<PAGE>

      As filed with the Securities and Exchange Commission on June 25, 2002

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                             ----------------------

                                    Form 20-F

                             ----------------------

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2001

                             ----------------------

                         Commission file number: 1-13200
                           GRUPO ELEKTRA, S.A. de C.V.
             (Exact name of Registrant as specified in its charter)
                                       N/A
                 (Translation of registrant's name into English)
                              UNITED MEXICAN STATES
                 (Jurisdiction of Incorporation or Organization)

             and the Co-registrants identified in footnote (1) below
             (Exact name of registrant as specified in its charter)

                      Edificio Parque Cuicuilco (Esmeralda)
                            Insurgentes Sur, No. 3579
                              Col. Tlalpan La Joya
                               14000 Mexico, D.F.
                    (Address of principal executive offices)

              Securities registered or to be registered pursuant to
                            Section 12(b) of the Act:
<TABLE>
<CAPTION>
<S>                                                                                        <C>
                                                                                             Name of Each Exchange on Which
                                                                                             ------------------------------
                        Title of Each Class                                                            Registered
                        -------------------                                                            ----------
Grupo Elektra, S.A. de C.V.:
----------------------------

Global Depositary Shares ("GDSs") evidenced by Global Depositary Receipts, each                 New York Stock Exchange
Global Depositary Share representing ten Certificados de Participacion
Ordinarios No Amortizables, each of which represents financial interests in and
limited voting rights with respect to two Series B Shares, without par value,
and one Series L Share, without par value, of Grupo Elektra, S.A. de C.V.

Certificados de Participacion Ordinarios No Amortizables (Ordinary Participation                New York Stock Exchange(2)
Certificates ("CPOs")), each of which represents financial interests and limited
voting rights with respect to two Series B Shares, without par value, and one
Series L Share, without par value, of Grupo Elektra, S.A. de C.V.

Series B Shares without par value                                                               New York Stock Exchange(2)

Series L Shares without par value                                                               New York Stock Exchange(2)
</TABLE>
     ------------------
     (1) The following subsidiaries of Grupo Elektra, S.A. de C.V. are
     guarantors of our notes and are co-registrants: Administrativos
     Empresariales, S.A. de C.V.; Aerotraxis Metropolitanos, S.A. de C.V.;
     Almacenes Especializados, S.A. de C.V.; Bienes Raices en Promocion del
     Centro, S.A. de C.V.; Colchones, S.A.; Colchones Coloso, S.A. de C.V.;
     Comercios Elektra, S.A. de C.V.; Compania Operadora de Teatros, S.A. de
     C.V.; Control y Direccion Administrativa, S.A. de C.V.; Corporacion Plisa,
     S.A. de C.V.; Datacion y Supervision de Personal, S.A. de C.V.; Direccion
     de Administracion Central, S.A. de C.V.; Direccion de Administracion en
     Proyectos Aplicados, S.A. de C.V.; Direccion de Administracion en Proyectos
     Especiales, S.A. de C.V.; Direccion Especial, S.A. de C.V.; Direccion
     Sistematica Empresarial, S.A. de C.V.; Electronica del Moral, S.A. de C.V.;
     Elektra Centroamerica, S.A. de C.V.; Elektra del Milenio , S.A. de C.V.;
     Elektra del Peru, S.A.; Elektra Mexicana, S.A. de C.V.; Elektra Transfer,
     S.A. de C.V.; Elektrafin Comercial, S.A. de C.V.; Elmex Superior, S.A. de
     C.V.; Entrega Especializada, S.A. de C.V.; Gerencia Administrativas
     Operacionales, S.A. de C.V; Grupo Mercantil Finemsa, S.A. de C.V.; Grupo
     Proasa, S.A. de C.V.; Importaciones Electronicas Ribesa, S.A. de C.V.;
     Importadora y Exportadora Elektra de El Salvador, S.A. de C.V.;
     Inmobiliaria Hecali, S.A. de C.V.; Inmobiliaria Liur, S.A. de C.V.;
     Inmuebles Ardoma, S.A. de C.V.; Inmuebles Elektra, S.A. de C.V.; Inmuebles
     Selectos, S.A. de C.V.; Intra Mexicana, S.A. de C.V.; Mediciones y
     Representaciones Comerciales, S.A. de C.V.; Mercadotecnia Tezontle, S.A. de
     C.V.; Mercantil Agricola, S.A.; Mi Garantia Extendida, S.A. de C.V.;
     Operadora SYR, S.A. de C.V.; Operadoras en Servicios Comerciales, S.A. de
     C.V.; Salinas y Rocha, S.A.; Siglo XXI, S.A. de C.V.; Sistemas de Mision
     Estrategica, S.A. de C.V.; THE ONE, S.A. de C.V.; and The One.Com S.A. de
     C.V.
     (2) Not for trading, but only in connection with the registration of Global
     Depositary Shares, pursuant to the requirements of the Securities and
     Exchange Commission.

<PAGE>

Securities registered or to be registered pursuant to Section 12(g) of the Act:
                                      None

                              --------------------

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:

                               Title of Each Class
                               -------------------
                      12% Guaranteed Senior Notes Due 2008

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

Grupo Elektra, S.A. de C.V.:
----------------------------

            Series A Shares without par value                   1,249,126,710

            Series B Shares without par value                   2,001,705,795

            Series L Shares without par value                     380,535,321


Compania Operadora de Teatros, S.A. de C.V.:**
--------------------------------------------
            Series A Shares without par value                          50,000

            Series B Shares without par value                     342,608,270


                              --------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

              Yes  |X|              No  |_|

Indicate by check mark which financial statement item the registrant has elected
to follow.

              Item 17  |_|          Item 18  |X|

**  All other registrants are wholly-owned subsidiaries of Grupo Elektra,
    S.A. de C.V.



================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>                                                                                        <C>
Introduction ...........................................................................     1
Items 1-2.    Not Applicable ...........................................................     2
Item 3.       Key Information ..........................................................     3
                 Risk Factors ..........................................................     8
Item 4.       Information on the Company ...............................................    19
                 Overview ..............................................................    19
                 Our Business ..........................................................    21
                 Elektra ...............................................................    29
                 Grupo SyR .............................................................    41
                 The One ...............................................................    43
                 La Curacao Mexico .....................................................    43
                 Additional Services ...................................................    47
                 Strategic Investments .................................................    51
                 Regulation ............................................................    54
Item 5.       Operating and Financial Review and Prospects .............................    55
Item 6.       Directors, Senior Management and Employees ...............................    74
Item 7.       Major Shareholders and Related Party Transactions ........................    80
                 Major Shareholders ....................................................    80
                 Related Party Transactions ............................................    81
Item 8.       Financial Information ....................................................    84
Item 9.       The Offer and Listing ....................................................    85
                 Nature of the Trading Market ..........................................    85
                 Trading on the Mexican Stock Exchange .................................    87
Item 10.      Additional Information ...................................................    87
                 Bylaws ................................................................    87
                 Material Contracts ....................................................    91
                 Exchange Controls .....................................................    91
                 Limitations Affecting Security Holders ................................    91
                 Taxation ..............................................................    94
                 Documents on Display ..................................................   100
Item 11.      Quantitative and Qualitative Disclosure about Market Risk ................   101
Items 12-17.  Not Applicable ...........................................................   104
Item 18.      Financial Statements .....................................................   104
Item 19.      Exhibits .................................................................   104
</TABLE>

<PAGE>

                                  INTRODUCTION

Presentation of Financial and Other Information

     Grupo Elektra, S.A. de C.V. ("Grupo Elektra," "we" or "the company") is a
corporation (sociedad anonima de capital variable) organized under the laws of
the United Mexican States. Grupo Elektra was formed in 1950 as a manufacturer of
radios and became involved in retailing in 1957 when we opened our first Elektra
store.

     In this Annual Report on Form 20-F (this "Annual Report"), references to
"US$," "$," "Dollars" and "U.S. Dollars," are to United States dollars. In this
Annual Report, all references to pesos are to the legal Mexican currency, and
references to "P$," "Ps." or "Pesos" are to Mexican pesos.

     We maintain our books and records in Pesos and prepare our consolidated
financial statements in Pesos. The Mexican Institute of Public Accountants has
issued Bulletin B-10, "Recognition of the Effects of Inflation on Financial
Information," and Bulletin B-12, "Statement of Changes in Financial Position."
These bulletins outline the inflation accounting methodology mandatory for all
Mexican companies reporting under generally accepted accounting principles in
Mexico ("Mexican GAAP"). Pursuant to Mexican GAAP, financial data for all
periods in the financial statements included in Item 18 (the "Consolidated
Financial Statements") and for all periods throughout this Annual Report, unless
otherwise noted, have been restated in constant Pesos as of December 31, 2001.

     Commencing January 1, 2000, we adopted Statement D-4 "Accounting Treatment
of Income Tax, Asset Tax and Employees' Profit Sharing" issued by the MIPA.
Under this statement, deferred taxes are initially recognized for all
differences between book and tax values of assets and liabilities and for tax
loss carry forwards and asset tax carry forwards that have a high probability of
realization.

     Commencing January 1, 2001, we adopted Statement C-2 "Financial
Instruments" issued by the MIPA. Under this statement, all derivatives are
required to be recognized in the balance sheet as either assets or liabilities,
and measured at fair value.

     Accounting principles generally accepted in Mexico differ in certain
important respects from accounting principles generally accepted in the United
States of America. The application of the latter would have affected the
Consolidated Financial Statements. See Note 17 of our Consolidated Financial
Statements.

     This Annual Report contains translations of certain Peso amounts into
Dollars at specified rates solely for the convenience of the reader. These
translations should not be construed as representations that the Peso amounts
actually represent such Dollar amounts or could be converted into Dollars at the
rates indicated or at any other rate. Unless otherwise indicated, U.S. Dollar
amounts have been translated from Mexican pesos at an exchange rate of Ps.9.1560
to US$1.00, the noon buying rate for pesos on December 31, 2001 as published by
the Federal Reserve Bank of New York (the "Noon Buying Rate"). On June 21, 2002,
the Noon Buying Rate was Ps.9.956 to US$1.00.

     As used in this annual report, EBITDA is operating income (loss) before
interest expense, taxes, depreciation and amortization, and adjusted by
eliminating monetary (loss) gain included in our revenues and cost,
respectively. EBITDA is presented because we believe that EBITDA provides useful
information regarding our Company. EBITDA should not be considered in isolation
or as a substitute for the consolidated income statements or the consolidated
statements of changes in financial position prepared in accordance with Mexican
GAAP or as a measure of profitability or liquidity. EBITDA is not (a) a measure
determined under U.S. GAAP, (b) an alternative to U.S. GAAP operating income
(loss) or net income (loss) or (c) a measure of liquidity or cash flows as
determined under U.S. GAAP. EBITDA does not represent discretionary funds.
EBITDA, as calculated by us, may not be comparable to similarly titled measures
reported by other companies.

     The term "billion" as used in this Annual Report means one thousand
million.


                                       1

<PAGE>

Forward-Looking Statements

     This Annual Report contains words, such as "believe," "expect" and
"anticipate" and similar expressions, that identify forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. These statements reflect our views about future events and financial
performance. Actual results could differ materially from those projected in such
forward-looking statements as a result of various factors that may be beyond our
control, including but not limited to effects on our company from competition,
limitations on our access to sources of financing on competitive terms,
significant economic or political developments in Mexico and changes in our
regulatory environment, particularly developments affecting the regulation of
consumer installment sales. Accordingly, readers are cautioned not to place
undue reliance on these forward-looking statements. In any event, these
statements speak only as of their dates, and we undertake no obligation to
update or revise any of them, whether as a result of new information, future
events or otherwise.

Items 1-2.  Not Applicable


                                       2

<PAGE>

Item 3.  Key Information

                             SELECTED FINANCIAL DATA

     The following table presents selected consolidated financial information
for each of the periods indicated. The selected consolidated financial
information set forth below should be read in conjunction with, and is qualified
in its entirety, by reference to our Consolidated Financial Statements, and the
notes thereto, included elsewhere in this Annual Report. The Consolidated
Financial Statements have been audited by PricewaterhouseCoopers, our
independent accountants.

     Our Consolidated Financial Statements have been prepared in accordance with
Mexican GAAP, which differs in certain respects from U.S. GAAP. See Note 17 to
our financial statements, which provides a description of the principal
differences between Mexican GAAP and U.S. GAAP as they relate to Grupo Elektra
and a reconciliation to U.S. GAAP of net income and stockholders' equity.

     Our financial statements were prepared giving effect to Bulletin B-10 and
Bulletin B-12 issued by the Mexican Institute of Public Accountants ("MIPA").
Bulletin B-10 is designed to provide for the recognition of certain effects of
inflation by requiring our company generally to restate non-monetary assets and
liabilities and the components of stockholders' equity using the National
Consumer Price Index (the "NCPI") and to record gains or losses in purchasing
power from holding monetary liabilities or assets. Bulletin B-12 requires that
the statement of changes in financial position reflect changes from the restated
historical balance sheet to the current balance sheet. Pursuant to Mexican GAAP,
the selected consolidated financial information set forth below, and all data in
the Consolidated Financial Statements, have been restated in constant pesos as
of December 31, 2001. The effects of inflation described above have not been
reversed in the reconciliation to U.S. GAAP. See Note 17 to the Consolidated
Financial Statements.

     Commencing January 1, 2000, we adopted Statement D-4 "Accounting Treatment
of Income Tax, Asset Tax and Employees' Profit Sharing" issued by the MIPA.
Under this statement, deferred taxes are initially recognized for all
differences between book and tax values of assets and liabilities and for tax
loss carry forwards and asset tax carry forwards that have a high probability of
realization.

     Commencing January 1, 2001, we adopted Statement C-2 "Financial
Instruments" issued by the MIPA. Under this statement, all derivatives are
required to be recognized in the balance sheet as either assets or liabilities,
and measured at fair value. The adoption of this statement on January 1, 2001
resulted in a loss of Ps.$8.3 million.


                                       3

<PAGE>

<TABLE>
<CAPTION>
                                                                            At and for the year ended December 31,
                                                     ----------------------------------------------------------------------------
                                                           1997              1998                1999                  2000
                                                     --------------    --------------     ----------------      -----------------
                                                     (millions of U.S. dollars or million of constant Ps. as of December 31, 2001,
                                                                            except per share data and percentages)
<S>                                                  <C>               <C>               <C>                  <C>
Income Statement Data
Mexican GAAP:
Merchandise, services and other revenues(2) .......  Ps.    9,439.4       Ps.11,590.2          Ps.13,044.8           Ps. 15,373.3
Cost of merchandise sold and of services(2) .......         5,782.7           6,875.7              7,716.4                8,807.6
                                                     --------------    --------------     ----------------      -----------------
Gross profit ......................................         3,656.7           4,714.5              5,328.4                6,565.7
Administrative and selling expenses ...............         2,283.5           3,017.2              3,352.3                4,203.7
Depreciation and amortization .....................           232.9             437.9                549.6                  631.6
                                                     --------------    --------------     ----------------      -----------------
Operating income ..................................         1,140.3           1,259.4              1,426.5                1,730.4
                                                     --------------    --------------     ----------------      -----------------
   Interest income ................................            47.3             104.7                179.0                  204.7
   Interest expense ...............................          (281.7)           (554.1)              (809.5)                (685.5)
   Foreign exchange (loss) gain ...................           (98.4)           (450.6)                26.1                 (114.1)
   Gain on net monetary position ..................           162.9             294.6                292.4                  297.2
Other financial operations ........................                --                 --                  --                    --
                                                     ----------------  -----------------  ------------------    ------------------
Total comprehensive financing cost  - Net(3) ......          (169.9)           (605.4)              (312.0)                (297.7)
                                                     ---------------   ---------------    -----------------     ------------------
Income before income taxes and employees'
   statutory profit sharing .......................           970.4             654.0              1,114.5                1,432.7
Taxes and employees' statutory profit sharing .....          (139.4)           (136.8)              (109.9)                (216.3)
Equity in earnings (losses) of affiliated
   companies - Net(2) .............................           170.0            (245.3)               (92.4)                 (23.3)
Net income ........................................         1,001.0             271.9                912.2                1,193.1
Income of minority stockholders ...................           (24.7)             (5.2)               (24.9)                 (21.2)
                                                     ---------------   ---------------    -----------------     ------------------
Income of majority stockholders ...................  Ps.      976.3    Ps.      266.7     Ps.        887.3      Ps.       1,171.9
                                                     ==============    ==============     ================      =================
Basic and diluted earnings
   per share ......................................           0.275             0.075                0.258                  0.323
Weighted average shares outstanding (in
   millions)(4) ...................................         3,553.6           3,574.7              3,440.5                3,622.8

 U.S. GAAP

Sales and money transfer services .................      Ps.7,738.9        Ps.9,433.1          Ps.10,605.3            Ps.12,466.0
Interest earned from customer credit operations ...         2,088.6           2,340.5              2,716.7                3,146.1
Operating income ..................................         1,296.8           1,832.7              1,959.0                2,392.6
Income before income taxes ........................           659.6             787.0              1,368.5                1,682.2
Net income ........................................           355.9             335.5              1,174.6                1,347.6
Basic and diluted earnings per share(4) ...........            0.10              0.09                 0.34                   0.37
Basic weighted average shares outstanding (in
   millions)(4) ...................................         3,553.6           3,574.7              3,440.5                3,622.8

<CAPTION>
                                                        At and for the year ended December 31,
                                                        -------------------------------------
                                                              2001               2001/(1)/
                                                        ----------------     ----------------
                                                       (millions of U.S. dollars or million of
                                                        constant Ps. as of December 31, 2001,
                                                        except per share data and percentages)
<S>                                                       <C>                   <C>
Income Statement Data
Mexican GAAP:
Merchandise, services and other revenues(2) .......          Ps.15,608.4           US$1,704.7
Cost of merchandise sold and of services(2) .......              8,977.1                980.5
                                                        ----------------     ----------------
Gross profit ......................................              6,631.3                724.2
Administrative and selling expenses ...............              4,065.8                444.1
Depreciation and amortization .....................                707.3                 77.3
                                                        ----------------     ----------------
Operating income ..................................              1,858.2                202.8
                                                        ----------------     ----------------
   Interest income ................................                131.3                 14.3
   Interest expense ...............................               (781.3)               (85.3)
   Foreign exchange (loss) gain ...................                 (8.6)                (0.9)
   Gain on net monetary position ..................                170.7                 18.6
Other financial operations ........................                135.5                 14.8
                                                        ----------------     ----------------
Total comprehensive financing cost  - Net(3) ......               (352.4)               (38.5)
                                                        -----------------    -----------------
Income before income taxes and employees'
   statutory profit sharing .......................              1,505.8                164.3
Taxes and employees' statutory profit sharing .....               (543.1)               (59.3)
Equity in earnings (losses) of affiliated
   companies - Net(2) .............................                187.0                 20.4
Net income ........................................              1,149.7                125.4
Income of minority stockholders ...................                (13.0)                (1.3)
                                                        -----------------    -----------------
Income of majority stockholders ...................     Ps.      1,136.7        US$     124.1
                                                        ================     ================
Basic and diluted earnings
   per share ......................................                0.309                0.034
Weighted average shares outstanding (in
   millions)(4) ...................................              3,682.9              3,682.9

 U.S. GAAP

Sales and money transfer services .................          Ps.12,396.1           Ps.1,353.9
Interest earned from customer credit operations ...              3,365.0                367.5
Operating income ..................................              2,474.0                270.2
Income before income taxes ........................              1,645.9                179.8
Net income ........................................              1,093.6                119.4
Basic and diluted earnings per share(4) ...........                 0.30                 0.03
Basic weighted average shares outstanding (in
   millions)(4) ...................................              3,682.9              3,682.9
</TABLE>


                                       4

<PAGE>

<TABLE>
<CAPTION>
                                                                           At and for the year ended December 31,
                                                      -------------------------------------------------------------------------
                                                         1997                 1998                 1999                2000
                                                      ----------           ----------           ----------          -----------
                                                      (millions of U.S. dollars or constant Ps. as of December 31, 2001, except
                                                                               per share data and percentages)
Balance Sheet Data
Mexican GAAP:
<S>                                                   <C>                  <C>                  <C>                 <C>
Accounts receivable due from customers - Net .......  Ps.2,125.8           Ps.2,016.9           Ps.2,691.4          Ps.3,853.8
Accounts receivable due from related
   parties - Net ...................................       215.9                261.9                230.6               180.4
Inventories ........................................     2,912.5              2,734.9              2,758.3             2,987.4
Total current assets ...............................     6,375.6              6,997.6              6,859.1             8,293.8

Property, machinery and equipment - Net ............     2,308.8              2,740.3              3,946.2             3,837.3
Total assets .......................................    11,740.5             12,591.6             13,443.4            14,799.7
Total current liabilities ..........................     4,922.1              4,888.4              5,755.2             5,333.0
Short-term debt ....................................     2,467.8              1,970.1              2,335.4             1,645.0
Long-term debt .....................................     1,260.2              2,770.2              1,749.8             2,906.1
Total debt .........................................     3,728.0              4,740.3              4,085.3             4,550.9
Total stockholders' equity .........................     5,531.5              4,776.5              5,331.9             5,704.6

U.S. GAAP
Accounts receivable from customers-Net .............     3,329.3              3,246.6              4,048.4             5,084.0
Inventories ........................................     2,871.3              2,734.8              2,758.4             2,803.6
Total assets .......................................    11,417.4             12,138.2             13,283.2            15,798.3
Short-term debt ....................................     3,588.1              1,970.1              2,562.9             2,612.6
Long-term debt .....................................     1,221.6              4,000.0              2,879.4             4,328.4
Majority stockholders' equity ......................     1,207.8                392.1              1,402.1             2,024.4

Other Financial Data
  (unaudited):
Capital expenditures ...............................     1,191.2                776.1                520.9               461.1
Gross margin .......................................        38.7%                40.7%                40.8%               42.7%
Operating income margin ............................        12.1%                10.9%                10.9%               11.3%
Stores opened at period end ........................         680                  819                  946                 950
Number of open installment accounts ................     948,054              682,163              812,676             923,546
Store space (square feet) ..........................   4,559,129            5,699,129            6,965,660           7,001,848
Earnings-to-fixed charges ..........................       2.4x                  1.7x                 1.9x                2.2x
<CAPTION>
                                                            At and for the year ended
                                                                    December 31,
                                                           -----------------------------
                                                             2001              2001/(1)/
                                                           ----------         ----------
                                                            (millions of U.S. dollars or
                                                                 constant Ps. as of
                                                             December 31, 2001, except
                                                           per share data and percentages)
<S>                                                        <C>                  <C>
Balance Sheet Data
Mexican GAAP:
Accounts receivable due from customers - Net .......       Ps.3,387.1           US$369.9
Accounts receivable due from related
   parties - Net ...................................            262.8               28.7
Inventories ........................................          2,881.5              314.7
Total current assets ...............................          8,855.1              967.1

Property, machinery and equipment - Net ............          3,657.1              399.4
Total assets .......................................         15,358.5            1,677.4
Total current liabilities ..........................          4,475.6              488.8
Short-term debt ....................................          1,039.2              113.5
Long-term debt .....................................          3,768.1              411.5
Total debt .........................................          4,807.3              525.0
Total stockholders' equity .........................          6,082.3              664.3

U.S. GAAP
Accounts receivable from customers-Net .............          4,797.3              523.9
Inventories ........................................          2,789.8              304.7
Total assets .......................................         15,317.9            1,673.0
Short-term debt ....................................          1,118.5              122.2
Long-term debt .....................................          5,356.1              585.0
Majority stockholders' equity ......................          2,572.2              280.9

Other Financial Data
  (unaudited):
Capital expenditures ...............................            610.0               66.6
Gross margin .......................................             42.5%              42.5%
Operating income margin ............................             11.9%              11.9%
Stores opened at period end ........................              953                 953
Number of open installment accounts ................        1,084,236          1,084,236
Store space (square feet) ..........................        7,223,929          7,223,929
Earnings-to-fixed charges ..........................             2.2x               2.2x

                                                           (footnotes on following page)
</TABLE>


                                       5

<PAGE>

----------------
(1)  The U.S. dollar amounts represent the peso amounts as of December 31, 2001,
     translated at the exchange rate of Ps.9.1560 per U.S. dollar (Noon Buying
     Rate) and are unaudited.

(2)  Up to December 31, 1999, we included equity in income (loss) of CASA as
     part of Merchandise, services and other revenues, and the amortization of
     CASA goodwill was included in Cost of merchandise sold and of services. As
     of January 1, 2000, we changed the presentation of both items to include
     them in a separate line after the income after taxes. For purposes of this
     table, all periods are presented using the current presentation.

(3)  Comprehensive financing cost does not include interest income and expense
     associated with our receivables portfolio. See Item 5. "Operating and
     Financial Review and Prospects--Accounting for Installment Sales."

(4)  After giving effect to the ten-to-one split of our common stock, which was
     authorized on August 15, 1997, each GDS currently represents 10 CPOs, while
     each CPO continues to represent two B Shares and one L Share. However, our
     equity structure will be modified accordingly if the planned conversion of
     our Series B Shares and Series L Shares into one class of stock is approved
     by our shareholders. See "Item 5. Operating and Financial Review and
     Prospects--Recent Developments--Single Series Initiative."

