ONSOLIDATED FINANCIAL STATEMENTS FOR QUARTER 3/1999

(Million (Million (Million (Million Baht) Baht) Baht) Baht) Expenses : - Land rental expenses 65.4 196.2 65.4 196.2 - Royalty and service fee 4.9 13.5 3.1 9.0 - Purchase of office supplies 0.1 0.4 0.3 0.6 - Purchase of fixed assets - - - 0.1 - Motor vehicle expenses 0.6 1.5 1.3 1.3 With an affiliated company Royalty fee 30.5 83.9 26.9 82.9 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 and its subsidiary companies have 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 their net sales. The consolidation The company only 1999 1998 1999 1998 (Million (Million (Million (Million Baht) Baht) Baht) Baht) Balance as at 30 September 1999 and 1998 Amounts due from subsidiary companies - - 162.2 181.3 Amounts due from affiliated companies 0.5 7.7 0.3 7.5 0.5 7.7 162.5 188.8 Unaudited Reviewed Siam Makro Public Company Limited Page 19 Notes to the consolidated financial statements and financial statements 30 September 1999 continued The consolidation The company only Notes 1999 1998 1999 1998 (Million (Million (Million (Million Baht) Baht) Baht) Baht) Short-term loans to subsidiary companies 5.1 (interest at 3.5% per annum) - Makro Properties Ltd. - - - 167.8 - Makro Auto Care Co.,Ltd. - - 71.4 87.5 - - 71.4 255.3 Amount due to a subsidiary company - - 1.7 31.9 Amounts due to affiliated companies 42.3 28.8 39.3 26.9 42.3 28.8 41.0 58.8 Long-term loans to a subsidiary company (interest at 6% per annum) 5.2 - - 1,178.4 1,178.4 Deposits for land lease paid to a subsidiary company - - 261.6 261.6 5.1 Short-term loans to subsidiary companies, being in the form of promissory notes, are due at call. 5.2 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 6. Inventories are made up as follows: The consolidation 1999 1998 (Baht' 000) (Baht' 000) Finished goods 2,317,468 2,297,200 Goods in transit 24,567 3,711 2,342,035 2,300,911 Less : Provision for obsolete and shrinkage inventories (175,229) (162,355) Inventories, net 2,166,806 2,138,556 The company only 1999 1998 (Baht' 000) (Baht' 000) Finished goods 2,123,697 2,083,896 Goods in transit 24,567 3,711 2,148,264 2,087,607 Less : Provision for obsolete and shrinkage inventories (144,889) (139,195) Inventories, net 2,003,375 1,948,412 Unaudited Reviewed Siam Makro Public Company Limited Page 20 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Investments 7. 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 Company Limited - Automotive service centers, automated car wash and gas stations Makro Office Centre Company Limited - Retail business of 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 Company Limited Being shareholder and management participation Makro Office Centre Company Limited Being shareholder and management 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 300,000 300,000 99.99 99.99 Makro Office Centre Company Limited 200,000 200,000 99.99 99.99 The consolidation 1999 1998 Subsidiary companies : Investment Dividend Investment Dividend (Baht'000) (Baht'000) (Baht'000) (Baht'000) Makro Properties Limited - - - - Makro Auto Care Company Limited - - - - Makro Office Centre Company Limited - - - - - - - - The company only 1999 1998 Subsidiary companies : Investment Dividend Investment Dividend (Baht'000) (Baht'000) (Baht'000) (Baht'000) Makro Properties Limited 1,157,719 - 1,182,369 - Makro Auto Care Company Limited 196,154 - 205,519 - Makro Office Centre Company Limited 140,312 - 131,484 - 1,494,185 - 1,519,372 - Unaudited Reviewed Siam Makro Public Company Limited Page 21 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Property, plant and equipment, net 8. The consolidation 1999 1998 (Baht'000) (Baht'000) Property, plant and equipment held for operation at cost Land 3,264,408 3,572,980 Buildings 3,930,126 3,452,487 Leasehold rights and leasehold improvement 726,911 470,684 Store equipment 2,829,743 2,546,762 Office equipment and furniture and fixtures 684,649 620,600 Motor vehicles 58,252 56,351 Construction in progress 90,249 163,950 11,584,338 10,883,814 Less: Accumulated depreciation (2,892,715) (2,227,361) Provision for the disposal of obsolete and lost equipment (33,847) - Net property, plant and equipment held for operation 8,657,776 8,656,453 Property held for sale or future development at cost 308,572 - Less : Provision