827 16,083 36,659 Net profit after the adjustment 147,732 150,452 106,485 404,669 The consolidation and the company only of 1998 First Second Third Nine-month quarter quarter quarter Total (Baht) (Baht) (Baht) (Baht) Earnings per share Earnings per share before the adjustment 0.58 0.58 0.38 1.53 Adjustment of change in accounting policy 0.04 0.05 0.06 0.16 Earnings per share after the adjustment 0.62 0.63 0.44 1.69 Short-term investments 3. As at 30 September 1999, short-term investments comprise fixed deposits and promissory notes bearing interest at rates 2.00-5.25% per annum. Unaudited Reviewed Siam Makro Public Company Limited Page 17 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Accounts receivable trade, net 4. The consolidation The company only 1999 1998 1999 1998 (Baht'000) (Baht'000) (Baht'000) (Baht'000) Accounts receivable-trade 6,108 6,026 2,010 4,155 Less: Allowance for doubtful accounts (50) - - - Accounts receivable-trade, net 6,058 6,026 2,010 4,155 As at 30 September 1999, the outstanding accounts receivable balance aged longer than 3 months are as follows : The consolidation The company only (Baht'000) (Baht'000) Accounts receivable aged longer than 3 months 679 410 Related parties transactions 5. A portion of the company's transactions has been made with subsidiary and affiliated companies. A summary of significant transactions is set out below: The consolidation 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Million Baht) (Million Baht) (Million Baht) (Million Baht) Transaction during the period : With an affiliated company Royalty fee 32.9 90.5 28.8 88.7 The company only 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Million Baht) (Million Baht) (Million Baht) (Million Baht) Transactions during he period : With subsidiary companies Revenues : - Sales of inventory 0.2 0.7 0.2 0.2 - Disposal of fixed assets - - - 0.6 - Interest income 18.7 57.1 22.9 78.4 - Rental income 16.7 49.7 19.8 55.9 - Management fee 0.5 1.4 0.5 1.4 - Vehicle rental income 0.1 0.1 - - Unaudited Reviewed Siam Makro Public Company Limited Page 18 Notes to the consolidated financial statements and financial statements 30 September 1999 continued The company only 1999 1998 Nine- Nine Third month Third -month quarter period quarter period (more)