Exchange Rates

     Mexico has had a free market for foreign exchange since 1991. Prior to
December 1994, the Mexican central bank, Banco de Mexico, kept the peso-U.S.
dollar exchange rate within a range prescribed by the government through
intervention in the foreign exchange market. In December 1994, the government
suspended intervention by Banco de Mexico and allowed the peso to float freely
against the U.S. dollar. The peso declined sharply in December 1994 and
continued to fall under conditions of high volatility in 1995. In 1996 and most
of 1997, the peso fell more slowly and was less volatile. In the last quarter of
1997 and for much of 1998, the foreign exchange markets were volatile as a
result of financial crises in Asia and Russia and financial instability in
certain countries, including Brazil and Venezuela. The peso declined during this
period, but was relatively stable during 1999 and 2000. The peso strengthened
during 2001 and the first quarter of 2002 but has begun to deteriorate during
the second quarter of 2002. There can be no assurance that the government will
maintain its current policies with regard to the peso or that the peso will not
further depreciate or appreciate significantly in the future.

     The following table sets forth, for the periods indicated, the period-end,
average, high and low, Noon Buying Rate, expressed in pesos per U.S. dollar,
published by the Federal Reserve Bank of New York. The rates have not been
restated in constant currency units. All amounts are stated in pesos.

                                             Free Market Rate/(1)/
                           -----------------------------------------------------
Year Ended December 31,    High          Low          Average(2)      Period End
-----------------------    ----          ---          -------         ----------
1997                        8.41         7.71           7.96             8.07
1998                       10.63         8.04           9.24             9.90
1999                       10.60         9.24           9.56             9.48
2000                       10.09         9.18           9.46             9.62
2001                        9.97         8.95           9.33             9.16

2001:
          November         9.308        9.147
          December         9.245        9.090


                                       6

<PAGE>
                                             Free Market Rate/(1)/
                           -----------------------------------------------------
Year Ended December 31,    High           Low         Average(2)      Period End
-----------------------    ----           ---         -------         ----------
2002:
          January          9.250         9.095
          February         9.170         9.048
          March            9.114         9.012
          April            9.360         9.002
          May              9.291         8.946
-------------------
(1)  Source:  Federal Reserve Bank of New York.
(2)  Average of end-of-month rates.

     On June 21, 2002, the Noon Buying Rate was Ps. 9.956 to US$1.00.

Dividends

     The declaration, amount and payment of dividends are determined by majority
vote of the holders of the A and B Shares and generally, but not necessarily, on
the recommendation of the Board of Directors. Dividends are declared in the
first quarter of each fiscal year based on our audited financial statements for
the preceding fiscal year. The amount of any such dividend would depend on,
among other things, our operating results, financial condition and capital
requirements and general business conditions.

     Under our Amended and Restated Bylaws and the Mexican General Corporate
Law, the gross profits of our company are applied as follows:

     At the annual ordinary general meeting of our shareholders, the Board of
Directors submits our financial statements for the previous fiscal year,
together with the report thereon by the Board, to the holders of A Shares for
approval. Once the financial statements have been approved by the holders of A
Shares, the holders of A and B Shares determine the allocation of our net
profits for the preceding year. They are required by law to allocate at least 5%
of such net profits to a legal reserve, which is not available for distribution
except as a stock dividend, until the amount of the legal reserve equals 20% of
our historical capital stock (before the effect of restatement). Thereafter, the
holders of A and B Shares may determine and allocate a certain percentage of net
profits to any general or special reserve, including a reserve for open-market
purchases of our shares. The remainder of net profits is available for
distribution in the form of dividends to the shareholders provided that the
holders of A and B Shares resolve favorably for the distribution of dividends.
Holders of B Shares and L Shares (directly or through CPOs) have equal rights,
on a per share basis, to dividends.

     On March 30, 2001, we declared a dividend of Ps.0.16 per CPO or Ps.0.04 per
A Share, and For B and L Shares that are not deposited in the CPO trust. This
dividend, which was paid on April 20, 2001, was equal to 7.3% of EBITDA for the
year ended December 31, 2000, or Ps.142.5 million (approximately US$15,000,000).

     On April 22, 2002, we declared a net dividend of Ps.0.12483 per CPO or
Ps.0.04161 per A Share, and for B and L Shares that are not deposited in the CPO
trust. This dividend, which was paid on April 29, 2002, was equal to 6% of
EBITDA for the year ended December 31, 2001, or Ps.157 million (approximately
US$16,000,000). The dividend payment per GDS was Ps.0.828 in 1998, Ps.0.975 in
1999, Ps.1.160 in 2000, and Ps1.2483 in 2001 (all figures are expressed in
nominal pesos).

     Under the terms of our indebtedness, we are subject to certain financial
covenants that directly or indirectly restrict the payment of dividends. See
Item 5. "Operating and Financial Review and Prospects--Liquidity and Capital
Resources."


                                       7

<PAGE>

                                  RISK FACTORS

Risks Associated with Grupo Elektra

     Our business is highly dependent on the Mexican economy.

     The success of our business is to a very large extent subject to the cycles
of the Mexican economy, which in turn are very much influenced by the economy of
the United States. Downturns of the Mexican economy directly impact the
purchasing power of our target market and the quality of our receivables
portfolio. The macroeconomic environment in which we operate is beyond our
control. Changes in the Mexican economy are a major risk of our business and
could have a material adverse effect on the success of our operations.

     Our success depends on our retention of certain key personnel, our ability
     to hire additional key personnel and the maintenance of good labor
     relations.

     We depend on the performance of our executive officers and key employees.
In particular, our senior management has significant experience in the retail
clothing, electronics, appliance, white goods and household furniture
industries, and the loss of any of them could negatively affect our ability to
execute our business strategy. Additionally, we do not have "key person" life
insurance policies on any of our employees.

     Our future success also depends on our continuing ability to identify,
hire, train and retain other qualified sales, marketing and managerial
personnel. Competition for such qualified personnel is intense and we may be
unable to attract, assimilate or retain them. Our businesses will be harmed if
we cannot attract this necessary personnel. In addition, approximately 26% of
our employees are members of various unions, and we could incur higher ongoing
labor costs and disruptions in our operations in the event of a strike or other
work stoppage.

     Our international operations expose us to numerous risks.

     We have retail operations in various foreign countries, including Peru, the
Dominican Republic, El Salvador, Honduras and Guatemala, and we intend to pursue
any beneficial opportunities that may arise in these and other countries. Net
revenues in these foreign countries represented approximately 6.1% of our net
revenues in 2001. We are subject to the risks inherent in conducting business
across national boundaries, any one of which could negatively impact our
business. These risks include:

     o economic downturns;

     o currency exchange rate fluctuations;

     o changes in governmental policy;

     o international incidents;

     o military outbreaks;

     o government instability;

     o nationalization of foreign assets; and

     o government protectionism.

     We cannot assure you that one or more of these factors will not impair our
current or future international operations and, as a result, harm our overall
business.

     In addition, we intend to phase out or sell our operations in the Dominican
Republic in 2002 and are considering a phase-out of our operations in El
Salvador. We cannot assure you that phasing out these operations will not have a
negative effect on our results of operation.


                                       8

<PAGE>

     We may have difficulty in obtaining enough quality, low-cost merchandise.

     Our future success depends on our ability to select and purchase quality
merchandise at attractive prices. We have historically been able to locate and
purchase quality merchandise, but such merchandise may not be available in the
future, or it may not be available in quantities necessary to accommodate our
expanding businesses, or it may become subject to higher import taxes than it
currently is. We are not generally dependent on any single supplier or group of
suppliers. Nonetheless, for white goods, Grupo Mabe and Grupo Vitro, and for
electronics, Sony and LG Electronics, represent a very significant portion of
our supplies. Our business and results of operations may be adversely affected
by a disruption in the availability of sufficient quantities of high quality,
affordable merchandise.

     Our future success depends on whether we can continue to deliver our
     products to our stores in a timely and cost-efficient manner.

     Our future success depends on whether we can continue to deliver our
products to our stores in a timely and cost-efficient manner. Substantially all
of our inventory is shipped or picked up directly from suppliers and delivered
to our nine regional distribution centers in Mexico, and to our distribution
centers in each of the other countries where we operate. The inventory is then
processed and distributed to our stores. The orderly operation of our receiving
and distribution process depends on effective management of our distribution
centers and strict adherence to shipping schedules. Our rapid growth puts
significant pressure on our distribution and receiving systems. Some of the
factors that could have an adverse effect on our distribution and receiving
systems are:

     o    expansion, replacement and addition of distribution centers to
          accommodate our growth;

     o    shipping disruptions; and

     o    natural or other disasters, because a fire, explosion, hurricane,
          tornado, flood, earthquake or other disaster at our distribution
          facilities could result in a significant disruption in the receipt and
          distribution of goods.

     Our agreements with Western Union constitute a significant source of our
     U.S. dollar denominated income.

     Our Exclusive Services Agreement with Western Union (and certain related
agreements) and our Foreign Exchange Agreement with Western Union are our
principal sources of U.S. dollar denominated revenues. This source of revenue is
particularly important to us because the cash flow which we use to service our
indebtedness is generated primarily in Mexican pesos, while the majority of such
indebtedness is denominated in U.S. dollars.

     Our agreements with Western Union expire in 2006, and we cannot assure that
we will be able to renew these agreements, or that if we are able to renew, that
such renewals will be on favorable terms. Failure to renew these agreements, and
to secure new or additional sources of U.S. dollar denominated revenues may have
an adverse effect on our results of operations.


                                       9

<PAGE>

     We face various uncertainties regarding our planned banking activities.

     During 2002, we intend to establish a banking subsidiary. We will initially
contribute up to $25 million of capital to the bank. We expect that the bank
will eventually house our consumer financing activities by financing retail
receivables of our customers, which are currently financed directly by us and by
securitized transactions. This will result in a separation of our financial
activities (other than our money transfer services, which not be performed
through the bank) from our retail activities.

     If our bank subsidiary is created as or becomes an unrestricted subsidiary,
it would not be a guarantor of our 12% Senior Notes due 2008, and it will not be
subject to the restrictive covenants contained in indenture for the related
notes.

     The establishment of the bank may require more capital than our initial
contribution. In addition, the new bank will face competition from domestic
banks and local branches of international banks. The bank will also be subject
to banking laws and regulations that are not applicable to our other lines of
business and which may place significant restrictions on its financial
activities and on the flexibility of our operations generally. We cannot assure
you that our banking activities will be successful or profitable, or that our
retail segment will continue to perform well as a stand alone business. We also
cannot assure you that we will be able to successfully integrate the bank's
activities into our corporate structure or that the establishment of the bank
will not have a negative effect on our overall profitability.

     Our financing arrangements contain restrictions that may limit management's
discretion in the operations of our businesses.

     Our existing financing arrangements impose financial and other restrictions
on us, including limitations on:

     o the incurrence of additional debt;

     o the ability to make investments

     o the ability to create liens; and

     o the ability to dispose of assets.

     Our debt and these financial restrictions are likely to make us more
vulnerable to economic downturns, limit our ability to withstand competitive
pressures and reduce our flexibility to respond to changing business or economic
conditions.

     We rely on our relationship with our affiliates, and any impairment of that
relationship may affect our businesses.

     Our main controlling shareholders are Hugo Salinas Rocha's heirs and Esther
Pliego de Salinas, who, including the Chairman of our Board of Directors,
Ricardo B. Salinas Pliego, are also the controlling shareholders of TV Azteca,
the second largest Mexican commercial TV broadcaster. Advertising through the
facilities of TV Azteca is an important element of our marketing strategy. Any
impairment of our ability to obtain advertising on attractive conditions may
have a material adverse effect on our business, results of operations or
financial condition.

     We often engage in a variety of transactions with companies owned by our
     controlling shareholders which may cause conflicts of interest.

     We have engaged and will continue to engage in a variety of transactions
with TV Azteca, Movilaccess, Unefon and other entities owned or controlled by
Ricardo B. Salinas Pliego and our other



                                       10

<PAGE>

controlling shareholders. See Item 7. "Major Shareholders and Related Party
Transactions--Related Party Transactions." While we intend to continue to
transact business with related parties on an arms-length basis, we cannot assure
you that such transactions will be unaffected by conflicts of interest between
such parties and us. We have agreed to terms governing our indebtedness which
restrict our ability to engage in transactions with our affiliates.

     Loss of existing or future market share to competitors may adversely affect
     our performance.

     Our businesses are highly competitive in all product categories. Earnings
primarily depend on the maintenance of high per-store sales volumes, efficient
product purchasing and distribution and cost-effective store operations. The
retail sector throughout Latin America is fragmented and consumers are served by
a number of formats, including traditional formats such as local, independent
retail stores, modern formats such as retail chains and department stores, as
well as informal outlets such as street vendors and outdoor markets. In general,
our competitors in this business include other specialty stores, independent
clothing, electronics and appliance stores and department stores, some of which
are national and international in scope and may have greater resources than we
possess in that specific country. Also, certain major U.S. retailers have
established joint ventures with Mexican retailers and have opened stores in
Mexico. We expect that other U.S. retailers may continue to do so in the future
(especially in light of the implementation of the NAFTA agreement). We also face
significant competition from the informal economy and parallel imports for the
products that we carry. There can be no assurance that our performance will not
be adversely affected by increased competition, consolidation of the retail
sector and more sophisticated competitors from these and other sources.

     There may be an adverse impact on our margins from pricing pressure.

     Pricing competition in the specialty-retailing sector is intense. Pricing
pressure from competitors is increasing as the sector consolidates and more
competitors are able to benefit from economies of scale and reduce their prices
to consumers. We also face pressure on the pricing of the credit we extend to
our customers as part of our installment sales program. There can be no
assurance that we will be able to maintain or increase our current margins, the
reduction of which could have a material adverse effect on our business.

     We may not be able to finance our working capital needs.

     We use non-committed short-term credit lines from Mexican banks.
Termination of such lines by these lenders would require us to refinance these
short-term loans. We cannot assure you that such refinancing can be arranged on
favorable conditions, or otherwise, on short notice. Similarly, we rely on our
receivables securitization programs for part of our working capital needs. A
downgrading or worsening of the quality of the receivables portfolio would
prevent us from using such receivables securitization programs on an ongoing
basis, and could have a material adverse effect on our business.

     Our operating results are likely to fluctuate in future periods and,
     therefore, are difficult to predict.

     Our annual and quarterly operating results are likely to fluctuate
significantly in the future as a result of numerous factors, many of which are
outside our control. These factors include seasonal factors. Historically, we
have experienced increased demand during the second and fourth quarters, as
customers increase spending for Mother's Day and the Christmas holiday relative
to other times of the year. Our results of operations for any one quarter are
not necessarily indicative of our annual results of operations.


                                       11

<PAGE>

     Our business is dependent on the integrity of our employees.

     Our profitability and success depend on the integrity and quality of our
employees in every segment of our distribution cycle. Failures in the integrity
and quality of our employees could have a negative impact on our profitability
and on the success of our operations in general.

     Our internet strategy may not succeed, which will impede our growth.

     We have pursued certain opportunities to sell our products over the
internet. This was a relatively new business and marketing strategy for us and
involved certain risks and uncertainties. Currently, we are focusing on the
e-catalog segment of this business. We may not succeed in marketing our products
over the internet and our internet strategy may require us to significantly
increase our advertising and marketing expenditures. If we significantly
increase such expenditures and such increase does not result in significant
sales, our results of operations may be adversely affected.

Risks Related to the Laws of the Countries in Which We Operate

     A change in consumer-related laws and regulations may have an adverse
     effect on our financial performance.

     The Ley Federal de Proteccion al Consumidor (the "Consumer Protection
Act"), which regulates consumer installment sales in Mexico, became effective on
December 25, 1992. This Act does not set a limit on the interest rate a merchant
may charge a consumer in an installment sale, and it does not require the
merchant to inform the consumer of the effective rate of interest charged. The
effective interest rate which we charge for electronics, appliances, furniture
and clothing is fixed at the time of the installment purchase. We cannot assure
you that in the future, the Mexican Government will not impose limitations or
additional informational requirements regarding such rates of interest. A
substantial portion of our revenues and operating cash flow is generated by our
installment sales program, and any such limitations or additional information
requirements could have a material adverse effect on our financial performance.
Furthermore, our financial performance could be materially adversely affected by
any material change in the regulations governing our collection practices and
repossession procedures. The consumer protection laws and their enforcement in
the other Latin American countries where we do business are comparable to
Mexican law. However, a change in the regulatory environment in Mexico, or in
the other countries where we operate, or the imposition of authorization
requirements could have a material adverse effect on our operations and our
financial performance.

     The Mexican Antitrust Law could prevent us from consummating business
     combinations which could have an adverse effect on our businesses.

     The Ley Federal de Competencia Economica, the Mexican Antitrust Law,
provides for various antitrust regulations and requires approval of the Comision
Federal de Competencia, the Mexican Federal Competition Commission, for certain
mergers, acquisitions and other corporate activities. We cannot guarantee that
we will not be investigated by the Comision Federal de Competencia and, as a
result thereof, be prevented from consummating business combinations or engaging
in certain types of commercial activities in the future, or that such events
would not have an adverse effect on our businesses.

     Differences between Mexican GAAP and U.S. GAAP may have an impact on the
     presentation of our financial information.

     Our consolidated financial statements are audited and published annually,
and are prepared in accordance with Mexican GAAP, which differs in certain
significant respects from U.S. GAAP. See Note 17



                                       12

<PAGE>

to our financial statements, which provides a description of the principal
differences between Mexican GAAP and U.S. GAAP as they relate to us.

Risks Related to our GDSs

     (We note that we intend to terminate the CPO Trust, after which GDSs will
     represent directly shares of our common stock)

     Preemptive rights may be unavailable to GDS holders.

     Under Mexican law, whenever we issue new shares for cash, we generally must
grant preemptive rights to our shareholders, giving them the right to purchase a
sufficient number of shares to maintain their existing ownership percentage. We
may not be able to offer shares to U.S. holders of GDSs pursuant to preemptive
rights granted to our shareholders in connection with any future issuance of
shares unless:

     o    a registration statement under the Securities Act of 1933, as amended
          (the "Securities Act") is effective with respect to such rights and
          shares; or

     o    an exemption from the registration requirements of the Securities Act
          is available.

     We intend to evaluate at the time of any rights offering the costs and
potential liabilities associated with a registration statement to enable U.S.
holders of GDSs to exercise their preemptive rights, the indirect benefits of
enabling U.S. holders of GDSs to exercise preemptive rights and any other
factors that we consider appropriate at the time. We will then decide whether to
file such a registration statement.

     We cannot assure you that such a registration statement would be filed. In
addition, although the Depositary (as defined below) is permitted, if at the
time it is both lawful and feasible, to sell preemptive rights and distribute
the proceeds of the sale to holders of GDSs who are entitled to the proceeds,
sales of preemptive rights are not lawful in Mexico at this time. As a result,
U.S. holders of GDSs may not be able to exercise their preemptive rights in
connection with future issuances of our shares. In this event, the interest of
holders of GDSs in the total equity of our company would decrease in proportion
to the size of the issuance. Depending on the price at which shares are offered,
such an issuance could result in dilution to holders of GDSs.

     Holders of GDSs and CPOs have limited voting rights.

     Our CPOs have been issued by Banco del Atlantico, S.A. as trustee (the "CPO
Trustee") for a Mexican trust (the "CPO Trust"). Each CPO represents financial
interests in, and limited voting rights with respect to, two B Shares and one L
Share. The GDSs have been issued by The Bank of New York as depositary (the
"Depositary"). Each GDS represents 10 CPOs.

     Under the CPO Trust agreement, holders of CPOs who are not Eligible Mexican
Holders have no voting rights with respect to the underlying B Shares. Eligible
Mexican Holders are Mexican individuals and Mexican corporations whose charters
contain a prohibition on ownership by non-Mexicans of the corporation's capital
stock. For Mexican law purposes, the Depositary is considered the owner of the
CPOs which are represented by the GDSs. Since the Depositary does not qualify as
an Eligible Mexican Holder, the Depositary and, consequently, the holders of
GDSs have no voting rights with respect to the underlying B Shares. The B Shares
that are held in the CPO Trust on behalf of holders of CPOs who are not Eligible
Mexican Holders are voted in the same manner as the respective majority of the B
Shares are voted at the relevant meeting. Given that a majority of the B Shares
are owned by the Controlling Shareholders, if the Controlling Shareholders vote
the same way on a matter, the CPO Trustee will be required to vote the B Shares
held in the CPO Trust on behalf of holders of CPOs who are not Eligible Mexican
Holders in the same


                                       13

<PAGE>

manner as the B Shares held by the Controlling Shareholders are voted. See "Item
10. Additional Information--Limitations Affecting Security Holders--Limitations
on Voting Rights."

     All holders of GDSs and CPOs, whether or not they are Eligible Mexican
Holders, are entitled to give instructions as to the manner in which the CPO
Trustee shall vote the L Shares whenever the holders of L Shares are entitled to
vote. In the case of the holders of GDSs, those instructions must be given to
the Depositary (who in turn conveys them to Banca Serfin, S.A., as Common
Representative of the holders of the CPOs (the "Common Representative")). In the
case of the holders of CPOs, the instructions must be given directly to the CPO
Trustee. The Common Representative must receive the voting instructions at least
five business days prior to the relevant meeting, and the CPO Trustee must
receive it at least within 3 calendar days. See Item 10. "Additional
Information--Limitations Affecting Security Holders--Limitations on Voting
Rights."

     Under our bylaws and Mexican law, holders of L Shares are entitled to vote
only in limited circumstances. Holders of L Shares may elect one of our nine
directors and the corresponding alternate, and are only entitled to vote on
specific matters, such as changes in our corporate form, certain mergers
involving our company, the cancellation of the registration of our shares and
actions that would prejudice the rights of holders of L Shares. However, during
2002, we intend to convert all of our existing classes of capital stock on a
one-to-one basis into one class of common stock. See Item 5. "Operating and
Financial Review and Prospects--Recent Developments--Single Series Initiative"
and Item 6. "Directors, Senior Management and Employees--Directors and Executive
Officers--Directors."

     Holders of GDSs are not entitled to attend shareholders' meetings, and they
may only vote through the Depositary.

     Under Mexican law, a shareholder is required to deposit its shares with a
Mexican custodian in order to attend a shareholders' meeting. A holder of CPOs
and GDSs will not be able to meet this requirement, and accordingly is not
entitled to attend shareholders' meetings. A holder of GDSs is entitled to
instruct the Depositary as to how to vote the shares represented by GDSs, in
accordance with procedures provided for in the deposit agreement, but a holder
of GDSs will not be able to vote its shares directly at a shareholders' meeting
or appoint a proxy to do so.

     The payment and amount of dividends are subject to covenant restrictions
     and to the determination of our controlling shareholders.

     The payment of dividends by us, and the amounts of such dividend payments,
are subject to the recommendation of our Board of Directors and approval by our
shareholders. As long as our controlling shareholders continue to own a majority
of these shares, they will have as a result the ability to determine whether or
not dividends are to be paid and the amount of any dividends. In addition, our
indentures contain covenants that restrict, among other things, our payment of
dividends.

     The significant share ownership of the controlling shareholders may have an
     adverse effect on the future market price of our traded equity.

     Approximately 72% of our equity is controlled by the heirs of Hugo Salinas
Rocha, including Ricardo B. Salinas and Esther Pliego de Salinas. These
controlling shareholders have the power to determine the outcome of
substantially all actions requiring shareholder approval, including the power to
elect 8 of our 9 directors and to determine whether dividends will be paid.
Moreover, actions by our controlling shareholders with respect to the
disposition of the shares they beneficially own, or the perception that such
actions might occur, may adversely affect the trading price of our equity on the
Mexican Stock Exchange and the market price of the GDSs. See Item 7. "Major
Shareholders and Related Party Transactions--Major Shareholders."


                                       14

<PAGE>

     We have significant transactions with affiliates that create potential
     conflicts of interest.

     We regularly engage in transactions with affiliates, including entities
owned or controlled by our Controlling Shareholders. See Item 7. "Major
Shareholders and Related Party Transactions--Related Party Transactions."
Transactions with affiliates may create the potential for conflicts of interest.
To guard against these potential conflicts of interest, we have established a
Related Party Transactions Committee of our Board of Directors to provide an
independent review of transactions with affiliates to determine whether these
transactions are related to our business and are consummated on terms that are
at least as favorable to us as terms that would be obtainable in a similar
transaction entered into on an arms-length basis with an unrelated third party.

     Holders of shares may experience dilution as a result of the exercise of
     stock options with exercise prices substantially below the market price of
     the shares.

     At December 31, 2001, we had outstanding stock options with respect to
approximately 17 million CPOs at exercise prices ranging from approximately
US$2.50 to US$4.00 per CPO. In addition to the options currently outstanding, we
have in the past issued options at substantially below the then-prevailing
market price of our CPOs. See Item 6. "Directors, Senior Management and
Employees--Stock Option Plan."

     There are risks associated with the trading of our equity on the Mexican
     Stock Exchange.

     The Mexican securities market is not as large or as active as the
securities markets in the United States and certain other developed market
economies. As a result, the Mexican securities market has been less liquid and
more volatile than other markets. To control excess price volatility, the
Mexican Stock Exchange operates a system that suspends dealing in shares of a
particular issuer when changes in the price of such shares (expressed as a
percentage of that day's opening price) exceed certain levels. Under current
regulations, this system does not apply to the CPOs (or the underlying shares
following termination of the CPO Trust) so long as the GDSs are listed on the
New York Stock Exchange or another foreign market.

     Developments in other emerging market countries may affect the prices for
     our securities.

     The market value of securities of Mexican companies is, to varying degrees,
affected by economic and market conditions in other emerging market countries.
Although economic conditions in such countries may differ significantly from
economic conditions in Mexico, investors' reactions to developments in any of
these other countries may have an adverse effect on the market value of
securities of Mexican issuers. In late October 1997, prices of both Mexican debt
securities and Mexican equity securities dropped substantially, precipitated by
a sharp drop in value of Asian markets. Similarly, in the second half of 1998,
prices of Mexican securities were adversely affected by the economic crises in
Asia, Russia and Brazil. We cannot assure you that the market value of our
securities would not be adversely affected by events elsewhere, especially in
emerging market countries.