for impairment relating to property (164,909) - operty held for sale or future Prdevelopment, net 143,663 - Total Property, plant and equipment, net 8,801,439 8,656,453 As a consequence of the change in purpose of the usage of a property (see Note 10), the carrying value of the fixed assets has been written down to the market value in current economic conditions. The consolidation 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht'000) (Baht'000) (Baht'000) (Baht'000) Depreciation 176,715 524,247 165,345 499,194 Unaudited Reviewed Siam Makro Public Company Limited Page 22 Notes to the consolidated financial statements and financial statements 30 September 1999 continued The company only 1999 1998 Property, plant and equipment, at cost (Baht'000) (Baht'000) Land 782,655 782,655 Buildings 3,758,073 3,294,081 Leasehold rights and leasehold improvement 666,248 412,665 Store equipment 2,520,246 2,277,707 Office equipment and furniture and fixtures 568,822 518,643 Motor vehicles 51,209 52,997 Construction in progress 70,071 155,232 8,417,324 7,493,980 Less: Accumulated depreciation (2,726,258) (2,138,173) Provision for the disposal of obsolete and lost equipment (30,096) - Property, plant and equipment, net 5,660,970 5,355,807 The company only 1999 1998 Third Nine-month Third Nine-month quarter period quarter Period (Baht'000) (Baht'000) (Baht'000) (Baht'000) Depreciation 155,716 465,431 147,007 445,023 Share capital 9. 1999 1998 (Baht'000) (Baht'000) Authorized share capital : 240,000,000 shares of Baht 10 each 2,400,000 2,400,000 Issued and paid up share capital : 240,000,000 shares of Baht 10 each 2,400,000 2,400,000 Impairment charge relating to property 10. In the second quarter ended 30 June 1999, the group introduced the accounting policy in respect of asset impairment and a subsidiary recognised a provision for impairment of a property of Baht 164.9 million. 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. Unaudited Reviewed Siam Makro Public Company Limited Page 23 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Dividends 11. At the annual shareholders' meeting dated 30 April 1999, it was unanimously resolved that dividends for the year ended 31 December 1998 be paid at Baht 0.85 per share totalling Baht 204 million, These dividends were already paid in the second quarter of 1999. Earnings per share 12. Earnings per share is calculated based on the weighted average number of shares in issue during the period. Earnings per share after the impairment loss is calculated as follows:- The consolidation and the company only 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht'000) (Baht'000) (Baht'000) (Baht'000) Net profit attributable to shareholders before impairment charge 146,459 484,866 106,485 404,669 Less : Impairment charge attributed to the statement of income - (164,909) - - Net profit 146,459 319,957 106,485 404,669 Weighted average number of shares 240,000,000 240,000,000 240,000,000 240,000,000 The consolidation and the company only 1999 1998 Third Nine-month Third Nine-month quarter period quarter period (Baht) (Baht) (Baht) (Baht) Earnings per share before impairment charge 0.61 2.02 0.44 1.69 Less : Impairment charge attributed to the statement of income - (0.69) - - Earnings per share 0.61 1.33 0.44 1.69 Unaudited Reviewed Siam Makro Public Company Limited Page 24 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Contingent liabilities and commitment 13. Bank guarantees As at 30 September 1999, the banks have given guarantees on behalf of the company and its subsidiary companies as follows: The The consolidation company only (Baht'000) (Baht'000) Electricity 38,791 37,142 Sales of liquor and cigarettes 2,127 2,097 Others 980 480 41,898 39,719 Letter of awareness As at 30 September 1999, the company has issued letters of awareness to a bank for a bank overdraft and other credit facilities of subsidiary companies amounting to Baht 70 million. Lease agreements The company has entered into several land lease agreements with a subsidiary company and several building areas lease agreements with external lessors. In addition, the subsidiary companies have also entered into building area lease agreements with external lessors. The future payments to which the company and its subsidiary companies are committed under these