     It may be difficult to enforce civil liabilities against us or our
     directors, officers and controlling persons.

     We are organized under the laws of Mexico, and most of our directors,
officers and controlling persons reside outside the United States. In addition,
a substantial portion of our assets and their assets are located in Mexico. As a
result, it may be difficult for investors to effect service of process within
the United States on such persons or to enforce judgments against them,
including in any action based on civil liabilities under the U.S. federal
securities laws. There is doubt as to the enforceability against such persons in
Mexico, whether in original actions or in actions to enforce judgments of U.S.
courts, of liabilities based solely on the U.S. federal securities laws.


                                       15

<PAGE>

     The protections afforded to minority shareholders in Mexico are different
     from those in the United States.

     Under Mexican law, the protections afforded to minority shareholders are
different from those in the United States. In particular, the law concerning
fiduciary duties of directors is not well developed, there is no procedure for
class actions or shareholder derivative actions, and there are different
procedural requirements for bringing shareholder lawsuits. As a result, in
practice it may be more difficult for our minority shareholders to enforce their
rights against us or our directors or controlling shareholders than it would be
for shareholders of a U.S. company.

     Our bylaws restrict the ability of non-Mexican shareholders to invoke the
     protection of their governments with respect to their rights as
     shareholders.

     As required by Mexican law, our bylaws provide that non-Mexican
shareholders shall be considered as Mexican in respect of their ownership
interests in our company and shall be deemed to have agreed not to invoke the
protection of their governments in certain circumstances. Under this provision,
a non-Mexican shareholder is deemed to have agreed not to invoke the protection
of his own government by asking such government to interpose a diplomatic claim
against the Mexican government with respect to the shareholder's rights as a
shareholder, but is not deemed to have waived any other rights it may have,
including any rights under the U.S. securities laws, with respect to its
investment in our company. If you invoke such governmental protection in
violation of this agreement, your shares could be forfeited to the Mexican
government.

     Exchange rate fluctuations may affect the value of our securities.

     Fluctuations in the exchange rate between the peso and the U.S. dollar will
affect the U.S. dollar value of an investment in our equity securities and of
dividend and other distribution payments on those securities. See "--Key
Information--Exchange Rates."

Risks Associated with Mexico

     Economic developments in Mexico may adversely affect our business and
     results of operations.

     We are a Mexican corporation, and the majority of our subsidiaries are also
Mexican corporations. As a result, our business may be significantly affected by
the general condition of the Mexican economy, by devaluation of the peso, by
inflation and high interest rates in Mexico, or by political developments in
Mexico.

     Mexico has experienced adverse economic conditions.

     Mexico experienced a severe economic crisis following the devaluation of
the peso in December 1994. In recent years, economic crises in Asia, Russia,
Brazil and other emerging markets have adversely affected the Mexican economy
and could do so again. In 1999, Mexico's gross domestic product, or GDP,
increased 3.7% and inflation was 12.3%. In 2000, inflation declined to 9.0%, and
real GDP increased by 6.6% in real terms in 2000, as compared with 1999. In
2001, inflation was 4.4% and real GDP growth decreased by 0.3% in real terms, as
compared to 2000.

     According to preliminary estimates of the Mexican Government, Mexico's GDP
contracted during the third and fourth quarters of 2001. If the Mexican economy
continues to contract, the Mexican economy falls into a recession or if
inflation and interest rates increase significantly, our business, financial
condition and results of operations could suffer material adverse consequences
because, among other things, demand for our stores' goods may decrease as
consumers find it more difficult to pay for our products.


                                       16

<PAGE>

     Depreciation of the peso relative to the U.S. dollar could adversely affect
     our financial condition and results of operations.

     Our sales volume may decrease following a significant devaluation or
depreciation of the peso if consumers spend less on our products as a result.
Although the value of the peso relative to the U.S. dollar has stabilized since
1998, any future depreciation or devaluation of the peso is likely to reduce our
sales volume, which may have a material adverse effect on our results of
operations.

     Declines in the value of the peso relative to other currencies increase our
interest costs in pesos relative to our indebtedness denominated in such other
currencies. Such declines could also cause us to register foreign exchange
losses and could adversely affect our ability to meet our interest and principal
obligations under our indebtedness. As of December 31, 2001, we had
approximately US$497.9 million indebtedness denominated in U.S. dollars and the
equivalent of US$16.6 million denominated in other currencies, and we may in the
future incur additional non-peso-denominated indebtedness. The value of the peso
has been subject to significant fluctuations with respect to the U.S. dollar in
the past and may be subject to significant fluctuations in the future. For
example, from January 1, 1995 to March 31, 1996, the Mexican peso depreciated
50.8% to Ps.7.5375 per U.S. dollar and fluctuated from a high, relative to the
U.S. dollar, of Ps.5.00 to a low, relative to the U.S. dollar, of Ps.8.14.

     Furthermore, severe devaluation or depreciation of the peso may also result
in disruption of the international foreign exchange markets and may limit our
ability to transfer or to convert pesos into U.S. dollars and other currencies
for the purpose of making timely payments of interest and principal on our
indebtedness. While the Mexican government does not currently restrict, and for
many years has not restricted, the right or ability of Mexican or foreign
persons or entities to convert pesos into U.S. dollars or to transfer other
currencies out of Mexico, the government could institute restrictive exchange
rate policies in the future. To the extent that there are currency fluctuations,
they are likely to continue to have an effect on our financial condition,
results of operations and cash flows in future periods.

     Although the value of the peso/U.S. dollar exchange rate has stabilized in
recent years, we can give no assurance that the peso will not depreciate in
value relative to the U.S. dollar in the future.

     High levels of inflation and high interest rates in Mexico could adversely
     affect our financial condition and results of operations.

     Mexico has experienced high levels of inflation in past years. The annual
rate of inflation, as measured by changes in the National Consumer Price Index,
was 18.6% for 1998, 12.3% for 1999, 9.0% for 2000 and 4.4% for 2001. On December
31, 2001, the 28-day Cetes rate was 6.75%. High interest rates in Mexico may
adversely affect our costs and thus our financial condition and results of
operations.

     Political events in Mexico, including the recent transition to a new
     presidential administration, could affect Mexican economic policy and our
     operations.

     Mexican political events may also significantly affect our operations and
the performance of Mexican securities, including our securities. In the Mexican
national elections held on July 2, 2000, Vicente Fox of the opposition Partido
Accion Nacional (National Action Party or PAN) won the presidency. His victory
ended more than 70 years of presidential rule by the Partido Revolucionario
Institucional (the Institutional Revolutionary Party or PRI). Neither the PRI
nor the PAN succeeded in securing a majority in the Congress or Senate.

     President Fox assumed office on December 1, 2000, and to date, there have
been no changes in Mexico's economic policies that would adversely affect our
business. A change in economic policy, as well as currency instability, could
have a material adverse effect on our business, financial condition, prospects
and results of operation.


                                       17

<PAGE>

Item 4.  Information on the Company

     Grupo Elektra is a corporation (sociedad anonima de capital variable)
organized under the laws of the United Mexican States. Our offices are located
at Edificio Parque Cuicuilco (Esmeralda), Insurgentes Sur, No. 3579, Col.
Tlalpan La Joya, 14000 Mexico, D.F.

                                    OVERVIEW

History

     Grupo Elektra was founded in 1950, and expanded over the years to become a
leading retailer in Mexico with significant operations in a number of other
Latin American markets. On March 10, 1999, a syndicate of banks holding a
majority equity interest in one of our biggest competitors in Mexico, Grupo SyR,
S.A. de C.V. ("Grupo SyR"), together with certain individual shareholders of
Grupo SyR, declared Grupo Elektra the winner of an auction to acquire a 94.3%
equity interest in Grupo SyR. Grupo Elektra won the auction with a bid of
approximately US$77.7 million. In addition, Grupo Elektra acquired tax losses of
Grupo SyR of approximately US$385.5 million, with a tax benefit of US$135
million.

Corporate Reorganization--Merger

     After the acquisition of Grupo SyR, Grupo Elektra initiated a corporate
reorganization to take advantage of certain tax loss carry-forwards reported by
Grupo SyR, and to make the corporate structure more efficient.

     On July 30, 1999, Salinas y Rocha (the principal operating subsidiary of
Grupo SyR) spun off three operating companies: On November 12, 1999, Corporacion
Diprofin, S.A. de C.V. and Articulos Domesticos al Mayoreo, S.A. de C.V.,
subsidiaries of Grupo Elektra, merged with and into Grupo SyR. On December 8,
1999, Elektra, S.A. de C.V. and Elektrafin, S.A. de C.V., subsidiaries of Grupo
Elektra, merged with and into Elektra Comercial, S.A. de C.V. and Elektrafin
Comercial, S.A. de C.V., respectively. As a result of this corporate
reorganization, Grupo Elektra owned 99.9% of Grupo SyR, which, at that time, had
Elektra Comercial, S.A. de C.V., Elektrafin Comercial, S.A. de C.V., Salinas y
Rocha and The One as its main operating companies.

     On December 18, 2000, Grupo Elektra merged with and into Grupo SyR. As a
result, Grupo SyR, the surviving company, changed its name to Grupo Elektra,
S.A. de C.V. and all of the operating companies, including Elektra Comercial,
Elektrafin Comercial, Salinas y Rocha and The One were, at that time, its
subsidiaries.

     On December 26, 2001, in a further internal reorganization, Elektra
Comercial, S.A. de C.V., merged with and into Elektra del Milenio, S.A. de C.V.
(formerly known as Grupo Hecali, S.A. de C.V).

     We expect to use Grupo SyR's tax credits over the next two to three years.

Significant Subsidiaries

     The table below sets forth all of our direct and indirect significant
subsidiaries and the percentage of equity of each subsidiary we owned directly
or indirectly as of December 31, 2001.


                                       18

<PAGE>
<TABLE>
<CAPTION>
                                                                                    Percentage
                                                                                    ----------
Name of Company                                                                       Owned
---------------                                                                       -----
                                                                                        %
<S>                                                                                <C>
Elektra del Milenio, S.A. de C.V., a Mexican corporation ..........................   99.9%
Elektrafin Comercial, S.A de C.V., a Mexican corporation ..........................   99.9%
Salinas y Rocha, S.A. de C.V., a Mexican corporation ..............................   99.9%
Mi Garantia Extendida, S.A. de C.V., a Mexican corporation ........................   99.9%
Importaciones Electronicas Ribesa, S.A. de C.V., a Mexican corporation ............   99.9%
Inmuebles Ardoma, S.A. de C.V., a Mexican corporation .............................   99.9%
</TABLE>

Our Company

     We are the largest specialty retailing group in terms of number of stores
and revenues in Mexico and one of the largest in Latin America, with a
significant presence in Peru, El Salvador, Guatemala, Honduras and the Dominican
Republic. As of December 31, 2001, we operated 953 retail stores, of which 101
are located in five other countries in Latin America. We believe that through
our 50 years of operations we have established a leading brand name and market
position with regard to all our major products in Mexico.

     We have developed a standardized system for operating our Grupo Elektra
stores. The system includes procedures for information technology, inventory
management, transaction processing, customer relations, store administration,
merchandise display and installment sales policies. As part of this effort, we
have developed and maintain operating manuals outlining our procedures relating
to maintenance, security and accounting.

     Our store operations are organized in operating areas. Our management
structure provides that store managers generally report to regional managers,
who report to area managers who, in turn, report to management at our
headquarters in Mexico City.

     We operate four store formats that provide specific product mixes to well
defined target markets. Our four formats are (i) traditional Elektra stores,
(ii) MegaElektra stores, (iii) Salinas y Rocha stores and (iv) The One stores.

     The traditional Elektra and MegaElektra stores sell brand name consumer
electronics, white goods, small appliances and furniture targeting low and
middle income segments of the Mexican and Latin American population. The Salinas
y Rocha stores offer a line of products that is similar to those offered by the
Elektra stores but are oriented to a higher socioeconomic bracket, and The One
stores sell fashionable clothing targeting mainly younger consumers. This
segmentation of our target markets allows us to attract a varied mix of
customers and we believe that it also allows us to retain such customers
throughout their entire lives.

     We also provide consumer finance in the form of installment sales marketed
to customers under the "Credimax" trademark. This is often the only financing
option available to the majority of our customers. We believe that our
installment sales program increases the number of potential customers and
increases our existing customers' loyalty and purchasing power, thereby
increasing overall sales and providing low-risk financing income, which results
in increased profitability

     In addition, we offer a variety of additional services, including telephony
services pursuant to an agreement with Unefon, money transfer services, savings
account services, photo products and processing services, extended warranty
services and home mortgage services. We have also introduced several new
products in our stores, including mobile phone handsets and computers. See
"--Additional Services."


                                       19

<PAGE>

                                  OUR BUSINESS

Our Target Market

     Our target market is the middle class of Mexico and Latin America. In
Mexico, we define the middle class as the 83% of the population that controls
71% of Mexico's household income. The Mexican Association of Research Agencies
has performed studies dividing the Mexican population into demographic groups
based on household income as indicated below as of December 31, 2001:

                                                             Percentage of Total
                                                             -------------------
 Demographic Group      Household Income per Month                Population
 -----------------      --------------------------                ----------

        A/B                 More than US$7,000                       5.9%

         C+            Between US$3,000 and US$7,000                 7.6%

         C             Between US$1,000 and US$3,000                 15.0%

         D+             Between US$600 and US$1,000                  28.8%

         D               Between US$200 and US$600                   27.3%

         E                     Under US$200                          15.4%

     Our stronghold is the C and D groups. We believe that the "typical"
customer of our Elektra stores is a person who is employed and owns his own
home, but does not own a car and therefore shops in his neighborhood or at
locations served by public transportation. Elektra's target market in all of the
countries of Latin America is determined according to similar criteria, modified
as necessary based on the specific social and economic conditions of each
country. The target market for our Salinas y Rocha stores is the Mexican middle
and upper-middle class, consumers who we believe have a household income between
US$12,000 and US$36,000 per year and between US$36,000 and US$72,000 per year,
respectively.

Merchandise and Marketing

     Pricing Policy

     Our pricing policy is to offer products at cash prices that are competitive
in our target market. In addition, we design the installment sales program to
provide our customers with financing for our products at an affordable weekly
cost. Our marketing department monitors prices at competing stores and adjusts
our cash and installment sales prices as necessary to keep them competitive. In
some regions, individual store managers have the flexibility to match the prices
of local competitors.

     Customer Service

     We believe that our commitment to customer service is a significant factor
in providing us with a loyal and expanding customer base. Grupo Elektra offers a
wide range of customer services, including, among others, a guaranteed 30-day
repair service for consumer electronics and appliances and a supplemental,
limited warranty on all of our products other than furniture. We also operate a
state-of-the-art customer service call-center that is open 365 days per year and
staffed with approximately 80 agents. This call-center helps us deliver on our
commitment to customer service.


                                       20

<PAGE>

     Advertising

     Our marketing strategy emphasizes nine factors in attracting and retaining
customers: strong brands, quality service, merchandise variety, convenient store
locations, installment sales availability, low prices, product availability,
customer satisfaction and functional display formats. We reinforce our marketing
strategy through an aggressive advertising program utilizing television, radio
and in-store promotional circulars, all of which are designed and prepared by
our in-house advertising department. We vary the volume and specific media of
our advertising efforts to match the size and customer profiles of our markets.
Our advertising programs are designed to (i) highlight our broad selection of
quality and brand name merchandise, (ii) introduce new products and (iii)
publicize special promotions and events. We have supplemented our advertising
strategy through the implementation of a direct marketing program using our
database of customers.

     In July 1993, our controlling shareholders, together with an investor
group, completed the acquisition of certain media assets including two national
television networks, a chain of movie theater properties and a television and
movie production studio. In March 1996, we acquired 35.8% of the capital stock
of Comunicaciones Avanzadas, S.A. de C.V. ("CASA"), the indirect controlling
shareholder of TV Azteca, one of the two national broadcasters in Mexico. On
March 25, 1996, Elektra and Television Azteca (a subsidiary of TV Azteca)
entered into a 10-year agreement pursuant to which Television Azteca agreed to
air at least 300 advertising spots for Elektra per week, each spot for a 20
second duration, totaling 100 minutes per week or 5,200 minutes annually, during
otherwise unsold airtime. We pay US$1.5 million annually for such advertising
time. The agreement may not be terminated by TV Azteca, but may be terminated by
Grupo Elektra, which may also transfer its rights under this Agreement to third
parties.

     In December 1998, Elektra entered into a separate 5-year agreement pursuant
to which TV Azteca agreed to air commercial spots for Elektra at discount rates
based on the gross rating points assigned to the airtime chosen by Elektra for
each commercial spot. At least 60% of the commercial spots must be aired during
"stellar" airtime, i.e. from 7:00 p.m. to midnight, and half of this 60% (30%)
of all commercial spots must be aired during "prime" airtime, i.e. from 9:00
p.m. to 11:00 p.m. The remaining 40% may be aired during airtime other than from
7:00 p.m. to midnight. Under this agreement Elektra determines each year how
much airtime to purchase from TV Azteca for that particular year. Because we
were able to satisfy our advertising requirements under our March 1996 agreement
with TV Azteca, we purchased no airtime under this agreement in 2000 and 2001.

     On February 17, 2000, Elektra and TV Azteca entered into an additional
one-year agreement pursuant to which TV Azteca will air commercial spots for
Elektra at rates based on the rating points assigned per program. At December
31, 2001, Elektra had purchased airtime amounting to Ps.53.1 million under this
contract.

     In May, 2001, Elektra del Milenio, S.A. de C.V., a subsidiary of ours,
entered into an advertising agreement with TV Azteca pursuant to which Elektra
del Milenio purchased advertising time on TV Azteca's channel 7 and channel 13
for the time period from May 2001 through December 2001. Elektra del Milenio
paid a total of Ps.54.5 million, in five monthly installments, to TV Azteca for
these services.

     We believe that our in-house advertising department provides us with
valuable cost savings. Our annual expenditures for advertising were 2.1%, 1.7%
and 1.6% of total revenues during 1999, 2000 and 2001, respectively.
Approximately 33.0% of our advertising expenditures in 2001 was spent on
television advertising, 16.0% was spent on radio advertising, and the remainder
was spent on various other forms of advertising, including the printing of
promotional circulars. We traditionally offer certain seasonal promotions on
predetermined dates each year, including Christmas and Mother's Day.


                                       21

<PAGE>

     We believe our relationship with TV Azteca enhances our ability to effect
our promotion strategy relative to other national and regional specialty
retailers and to develop brand awareness of all our brands. See Item 7. "Major
Shareholders and Related Party Transactions--Related Party Transactions."

     Suppliers

     Three of Elektra's and Salinas y Rocha's suppliers, Grupo Mabe, Sony and LG
Electronics, together accounted for 30% of our aggregate purchases of
merchandise in the year ended December 31, 2001. Grupo Mabe accounted for 12% of
merchandise, Sony accounted for 10% and LG Electronics accounted for 8%. No
other supplier represented in excess of 7% of our purchases.

Installment Sales Program

     We finance customer purchases through our Elektrafin subsidiary. Our
pricing strategy is to provide customers with a choice of a cash price or an
alternative installment purchase price.

     The effective rate of interest that we charge for our merchandise is
determined at the time of an installment purchase and is a fixed rate. We
believe that the weekly payments charged to our customers are competitive with
those of competitors who offer similar programs. We do not provide a statement
of the effective interest rate included in the installment sales price to the
customer. The installment sales program is regulated by the consumer protection
legislation of the countries where the respective customers are located. In
Mexico, the Consumer Protection Act imposes no ceiling on the interest rate a
merchant may charge a consumer in an installment sale and does not require
disclosure of the effective rate of interest charged by the merchant. The
following table sets forth certain information concerning the consolidated
installment sales program for all of our operations:

<TABLE>
<CAPTION>
                                                                                             As of and for the Year
                                                                                               Ended December 31,
                                                                             -------------------------------------------------------
                                                                                1999                   2000                  2001
                                                                             ----------            ----------             ----------
                                                                                  (in millions of Ps. as of December 31, 2001)
<S>                                                                            <C>                   <C>                    <C>
Accounts receivable retail customers-net (at period end)(1) ...............    1,909.7               2,273.8                2,177.4
Installment sales as a percentage of merchandise revenues(2) ..............       66.4%                 69.4%                  68.1%
Total number of open accounts (at period-end)(1) ..........................    812,676               923,546              1,084,236
Average balance per retail customer (Pesos) ...............................    2,349.9               2,462.0                2,008.3
Reserve for doubtful accounts after reduction for write-offs
     as a percentage of gross retail receivables after write-offs(3) ......        4.8%                  5.7%                   5.4%
Annualized weighted average cost of receivables financing(4) ..............       17.7%                 15.9%                  12.4%
</TABLE>

--------------
(1)  Net of receivables securitization and net of allowance for doubtful
     accounts.
(2)  Includes mark-up on installment sales.
(3)  Net of receivables securitization.
(4)  Includes factoring and unsecured bank debt used to finance the receivables.

     We have provided in-store credit to our customers in our Elektra stores
since 1957 and have introduced the same system in the other store formats
through the years. Since our target customers are the segment of the Mexican
population that typically has not had access to consumer credit, we have found
the availability of an installment sales program to be an important factor in
customers' purchasing decisions. We believe that the availability of an
installment sales program also strengthens customer loyalty and increases
overall revenues and provides us with additional income from a relatively
conservative credit portfolio.


                                       22

<PAGE>

     Credit Approval

     Approval for an installment purchase of electronics, appliances, white
goods or furniture requires the customer to complete an application form,
execute a credit contract and a promissory note, provide an official form of
identification containing a photograph, a recent payroll receipt or income tax
payment receipt, where an individual is self-employed, and evidence of home
ownership, such as a receipt for property taxes. In addition, a second party is
normally required to guarantee the promissory note if the customer does not meet
the applicable financial requirements or does not own a home. We investigate the
customer's and second party's credit prior to delivering the merchandise.
Generally, we will not grant the customer credit if the weekly payments would be
in excess of 20% of the customer's weekly gross income, or 12.5% in the case of
a purchase at The One. A regional manager must approve installment sales where
the amount being financed is in excess of Ps.5,500 and an area manager must
approve installment sales where the amount being financed is in excess of
Ps.9,000. Since there is no credit bureau in Mexico that reports on consumer
credit (other than on more affluent consumers with credit cards), an employee
personally visits the customer's residence to confirm the accuracy of the credit
application. Although these policies and procedures are generally applied
throughout our retail sales network, store managers and credit managers have the
discretion to deviate, within certain limits, from these policies when they find
it is appropriate. The verification period usually takes less than 24 hours. If
approved for credit, the customer makes weekly payments in cash at the Grupo
Elektra store where he made the purchase. Due to the lack of widespread
telephone service among our customers, we personally visit many of our credit
customers. We have processed and carried out investigations on over four million
credit applications since 1993, creating a valuable computerized database of
information on our customers.

     Installment sales on products sold through our stores are documented by
credit contracts and fixed-term promissory notes with fixed weekly payments and
stated interest, if any. These promissory notes provide for a penalty interest
rate in the event that payments are not made when due. Such penalty interest is
computed daily on the past due payments until the payments are current.

     Collection

     The collection practices and repossession procedures we use in our
operations in Mexico are regulated under the Mexican Commercial Code, the
Consumer Protection Act and the Mexican Civil Code. In Latin America, we are
regulated by each country's commercial, civil and consumer protection laws and
regulations. Our collection operations are implemented and monitored at the
individual store level. Each store has an installment sales manager who, under
the regional manager's supervision, is responsible for extending credit and
collecting that store's outstanding accounts in accordance with corporate
guidelines.

     Our accounting policy is to record five percent of the value of the cash
price of the merchandise sold pursuant to our installment sales program, plus
the mark-up, less the downpayment, if any, as a provision for doubtful accounts.
We write off all the outstanding balances of accounts receivable once the amount
past due becomes equal to 13 weekly payments but we continue collection efforts
after writing off accounts receivable.

Information Systems

     We have developed in-house a state-of-the-art point-of-sale information
system, which allows centralized real time seamless management of our inventory.
Our management information systems utilize point-of-sale scanners at individual
stores to generate real-time information on sales, gross margins, inventory
tracking, replacement requirements, merchandise mix, expenses and current versus
historical performance. In addition, we use a system which provides real-time
satellite communication between individual stores and our headquarters, which
has improved the speed and efficiency with which merchandise is delivered from
the distribution centers to the stores.


                                       23

<PAGE>

     This system facilitates the flow of information between our stores and from
our stores to our headquarters, thereby improving distribution of merchandise
and facilitating the expansion of our installment sales operations. We are
continuously designing new systems and improving existing systems with an
in-house team of approximately 300 software engineers. In addition to
point-of-sale systems, we are making a significant effort to improve
distribution and logistics systems. These systems allow us to efficiently manage
our distribution systems as well as the logistics and fulfillment of our store
merchandise requirements. We have also established electronic data interchanges
with the vast majority of our major suppliers to facilitate replenishment of
inventory.

     Capital expenditures for information systems were Ps.83.8 million (US$12.4
million) in 1999, Ps.325.7 million (US$32.4 million) in 2000 and Ps.78.0 million
(US$8.5 million) in 2001.

Seasonality

     For a discussion of the seasonal fluctuations in our sales, see Item 5.
"Operating and Financial Review and Prospects--Seasonality of Sales."

Employees

     As of December 31, 2001, we employed approximately 18,235 people on a
full-time basis in our operations. We employed 7,121 employers in our stores,
5,118 in our credit and collections operations and 5,996 in our corporate and
administrative divisions. None of our operating companies has any employees
directly, as personnel services are provided by our other subsidiaries. We
employ part-time employees to meet seasonal needs as necessary. See also Item 6.
"Directors, Senior Management and Employees--Employees."

     Each employee's compensation package is comprised of a fixed salary and
commission, based on company profit, operation volume and personal performance.
If the employee does not meet the minimum personal performance standard, the
employee receives only a fixed salary. Newer employees, during the first three
months of their employment, usually receive only their fixed salary. After three
months, most employees surpass the minimum personal performance standards and
receive compensation based on performance in addition to their fixed salary. On
average, an employee's fixed salary is approximately 35% of his total
compensation, with the remaining 65% of the compensation based on a variable
scheme. This structure applies to salespeople, collectors and investigators.
There is no limit to the amount that an employee may receive as variable
compensation.

     Credit, store, regional and area managers are compensated by a combination
of a fixed salary and performance bonuses for each business unit they manage.
The performance bonus that a manager can receive from each unit is capped.
Administrative personnel and the executive level employees are evaluated each
trimester based on pre-established financial and operational goals, and based on
the results, receive a performance bonus. On average, the fixed salary of an
employee at this level represents approximately 65% of their total compensation,
and the bonus represents the remaining 35%.

     This compensation program has contributed to the successful implementation
of our business strategies, and our successful employees receive a compensation
package well above the market average. In addition, we are implementing
procedures that we believe will help us to more efficiently monitor the
performance of our employees and more accurately apply our compensation
structure.

     We recruit employees at high schools and universities and through
advertisements at each of our stores. Our policy is to hire store employees from
within the local community where the store is located to offer better customer
service.


                                       24

<PAGE>

     Training of Personnel

     We consider the training of our staff a high priority to ensure the highest
levels of customer service. We recognize that the success of our retail
operations ultimately depends in large measure on the level of service provided
by its personnel. Every employee, from a cashier to a division manager, receives
a description of his or her responsibilities and on-going training to help them
develop the professional and personal characteristics necessary to provide
Elektra's customers with the highest level of service. Employees are regularly
briefed on the performance of their store and our operations as a whole. Since
1997, we have trained more than 70,000 employees at Elektra University, our
in-house school of excellence, which includes model Elektra, Salinas y Rocha,
Bodega de Remates and The One stores and offers over 120 educational programs.
Elektra University also provides employees with skills training designed to
train new employees and to keep current employees informed of changes and
modifications to our operating procedures, as well as to demonstrate new
products. New store employees generally receive two weeks of training at Elektra
University prior to assuming responsibilities, and new store managers and credit
managers, as well as new sales and credit regional managers, receive one month
on average of training at Elektra University.

Trademarks

     Our trademarks, including "Elektra", "MegaElektra", "Salinas y Rocha" and
"The One", are registered with the Mexican Institute of Intellectual Property of
the Ministry of Commerce and Industrial Development. We continue to invest in
strengthening the protection of our trademarks through registration with the
appropriate authorities in each country where we do business. In addition, we
have an ongoing program in all countries in which we have businesses to protect
our brand names against piracy.

Capital Expenditures and Divestitures

     Capital Expenditures

     Capital expenditures in 2001, 2000 and 1999 were Ps.610.0 million, Ps.461.1
million and Ps.520.8 million, respectively. All were financed from both bank
debt and resources provided by our operations. Our principal capital
expenditures during 2001, 2000 and 1999 consisted of investments in stores,
computers, machinery, fixtures and automobiles.

     Our capital expenditures are expected to be approximately US$75 million for
2002. Projected capital expenditures include the cost of opening new stores,
expanding existing stores, enlarging our distribution network and investing in
technology and systems.

Our Strategy

     We expect to further expand our sales and increase our profitability by
capitalizing on our position as a leading distributor of electronics, basic
household goods, clothing and services in Mexico and elsewhere in Latin America
and by leveraging our distribution network and customer base to offer new
financial services and launch new ventures. Key elements of our strategy
include:

     Mass Market Focus. We provide affordable goods and services to our target
market, which is young and growing and includes the majority of the population
in Mexico and those other countries where we operate. The Mexican middle class,
which we have served for the past 50 years, is made up of 78 million Mexicans.
We primarily target young customers, who are establishing new households and are
relying on Elektra for their furniture, consumer electronics, appliances and
white goods.


                                       25

<PAGE>

     Growth Strategy. We believe that with 953 stores as of the end of 2001, we
have reached the size and market exposure necessary to establish our leadership
in the specialty retail sector in Mexico and in the countries of Latin America
where we have a presence. In this regard, we expect to make a number of store
closures in the future and are focusing on a qualitative growth approach. The
keys to our growth strategy include:

     o    Investment in Technology. We will continue to develop information and
          merchandise management systems that will allow us to achieve even more
          efficient management of our high-volume operations and to take full
          advantage of the satellite communications network that links most of
          our stores. As part of these efforts, we are negotiating to enter into
          an agreement with Manugistics, a global leader in intelligent
          solutions for supply chain management, under which Manugistics would
          implement its inventory forecasting system in our stores.

     o    Investment in our Employees. Both in our stores and through our
          state-of-the-art-training center, Elektra University, which offers
          actual store environments and multi-media computer equipment, we
          intend to continue to emphasize the individual responsibility of our
          employees while providing them with extensive training in our
          corporate standards of excellence. We also intend to continue to
          motivate our employees with career advancement opportunities and with
          cash bonuses, incentive programs, public recognition and a
          company-wide stock option program. We firmly believe that our
          workforce is an essential element in the future success of our
          business.

     o    Exploiting the Benefits of Our Extensive Store Network. We intend to
          continue to exploit the benefits of our extensive store network with
          the introduction of new products and services. We develop products and
          services that we believe will best capitalize on our current retail
          and consumer finance competencies, while providing benefits to
          customers and increasing traffic in our stores.

     International Growth. In 1997, we began to operate stores outside of
Mexico. As of December 31, 2001, we operated 101 MegaElektra stores in El
Salvador, Guatemala, Honduras, Peru and the Dominican Republic. Elektra follows
a "cookie-cutter" strategy through which it transports its store formats and
marketing strategies to countries that have similar demographics to those of
Mexico. As of December 31, 2001, international operations represented
approximately 6.1% of our consolidated revenues. We intend to phase out or sell
our operations in the Dominican Republic during 2002 and are considering phasing
out our operations in El Salvador. In addition, we have already discontinued our
credit operations in our stores in the Dominican Republic and El Salvador. See
Item 5. "Operating and Financial Review and Prospects--Recent
Developments--Operations in Latin America."

     E-catalog. We have in the past pursued certain opportunities to sell our
products over the internet. We believe that internet sales are a natural
extension of our existing "brick & mortar" business units. Our e-commerce
efforts have focused on the same product lines as those found in our stores.
Currently, the only internet business that we engage in is our e-catalog
business through which our customers can order our products from our "virtual
store" through our on-line catalog. We believe that our e-catalog, if
successful, will allow for more breadth within the existing product lines.

     Todito Agreement. On May 9, 2000, we signed a five-year strategic alliance
with Todito.com, an internet portal and marketplace for North American
Spanish-speakers. Through our indirect shareholding in TV Azteca, we currently
own 9.1% of Todito, and as part of the alliance, we were also granted options to
acquire up to 3% of Todito's capital stock over an eighteen-month period. The
agreement covers the establishment of Todito Internet kiosks in our stores,
reciprocal on-line promotion, as well as bilateral e-commerce support. The
kiosks sell low-cost computers and web appliances packaged with a Todito
Internet connection service. Qualified customers may purchase computer/Internet
Service Provider/education packages


                                       26

<PAGE>

through our consumer credit program. As of December 2001, we expanded Todito
Internet kiosks to approximately 640 Elektra Stores.

     Customer Loyalty. We want to attract young Latin American consumers with
affordable products at Elektra, Salinas y Rocha and The One and, as they mature
and their preferences and incomes change, retain their loyalty through the whole
store network. In addition to providing credit to support the purchasing habits
of our target market, we have developed loyalty programs, such as "cliente
amigo", which are aimed at rewarding frequent users of our money transfer
services and encouraging future use of such services.

     Investment in Advertising and Publicity. We invest in advertising and
publicity to achieve further consumer recognition and deeper market penetration,
in particular, through television advertising on TV Azteca, our affiliate.

     Branding. We have implemented a program called "Building Strong Brands",
which focuses on enhancing our brand names. The program consists of several
strategies. One such strategy is developing individual brand philosophies and
concepts that underline our core values (closeness to the consumer, loyalty,
trendiness and trust-worthiness). Our advertising campaign has been redesigned
to depart from our traditional focus on low prices and is now stressing consumer
value. Finally, we have trained our top 100 executives to better understand the
importance of "branding." We believe that stronger brands will result in the
customer's willingness to pay a premium for our products and thus higher margins
for our company.

     Enhancement of Consumer Financing Opportunities. We intend to further
emphasize installment sales to increase the number of our potential customers
and the purchasing power of those customers, and to effectively manage our
installment sales program in order to maintain the profitability and quality of
our credit portfolio. We are considering additional opportunities in the finance
area that permit us to leverage our customer base, our store network and our
consumer finance competencies. We recently entered into a strategic alliance
with Banca Quadrum, a Mexican financial institution, to market home mortgages
financed by a Mexican government program through our network of Elektra stores.
Customers will be able to build a credit history, complete their credit
applications and make mortgage payments at Elektra stores through our "Credimax"
program. We believe that this alliance will capitalize on our experience in
credit approvals and collection efforts while leveraging our extensive consumer
base. However, we can give no assurance that this or other projects will proceed
and/or succeed.


                                       27

<PAGE>

                                     ELEKTRA

Stores

     In Mexico, we operate (i) 238 "traditional" Elektra stores, 61 of which are
operated under our "Bodega de Remates" outlet format, and (ii) 391 "MegaElektra"
superstores, in which we offer a broad range of internationally-recognized brand
name consumer electronics, small appliances, white goods and household
furniture. In Peru, El Salvador, Honduras, Guatemala and the Dominican Republic,
we currently operate 101 MegaElektra superstores.

     Our traditional Elektra stores have an average size of 4,900 square feet.
In 1992, we introduced our MegaElektra superstore format. The MegaElektra stores
have an average size of approximately 9,400 square feet. The MegaElektra format
allows us to increase our on-site inventory levels, increase the amount of floor
space dedicated to our higher margin furniture product line, take advantage of
certain economies of scale and lower our out-of-stock position. We have expanded
the size of our newer traditional stores to increase the number of items (Stock
Keeping Units or "SKUs") and the amount of furniture in those stores. Each of
the MegaElektra stores offers approximately 505 SKUs, while each traditional
Elektra store typically offers approximately 289 SKUs.

Property, Plant & Equipment

     The following table sets forth information with respect to the value of our
property, plants and equipment as of December 31, 2001.


<TABLE>
<CAPTION>

                                      As of and for the Year Ended December 31, 2001
                                  -------------------------------------------------------
                                                     (in millions of Ps.)                     Assets under
                                                                                           capitalized lease
                                                                                               agreements
                                                         Assets owned

         Category                                       Net Book Value                          Net Book
 ------------------------             -------------------------------------------------         Value(1)

                                                          Central and
                                          Mexico         South America         Total              Total
                                      -------------     --------------      -----------         ----------
<S>                              <C>                  <C>                 <C>              <C>
Land                                  Ps.     901.1       Ps.   15.6        Ps.   916.7         Ps.    -
Buildings                                     704.1             23.4              727.5                -
Investment in stores                          620.3             95.5              715.8                -
Computer equipment                            340.4             21.4              361.8              223.3
Communication equipment                       160.2             10.8              171.0                -
Transportation equipment                      165.2              6.5              171.7                -
Furniture and fixtures                        296.0             49.9              345.9                -
Machinery and equipment                       216.0             30.7              246.7                -
                                      -------------     --------------      -----------         ----------
     Total                            Ps.   3,403.3       Ps.  253.8        Ps. 3,657.1         Ps.  223.3
                                      =============     ==============      ===========         ==========
</TABLE>
-------------------
(1)  Included in total fixed assets.



                                       28

<PAGE>

Merchandise and Marketing

     Merchandise Selection

     We offer our products at several different price points with the greatest
inventory depth at the middle to low price levels. In addition, we sell
Elektra-brand products at prices that are generally lower than the
internationally-recognized brand name products that we sell in the same product
category. Consumer electronics, which consist of video and audio equipment, as
well as pagers, constitute our leading product category. We purchase the
products that we sell from various domestic and international suppliers.

     Purchasing

     An important element of our marketing strategy is our ability to offer a
wide selection of brand name products to our customers. We currently have a
network of approximately 316 suppliers for our electronics, appliances and
furniture products. Approximately 3.5% of these products are imported directly.
We have developed strong relationships with both the world's major suppliers of
electronics and household appliances and well-established local manufacturers of
furniture and household goods. We always maintain an offering of our product
lines through a variety of vendors.

     Customer Service

     Among the customer services we offer is a guaranteed 30-day repair service
for our consumer electronics and appliances. Under this program, if a product
cannot be repaired within 30 days, we provide the customer with a replacement
product until the original product has been repaired. During the period of
repair, payments and interest on the product are suspended. We also supplement
the manufacturer's warranty with a limited warranty that provides a minimum of
12 months of warranty coverage on all of our products except furniture (which
carries a 90-day warranty on materials and workmanship) and 18 months of
warranty coverage on most televisions and major appliances. See "--Information
on the Company--Additional Services--Extended Warranties." During 2001, we sold
538,052 million extended warranty policies. We also offer a 30-day refund and
exchange policy on all of our products and operate a state-of-the-art customer
service call center in Mexico that allows us to respond to customer inquiries
and needs.

Installment Sales Program

     Credit Sales

     Elektra customers can choose to pay for merchandise on a weekly basis for a
period ranging from 13 to 53 weeks.

     Elektra's total credit sales in 2001 represented 68.6% of our consolidated
merchandise revenues. As of December 31, 2001, 53-week plan sales represented
37.4%, the 39-week plan sales represented 39.0%, the 26-week plan sales
represented 20.0% and the 13-week term plan sales represented 3.6% of the total
amount of Elektra's installment sales.

     During the third and fourth quarters of 2001, Elektra promoted the 53-week
plan (which has a higher rate of mark-up or interest than our other plans) in an
effort to increase our margins. As a result, the average payment term was 46
weeks as of the end of 2001. We expect this trend to continue during the first
half of 2002.


                                       29

<PAGE>

     Collection

     Elektra currently has approximately 3,000 employees dedicated to
installment sales collections and investigations related to purchases of
merchandise at its Elektra stores. Customers make their weekly installment
payments in person at the Elektra stores, which are open seven days a week, from
9:00 a.m. to 9:00 p.m. In the event that the customer misses two consecutive
weekly installment payments, our collectors visit the customer in person at
least once a week. If total arrearages exceed eight weekly payments, an
installment sales supervisor will visit the customer weekly. When the customer's
arrearages exceed 13 weekly payments, the matter is referred to our legal
department, which sends an attorney to the customer's house or place of business
to attempt to settle the collection matter. In the event that a customer's total
arrearages exceed 16 weekly payments, we may institute judicial procedures to
settle the claim by obtaining a court order for attachment of the customer's
assets. However, our policy is to attempt first to reach an agreement with the
customer whereby the customer resumes payment or the merchandise is returned.
Returned merchandise is refurbished and transferred, together with floor models
withdrawn from display, to Bodega de Remates, our chain of outlet stores created
especially for this purpose.

ELEKTRA IN MEXICO

Stores

     At December 31, 2001, we operated a total of 629 Elektra stores in Mexico,
including 391 MegaElektra superstores and 238 traditional Elektra stores (61 of
which are operated as Bodega de Remates outlet stores). As of December 31, 2001,
the total store area of Elektra stores in Mexico was 4,873,586 square feet,
which reflects a 6.6% compound annual growth rate since 1997. At December 31,
2001, we owned 75 Elektra stores and leased 554 Elektra stores under one-year
leases that typically allow us to renew such leases automatically for up to nine
successive years.

     The following table sets forth certain statistics for traditional Elektra
and MegaElektra stores in Mexico as of December 31, 2001:
<TABLE>
<CAPTION>
                                                              Traditional     Bodega de
                                                                Elektra        Remates          Mega            Total
                                                              -----------     ----------     ----------       ---------
<S>                                                         <C>              <C>              <C>             <C>
Number of stores ........................................         177              61               391             629
Aggregate store area (square feet) ......................     843,858         376,199         3,653,530       4,873,587
Number of store employees(1) ............................       1,654             271             2,925           4,850
</TABLE>
-------------
 (1)  Does not include corporate or credit and collections staff.


                                       30

<PAGE>

     Location

     We operate Elektra stores in 31 Mexican states and the Federal District.
The following table sets forth information with respect to the distribution of
our traditional and MegaElektra stores in Mexico as of December 31, 2001:

<TABLE>
<CAPTION>
                                    Number of Stores                           Store Area (square feet)(1)
                         -------------------------------------------  ---------------------------------------------
                                                            % of all
                                                             Stores
                                                            --------                                    % of Total
       Zone              Traditional     BdeR       Mega              Tradit       BdeR        Mega     Sales Areas
--------------------     -----------     ----       ----    --------  -------     -------   ---------   -----------
<S>                    <C>             <C>         <C>      <C>      <C>         <C>       <C>         <C>
Mexico City(2) .....          49          23         100      27.3    229,787     157,391     969,443      27.8
Metro-North-Bajio...          11           5          26       6.7     64,487      28,826     215,450       6.3
Metro-South-Center..           6           3          29       6.0     41,516      27,426     260,906       6.8
Northeast Frontier..          27           6          58      14.5    114,485      26,748     577,774      14.8
Pacific Frontier ...          20           7          59      13.7    106,875      35,951     589,141      15.0
West-South .........          38          11          58      17.0    160,684      73,819     527,119      15.6
Southeast ..........          26           6          61      14.8    126,024      26,038     513,697      13.7
Total ..............         177          61         391     100.0%   843,858     376,199   3,653,530     100.0%
                             ===          ==         ===     ======   =======     =======   =========     ======
</TABLE>
--------------
(1)   Based on total surface area of each store.
(2)   Includes the metropolitan area.


     Expansion Plan

     We anticipate opening approximately 40 additional MegaElektra stores in
Mexico in 2002. In addition, we intend to convert all of our existing
traditional Elektra stores in Mexico to the MegaElektra superstore format either
by renovation or relocation within the next two years.

     The average cost of opening a new MegaElektra store in Mexico is
approximately Ps.2.9 million, excluding the cost of inventory and real estate,
while the cost of converting a traditional existing store into the MegaElektra
format varies depending upon available space and required renovation and has in
the past averaged approximately Ps.1.4 million. The average time required to set
up a new store is approximately three months. The traditional Elektra stores and
MegaElektra stores utilize standardized modular racking, tiles, lighting and
equipment. The modular design of our stores allows us to quickly and
inexpensively close under-performing stores and move the furniture, fixtures and
inventory from such stores to new locations.

     Elektra stores are typically located in Mexico's middle class
neighborhoods. Criteria for the location of an Elektra store usually include
pedestrian traffic of at least 200 persons per hour during peak hours for a
traditional Elektra store and 250 persons per hour during peak hours for a
MegaElektra store. We also consider automobile traffic in selecting store sites,
although we believe that the majority of Elektra consumers walk to our stores or
travel to the store by public transportation. We have in the past located our
new stores primarily in the major metropolitan areas of Mexico. However, as the
Mexican population outside the major metropolitan areas continues to increase
rapidly, we believe that it will become increasingly important to locate stores
in small-to-medium sized population areas of the country.


                                       31

<PAGE>

     We continuously evaluate our Elektra stores and close those stores that do
not meet performance targets. We generally negotiate provisions in our leases
for Elektra store locations that permit us to terminate our leases on three
months' notice.

     The following table provides a history of our traditional and MegaElektra
stores in Mexico since 1998:
<TABLE>
<CAPTION>
                                                                   1998    1999    2000    2001
                                                                   ----    ----    ----    ----
Traditional Stores:
<S>                                                              <C>     <C>     <C>     <C>
     Number of stores open at beginning of period ..............    254     235     232     232
     Number of new stores opened ...............................      2       5       2       8
     Number of stores converted to MegaElektra stores ..........     19       6       0       0
     Number of stores closed ...................................     (2)     (2)     (2)     (2)
     Number of Traditional stores open at end of period ........    235     232     232     238
MegaElektra Stores:
     Number of stores open at beginning of period ..............    272     346     366     366
     Number of new stores opened ...............................     56      16       0      28
     Number of stores opened by conversion of Traditional stores     19       6       0       0
     Number of stores closed ...................................     (1)     (2)      0      (3)
     Number of MegaElektra stores open at end of period ........    346     366     366     391
Traditional Stores and MegaElektra Stores:
     Number of stores open at beginning of period ..............    526     581     598     598
     Total number of stores open at end of period ..............    581     598     598     629
</TABLE>

Store Operations

     Our store operations in Mexico are organized into six operating areas. The
operating areas contain four to five geographical regions, with each region
consisting of nine to fifteen stores. Our management structure provides that
store managers generally report to regional managers, who report to area
managers who, in turn, report to management at our headquarters in Mexico City.

     Elektra stores in Mexico are open every day of the year, from 9:00 a.m. to
9:00 p.m. A typical, traditional Elektra store is staffed by a full-time
manager, one installment sales manager, one credit investigator and two
collectors and, on average, five sales and support personnel. A typical
MegaElektra store has the same staff composition except that the number of sales
and support employees ranges from 15 to 20, depending on the size of the store.
We centralize the investigation and collection functions of our Elektra
operations within a city when doing so is more efficient than handling such
function at the individual store level. In Mexico City and Guadalajara, the
credit investigation function has been centralized and is performed by a staff
of 51 and 11 investigators, respectively. Our sales personnel operate on a sales
commission basis, and store managers typically receive quarterly bonuses based
on the profitability of the stores. Credit investigators and collectors are
compensated based on the performance of their credit portfolios.

Merchandise and Marketing

     Our centralized merchandising and buying group for Mexico consists of a
staff of seven buyers. Our buyers are assisted by a sophisticated management
information system that provides them with current inventory, price and unit
sales information by SKU, thus allowing us to react quickly to market changes
and to avoid inventory shortages or surpluses. We believe that our centralized
purchasing system enhances our buying power and increases our ability to obtain
favorable pricing and delivery terms from our suppliers.


                                       32

<PAGE>

     We currently distribute products to our Elektra stores from a 215,278
square foot warehouse and distribution facility located in Mexico City with
satellite distribution centers in Guadalajara (50,590 sq. ft.), Monterrey
(39,826 sq. ft.), Tijuana (24,219 sq. ft.), and Chihuahua (21,527 sq. ft.), and
a support facility in Laredo, Texas. Deliveries to Elektra stores are made
primarily by contract trucking carriers, although Grupo Elektra has a small
number of trucks at each distribution center for movement of merchandise between
stores and for special delivery requirements. Management believes that our
distribution centers and support facilities significantly reduce freight costs
and delivery time by providing warehouse space relatively close to our stores
and that our distribution network will be a key element of our e-catalog
business.

     Quality Control

     We operate quality control laboratories at our distribution centers,
conducting random testing of products and approving new products as part of our
on-going effort to ensure the quality of the products we sell.

Installment Sales Program

     The following table sets forth certain information concerning the
installment sales program of Elektra's operations in Mexico:

<TABLE>
<CAPTION>
                                                                               As of and for the year
                                                                                 ended December 31,
                                                                ---------------------------------------------------
                                                                   1999                2000                 2001
                                                                -----------        -----------          -----------
                                                                   (in millions of Ps. as of December 31, 2001)
Accounts receivable retail customers - net
<S>                                                            <C>                <C>                  <C>
      (at period end)(1) ..................................     Ps. 1,227.4        Ps. 1,462.3          Ps. 1,551.7
Installment sales as a percentage of
      merchandise revenues(2) .............................           67.0%              70.8%                68.6%
Total number of open accounts (at period end) (1) .........         383,258            464,475              681,692
Average balance per retail customer (Pesos) ...............         3,202.6            3,148.3              2,276.2
Reserve for doubtful accounts after reduction
      for write-offs as a percentage of gross
      retail receivables after write-offs(3) ..............            4.3%               6.2%                 5.5%
Annualized weighted average cost of
      receivables financing(4) ............................           16.9%              15.0%                12.1%

---------------------
(1)   Net of receivables securitization and net of allowance for doubtful accounts.
(2)   Includes mark-up on installments.
(3)   Net of receivables securitization.
(4)   Includes factoring and unsecured bank debt used to finance the receivables.
</TABLE>

Competition

     Our electronics, appliance and furniture retail business is highly
competitive. Including cash and credit operations, we believe that Elektra's
margins are among the highest in the retail sector of Mexico. Earnings primarily
depend upon the maintenance of high per-store sales volumes, efficient product
purchasing and distribution and cost-effective store operations. The Mexican
retail sector is highly fragmented and consumers are served by a number of
formats, including traditional formats such as local, independent retail stores,
modern formats such as retail chains and department stores, and informal outlets
such as street vendors and markets. Management believes, however, that no
competing business has the combination of a specialization in consumer
electronics, major appliances and household furniture, national coverage,
availability of an installment sales program and experience selling to the
middle class that we possess. In


                                       33

<PAGE>

addition, department stores and discount clubs that carry the same merchandise
lines generally offer less product variety than we do.