agreements are as follows : The consolidation The company only (Baht'000) (Baht'000) Due within 1 year 76,714 212,328 Due after 1 year but within 5 years 295,790 262,631 Due after 5 years 888,155 703,070 1,260,659 1,178,029 Capital expenditure commitment As at 30 September 1999, the company and its subsidiary companies have capital commitments in respect of construction contracts and the purchase of fixed assets as follows : The consolidation The company only (Baht'000) (Baht'000) Commitments 207,857 115,290 Unaudited Reviewed Siam Makro Public Company Limited Page 25 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Financial instruments 14. The company's policy on risk management of liabilities in foreign currencies is to use financial instruments purchased in the financial markets. For hedging purposes, the company has entered into forward exchange contracts to cover parts of loan and purchase commitment in foreign currencies. Bank facilities 15. As at 30 September 1999, the company and its subsidiary companies have the following unutilised credit facilities available with local banks and foreign banks : The consolidation The company only Currencies Amount Amount (Unit : Million) (Unit : Million) Local banks - Bank overdrafts facilities Baht 140 100 - Loan facilities Baht 185 175 - Letter of credit facilities Baht 299 264 - Letter of guarantee facilities Baht 43 30 Foreign banks - Loan facilities USD 35 35 The loan facilities from foreign banks are available through 25 January 2001. Unaudited Reviewed Siam Makro Public Company Limited Page 26 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Segmental information by business activity 16. The consolidation for the third quarter ended 30 September 1999 Wholesale Land and Retail Service Rental Elimination Total Business Business Business (Million Baht) (Million Baht) (Million Baht) (Million Baht) (Million Baht) Sales and service income - Unaffiliated customers 8,925 273 - - 9,198 - Intercompany - - 70 (70) - 8,925 273 70 (70) 9,198 Gross profit 615 64 - (3) 676 Other income 240 Selling and administrative expenses (698) Impairment charge relating to property - Interest expenses - Directors' remuneration (1) Income tax (71) Net income 146 Property, plant and equipment, Net book value as at 30 September 1999 8,801 Other assets 5,569 Total assets at 30 September 1999 14,370 The consolidation for the nine-month period ended 30 September 1999 Wholesale Land and Retail Service Rental Elimination Total Business Business Business (Million Baht) (Million Baht) (Million Baht) (Million Baht) (Million Baht) Sales and service income - Unaffiliated customers 24,379 770 - - 25,149 - Intercompany 1 1 210 (212) - 24,380 771 210 (212) 25,149 Gross profit 1,893 168 - (3) 2,058 Other income 634 Selling and administrative expenses (1,981) Impairment charge relating to property (165) Interest expenses (5) Directors' remuneration (1) Income tax (220) Net income 320 Property, plant and equipment, Net book value as at 30 September 1999 5,766 410 2,625 - 8,801 Other assets 5,569 Total assets at 30 September 1999 14,370 The company and its subsidiary companies operate 3 major businesses as follows : - Cash and carry trade center of food and non food products and retail business of office supplies. - Automotive service centers and gas stations. - Land investment and property leasing. Sales to unaffiliated customers, subsidiary and affiliated companies are presented at market price . Property, plant and equipment of each business are for its own operations. Other assets mainly comprise cash in hand and at banks, inventories, amounts due from affiliated companies, deposits and other assets. Unaudited Reviewed Siam Makro Public Company Limited Page 27 Notes to the consolidated financial statements and financial statements 30 September 1999 continued Segmental information by business activity The consolidation (Restated) for the third quarter ended 30 September 1998 Wholesale Land and Retail Service Rental Elimination Total Business Business Business (Million Baht) (Million Baht) (Million Baht) (Million Baht) (Million Baht) Sales and service income - Unaffiliated customers 7,239 199 - - 7,438 - Intercompany - - 69 (69) - 7,239 199 69 (69) 7,438 Gross profit 597 34 - - 631 Other income 187 Selling and administrative expenses (647) (more)