     Certain international retailers have established joint ventures with
Mexican retailers and have opened stores in Mexico. We expect that other
international retailers will do so in the future. We also compete against a
significant informal market for our products. We believe that our brand
recognition, goodwill in our name, 50 years of experience, extended warranties,
repair service and credit availability provide us with a competitive advantage
over the lower-priced goods sold in this informal market.

     On March 10, 1999, we were declared the winner of an auction to acquire a
94.3% equity interest in our most significant competitor in Mexico, Grupo SyR.
See "--Grupo SyR." We continue to face strong regional competition from Singer,
Viana, Coppel, Famsa, other regional chains and an estimated 7,000 local,
independent retail stores. The following table sets forth certain information
concerning what we believe are our primary competitors in Mexico.

                                Estimated Primary Region       Number of
         Store                      of Operations              Stores(1)
-------------------------     ---------------------------      --------------
Elektra                       Nation-wide                          800(2)
Singer                        Nation-wide                          157
Famsa                         Northeast                            201
Coppel                        Northwest                            115
Ceteco                        Southeast                             38
Independent retail stores     Nation-wide                       Approx. 7,000

---------------
(1)   Estimates of Grupo Elektra, as of December 31, 2001.
(2)   Includes Elektra and Salinas y Rocha stores.

     With 172 Elektra stores (including Bodega de Remates stores) in the Mexico
City metropolitan area, we believe that we are a leading specialty retailer of
consumer electronics, small appliances, white goods and household furniture in
that region. In Mexico City, we consider Singer to be our major competitor in
the electronics, small appliances and white goods retail market. Except for
Singer, in regions of the country outside Mexico City, most of our formal
competitors are regional and local department and specialty stores. We believe
that, through our Elektra operations, we are well-positioned to compete in all
of our markets in Mexico.

Employees

     As of December 31, 2001, we employed approximately 4,850 people (excluding
corporate and credit staff), on a full-time basis at our Elektra operations in
Mexico. Approximately 25% of our employees in our Elektra stores worked in
Mexico City and the remaining employees were located throughout the rest of the
country. Approximately 20% of our full-time employees in our Elektra stores were
represented by one of five unions. We have a collective bargaining contract with
each of our unions. Mexican labor laws require union contracts to be reviewed
and renegotiated yearly, with respect to salaries, and every other year with
respect to fringe benefits. The average salary increase contained in each of the
new collective bargaining agreements during the past year for the union
employees referred to above was above the average inflation rate in Mexico. We
believe our relations with the employees involved in Elektra and Elektrafin
operations are good; we have not experienced a strike since 1983.


                                       34

<PAGE>

Portfolio Securitization Program

     We utilize Elektrafin, a subsidiary of Grupo Elektra, to securitize our
receivables. In July 1997, we completed our initial securitization of Ps.625
million (nominal), and in December 1997, we completed a second offering of
Ps.241.3 million (nominal) in Ordinary Participation Certificates ("CPOs") on
the Mexican Stock Exchange. These two programs have been fully paid off. In
April 1998, we launched a Ps.793.3 million (nominal) four-year revolving
securitization program, the first of its kind in Mexico. The yield is based on
the interbank rate (Tasa de Interes Interbancaria de Equilibrio) or "TIIE", plus
225 basis points. In December 1998, we launched our second two-year revolving
securitization of receivables in an offering of Ps.200 million (nominal) with a
yield equal to TIIE, plus 125 basis points. These two programs have been fully
paid as of December 2001. In September 1999, we issued a three-year revolving
securitization of receivables in an offering of Ps.200 million (nominal), at a
rate equal to the higher of TIIE plus 150 basis points or a yield indexed to the
UDI (inflation indexed units of accounts) over 28 days. This program was fully
paid off in March 2002. In April 2000, we launched our sixth securitization
program for Ps.127 million UDIs, equivalent to Ps.350.8 million (nominal). This
issue has a total term of four years, three revolving and one of amortization,
and yields a real rate of interest of 8.35%. per annum, Nacional Financiera,
S.N.C., Fiduciary division, acted as the fiduciary issuer of the CPOs. This
program is currently undergoing its amortization phase.

     In March 2001, we completed our seventh securitization program for Ps.650
million (nominal). This issue has a total term of three years, two revolving and
one of amortization, and yields a real rate of interest of TIIE plus 200 basis
points per annum. In July 2001, we launched our eighth securitization program
for Ps.550 million (nominal) with a term of four years, three revolving years
and one of amortization, which yields a real rate of interest of TIIE plus 70
basis points per annum.

     In February 2002 we launched our ninth securitization program for Ps.750
million (nominal) with a term of four years, three revolving years and one of
amortization. This program yields a real rate of interest equal to TIIE plus 65
basis points per annum.

     Our first five revolving securitization programs during their redemption
period were rated "AAA" by Fitch IBCA, and our last four programs were rated
"AAA" at the commencement of their issuance. Our securitization programs provide
attractive financing alternatives and the proceeds are used primarily to pay
short-term debt and to finance our working capital.

     Our securitization programs are arranged on a non-recourse basis.
Maintenance of the programs and reinvestment of collection proceeds in new
receivables requires compliance with certain overcollateralization, quality and
receivables performance standards. See Item 5. "Operating and Financial Review
and Prospects--Liquidity and Capital Resources."

     In June 2002, we launched a Ps.500.9 million (nominal) four-year revolving
securitization program. This program has a term of four years, three revolving
years and one year of amortization, which yields a real rate of interest of TIIE
plus 90 basis points per annum.

     In the future, we may enter into additional securitization programs.

ELEKTRA IN LATIN AMERICA

General

     In April 1997, we began our electronics, appliances and furniture retail
operations in Latin America through the opening of four stores in Guatemala.
This was the first step of our expansion process outside Mexico and into
Guatemala, El Salvador, Honduras, the Dominican Republic and Peru.


                                       35

<PAGE>

     At December 31, 2001, we operated 101 international Elektra stores,
reflecting a decrease in stores of 1.0% since December 31, 2000. The total store
area of these Elektra stores was in excess of 861,059 square feet. We owned five
of these Elektra stores and leased the others under mid-term leases that
typically contain terms from five to ten years.

     We believe that our strengths in management, credit and marketing
expertise, technological infrastructure and merchandising will enable us to
compete successfully in various markets in Latin America and, over time, become
a leading competitor in the region.

     For our expansion into Latin America, we have established in each of the
five foreign countries in which we operate a corporation organized under the
laws of such country. These corporations are owned by Elektra Centroamerica,
S.A. de C.V., a subsidiary of Grupo Elektra, which is organized under the laws
of Mexico. Our Latin American retail operations headquarters are currently
located in San Salvador, the capital of El Salvador.

Target Market

     The target market for our international retail operations is similar to the
target market for our domestic retail operations. The profile of the "typical"
customer for our international operations is that of a person who is employed or
is self-employed and owns his or her home, but does not own a car and therefore
shops in his neighborhood or at locations served by public transportation.

     The populations in the Latin America countries (other than Mexico) in which
we currently operate--Guatemala, El Salvador, Honduras, the Dominican Republic
and Peru--are young. According to the Latin American and Caribbean Demographic
Center, approximately 50% of the population of these countries is less than 24
years of age. We estimate that over 70% of the population of these countries is
in the middle class, as we define it, with our stronghold being represented by
the lower middle class.

Stores

     The following table sets forth certain operating statistics for our Latin
America Elektra stores (outside Mexico) as of December 31, 2001:
<TABLE>
<CAPTION>
                                                                             Dominican
                                         Guatemala  El Salvador  Honduras     Republic     Peru
                                         ---------  -----------  --------    ---------    -------
<S>                                    <C>         <C>         <C>         <C>         <C>
Number of stores ....................          26          13          16          23          23
Aggregate store area (square feet) ..     230,617     117,058     137,713     192,265     183,406
Number of store employees(1) ........         253          75         184         169         282
Average selling space (square feet)..       8,870       9,004       8,607       8,359       7,974
</TABLE>

-----------------
(1)  Exclusive of corporate and collections staff.

     As of December 31, 2001, Elektra had 101 MegaElektra stores and five
distribution centers outside of Mexico, one distribution center in each of the
foreign countries in which we operate (El Salvador, Guatemala, Honduras, Peru
and the Dominican Republic). Of these stores, 96 are leased.

     Expansion Plan

     In 2002, we anticipate no store openings in the Latin American countries in
which we operate. We plan to phase out or sell our operations in the Dominican
Republic in 2002 and are considering phasing out our


                                       36

<PAGE>

operations in El Salvador. See Item 5. "Operating and Financial Review and
Prospects--Recent Developments--Operations in Latin America."

     The average cost of opening a new international Elektra store has been
approximately Ps.3.1 million, excluding the cost of inventory and real estate.
The average time required to set up a new store is approximately three months.

Store Operations

     The management structure for our international operations provides that
store managers report directly to management at our headquarters, which is
usually located in each country's capital (with the exception of Honduras, where
our headquarters are located in the town of San Pedro Sula instead of the
capital, Tegucigalpa).

     Our international Elektra stores are open every day of the year, except New
Year's Day, usually from 8 a.m. to 8 p.m. A typical international Elektra store
has the same staff composition as a MegaElektra store in Mexico. See
"--Elektra--Elektra in Mexico--Store Operations."

Merchandise and Marketing

     Purchasing and Distribution

     The centralized merchandising and buying group for our international retail
operations consists of a staff of five buyers who purchase substantially all
electronics, appliances and household furniture merchandise for the Elektra
stores outside of Mexico. All electronics and appliance merchandise is purchased
in each country from local suppliers of brand name consumer electronics and from
suppliers of major appliances such as Mabe, Vitro, Tappan, Atlas and Bosch.
Household furniture, such as living room furniture, complete kitchen units,
dressers and mattresses are purchased in each country from local suppliers,
whereas bedroom furniture, dinettes, tables and chairs are generally purchased
from Mexican suppliers.

     We currently distribute products to our international Elektra stores from a
leased central warehouse and distribution facility located in each country.
Deliveries to Elektra stores are made primarily by contract trucking carriers.

     The following table sets forth certain information regarding the warehouses
from which Grupo Elektra distributes products to its international Elektra
stores:

Country                 Warehouse Location (City)     Warehouse Area (Sq. feet)
-----------             -------------------------     -------------------------
Guatemala                     Guatemala City                 53,819.5
El Salvador                   San Salvador                   21,527.8
Honduras                      San Pedro Sula                 26,909.8
Dominican Republic            Santo Domingo                  64,583.5
Peru                          Lima                           76,746.7

     The computerized management information system we developed for our Mexican
Elektra operations has been adapted to meet the various subtle differences in
terminology in each country as well as the unique tax requirements of each
country. The system provides real-time satellite communication among the
individual Elektra stores, each country's company headquarters, our Latin
America operations headquarters (located in San Salvador) and our main
headquarters in Mexico City.


                                       37

<PAGE>

     Our policies for our international retail operations with regard to
pricing, customer service and advertising are substantially the same as those
applied to our operations in Mexico. See "--Elektra--Elektra in
Mexico--Merchandise and Marketing." One difference, however, is that every
international Grupo Elektra store has an Express Service stand that offers the
customer a fast repair service for small appliances and consumer electronics.

Installment Sales Program

            The following table sets forth certain information concerning our
installment sales program for our Latin America operations:

<TABLE>
<CAPTION>
                                                                            As of and for the year ended December 31, 2001
                                                                    -------------------------------------------------------------
                                                                            (in millions of Ps. as of December 31, 2001)
                                                                                     El                     Dominican
                                                                    Guatemala     Salvador     Honduras      Republic      Peru
                                                                    ---------     --------     --------     ---------     -------
<S>                                                               <C>           <C>          <C>           <C>         <C>
Accounts receivable retail customers-net (at period end) ........    Ps.74.1       Ps.9.9       Ps.31.0       Ps.18.4     Ps.99.4
Installment sales as a percentage of merchandise revenues(1) ....      66.3%        57.4%         71.6%         71.5%       81.6%
Total number of open accounts (at period-end) ...................     38,007        7,599        21,471         9,064      54,839
Average balance per retail customer (in Pesos) ..................    1,949.0      1,306.3       1,445.0       2,030.0     1,812.4
Reserve for doubtful accounts as a percentage of gross retail
    receivables .................................................       2.6%         0.0%         19.9%         11.0%        2.4%
Annualized weighted average cost of receivables financing(2) ....      19.6%        13.3%         18.8%         22.5%       12.5%
</TABLE>
-------------
(1) Includes mark-up on installment sales.
(2) Includes unsecured bank debt used to finance the receivables.

     Credit Sales

     Total credit sales in 2001 represented 72.2% of our total sales in our
international operations. During the last quarter of 2001, we discontinued our
credit operations in the Dominican Republic and El Salvador.

Competition

     Our electronics, appliance and furniture retail businesses in Latin America
face numerous competitors in all product categories. Earnings primarily depend
on the maintenance of high per-store sales volumes, efficient product purchasing
and distribution and cost-effective store operations. The retail sector
throughout Latin America is fragmented and consumers are served by a number of
formats, including traditional formats such as independent retail stores, modern
formats such as retail chains and department stores, as well as informal outlets
such as street vendors and markets.

     The competition from organized competitors in these regions is relatively
weak. This situation provides us with an added opportunity for growth, and over
the medium-term, we envision expanding our presence to other Spanish-speaking
countries in Latin America.

     However, we face significant competition from the informal economy and
parallel imports for the products we carry. We believe that our extended
warranties, repair service and credit availability provide us with a competitive
advantage over lower-priced goods sold in this informal market.


                                       38

<PAGE>

     The following table sets forth certain information based on our estimates
concerning our primary competitors in the five Latin American countries outside
Mexico in which we operate:

  Country                       Competitor            Estimated Number of Stores
------------                    ------------          --------------------------
 Guatemala                      Curacao                           35
                                Tropigas                          13

                                Distelsa-Max                      16
                                Radiovision                       10
                                Agencias Way                      37
                                Tirador                           5

 El Salvador                    Curacao                           26
                                Prado                             20
                                Tropigas                          10
                                Omnisport                         19

 Honduras                       Curacao                           24
                                Tropigas                          13

 Dominican Republic             Curacao                           24
                                Corripio                          30
                                Ray Muebles                       12
                                Plaza Lama                        5

 Peru                           Efe                               14
                                Carsa                             42
                                Curacao                           30


Employees


     As of December 31, 2001, we employed approximately 2,020 people on a
full-time basis in our international operations (including store, credit and
collections and corporate and administration employees). We employ part-time
employees to meet seasonal demand as necessary. None of our employees in the
Latin American countries outside of Mexico in which we operate is represented by
a union. We believe that our relations with these international employees have
been good since inception in 1997. Grupo Elektra has never been subject to a
strike by our international employees.

     Training

     We have an extensive in-house education program to train new employees,
keep current employees informed of additions and modifications to our operating
procedures and demonstrate new products. New store employees generally receive
two weeks of training prior to assuming responsibilities, and new store
managers, credit managers, sales and credit regional managers receive three
months of training at the Elektra University located in Mexico City. In
addition, we offer continuing education programs to our existing employees.
Training consists of both product training and classes focused on the social and
personal attributes important for the particular position.


                                       39

<PAGE>

                                    GRUPO SyR

Acquisition of Grupo SyR

     On March 10, 1999, a syndicate of banks holding a majority equity interest
in Grupo SyR, together with certain individual shareholders of Grupo SyR,
declared us the winner of an auction to acquire a 94.3% equity interest in Grupo
SyR. At the time of its acquisition by Grupo Elektra, Grupo SyR was a holding
company whose principal subsidiary, Salinas y Rocha, was engaged in the sale of
furniture, household goods and clothing. In connection with this acquisition, we
acquired tax losses of Grupo SyR of approximately US$385.5 million, with a tax
effect benefit of US$135 million. Throughout the last three quarters of 1999, we
consolidated the 86 traditional Salinas y Rocha stores into Grupo Elektra, sold
10 department stores to El Puerto de Liverpool, S.A. de C.V. ("Liverpool"), and
converted the remaining department store into a Salinas y Rocha superstore. On
December 18, 2000, Grupo Elektra merged with and into Grupo SyR, which, as the
surviving entity, changed its name to Grupo Elektra, S.A. de C.V.

     Our management believes that the acquisition of Grupo SyR has resulted in
an increase in the competitiveness and profitability of both the Elektra and
Salinas y Rocha chains of stores. Since their acquisition by Grupo Elektra, the
Grupo SyR operations have experienced a positive turn-around. Our management has
restructured Grupo SyR by reducing costs, creating more efficient operations and
introducing systems and business strategies proven in Elektra operations. Some
stores and real estate have been sold, and the remaining stores have been
remodeled. In addition, we have reduced the Grupo SyR workforce while imposing
efficiencies by introducing store operations similar to those employed by
Elektra. Finally, installment sales programs have been reintroduced, following
the program used by Elektrafin.

     Strength of Retail Brand Name. The "Salinas y Rocha" brand name enjoys
strong national recognition among Mexico's middle class. The acquired stores,
which continue to operate under the Salinas y Rocha name, specialize in sales of
furniture and home appliances and cater to a demographic group with more
purchasing power than the traditional Elektra customers. As a result, we are
increasing our penetration of a higher income sector. While Elektra has
typically been associated with easy access and affordability, Salinas y Rocha is
recognized as a lifestyle brand name.

     Opportunities for Creating New Value in Salinas y Rocha. We can
successfully offer a number of our products and services in Salinas y Rocha
stores, including the credit services traditionally offered at Elektra stores.
We continue the conversion of Salinas y Rocha customers from the Salinas y Rocha
credit system to Elektra's credit system. In addition, we will increase our
television advertising efforts in order to promote products offered in Salinas y
Rocha stores. As a result, management believes that the expanded variety of
products offered at Salinas y Rocha stores should result in higher levels of
sales and customer satisfaction.

Target Market

     The target market of Salinas y Rocha's traditional stores is the Mexican
middle and upper-middle class or consumers with household income between
US$12,000 and US$36,000 per year and between US$36,000 and US$72,000 per year,
respectively. Salinas y Rocha's target market is therefore more affluent and has
more purchasing power than Elektra's traditional target market, the Mexican
lower-middle and middle classes.

     The Salinas y Rocha brand name is highly recognized among the middle
socioeconomic segments of the Mexican population. Regardless of the financial
difficulties experienced by Grupo SyR prior to its acquisition by Grupo Elektra,
the name Salinas y Rocha is still associated with broad selection, quality and
accessibility.


                                       40

<PAGE>

Property

     As of December 31, 2001, Salinas y Rocha leased 77 stores and owned 13
stores.

Merchandise

     Salinas y Rocha stores sell a combination of electronic goods, small
appliances, white goods and furniture. Furniture provides larger profit margins
than electronics and appliances. As a result of the fact that Salinas y Rocha
stores sell a higher percentage of furniture (approximately 26% of Salinas y
Rocha's total sales) relative to the percentage of furniture sold in Elektra
stores (approximately 16% of Elektra's total sales), the potential consolidated
gross margins for Grupo Elektra could be enhanced.

Installment Sales Program

     Salinas y Rocha has offered in-store credit to its customers in the form of
installment sales and revolving credit lines since 1936. Prior to its
acquisition by Grupo Elektra, Salinas y Rocha's credit operations, unlike those
of Elektra stores, involved the issuance of a Salinas y Rocha credit card, which
could be used to purchase merchandise at any Salinas y Rocha store. In addition,
Salinas y Rocha's credit operations were managed by regional credit centers, as
opposed to the individual store supervision conducted by Elektra stores. Since
we acquired Grupo SyR, Salinas y Rocha has discontinued its credit program and
has implemented an installment sales program that is identical in all
significant respects to the credit program conducted by Elektra stores, except
that payments are made biweekly.

     Salinas y Rocha stores currently provide to customers a choice of a cash
price or an alternative biweekly installment purchase price. Salinas y Rocha
customers can choose to pay for merchandise on a biweekly basis for periods of
13, 26, 39 or 53 weeks. For the year ended December 31, 2001, Salinas y Rocha's
total credit sales represented approximately 65.6% of Salinas y Rocha's total
sales. As of the same date, 53-week plan sales represented 24.2%, 39-week plan
sales represented 53.3%, 26-week plan sales represented 16.6% and 13 week plan
sales represented 5.9% of the total amount of Salinas y Rocha's installment
sales. In addition, as of the same date, 53-week receivables represented 46.2%,
39-week plan receivables represented 40.9%, 26-week receivables represented
10.7% and 13-week receivables represented 2.2% of Salinas y Rocha's installment
sales receivables portfolio.

     The following table sets forth, as of December 31, 2001, certain
information regarding Salinas y Rocha's installment sales operations under our
ownership:

<TABLE>
<CAPTION>
                                                                                                 As and for the year ended
                                                                                                        December 31,
                                                                                     -----------------------------------------------
                                                                                        1999             2000               2001
                                                                                     -----------      -----------       ------------
                                                                                                 (in millions of pesos as
                                                                                                  of December 31, 2001)
<S>                                                                                <C>               <C>               <C>
Accounts receivable retail customers (at period end)(1) ........................     Ps.  211.3       Ps.   337.5       Ps.   290.5
Installment sales as a percentage of merchandise revenues(2) ...................           62.3%             63.4%             65.6%
Total number of open accounts (at period end) ..................................         65,666           102,377           106,961
Average balance per retail customer (in Pesos) .................................        3,217.2           3,296.3           2,716.1
Reserve for doubtful accounts after reduction for write-offs
  as a percentage of gross retail receivables before write-offs ................           11.4%              8.2%              4.4%
Annualized weighted average cost of receivables financing(3) ...................           16.9%             15.0%             12.1%

---------------
(1)   Net of allowance for doubtful accounts.
(2)   Includes mark-up on installment sales.
(3)   Includes factoring and unsecured bank debt used to finance the receivables.
</TABLE>


                                       41

<PAGE>

     Credit Approval and Collection

     Prior to Grupo Elektra's acquisition of Grupo SyR, Salinas y Rocha's credit
approval and collection procedures were conducted through regional credit
centers, each of which was responsible for the implementation of these
procedures for a number of Salinas y Rocha stores. After Grupo Elektra's
acquisition of Salinas y Rocha, the operations of the regional credit centers
were discontinued. Credit approval and collection procedures of Salinas y
Rocha's installment sales program are now conducted by credit managers,
investigators and collectors located in each Salinas y Rocha store. In addition,
credit approval and collection procedures are now substantially similar to those
of Elektra's installment sales program, except that Salinas y Rocha offers
customers biweekly installment credit programs. See "--Elektra--Installment
Sales Program--Credit Sales" and "--Collection."

Employees

     At December 31, 2001, approximately 824 employees worked in Salinas y
Rocha's operations (excluding corporate and credit staff), approximately 4.8% of
which belonged to labor unions. Grupo SyR has never experienced a labor strike,
and management believes that it has good employee and labor relations. During
1999, management began converting all employee compensation to the system
currently utilized by Grupo Elektra, which provides for a higher percentage of
performance-based compensation. In addition, we have converted all employee
benefit plans to those currently provided by Grupo Elektra, including medical,
life and pension benefits.

                                     THE ONE

     The One is our chain of clothing stores. At December 31, 2001, The One had
130 stores throughout Mexico (with an additional three Hecali Stores that we
expect to convert into The One stores). Our strategy at The One is to expand our
store network and support the stores with strong management, automated material
handling, state-of-the-art information systems and communications, credit,
substantial television advertising and selling space.

Conversion of Hecali to "The One"

     During the second quarter of 1999, we initiated a conversion of the name
and format of our Grupo Hecali, S.A. de C.V. ("Hecali") stores to "The One", a
new apparel chain providing high-quality basic garments for the entire family.
We originally expected to convert all Hecali stores into The One. As of the end
of 2001, we had already converted 130 stores with the remaining 3 stores
expected to be converted by the end of 2002. Conversion to the new format costs
approximately US$100,000 per store.

     The One stores feature a higher quality and broader range of products
within each line than Hecali stores. This change permits us to reduce the number
of suppliers we deal with and lowers our inventory levels. Because the products
are of a higher quality, prices at The One stores are generally higher than
those at Hecali stores, and the products are expected to earn higher profit
margins. The One stores have also provided us the opportunity to develop private
labels. We offer financing to customers in The One stores similar to the
financing provided to Hecali customers.

     On February 29, 2000, The One launched an Internet web-site
(www.theone.com.mx), which may be accessed by customers at home or at The One
stores. The web-site allows customers to place orders for The One products, for
delivery to customers anywhere in Mexico.


                                       42

<PAGE>

Stores

     At December 31, 2001, there were 130 The One stores in operation (and
another three Hecali stores that we expect to convert into the One Stores). At
December 31, 2001 The One owned 15 stores and leased 118 stores under mid-term
leases that typically contain terms from five to ten years. The One stores range
in size from 1,184 to 11,281 square feet with an average 4,048 square feet of
selling space.

     The following table sets forth certain operating statistics for The One
stores as of, and for the year ended, December 31, 2001:

Sales (Ps. Millions)(1) .................         541.3
Number of stores ........................          133
Aggregate store area (sq. ft.) ..........      538,378
Number of store employees(2) ............        1,447

-------------
(1) Excludes mark-up on installment sales.
(2) Excludes corporate and collections staff.

     Location

     The One operates stores in 97 cities in 30 Mexican states. The following
table sets forth information with respect to the distribution of The One stores
in Mexico as of December 31, 2001:

<TABLE>
<CAPTION>
                                        Number of Stores                   Store Area (sq. ft.)
                               --------------------------------    ----------------------------------
                                                      % of all                             % of Total
   Zone                         The One                Stores        The One                 Stores
----------                     ----------            ----------    ----------              ----------
<S>                           <C>                  <C>            <C>                      <C>
Metropolitan ..............        17                   12.8         68,975                   12.8%
Metro-North-Bajio .........         6                    4.5         19,138                    3.6%
Metro-South-Center ........         6                    4.5         28,610                    5.3%
Northeast Frontier ........        18                   13.5         78,275                   14.5%
Pacific Frontier ..........        22                   16.5         92,279                   17.1%
West-South ................        21                   15.8         80,955                   15.0%
Southeast .................        43                   32.4        170,146                   31.7%
                               ---------             ---------     ---------                ---------
            Total .........       133                    100%       538,378                    100%
                               =========             =========     =========                =========
</TABLE>

     Expansion Plan

     The One opened seven additional stores in Mexico in 2001, and closed 35
stores. We have closed 10 The One Stores during 2002 and anticipate no store
openings for 2002. The average cost of opening a new The One Store is
approximately Ps.2.3 million, excluding the cost of inventory and real estate.
The average time required to set up a new The One store is approximately three
months.

     The following table provides a history of The One store program as of
December 31, 1999, 2000 and 2001.
<TABLE>
<CAPTION>

                                                        1999      2000      2001
                                                       ------    ------    ------
The One Stores:
<S>                                                   <C>       <C>       <C>
  Number of stores open at beginning of period ....      155       159       161
  Number of new stores opened .....................        5         3         7
  Number of stores closed .........................       (1)       (1)      (35)
                                                         ---       ---       ---
  Number of The One stores open at end of period ..      159       161       133(1)
                                                         ===       ===       ===
</TABLE>


                                       43

<PAGE>

-------------
(1) Includes three Hecali Stores.

Merchandise and Marketing

     Merchandise Selection

     The One stores, which average approximately 4,048 square feet of selling
space, offer a broad range of basic and sports apparel and shoes for men, women
and children at different price levels with the greatest inventory at the
middle-to-lower price levels. The following table sets forth the approximate
percentages of total retail merchandise revenues (excluding mark-up for
installment sales) from each of The One's principal product lines for 1999, 2000
and 2001:

                                                  Year Ended December 31,
                                          --------------------------------------
                                           1999           2000             2001
                                          ------         ------           ------
Men's clothing .....................       56.2%          50.5%            50.6%
Children's clothing ................       20.6           24.7             23.9
Ladies' clothing ...................       20.2           22.4             20.5
Other ..............................        3.0            0.3              1.6
Telephones .........................       --              2.1              3.4
                                                         -----            -----
            Total ..................      100.0%         100.0%           100.0%
                                          =====          =====            =====

     Pricing Policy

     The policy for The One operations is to offer its products at cash prices
that are competitive in its targeted markets. In addition, its installment sales
plan is designed to provide its customers at The One stores with financing for
the products offered at an affordable weekly cost.

     Purchasing and Distribution

     An important element of The One's marketing strategy is its ability to
offer a wide selection of brand name products to its customers. As of December
31, 2001, The One had a network of approximately 124 suppliers, nine of which
supplied the majority of its products.

     The centralized merchandising and buying group consists of a specialized
staff of buyers who purchase substantially all merchandise for The One stores.

     The One currently distributes products to its stores from its Toluca
warehouse. Deliveries to The One stores are made primarily by 11 contract
trucking carriers, although Grupo Elektra has a nominal number of trucks at the
distribution center for movement of merchandise between stores and special
delivery requirements. The One's contract carriers employ a fleet of
approximately 30 trucks to deliver merchandise to stores. Merchandise for The
One can be sourced from a large number of suppliers (including private label
manufacturers).

Installment Sales Program

     Operations

     The One has developed a system to extend credit for lower-priced purchases,
and has provided in-store credit to its customers since January 1996.


                                       44

<PAGE>

     The following table sets forth certain information concerning the
installment sales program on The One's products for the years 1999, 2000 and
2001:

<TABLE>
<CAPTION>
                                                                                             As of and for the Year
                                                                                               Ended December 31,
                                                                            ------------------------------------------------------
                                                                               1999                  2000                  2001
                                                                            ----------           -----------           -----------
                                                                                  (in millions of Ps. As of December 31, 2001)

<S>                                                                        <C>                  <C>                   <C>
Accounts receivable retail customers-net (at period end) ..............     Ps. 132.8            Ps.  113.3            Ps.  102.4
Installment sales as a percentage of merchandise revenues(1) ..........          52.9%                 48.3%                 48.4%
Total number of open accounts (at period-end) .........................       219,813               194,355               164,603
Average balance per retail customer (in Pesos) ........................         603.9                 582.9                 622.1
</TABLE>

-------------
(1) Includes mark-up on installment sales.

     Collection

     The One's collection practices are implemented and monitored at the
individual store level. The One currently has approximately 535 employees
dedicated to installment sales collections and investigations.

Competition

     In general, The One's competitors in the clothing retailer business include
other specialty stores, department stores and warehouse clubs, some of which are
national and international in scope and have greater resources than The One. We
believe the main competitors for The One are Super Jeans, Edoardos and the
private labels of department stores.

Employees

     As of December 31, 2001, The One employed approximately 1,447 people
(excluding corporate and credit staff) on a full-time basis. Approximately 4.9%
of The One full-time employees were represented by five unions. As of December
31, 2000, Mexican labor laws require union contracts to be reviewed and
renegotiated yearly, with respect to salaries, and every other year with respect
to fringe benefits. We believe that our relations with these employees are good;
since assuming control of The One in 1996, Grupo Elektra has not been subject to
a strike by employees working at The One stores.

Strategies

     The One stores continue to lag in their performance and have not reached
our expectations for this business segment. Our objective with respect to The
One stores has been, and remains, to increase sales to achieve an acceptable
level of profitability. In this regard, we have implemented the following
strategies: (a) closing a number of stores that were not meeting our
profitability objectives; and (b) lowering inventories with more "one-shot"
purchases.

     The "one-shot" strategy involves buying merchandise in limited quantities
and displaying such merchandise for a limited time period (2-3 months), which
allows us to discount and quickly sell slow moving or obsolete items.


                                       45

<PAGE>

     Our strategy also includes acceptance of all major credit cards for
purchases of up to ten thousand pesos. We have also improved our product
sourcing and hired 60 new store managers. In addition, we have instituted a new
compensation system for our store associates.

     We are confident that these measures should lead to an enhanced
profitability at The One. However, we will continue to consider other possible
alternatives, including closing all of our The One stores and/or a total
divestiture of this business segment, if these improvements are not successfully
realized during 2002.

                                LA CURACAO MEXICO

     On July 10, 2001, we acquired 35 La Curacao Mexico stores located in
southeastern and central Mexico for US$5.4 million. La Curacao Mexico
specialized in electronics, white goods and appliance sales and had revenues of
approximately US$30 million in 2000.

     We have converted the 35 stores into 15 Elektra stores, 9 The One stores, 5
Salinas and Rochas stores and 4 Bodegas de Remates stores. We also closed 2 of
the La Curacao Mexico stores. We believe that the acquisitions and conversions
have strengthened our presence in the growing southeastern Mexico market area.

                               ADDITIONAL SERVICES

Money Transfer Business

     Through our operations in Mexico, we participate in two separate sectors of
the money transfer business. Through "Dinero en Minutos", we act as paying agent
in Mexico of electronic money transfers initiated by agents of Western Union
Financial Services, Inc. to transfer funds electronically from abroad, primarily
originating in the United States, to Mexico. Elektra and The One stores offer
customers electronic money transfer services within Mexico under the brand name
"Dinero Express." During 2001, we generated Ps.506.6 million in revenue from
Dinero en Minutos and Dinero Express.

     Dinero en Minutos

     In October 1993, we entered into certain joint arrangements (the "Joint
Venture Arrangement") with Western Union Financial Services, Inc. ("Western
Union") to provide electronic money transfer services in Mexico. These
arrangements provided us with the benefit of increased customer traffic in our
stores and also generated U.S. Dollar revenue. Under the Joint Venture
Arrangement, Western Union's worldwide network of agents originated electronic
money transfers to Mexico, and Elektra's domestic network of stores, as well as
certain banks and other retailers that do not compete directly with the retail
operations of Elektra, distributed such electronic money transfers as agents in
Mexico. Western Union's Will Call Money Transfer Service (the "Will Call
Service") was marketed through the Joint Venture Arrangement in Mexico under the
trade name "Dinero en Minutos."

     In January 1996, Elektra sold its interests in the entities established
pursuant to the Joint Venture Arrangement to American Rapid Corporation Inc., a
wholly-owned subsidiary of Western Union ("American Rapid"), for US$20 million
and received its share of all undistributed net profits in the form of a
dividend. In addition, Elektra and Western Union entered into a ten-year
Exclusive Services Agreement dated January 11, 1996 (the "Exclusive Services
Agreement"), which provided the framework for the continued service by Elektra
as an agent for Western Union's Will Call Service in Mexico. Pursuant to the
Exclusive Services Agreement, Elektra received US$142 million, which was
deposited in escrow with First Bank, National Association (the "Escrow Agent"),
in consideration for (i) the services to be rendered pursuant to the agency
agreements described below, (ii) terminating the prior agreement relating to
foreign exchange gains and (iii) agreeing to certain noncompete covenants. Grupo
Elektra has caused the money deposited in escrow to be invested in 2% of the
capital stock of each of Elektra, Elektrafin and Importaciones Electronicas
Ribesa, S.A.


                                       46

<PAGE>

de C.V., each a subsidiary of Grupo Elektra (the "Western Union Transaction").
These subsidiaries in turn applied the funds to repay short-term debt of Grupo
Elektra, to reduce accounts payable to our suppliers, to pay a portion of the
cash consideration of our investment in CASA and for general corporate purposes.
Each year, the escrow agent releases a portion of the shares held in escrow
equivalent to US$14.2 million, and pays that amount to us as compensation for
our services for the corresponding year.

     Under the Inbound Agency Agreement, dated January 11, 1996 (the "Inbound
Agency Agreement"), between Elektra and American Rapid (entered into pursuant to
the Exclusive Services Agreement between Elektra and Western Union), Elektra
acts as one of the authorized agents used by Western Union to implement and
provide the Will Call Service in Mexico. This service consists of the transfer
of money originating outside Mexico by persons who pay Western Union's agents an
amount in U.S. Dollars (or an appropriate local currency) to be sent to persons
in Mexico who receive such amount in Pesos. Grupo Elektra transferred the
equivalent of US$570.7 million in 1998, US$643.4 million in 1999, US$669.3
million in 2000 and US$646.6 million in 2001. We believe that we are one of the
largest money transfer agents in Mexico. Elektra receives an agency fee in U.S.
Dollars in respect of the transactions completed during each month. This
agreement expires in January, 2006.

     Western Union and Elektra also entered into a Foreign Exchange Agreement,
dated January 11, 1996 (the "F/X Agreement"), whereby Elektra receives a
percentage of the net foreign exchange gain with respect to the portion of the
money transfer business for which Elektra provides services. Under the F/X
Agreement and the Inbound Agency Agreement, until January 11, 2000 Elektra
received approximately 2.4% of the monies transferred into Mexico, as
compensation for acting as the transfer agent. Under the same agreements, we now
receive approximately 6% of such monies. The exact percentage depends on the
spreads realized by Western Union in respect of foreign exchange transactions
and the commission charged to its customers. The net foreign exchange gain for
each month is paid in U.S. Dollars. This agreement expires in January, 2006.

     Elektra is the largest paying agent for Western Union in Mexico. We operate
approximately 10.8% of the total volume of money transfers as reported by Banco
de Mexico, and an estimated 7.3% of the total amount of U.S. dollars transferred
to Mexico electronically.

     Competition

     Western Union's major competitor in the electronic money transfer business
to Mexico is BBVA Bancomer, S.A. ("Bancomer") due to Bancomer's service
agreements with more than 40 companies to pay out in Mexico money sent through
such companies. MoneyGram has an agreement with Banco Nacional de Mexico, S.A.
First Data Corporation, which in 1996 owned a controlling interest in both
Western Union and MoneyGram, disposed of its interest in MoneyGram in December
1996 pursuant to a consent decree. We believe that the remainder of the market
consists primarily of relatively small, often family-run, operations and some
medium and small size companies.

     Dinero Express

     Dinero Express is the first standardized intra-Mexico money transfer
service offered to our target customer group by a major enterprise. From the
startup of Dinero Express's operations in February 1996 through December 31,
2001, the number of money transfers handled by Dinero Express grew at a
compounded average annual rate of 24.7%. The number of money transfers grew
25.5% during 2001, due primarily to the opening of this service in our The One
and Salinas y Rocha stores. We believe that Dinero Express has brought an
increase in store traffic, and that television advertising through TV Azteca has
been a large factor in the success of this business.


                                       47

<PAGE>

     Fotofacil

     In January 1997, we began offering photo processing services at selected
Elektra stores in Mexico under the trademark of "Fotofacil." The photography
kiosks at Elektra stores offer products such as film, cameras, photo albums,
batteries, frames and audiocassettes, as well as services such as film
development and ID photography. The space required in Elektra stores for
installation of photography minilabs is approximately 108 square feet (10 square
meters). Generally, two specialized salespersons staff each minilab. The average
development time for a roll of film is one hour.

     As of December 31, 2001, we had installed Fotofacil kiosks in 180 Elektra
stores which generated a total of Ps.156.0 million in revenue.

Banking Services

     In August 1997, we launched in Mexico a savings account service in alliance
with Serfin, a Mexican bank. Through this alliance, we promote savings by
Elektra's low to middle income customer base. This savings account service
enables Elektra's customers to open Serfin bank savings accounts named
"Guardadito" at small kiosks located within stores throughout Mexico. These
small kiosks act as a limited Serfin branch, and Serfin hires and pays the
employees who staff these kiosks. This venture increases the range of financial
products and services being offered to the middle class consumer in Mexico, the
majority of whom have formerly depended primarily on informal savings
mechanisms, and increases traffic to our stores.

     Guardadito also provides increased profits from commissions from Serfin. A
minimum deposit of Ps.20 is required to open an account, but there are no direct
commissions or fees paid by the customer, and the savings in the account
generate interest. Under our agreement with Serfin, we are entitled to a
commission equivalent to 50% of the profit made by Serfin from Guardadito
savings accounts. The profit is determined by multiplying the total deposits in
Guardadito accounts by the difference between the TIIE rate and the rate paid by
Serfin to Guardadito account holders, less any expenditures of Serfin in
connection with the Guardadito savings account service. This commission is paid
on a monthly basis.

     There are two different types of "Guardadito" accounts: "Guardadito
Ahorro," which consists of a passbook savings account that generates interest,
and "Guardadito Tanda," which consists of a savings club whereby the customer
deposits a fixed amount of cash (a minimum of Ps.20) on a weekly basis for a
certain term (eight to 32 weeks) after which the customer receives the total
amount of cash saved along with the earned interest.

     As of December 31, 2001, there were approximately 998,000 "Guardadito"
savings accounts maintained by Serfin with an average balance of approximately
Ps.397.00.

     On April 4, 2002, the Mexican Ministry of Finance approved our application
to operate a consumer bank. This was the first new banking license granted in
Mexico since the 1994 Mexican economic crisis. We intend to establish a banking
subsidiary during 2002. We are establishing the bank in order to ensure
consistent financing for our customer receivables, which are an integral part of
our retail strategy. The bank would house all of our consumer financing
operations, while our money transfer operations would remain with the retail
segment of our business. We do not intend to open stand-alone bank branches, but
will have the bank's products and services offered through service windows or
mini-branches located in our stores. The bank's credit operations would be
funded through our current securitization program, deposits and the inter-bank
and capital markets. We are currently in negotiations with Serfin to terminate
our agreement with them and to eventually transfer the Guardadito accounts to
our new bank. We cannot assure you that these


                                       48

<PAGE>

negotiations will be successful. We intend to eventually offer many of the
services that are currently offered through Banco Serfin through our banking
subsidiary.

Unefon Agreement

     In November 2000, we entered into a ten-year service agreement with Unefon,
S.A. de C.V., an affiliated provider of wireless telecommunications and other
telephony products and services in Mexico.

     Pursuant to our agreement with Unefon, we market and distribute handsets,
or mobile phones, which we generally purchase from Unefon and then re-sell in
our stores. Unefon currently offers handsets manufactured by Nokia, Motorola, LG
and Qualcomm. We must obtain Unefon's approval prior to selling models of
handsets purchased from third parties for sale in our stores.

     In general, we receive compensation pursuant to this agreement based on the
percentage of revenues generated by the sale of handsets and airtime sold in our
stores. We receive a 20% discount on the price of handsets purchased from
Unefon, 5.8% of revenue from all airtime sold at our stores for use on Unefon's
network through virtual or prepaid cards, 5.8% of Unefon's net interconnection
revenues from "calling party pays" subscribers signed-up through our stores, and
50% of the profits generated by any service Unefon provides that is collected at
our stores, other than telephony-related services or airtime sold in our stores
through prepaid or virtual cards and other value-added services bundled together
with the sale of such cards.

     Unefon is entitled to defer both airtime and interconnection related
amounts due during 2000, 2001 and 2002 until the end of 2004 and all amounts due
during 2003 and 2004 until the end of 2005. On each due date, Unefon must pay
the principal amount due plus interest calculated at a rate equal to the average
annual cost of our indebtedness in pesos or U.S. dollars, depending on the
currency of the amount due. For the year ended December 31, 2001, as a result of
Unefon's right to defer payments, Unefon owed us Ps.22.8 million for commissions
and discounts related to sales of airtime, value-added services and handsets in
our stores. This amount represented approximately 22% of the airtime,
value-added services and handset revenues generated by Unefon through our stores
in 2000.

     As part of our investment in CASA and in TV Azteca through CASA, we
indirectly own 9.1% of Unefon. TV Azteca has adopted a resolution to permit the
spin-off, subject to certain conditions, of its interest in Unefon to its
shareholders, including Azteca Holdings. See "--Strategic Investments--TV Azteca
Spin-Off of Unefon."

Extended Warranties

     In September 1997, we launched in Mexico our extended warranty service that
includes warranty certificates and additional service contracts under the
trademark of "Milenia." This service is becoming a more prominent contributor to
our overall revenues.

     The extension of a product warranty is available only for electronics and
appliance merchandise. There are three terms of extended warranties: two, three
and five years. The program's goal is for Grupo Elektra's customers to rely on a
professional product maintenance service and for the program to achieve a
penetration of six percent of Elektra's total sales. Under the extended warranty
program, Grupo Elektra independently repairs and provides maintenance for
products when they are not covered by the manufacturer's warranty. This program
is currently offered only to a limited number of products at the Elektra stores,
but there are plans to introduce it to other product lines as well as in Salinas
y Rocha stores. Grupo Elektra's customers can pay the price of the warranty
through Grupo Elektra's installment sales program on the same credit terms that
apply to the merchandise.


                                       49

<PAGE>

     As of December 31, 2001, we have sold 538,052 extended warranties. The
extended warranties generated Ps.208.1 million (US$22.7 million) in revenue in
2001.

Computers

     Following a successful pilot program in 2000, we have begun offering
computers in approximately 300 Elektra stores to target the underdeveloped
computer market in Mexico. We expect to expand the number of Elektra stores
selling computers to approximately 600 by the end of 2001. Because computer
sales in Mexico have lagged significantly behind sales in the United States
during the past ten years, we believe that by targeting our existing customer
base we may be able to generate increased revenues and attractive margins
through the sale of computers to first-time computer owners.

                              STRATEGIC INVESTMENTS

CASA

     On March 26, 1996, we purchased 35.8% of the capital stock of CASA, a
holding company through which our Controlling Shareholders own their interests
in TV Azteca and Grupo COTSA S.A. de C.V. ("Grupo COTSA"). CASA indirectly owns
(through Azteca Holdings, S.A. de C.V., an intermediate holding company)
approximately 56.7% of the outstanding common stock of TV Azteca and 26.2% of
the outstanding common stock of Grupo COTSA. We acquired our interests in CASA
in exchange for capitalizing US$45.4 million of accounts receivable due to us
from CASA and its subsidiaries, and paying US$62.2 million in cash, which CASA
used to repay bank debt incurred in connection with the acquisition of interests
in TV Azteca and Grupo COTSA. We acquired non-voting "N" Shares in CASA,
together with the right to exchange such "N" Shares for 226,492,629 CPOs of TV
Azteca owned by Azteca Holdings. This exchange right allows us to effectively
exchange all of the CASA "N" Shares for shares representing, approximately 7.6%
of TV Azteca's capital stock. Elektra may make such exchange, in whole or in
part, at any time prior to March 26, 2006.

     On September 1, 2000, we entered into an agreement with CASA pursuant to
which we granted CASA a twelve-month option to purchase the 35.8% of CASA shares
we currently own, for approximately US$316 million, based on the average price
of TV Azteca's shares during the ninety day period preceding the date of the
agreement, net of CASA's proportional share of Azteca Holdings' debt. CASA had
until October 12, 2001 to exercise its option pursuant to the agreement. CASA
did not exercise the option and paid a penalty of US$15.8 million, which we
received on October 15, 2001.

TV Azteca

     In July 1993, an investor group, including the Controlling Shareholders of
Grupo Elektra, acquired a controlling interest in TV Azteca, one of Mexico's two
over-the-air television broadcasters. TV Azteca owns and operates two national
networks and more than 250 commercial repeater stations.

     TV Azteca is the second largest television broadcasting company in Mexico.
TV Azteca is a holding company with three principal subsidiaries: Television
Azteca, Azteca Digital, S.A. de C.V. ("Azteca Digital") and Grupo TV Azteca,
S.A. de C.V. ("Grupo TV Azteca"). Television Azteca and Azteca Digital own and
operate all TV Azteca's broadcast assets, including the licenses to operate
television transmitters, TV Azteca's transmission equipment and TV Azteca's
headquarters and production studios in Mexico City. Substantially all payments
to TV Azteca from advertisers are made through Grupo TV Azteca.

     TV Azteca owns and operates two national television networks through two
anchor stations in Mexico City and numerous other stations located throughout
Mexico that rebroadcast the signals of TV Azteca's Mexico City stations.
Although most of the stations outside Mexico City are repeater stations that
solely rebroadcast the anchor stations' signals, stations in 31 of Mexico's
larger metropolitan areas broadcast local


                                       50

<PAGE>

programming and advertising in addition to the national programming and
advertising broadcast by the anchor stations.

     TV Azteca believes that its ability to provide a diverse mix of quality
programming has been, and will continue to be, one of the primary factors in
maintaining and increasing its overall ratings and share of the Mexican
television audience. Since 1994, TV Azteca has focused on acquiring and
producing programming that appeals to most Mexican television viewers, rather
than targeting specific segments of the Mexican television audience.

Todito.com

     On May 9, 2000, we signed a five-year strategic alliance with Todito.com,
an internet portal and marketplace for North American Spanish-speakers. Through
our indirect shareholding in TV Azteca, we currently own 9.1% of Todito. See
"--Our Business--Our Strategy--E-commerce" and "--Strategic Investments--CASA."

Unefon

     TV Azteca currently owns 46.5% of the equity of our telecommunication
affiliate, Unefon, S.A. de C.V. As part of our investment in CASA and in TV
Azteca through CASA and its 90% subsidiary Azteca Holdings, we indirectly own
9.1% of Unefon. See "--Additional Services--Unefon Agreement" and "Strategic
Investments--CASA."

TV Azteca Spin-Off of Unefon

     On October 19, 2000, TV Azteca granted, on a pro rata basis to certain of
its shareholders, including Azteca Holdings, rights to acquire all of the shares
of Unefon owned by TV Azteca. The grant of the rights remains subject to, among
other things, the effectiveness of a registration statement filed with the U.S.
Securities and Exchange Commission that registers the Unefon shares underlying
the rights and the receipt of all applicable regulatory approvals.

     The aggregate exercise price for all Unefon shares subject to the rights is
approximately US$177 million, all of which would be received by TV Azteca. The
rights to acquire the Unefon shares do not trade separately from the TV Azteca
shares and the rights are exercisable only on December 11, 2002, unless the time
of exercise is extended by TV Azteca or an acceleration event occurs. Any rights
that are not exercised on the exercise date will expire and TV Azteca will
retain ownership of the Unefon shares underlying the rights. If, prior to
December 11, 2002, the board of directors of TV Azteca approves a merger or
consolidation of Unefon, a sale of all or substantially all of Unefon's assets
or a sale (by tender or otherwise) of at least a majority of Unefon's shares or
otherwise determines to accelerate the exercisability of the rights, each a sale
event, TV Azteca will notify its shareholders that a sale event is anticipated
to occur and the rights will be exercisable in connection with the sale event
for a period of time to be determined by TV Azteca. Any exercise of the rights
in connection with a sale event will be conditioned on the consummation of the
relevant sale event. If such sale event is consummated, any rights which were
not exercised during the period designated by TV Azteca will expire and TV
Azteca will retain ownership of the Unefon shares underlying the rights.

     Of the 601,042,247 Series A shares of Unefon that Azteca Holdings may
acquire pursuant to the rights, as a shareholder of TV Azteca, 511,743,120
shares are subject to a right to purchase granted in favor of Ricardo B. Salinas
Pliego and Elisa Salinas Gomez, Mr. Salinas Pliego's aunt. Mr. Salinas and Mrs.
Salinas Gomez paid a US$6.65 million non-refundable premium to Azteca Holdings
for these purchase rights. However, in order to exercise these purchase rights,
Mr. Salinas Pliego and/or his affiliates must first have directly or indirectly
acquired the CASA shares or all of our outstanding capital stock, or we must
have


                                       51

<PAGE>

exercised our right to exchange all of the shares of CASA owned by us for
226,492,629 CPOs of TV Azteca pursuant to the terms of the share exchange
agreement dated March 26, 1996 between our company and Azteca Holdings. If Mr.
Salinas Pliego and Mrs. Salinas Gomez have not so acquired the CASA shares, and
we have not exercised our share exchange right, then we will have the right, in
lieu of Mr. Salinas Pliego and Mrs. Salinas Gomez, to exercise up to 34% of
Azteca Holdings rights to acquire Unefon shares. If we or Mr. Salinas Pliego and
Mrs. Salinas Gomez, if applicable, exercise the purchase rights and acquire the
Unefon shares, such shares, together with any cash proceeds or securities
received upon the sale of such shares or acquired with such cash proceeds, will
be pledged by the applicable party(s) as collateral to secure notes of Azteca
Holdings. The purchase rights to acquire Unefon shares expire on December 11,
2002.

COTSA

     On September 30, 1999, Inmuebles Ardoma, S.A. de C.V. (a wholly-owned
subsidiary of Grupo SyR (now Grupo Elektra) acquired approximately 90% of the
capital stock of Compania Operadora de Teatros, S.A. de C.V. ("COTSA") through
the capitalization of Ps.369.6 million of accounts receivable due from COTSA.
Before this acquisition, COTSA was a subsidiary of Grupo COTSA. The main assets
of COTSA are 86 buildings, most of which are being converted to Elektra and The
One stores. Among its assets, COTSA owns 46 properties (formerly theaters),
which were transformed into Elektra and The One stores. Of those properties,
seven are shared between Elektra and The One. We are currently in the process of
transforming another five buildings into stores.


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<PAGE>

                                   REGULATION

Consumer Protection Laws

     The Ley Federal de Proteccion al Consumidor (the "Consumer Protection
Act"), which regulates consumer installment sales in Mexico, became effective on
December 25, 1992. This act does not set a limit on the interest rate a merchant
may charge a consumer in an installment sale, and it does not require the
merchant to inform the consumer of the effective rate of interest charged. The
effective interest rate which we charge for electronics, appliances, furniture
and clothing is fixed at the time of the installment purchase. We cannot assure
you that in the future the Mexican Government will not impose limitations or
additional informational requirements regarding such rates of interest. A
substantial portion of our revenues and operating cash flow is generated by our
installment sales program, and any such limitations or additional information
requirements could have a material adverse effect on our financial performance.

     The collection practices and repossession procedures we use in our
operations in Mexico are regulated under the Consumer Protection Act, the
Mexican Commercial Code and the Mexican Civil Code. In Latin America, we are
regulated by each country's commercial, civil and consumer protection laws and
regulations. Our collection operations are implemented and monitored at the
individual store level. Each store has an installment sales manager who, under
the regional manager's supervision, is responsible for extending credit and
collecting that store's outstanding accounts in accordance with corporate
guidelines and applicable law. Any material change in the regulations governing
our collection practices and repossession procedures could have a material
adverse effect on our financial performance.

     The consumer protection laws and their enforcement in the other Latin
American countries where we do business are comparable to Mexican law. However,
a change in the regulatory environment in Mexico, or in the other countries
where we operate, or the imposition of authorization requirements could have a
material adverse effect on our operations and our financial performance.

     If we create a new banking subsidiary, such subsidiary will be subject to
Mexican banking laws and regulations, which may restrict its financial and
operational flexibility and may affect our financial performance and
profitability.

Free Trade Agreements

     Free trade agreements may increase competition as they make it easier for
non-Mexican retailers to enter the Mexican market. The North American Free Trade
Agreement (NAFTA) established a North American "free trade" zone and generally
eliminates import duties, tariffs and barriers among Mexico, the United States
and Canada. As a result, we expect to see an increase in the number of U.S.
retailers in Mexico with whom we will compete. The free trade agreement between
Mexico and the European Union, which became effective on July 1, 2000, will also
make it easier for European retailers to enter the Mexican market. In addition,
we face significant competition from the informal economy and parallel imports
for the products that we carry. There can be no assurance that our performance
will not be adversely affected by increased competition and more sophisticated
competitors from these and other sources.


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<PAGE>

Item 5.  Operating and Financial Review and Prospects

     The following discussion should be read in conjunction with, and is
qualified in its entirety by reference to, our Consolidated Financial Statements
and the Notes thereto included elsewhere in this Annual Report. Our financial
statements have been prepared in accordance with Mexican GAAP, which differ in
certain respects from U.S. GAAP. Note 17 to the Consolidated Financial
Statements provides a description of the principal differences between Mexican
GAAP and U.S. GAAP as they relate to our company and a reconciliation to U.S.
GAAP of net income and stockholders' equity. The comparison of the years ended
2000 and 1999 below does not contain detailed segment and geographical
information because we did not begin compiling such information until 2000.

Basis of Presentation

     The Consolidated Financial Statements have been prepared on a consolidated
basis to reflect the financial condition and the results of operations of our
company and our consolidated subsidiaries.

     Mexican GAAP requires that the Consolidated Financial Statements recognize
certain effects of inflation. Financial information for all periods in the
Consolidated Financial Statements has been restated in constant Pesos as of
December 31, 2001 in accordance with the Third Amendment to Bulletin B-10 of the
Mexican Institute of Accountants. Effective January 1, 1997, the Fifth Amendment
to Bulletin B-10 modified the method of restatement of non-monetary assets for
the effects of inflation. Accordingly, the percentage increases discussed herein
are adjusted for the general effects of inflation to permit period-to-period
comparisons.

     In accordance with Bulletin B-10, we are required to report, as a gain or
loss on our net monetary position, the effects of inflation on monetary assets
and liabilities. This net amount reflects the gain or loss arising from holding
a net monetary liability or asset position in an inflationary period, since over
time a monetary liability can be settled for units of less purchasing power
whereas a monetary asset decreases in value in real terms. Our operations
continually generate monetary assets (primarily from our installment sales)
while our accounts payable and borrowings to finance capital expenditures result
in monetary liabilities.

     With effect from January 1, 2000, we adopted Statement D-4 "Accounting
Treatment of Income Tax, Asset Tax and Employees' Profit Sharing" issued by the
MIPA. Under this statement, deferred taxes are initially recognized for all
differences between book and tax values of assets and liabilities and for tax
loss carry forwards and asset tax carry forwards that have a high probability of
realization. The adoption of this statement resulted in an increase in
stockholders' equity of Ps.263.0 million, including Ps.5.2 million corresponding
to minority interest. For the years ended December 31, 2001 and 2000, we
recorded Ps.260.8 and Ps.215.2 million provisions, respectively, for deferred
income tax, including the loss on monetary position related to the deferred tax
asset. Through December 31, 1999, deferred taxes were recognized for
non-recurring timing differences between financial pre-tax income and taxable
income, which were expected to reverse in an identifiable period.

     In 2001, Statement C-2 "Financial Instruments" went into effect. Under this
statement, all derivatives are required to be recognized in the balance sheet as
either assets or liabilities, and measured at fair value. The adoption of this
statement resulted in a loss for us of Ps.8.3 million.

Critical Accounting Policies

     We have identified the following accounting policies and estimates that
require significant judgment as critical to our business operations and the
understanding of our results of operations. The associated risks related to
these policies and the impact of these policies on our business operations are
discussed throughout "Management's Discussion and Analysis of Financial
Condition and Results of Operations" where such


                                       54

<PAGE>

policies affect our reported and expected financial results. For a detailed
discussion of the application of these and other accounting policies, see Notes
3 and 17 to the consolidated financial statements. The preparation of our
consolidated financial statements requires us to make estimates and assumptions
that affect the reported amount of assets and liabilities, disclosure of
contingent assets and liabilities at the date of our financial statements, and
the reported amounts of revenue and expenses during the reporting period. There
can be no assurance that actual results will not differ from those estimates.

Allowance for doubtful accounts

     We perform ongoing credit evaluations of our customers and adjust credit
limits based upon payment history and the customer's current credit worthiness.
We continuously monitor collections and payments from our customers and maintain
a provision for estimated credit losses based upon our historical experience and
any specific customer collection issues that we have identified. While such
credit losses have historically been within our expectations and the established
allowance, we cannot guarantee that we will continue to experience the same
credit loss rates that we have in the past.

Deferred income tax and employees' statutory profit sharing

     Our income tax expense and employees' statutory profit sharing is comprised
of current expenses and deferred expenses. Deferred income tax represents future
receivables or payables resulting from the temporary differences generated from
the differences in the accounting and tax treatment of balance sheet items, such
as our allowance for doubtful accounts, inventories, property, furniture,
equipment and investment in stores, installment sales, and from operating loss
carryforwards and credits. Deferred employees' statutory profit sharing is
calculated in a similar manner. These temporary differences and tax loss
carryforwards and credits are accounted for as deferred tax assets or
liabilities on our balance sheet. The corresponding change in the balances of
the recognized deferred tax assets and liabilities is recorded in earnings.
Deferred tax assets and deferred employees, statutory profit sharing assets are
subject to valuation allowances if their being realized is not more likely than
not. To the extent that we establish a valuation allowance, or increase this
allowance, during a period, we must include an expense within the tax provision
in the statement of operations. Significant management judgment is required to
determine our provision for income taxes, our deferred tax assets and
liabilities and any valuation allowance recorded against our net deferred tax
assets.

Property, furniture, equipment and investment in stores

     Property, furniture, equipment and investment in stores is recorded at cost
and is depreciated on a straight-line basis over the estimated useful lives of
such assets. Changes in circumstances such as technological advances, changes to
our business model or changes in our capital strategy can result in the actual
useful lives of such items differing from our original estimates. In those cases
where we determine that the useful life of any property, furniture, equipment
and investment in stores should be shortened, we depreciate the net book value
in excess of the salvage value, over its revised remaining useful life thereby
increasing depreciation expense.

Goodwill

     We periodically evaluate (acquired businesses for potential indicators of
impairment of our goodwill. Our judgment regarding the existence of impairment
indicators is based on legal factors, market conditions and operational
performance of our acquired businesses. Future events could cause us to conclude
that impairment indicators exist and that goodwill associated with our acquired
businesses is impaired. Any resulting impairment loss could have a material
adverse impact on our financial condition and results of operations.


                                       55

<PAGE>

Accounting for Installment Sales

     We sell products through our different store formats for cash and for
credit under an installment sales program known as Credimax. The cost to the
customer of merchandise purchased under the Credimax program includes a cash
price component plus a mark-up component and, in certain circumstances, a stated
interest component depending on our current marketing objectives. If stated
interest is used, we disclose the applicable interest rate; however, the
implicit cost of financing due to the mark-up is not disclosed to the customer.
Mark-up and, if included, stated interest represent the costs associated with
providing the installment sales program plus a profit margin. Such costs include
the cost of financing, the cost of credit investigations and the cost of
collection and legal process relating to bad debts.

     Revenues from Elektra installment sales are accounted for as follows: (i)
an amount equivalent to the cash price of the merchandise is recorded as
merchandise revenue at the time of sale; (ii) the installment sales mark-up, as
described below, is recorded as merchandise revenue ratably over the life of the
installment sale contract; (iii) stated interest, if any, is recorded as
merchandise revenue ratably over the life of the installment sale contract; and
(iv) penalty interest on past due installment sales payments is recorded as
merchandise revenue when collected.

     Our income statement shows all the revenues and costs associated with the
installment sales program within merchandise, services and other revenue and
cost of merchandise sold and services, thus allowing a better matching of
revenues with the costs needed to produce them. Accordingly, the cash price,
mark-up, stated interest and penalty interest on installment sales are part of
merchandise services and other revenues as well as operating income. In
addition, parts of the revenues from installment sales are subject to a loss on
monetary position from accounts receivable. Cost of sales includes the cost of
merchandise sold, the cost of financing the installment sales program and the
allowance for doubtful accounts, less any monetary gain on financing of
receivables. The cost of financing our installment sales program is calculated
by applying our average financing rate to the portion of our portfolio financed
by bank debt.

     When an installment sale is made for products at Elektra, Salinas y Rocha,
Bodega de Remates or The One stores, the customer signs a promissory note in the
amount of the equivalent cash price of the merchandise plus the mark-up and, if
applicable, stated interest minus any down payment. At the time of the sale, the
equivalent cash price of the merchandise is booked as merchandise revenue, and a
net account receivable is generated in the amount of the
installment-sale-equivalent cash price minus any down payment. During the term
of the installment sale contract, each weekly payment is applied proportionately
among the equivalent cash price, the mark-up and the stated interest. The
portion of the weekly payment allocated to the equivalent cash price is applied
to reduce the account receivable and has no effect on our income statement. The
portions allocated to mark-up and stated interest are recognized as merchandise
revenues, in each case ratably over the term of the installment transaction. If
the customer is late with a weekly payment, the mark-up and stated interest
portion of the missed payment is recognized as merchandise revenue and the
account receivable is increased by both amounts. Penalty interest is charged on
amounts that are past due and is recognized when paid as merchandise revenues.
Payments are applied first to any penalty interest balances. In summary, if a
customer is current on the payment of an installment sale, the account
receivable associated with the installment sale includes only the equivalent
cash price portion of the sale (minus the down payment) and is amortized weekly
in equal amounts during the term of the installment sale. To the extent that a
customer is late on the payments of an installment sale, the account receivable
associated with the installment sale includes the remaining equivalent cash
price portion (minus the down payment) and any accrued but unpaid mark-up and
stated interest.

     During 1999, most installment sales were made under the 26-week and 39-week
terms, resulting in an average portfolio length of 34 weeks for 1999. During the
first half of 2000, and in light of the political uncertainties at that time, we
intentionally reduced our average portfolio to 33 weeks by the end of the second


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<PAGE>

quarter. After the smooth political transition following the presidential
election on July 2, 2000, we lengthened again our average portfolio by promoting
the 39-week term during the third quarter and the 53-week term during the fourth
quarter. Our average portfolio length was 44 weeks in 2000. During the second
half of 2001, the 53-week term was heavily promoted, therefore, our average
portfolio length was 46 weeks.

During the first quarter of 2002, as a result of our heavy promotion of the
53-week term, our average portfolio length was 53 weeks.

Reserve for Doubtful Accounts

     We record a provision for doubtful accounts at the time of any installment
sale in an amount equal to five percent of the cash price of the merchandise
sold, plus the markup and less the down payment, if any. Normally, we require a
ten percent down payment for all installment sales, but we waive this
requirement from time to time for marketing purposes. After giving effect to
write-offs, the reserve for doubtful accounts was 5.7% of accounts receivable
(net of securitization) due from retail customers as of December 31, 2000 and
5.4% of accounts receivable (net of securitization) due from retail customers as
of December 31, 2001. We believe that our reserve policy for installment sales
is adequate to cover potential write-offs. Moreover, Elektra continues
collection efforts after writing off accounts receivable.

Effects of the Peso Devaluation and Inflation

     Our results of operations will continue to be affected by economic
conditions in Mexico and in the other countries in which we operate. In periods
of slow economic growth, demand for our products tends to be adversely affected.
Poor economic conditions, particularly unemployment and high domestic interest
rates, can also result in an increase in allowance for doubtful accounts.
Devaluation of the peso, such as occurred most recently in 1998, also results in
exchange losses on our foreign-currency denominated indebtedness.

     According to Banco de Mexico and the Mexican Ministry of Finance and Public
Credit, for the year ended December 31, 2001, the Mexican economy weakened, with
a gross domestic product decrease of 0.3%, compared to growth of 6.9% in 2000.
Interest rates on 28-day Cetes in 2001 decreased to an average of 11.3%,
compared to an average of 15.4% in 2000, and the peso appreciated 4.5% to
Ps.9.17 per US$1.00 at the end of 2001 from Ps.9.60 per US$1.00 at the end of
2000. Inflation decreased to a rate of 4.4% in 2001 from 8.9% in 2000. We can
give no assurances that economic conditions in Mexico and in the other countries
in which we operate will not have adverse effects on our financial condition and
results of operations. See Item 5. "Operating and Financial Review and
Prospects--Basis of Presentation."

Investment in CASA

     Since January 1, 1997, we have presented our statement of income to show
the income associated with our investment in CASA, a holding company through
which our Controlling Shareholders own the controlling interest in TV Azteca and
Grupo COTSA, as part of merchandise, service revenue and other in order to
emphasize this item within results of operations and to allow a better matching
of such income with the amortization of goodwill related to such investment.
This presentation is consistent with Mexican GAAP.

     We decided, as of January 1, 2000, to present the equity in income of CASA,
net of the amortization of the goodwill related to the CASA acquisition, as a
net item below income after taxes. Consequently, in the 1999 consolidated
financial statements and the summary consolidated financial information, the
equity in earnings of CASA and the related goodwill amortization have been
reclassified to conform to the current presentation, which is also consistent
with Mexican GAAP.


                                       57

<PAGE>

Seasonality of Sales

     We have historically experienced, and expect to continue to experience,
seasonal fluctuations in sales, reaching highs in the months of May and
December. Such seasonality results mainly from increases in general consumption
associated with Mother's Day and the Christmas season. We typically experience
lows during the months of February and September.

Results of Operations

     The following table sets forth certain consolidated financial information
of our company expressed as a percentage of total revenues (merchandise, service
and other revenues) for the three years ended December 31, 1999, 2000 and 2001:

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                         ------------------------------
                                                                          1999        2000        2001
                                                                         ------      ------      ------
<S>                                                                     <C>         <C>         <C>
Merchandise, service and other revenues ..........................         100%        100%        100%
Cost of merchandise sold and of services .........................       (59.2)      (57.3)      (57.5)
Gross profit .....................................................        40.8        42.7        42.5
Administrative and selling expenses ..............................       (25.7)      (27.3)      (26.0)
Depreciation and amortization ....................................        (4.2)       (4.1)       (4.5)
Operating income .................................................        10.9        11.3        12.0
Comprehensive financing cost (net) ...............................        (2.4)       (2.0)       (2.3)
Income before income taxes and employees' statutory profit sharing         8.5         9.3         9.7
Consolidated net income ..........................................         7.0         7.6         7.3
</TABLE>

General

     Revenues

     We have increased prices to offset the increases in the cost of merchandise
sold and operating expenses. Our gross profits do not vary materially within
each of our consumer electronics product lines, although we realize a greater
gross profit from the sale of Elektra brand products, which typically are the
lowest priced merchandise in the consumer electronics product line. The
introduction of, and emphasis on, furniture and clothing in the product mix has
resulted in higher gross profits, since these products carry higher margins than
the core electronic lines that we carry.

     We present penalty interest as part of our revenues. For the years ended
December 31, 1999, 2000 and 2001, the amounts for penalty interest were Ps.369.1
million, Ps.373.7 million and Ps.367.7 million, respectively.

     Depreciation and Amortization Expense

     Prior to 1997, Bulletin B-10 required all property, machinery, equipment
and other non-monetary assets, such as our stores and inventory, to be restated
based upon replacement cost or the NCPI. Prior to 1997, we had generally
restated assets based on replacement cost. Since 1997, the Fifth Amendment to
Bulletin B-10 requires non-monetary assets of Mexican origin to be restated
based on the NCPI but permits those of non-Mexican origin to be restated based
on the devaluation of the Mexican peso against the relevant foreign currency
after applying the inflation factor of the relevant foreign country.


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<PAGE>

     Comprehensive Financing Cost

     As of December 31, 1999, 2000 and 2001, we had approximately US$267.0
million, US$413.7 million and US$497.9 million of monetary liabilities
denominated in U.S. dollars, respectively. Virtually all of our monetary
liabilities represented our outstanding indebtedness for borrowed money. Our
U.S. dollar-denominated monetary assets as of December 31, 1999, 2000 and 2001
amounted to approximately US$33.6 million, US$84.3 million and US$131.2 million,
respectively. At December 31, 1999, 2000 and 2001, we also had certain assets
and liabilities denominated in several Latin American currencies. Those assets
were equivalent to US$40.0 million in 1999, US$43.5 million in 2000 and US$39.3
million in 2001, and the liabilities were equivalent to US$55.1 million in 1999,
US$48.8 million in 2000 and US$16.6 million in 2001. Interest income and
interest expense associated with our receivables portfolio are reflected in
revenue and cost of goods sold, and are not reflected as part of comprehensive
financing cost.

     Interest expense. Interest on our foreign currency-denominated indebtedness
exposes us to exchange rate fluctuations, with the peso cost of interest
payments on such indebtedness increasing as the peso's value declines against
the US dollar and other currencies.

     Interest income. Interest income is positively affected by inflation as we
receive higher rates of return on our temporary investments, which are primarily
fixed-rate short-term peso deposits in Mexican banks.

     Exchange (loss) gain. We record a foreign exchange gain or loss with
respect to US dollar-denominated monetary assets or liabilities when the peso
appreciates or depreciates in relation to the US dollar. Our US
dollar-denominated monetary liabilities, which principally consist of our US
dollar-denominated indebtedness for borrowed money, substantially exceed our US
dollar-denominated monetary assets, which principally consist of US dollar bank
deposits. As a result, we have recorded a foreign exchange loss during each
period in which the peso depreciated in relation to the US dollar and vice
versa.

     Gain on net monetary position. Gain or loss on net monetary position refers
to the gains or losses, due to the effects of inflation, from holding net
monetary liabilities or assets. A gain on monetary position results from holding
net monetary liabilities during periods of inflation, as the purchasing power
represented by nominal peso liabilities declines over time. Accordingly, since
our monetary liabilities exceeded our monetary assets in 1999, 2000 and 2001, we
recorded a gain on monetary position in those periods.

     We also allocate a portion of interest expense as part of cost of sales.
Interest expense on funding our installment sales program, presented as part of
our cost of sales was Ps.310.6 million, Ps.320.8 million and Ps.308.6 million
for the years ended December 31, 1999, 2000 and 2001, respectively.

     Loss on monetary position from accounts receivable included in revenues for
the years ended December 31, 1999, 2000 and 2001 was Ps.277.7 million, Ps.238.7
million and Ps.152.7 million. Gain on monetary position on loans obtained to
finance the installment sales program was Ps.180.5 million, Ps.155.2 million and
Ps.99.3 million for the years ended December 31, 1999, 2000 and 2001.

Year ended December 31, 2001 compared to year ended December 31, 2000

     Merchandise Revenue

     Total revenues in 2001 increased 2%, or Ps.234.6 million, to Ps.15,608.4
million from Ps.15,373.8 million in 2000. Merchandise revenues decreased 1% in
2001 to Ps.12,396.1 million from Ps.12,466.0 million in 2000. Credit revenues
increased 10%, from Ps.2,907.3 in 2000 to Ps.3,212,3 million in 2001.

     Merchandise Revenue by Store Chain. Merchandise revenues include revenue
from sales of merchandise and, to a lesser extent, revenue from sales of
extended warranties and income from our money


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<PAGE>

transfers services. Merchandise revenues came primarily from Elektra's retail
network, which accounted for 84% of total merchandise revenues, with 8.0%, 4.0%
and 4.0% of revenues coming from Salinas y Rocha, Bodega de Remates and The One
stores, respectively. Merchandise revenues in the Elektra stores increased 1% to
Ps.10,366 million in 2001 compared to Ps.10,223 million in 2000. This increase
was partially offset by decreases in our other store chains. Merchandise
revenues decreased 2% , to Ps.958 million in 2001 from Ps.974 million in 2000 in
our Salinas y Rocha stores. Merchandise revenues decreased 3%, to Ps.518 million
in 2001 in our Bodega de Remates stores. Merchandise revenues sales decreased
25%, to Ps.554 million in 2001 from Ps.735 million in 2000, in our The One
stores, as this store continues to perform below expectations, with below target
sales and margins. The objective for The One continues to be growing sales to
achieve an acceptable level of profitability.

     Merchandise Revenue by Products and Services. During 2001, sales in our
core product lines (electronics, white goods, furniture and small appliances)
decreased 4% to Ps.10,293 million, compared to Ps.10,723 million in 2000. This
decrease was largely the result of overall declines in sales of electronics,
white goods and furniture and was partially offset by an increase in sales of
small appliances, both of which were caused by a slowdown in the Mexican
economy. In addition, consolidated merchandise revenues were boosted by two new
product lines, telephones, whose contribution to revenues rose to 3% in 2001
from 1% in 2000, and computers, which did not contribute to revenues in 2000 but
represented 3% of merchandise revenues in 2001.

     Milenia. During 2001, our extended warranty program, Milenia, reported a
27% increase in revenue to Ps.208 million, from Ps.163 million in 2000. This
increase was the result of an intensive point-of-sale advertising campaign to
promote this service.

     Fotofacil. In 2001, Fotofacil continued to operate 180 mini-labs, reporting
revenues of Ps.156 million, a 20% increase compared to Ps.130 million in 2000.
This increase was the result of an intensive point-of-sale advertising campaign
to promote this service.

     Unefon. In 2001, revenues related to our agreement with Unefon 2001 reached
Ps.378 million, almost tripling sales of Ps.132 million in 2000. Unefon has
reached coverage of 15 cities. To date we have sold more than 425,000 handsets
at 350 stores. We have also generated increased revenue from sales of telephones
and pre-paid calling cards (371 million minutes of airtime sold in 2001,
compared to 22.5 million minutes in 2000). The increases were the result of
Unefon's increased coverage in Mexico and the rollout of Unefon's products into
an increased number of stores. As of December 31, 2001, we had a Ps.43.9 million
outstanding account receivable from Unefon.

     Dinero en Minutos. During 2001, the volume of operations in our
international money transfer service with Western Union faced increased
competition that led to price declines. This resulted in a 4% decline in the
volume of operations as compared to 2000, and in a 25% decrease in revenue for
the year, to Ps.353 million, compared to Ps.468 million in 2000.

     Dinero Express. Grupo Elektra's intra-Mexico money transfer service
reported an 18% increase in revenue, from Ps.131 million in 2000 to Ps.154
million in 2001. This was caused by an increase in our share of the Intra-Mexico
money transfer market and our aggressive advertising of this product.

     Computers, peripherals and accessories. Revenues of this product line in
2001 reached Ps.331 million, the first year in which we offered these products.
During 2001, we sold approximately 28,000 PC's and more than 63,000 peripherals.

     Merchandise Revenue by Region. During 2001, merchandise revenues from our
operations in Mexico decreased 1% to Ps.11,681 million from Ps.11,757 million in
2000, while merchandise revenues from our operations outside Mexico increased
Ps.715 million, or 1%, compared to Ps.709 million in 2000.


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<PAGE>

     Installment Sales Revenue

     Installment Sales Revenue by Store chain. Installment sales revenues in
2001 came primarily from Elektra's retail network, which accounted for 86% of
total installment sales revenues, with 9.0%, 3.0% and 2.0% of such revenues
coming from Salinas y Rocha, Bodega de Remates and The One stores, respectively.
Installment sales revenues in the Elektra stores increased 11% to Ps.2,769
million in 2001 compared to Ps.2,485 million in 2000. Installment sales revenue
in the Salinas y Rocha stores revenue increased 17% to Ps.284 million from
Ps.242 million in 2000, while Bodega de Remates installment sales revenue
decreased 6% to Ps.96 million from Ps.102 million in 2000 and The One
installment sales revenue decreased 19% to Ps.64 million from Ps.79 million in
2000.

     Installment Sales Revenue by Region. During 2001, installment sales
revenues from our operations in Mexico increased 9% to Ps.2,974 million from
Ps.2,722 million in 2000, while installment sales revenues from our operations
outside Mexico reached Ps.239 million, a 28% increase compared to Ps.186 million
in 2000. These increases were caused by the lengthening of our average
receivables payment terms as a result of our promotion of the 53-week payment
term in 2001.

     Gross Profit

     Consolidated gross profit rose 1% from Ps.6,566 million in 2000 to Ps.6,631
million in 2001. Meanwhile, consolidated gross profit as a percentage of total
revenues decreased 20 basis points to 42.5% in 2001 from 42.7% in 2000.
Merchandise gross profit decreased 3%, from Ps.4,423.8 million in 2000 to
Ps.4,283.1 million in 2001. Merchandise gross margin fell 90 basis points from
35.5% in 2000 to 34.6% in 2001. This decrease was largely the result of a 31%
decrease in same-store contribution in 2001 compared to 2000 from the The One
store chain and was coupled with more aggressive price and promotion campaigns
across all of our store chains. Credit gross profit rose 10%, from Ps.2,142.1
million in 2000 to Ps.2,348.3 million in 2001. Credit gross margin fell 60 basis
points, from 73.7% in 2000 to 73.1% in 2001. This was primarily the result of a
9% higher provision for doubtful accounts in 2001 compared to 2000 and a 36%
lower monetary gain from our credit operations.

     The repair provision for our extended warranty program, Milenia, increased
26.7%, or Ps.13.1 million, to Ps.62.1 million in 2001 from Ps.49.0 million in
2000. This increase was the result of a 27.5% increase in the sale of extended
warranties to Ps.208.1 million in 2001 from Ps.153.3 million in 2000.

     Administrative and Selling Expenses

     Administrative and selling expenses, which include salaries, rent and other
occupancy expenses, advertising, sales and collections commissions and other
operating expenses, decreased 3%, to Ps.4,066 million in 2001 from Ps.4,204
million in 2000. This decrease was largely the result of our on-going
expense-control initiatives, which led to declines in most of our expense lines.
As a percentage of gross profit, administrative and selling expenses decreased
to 26.0% in 2001 from 27.3% in 2000.

     EBITDA

     EBITDA, excluding monetary losses and gains reported in revenues and cost
of goods sold, rose 7%, or Ps.173 million, to Ps.2,619 million in 2001 from
Ps.2,446 million in 2000. This was largely the result of enhanced operating
leverage and a decrease in operating expenses (excluding depreciation and
amortization).

     Depreciation and Amortization

     Depreciation and amortization increased 12%, or Ps.75 million, to Ps.707
million in 2001 from Ps.632 million in 2000. This increase was due primarily to
Ps.469.5 million in net capital expenditures associated


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<PAGE>

with the opening of new stores and the remodeling of existing stores, including
the stores acquired from La Curacao Mexico.

     Comprehensive Financing Cost

     Comprehensive financing costs increased 70% in 2001 to Ps.507 million from
Ps.298 million in 2000, due to a 35% increase in net interest expense and a 77%
decrease in monetary gains, which were partially offset by a 92% decrease in
foreign exchange loss. Interest income decreased to Ps.131 million in 2001 from
Ps.205 million in 2000 as a result of lower interest rates in the local money
market. Interest expense increased to Ps.781 million in 2001 from Ps.686 million
in 2000, due primarily to the funding of the store expansion program and an
increase in our credit portfolio. The foreign exchange loss was Ps.9 million in
2001 compared to a loss of Ps.114 million in 2000. Gains in the net monetary
position decreased to Ps.170 million in 2001 from Ps.297 million in 2000 due to
a lower Mexican inflation rate of 4.4% for 2001, compared with the 9.0% rate for
2000. In 2001, we reported Ps.135.5 million income from other financial
operations which was the result of the penalty fee coming from the non-exercise
of the CASA option. See "Item 4. Information on the Company--Strategic
Investments--CASA."

     Taxes

     Income before taxes and employees' statutory profit sharing increased 5% to
Ps.1,506 million in 2001 from Ps.1,433 million in 2000.

     Provision for income tax and employees' statutory profit sharing increased
151% or Ps.327 million, to Ps.543 million in 2001 from Ps.216 million in 2000,
which resulted from greater use of our tax-loss carry forwards in 2001 compared
to 2000. As a percentage of pre-tax income, the provision for income tax, asset
tax and employees' statutory profit sharing increased to 36.1% in 2001 from
15.1% in 2000, due mainly to our election to consolidate our subsidiaries for
tax purposes in 2001. This increase was partially offset by the use of the tax
loss carry forwards of Grupo SyR, whose merger with Grupo Elektra was completed
during 2000.

     We have several operating subsidiaries with tax loss carry forwards. Other
than in connection with the merger of Grupo Elektra and Grupo SyR, which made
available tax loss carry forwards to us, our subsidiaries file individual income
tax returns. With effect as of 1999, the Mexican Income Tax Law modified the
regulations for tax consolidation by limiting consolidation from 100% to 60% of
net operating losses generated in the future.

     In 2001, Elektra's investment in CASA, which is booked under the equity
participation method, recorded income of Ps.187.0 million, net of amortization
of goodwill, compared to a loss of Ps.23.3 million in 2000.

     Net Income

     Income of minority stockholders in 2001 was Ps.13.0 million, a decrease of
39% from Ps.21.3 million in 2000. The income of minority stockholders is
primarily related to the investment of funds put in escrow pursuant to the
Western Union transaction in shares of Elektra affiliates.

     Net Income of majority stockholders decreased 3%, or Ps.35 million, to
Ps.1,137 million in 2001 from Ps.1,172 million in 2000. Adjusted net income (net
income excluding all non-cash items) decreased 12.2%, to Ps.889 million in 2001
from Ps.1,012 million in 2000. Earnings per CPO decreased 4%, or Ps.0.04 to
Ps.0.93 in 2001 from Ps.0.97 in 2000.


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<PAGE>

     Year ended December 31, 2000 compared to year ended December 31, 1999

     Total revenues in 2000 increased 17.9%, or Ps.2,329.0 million, to
Ps.15,373.3 million from Ps.13,044.3 million in 1999. Merchandise revenues
(which includes mark-up on installment sales and penalty interest) accounted for
97.7% of total revenues in 2000 and 99.1% in 1999. Money transfer services
increased to 3.9% of total revenues in 2000 from 3.0% in 1999. The monetary loss
on accounts receivable represented (1.6%) of total revenues in 2000, compared to
(2.1%) in 1999.

     Merchandise Revenue

     Merchandise revenues, including cash and installment sales, increased
16.1%, or Ps.2,087.0 million, in 2000 to Ps.15,013.6 million from Ps.12,926.6
million in 1999. Merchandise and credit revenues came primarily from Elektra's
retail network at 86% of total merchandise revenues, with 8.2% and 4.9% of
revenues coming from Salinas y Rocha and The One stores, respectively. The
increase in merchandise and credit revenues was largely due to a 13.7%
consolidated increase in same store sales and the opening of a net of four new
stores, which increased selling space by 1%. This increase was partially offset
by a 9.4% decline in sales at The One stores. Consolidated same-store
contribution rose 15.1% in 2000, reflecting our successful strategy of focusing
on high-margin products and services directed to our target market. Monetary
loss on accounts receivable in 2000 decreased 14.0%, or Ps.38.9 million, to
Ps.238.7 million from Ps.277.6 million in 1999, primarily due to a lower
inflation rate of 8.9% in 2000, compared to 12.3% in 1999.

     Installment Sales Revenue

     Installment sales decreased as a percentage of our total merchandise
revenues in 2000, representing 63.4% of total merchandise revenues in 2000,
compared to 66.4% in 1999, while cash sales represented the remaining 36.6% and
33.6% in 2000 and 1999, respectively. Our aggregate revenue from mark-ups on
installment sales and penalty interest, which is included in total revenues,
increased by 15.8% in 2000, from Ps.2,716.7 million in 1999 to Ps.3,146.1
million in 2000. Included in these amounts are mark-ups on installment sales of
Ps.2,772.3 million and Ps.2,347.5 million, and penalty interest of Ps.373.8
million and Ps.369.2 million in 2000 and 1999, respectively. The overall
increase in revenues from installment sales largely resulted from a 13.6%
increase in 2000 in the number of active installment sales accounts, which
totaled 1.9 million as of December 31, 2000.

     Money Transfer Services Revenue

     Revenues from electronic money transfer services in 2000 rose 51.4%, or
Ps.203.2 million, to Ps.598.5 million from Ps.395.3 million in 1999. Our
U.S.-Mexico money transfer agreement with Western Union recorded a 64.4%
increase in revenue, from Ps.284.0 million in 1999 to Ps.467.1 million in 2000,
resulting from a 4.4% increase in the number of operations and the increase in
our share of the commission. Elektra's intra-Mexico money transfer service
recorded a 22.4% increase in revenue in 2000, due to a 28.5% increase in the
number of transactions. Factors driving this growth in volume include the close
proximity of our stores to customers, the convenient hours offered by our
stores, and our "Frequent Client" loyalty program, through which frequent
customers receive additional benefits.

     Gross Profit

     Gross profit as a percentage of total revenues rose to 42.7% in 2000 from
40.8% in 1999. This increase resulted from an increase in the gross margin of
electronic money transfers from 95.8% in 1999 to 97.6% in 2000, due to increased
commissions from the U.S.-Mexico money transfer service, and an increase in the
gross margin of merchandise from 30.9% in 1999 to 32.8% in 2000. Gross margins
of merchandise improved due to the gradual increase in our Latin American stores
and strong demand in our Mexican stores, an increase in the number of our
apparel store formats resulting from the conversion from Hecali to The One,


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<PAGE>

and better terms and conditions offered by suppliers. The increase in gross
margin was partially offset by a decline in the gross margin of merchandise at
our Salinas y Rocha stores. The gross margin for our credit sales declined
slightly to 73.7% in 2000 from 74.9% in 1999.

     Interest on funding installment sales allocated to the cost of sales
increased 3.3%, or Ps.10.2 million, from Ps.310.6 million in 1999 to Ps.320.8
million in 2000, while the provision for doubtful accounts rose 24.3% to
Ps.599.7 million in 2000 from Ps.482.5 million in 1999. These increases resulted
from a 20.0% increase in gross accounts receivable, from Ps.4.1 billion in 1999
to Ps.4.9 billion in 2000 and a slight increase in the amount reserved for
doubtful accounts, from the usual 5% to 6%, effective on all installment sales
as of the fourth quarter of 2000.

     The repair provision for extended warranties increased 65.0%, or Ps.19.3
million, to Ps.49.1 million in 2000 from Ps.29.8 million in 1999, resulting from
a 64.9% increase in the sales of extended warranties in 2000 compared to 1999.

     Administrative and Selling Expenses

     Administrative and selling expenses, which include salaries, rent and other
occupancy expenses, advertising, sales and collections commissions and other
operating expenses, rose 25.4% to Ps.4,203.7 million in 2000 from Ps.3,352.2
million in 1999. As a percentage of total revenues, administrative and selling
expenses increased to 27.3% in 2000 from 25.7% in 1999, resulting primarily from
salary increases of senior management, increased hiring in our regional and
corporate offices, increased freight costs associated with higher sales volume,
increased consulting fees and information technology expenses and maintenance
upgrades for all of our stores. We record such expenses immediately instead of
capitalizing them over time. We believe that our increased administrative and
selling expenses are associated with improvements in the performance and quality
of our long-term operations.

     EBITDA

     EBITDA, excluding monetary losses and gains reported in revenues and cost
of goods sold, rose 18.0%, or Ps.372.4 million, to Ps.2,445.6 million in 2000
from Ps.2,073.2 million in 1999. This was largely the result of enhanced
operating leverage resulting from a 15.1% increase in same-store contribution in
2000.

     Depreciation and Amortization

     Depreciation and amortization increased 14.9%, or Ps.82.1 million, to
Ps.631.6 million in 2000 from Ps.549.5 million in 1999. This increase primarily
reflects the Ps.461.1 million spent in 2000 on capital expenditures associated
with the acquisition of the ADN software operation system, the opening of eight
stores, the conversion of 56 Hecali stores to The One, the closing of four
stores, and the remodeling of five and the relocation of four Elektra stores.

     Comprehensive Financing Cost

     Comprehensive financing costs decreased 4.6%, or Ps.14.4 million, in 2000
to Ps.297.6 million from Ps.312.0 million in 1999, largely due to a 31.1%
year-on-year decrease in net interest expense and a 1.6% year-on-year increase
in monetary gain, which were only partially offset by a foreign exchange loss in
2000 compared to a foreign exchange gain in 1999. Net interest expense in 2000
decreased to Ps.480.8 million from Ps.630.4 million in 1999, due primarily to
the placement of US$275 million in eight-year Senior Notes in March 2000, which
significantly strengthened our financial position by enabling us to effectively
retire shorter-term debt and extend our debt profile. We recorded a foreign
exchange loss of Ps.114.1 million in 2000 compared to a Ps.26.1 million foreign
exchange gain in 1999, due to decline of the peso against the US dollar


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<PAGE>

by 1.2% in 2000. Monetary gains rose to Ps.297.1 million in 2000 compared to
Ps.292.3 million in 1999 due to a higher level of net monetary liabilities.

     Taxes

     Income before taxes and employees' statutory profit sharing increased
28.6%, or Ps.318.2 million, to Ps.1,432.7 million in 2000 from Ps.1,114.5
million in 1999.

     Provision for income tax and employees' statutory profit sharing increased
97.0% or Ps.106.5 million to Ps.216.3 million in 2000 from Ps.109.8 million in
1999, resulting from the application of Bulletin D-4 of the Mexican Institute of
Accountants, which changed the recognition of deferred taxes. This increase was
partially offset by the use of tax loss carry-forwards of Grupo SyR, whose
merger with Grupo Elektra was completed during 2000.

     We have several operating subsidiaries with tax loss carry forwards. Except
for the merger of Grupo SyR and Grupo Elektra, which made available tax loss
carry-forwards to Grupo Elektra, our subsidiaries file individual income tax
returns. As of 1999, the Mexican Income Tax Law changed the regulations for tax
consolidation purposes by limiting consolidation from 100% to 60% of net
operating losses generated in the future.

     In 2000, Elektra's investment in CASA, which is booked under the equity
participation method, recorded a loss of Ps.23.3 million, net of amortization of
goodwill, compared to a loss of Ps.92.4 million in 1999.

     Net Income

     Income of minority stockholders in 2000 was Ps.21.3 million, a decrease of
14.3% from Ps.24.8 million in 1999. The income of minority stockholders is
primarily related to the investment of funds put in escrow pursuant to the
Western Union transaction in shares of Elektra affiliates.

     Net income of majority stockholders increased 32.1% or Ps.284.6 million to
Ps.1,171.9 million in 2000 from Ps.887.3 million in 1999. Earnings per CPO
increased 32.9%, or Ps.0.24, to Ps.0.97 in 2000 from Ps.0.73 in 1999.

     Contractual Obligations

     The following table sets forth information with respect to the Company's
contractual obligations as of December 31, 2001:


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<PAGE>

<TABLE>
<CAPTION>
                                                                      Payments Due by Period
                                             ---------------------------------------------------------------------
                                                             Less than 1                                 After 5
Contractual Obligations                         Total           year       1-3 years     4-5 years        years
----------------------------------------     -----------     -----------  -----------    ---------     -----------

<S>                                         <C>             <C>          <C>            <C>           <C>
Long-Term Debt .........................     Ps  3,713.9           -      Ps.   894.1    Ps. 298.0     Ps. 2,521.8
Capital Lease Obligations ..............     Ps.   203.0     Ps. 129.1    Ps.    73.9          -               -
Operating Leases .......................     Ps. 1,510.2     Ps. 309.5    Ps.   519.6    Ps. 214.6     Ps.   466.5
Unconditional Purchase Obligations .....             -             -              -            -               -
Other Long-Term Obligations ............     Ps.    31.9     Ps.   7.5    Ps.    15.0    Ps.   7.5     Ps.     1.9
Total Contractual Cash Obligations .....     Ps. 5,459.0     Ps. 456.1    Ps. 1,492.6    Ps. 520.1     Ps. 2,990.2
</TABLE>


Liquidity and Capital Resources

     Liquidity

     Our net working capital increased to Ps.4,380 million as of December 31,
2001, compared to Ps.2,961 million as of December 31, 2000. The increase in our
working capital during 2001 was principally attributable to a Ps.1,114 million
increase in cash, coupled with a Ps.571 million decrease in short-term
liabilities. Our cash and cash equivalents were Ps.1,914 million as of December
31, 2001, as compared to Ps.800 million as of December 31, 2000. Meanwhile,
total interest-bearing liabilities at the end of 2001 were Ps.4,809 million,
compared to Ps.4,520 million at the end of 2000. As a result, net debt at the
end of 2001 reached Ps.2,893 million, representing a 18% decrease compared to
the Ps.3,530 million at the end of 2000.

     We fund our operations through cash flow from operations and borrowings.
Cash flow provided by operations in 2001 was Ps.1,830.4 million as compared to
Ps.418.9 million in 2000. This increase is primarily attributable to an
increased operating profitability, as evidenced by our year-to-year increases in
both operating profits and EBITDA (7% and 2%, respectively), partially offset by
increased needs in net working capital.

     Total debt with cost equivalent to US$524.4 million as of December 31, 2001
matures as follows:

                      Maturity Date                     Debt Amount
                 Year ended December 31,        (in millions of US dollars)

             2002 ..........................         US   $119.40
             2003 ..........................                48.75
             2004 ..........................                48.75
             2005 ..........................                16.25
             2006 ..........................                16.25
             2008 ..........................               275.00

     In 1999, 2000 and 2001, we advanced an aggregate of Ps.21.3 million,
Ps.19.5 million and Ps.27.9 million, respectively, to affiliates. Outstanding
advances to affiliates, including accrued interest, were Ps.34.8 million in
1999, Ps.44.9 million in 2000 and Ps.51.2 million in 2001. Certain advances were
financed by short - term bank loans. As of December 31, 2001, we had accounts
receivable of Ps.262.8 million that arose in the ordinary course of business
with affiliates.


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<PAGE>

     In July, 2001 we secured a US$130 million syndicated loan facility from an
international group of financial institutions, led by Salomon Smith Barney. The
loan was used to lengthen our debt position from an average term of 2.5 years to
four years. The loan is structured in two US$65 million tranches. Tranche A
carries an interest rate of LIBOR plus a margin of 275 basis points and matures
in three years. Tranche B carries an interest rate of LIBOR plus a margin of 325
basis points and matures in five years.

     We also meet our working capital requirements through the financing of
accounts receivable. Net receivables balances of Ps.3,387.1 million and
Ps.3,853.7 million were on our books as of December 31, 2001 and 2000,
respectively.

     We utilize Elektrafin to securitize our receivables. In 1997, we issued our
first two securitization programs for a total of Ps.866.3 million (nominal) on
the Mexican Stock Exchange with Nafin acting as the fiduciary issuer of the
securities. These two programs have been fully paid off. In April 1998, we
launched a Ps.793.3 million (nominal) four-year revolving securitization
program, the first of its kind in Mexico. In December 1998, we launched our
second two-year revolving securitization of receivables in an offering of Ps.200
million (nominal). These two programs were fully paid off as of December 2001.
In 1999, we issued another three-year revolving securitization of receivables in
an offering of Ps.200 million (nominal), with the rate being the higher of TIIE
plus 150 basis points or the yield of the UDI over 28 days. This was our third
revolving securitization and the fifth one completed through the Mexican Stock
Exchange. In April 2000, we issued our sixth securitization program for a
further Ps.350 million. This issue has a total term of four years, three
revolving and one of amortization, and yields a real rate of interest of 8.35%
per annum. In March 2001, we securitized Ps.650 million of accounts receivable
under a three-year term with an interest rate of TIIE plus 200 basis points. In
July, 2001, we securitized an additional Ps.550 million under a four year-term
bearing an interest of TIIE plus 70 basis points. As of December 31, 2001, our
revolving securitization programs have raised for us a total of approximately
US$400 million. The high quality and performance of our revolving
securitizations programs have enabled us to maintain a "AAAmex" rating. There
has been a strong demand for our active issuances, which provides attractive
financing alternatives for us where the proceeds are used primarily to pay
short-term debt and to finance our working capital. Our securitization programs
are arranged on a non-recourse basis. Maintenance of the programs and
reinvestment of collection proceeds in new receivables requires compliance with
certain overcollateralization, quality and receivables performance standards.

     Capital Expenditures

     Capital expenditures for the years ended December 31, 1999, 2000 and 2001
were Ps.520.9 million, Ps.461.1 million and Ps.610 million, respectively.
Capital expenditures for store openings and improvements were Ps.182.9 million
in 1999, Ps.129.0 million in 2000 and Ps.496.3 million in 2001. Other capital
expenditures for distribution centers, data processing equipment and trucks
totaled Ps.337.9 million in 1999, Ps.332.1 million in 2000 and Ps.113.7 million
in 2001. The acquisition of Salinas y Rocha during 1999 involved a capital
expenditure of Ps.991.3 million, or US$91.9 million. Our capital expenditures
are expected to be approximately Ps.712 million for 2002, including the cost of
opening new stores and expanding existing stores, as well as investing in
information systems.

     Although we anticipate that cash flow from operations will remain positive,
we will continue to require financing for our expansion plan and the anticipated
growth of our receivables portfolio under our installment sales program. We
expect that, absent a material adverse change in the Mexican economy, financing
will be available, but there can be no assurance that it will be available on
favorable terms.

Recent Developments

     Dividend. On April 22, 2002, our shareholders declared a dividend
equivalent to US$16 million, which represented 6% of the EBITDA of US$286
million reported for 2001. On March 30, 2001, our


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<PAGE>

shareholders had declared a net dividend of US$15 million, on an EBITDA of
US$244 million for 2000. Our policy during the past years has been to declare a
dividend of between 6% and 7% of EBITDA.

     Single Series Initiative. Our capital stock is currently comprised of three
different series of shares as follows:

     o    Series "A" shares, with full voting rights, representing 33.5% of
          total outstanding shares,

     o    Series "B" shares, with full voting rights, representing 56.4% of
          total outstanding shares, and

     o    Series "L" shares, with limited voting rights, representing 10.1% of
          total outstanding shares.

     At its meeting held on April 18, 2002, our Board of Directors passed a
resolution to convert all of our existing shares into a single class of shares,
with equal dividend and voting rights. In order to become effective, this
conversion must be approved by our shareholders.

     Currently, our shares are publicly held in the form of Ordinary
Participation Certificates ("CPOs"), which are comprised of two series "B"
shares and one series "L" share, and in the from of Global Depository Receipts
("GDRs") that trade on the New York Stock Exchange (each of which represents ten
CPOs). The CPOs and GDRs represent approximately 26.5% of the total economic
rights of Grupo Elektra, but only 19.7% of the total voting rights. In
connection with the conversion of our existing shares into a single class of
shares, we intend to terminate the trust through which the CPOs are held (the
"CPO Trust"). After the termination of the CPO Trust the ADRs will directly
represent the new single class of shares.

     The conversion of the existing series of our capital stock into a single
series will not alter the economic rights of our shareholders. However, the
conversion will increase the voting rights of certain of our shareholders, in
particular our minority shareholders because after the conversion, our shares
that are publicly held will possess 26.5% of both our economic and voting
rights.

     Through the conversion of our existing shares into a single series of
shares, we are demonstrating our commitment to international best corporate
governance practices.

     Through this initiative, we hope to:

     o    Improve the liquidity of our capital stock.

     o    Make it easier to track and evaluate per share performance.

     o    Improve the fairness and transparency of our equity structure and
          provide the same rights for all of our shareholders by eliminating the
          CPO trust that currently holds some of our shares.

     o    Continue being at the forefront of corporate governance best practices
          and meeting the expectations of the capital markets.

     The Banking License. On April 4, 2002, the Mexican Ministry of Finance
approved our application to operate a consumer bank. This was the first new
banking license granted in Mexico since the 1994 Mexican economic crisis.
Initially, we expect to establish a bank during 2002 that will be our
wholly-owned unrestricted subsidiary. We are establishing the bank in order to
optimize financing for our customer receivables, which are an integral part of
our retail strategy. Therefore, the bank will house all of our consumer
financing operations, while our money transfer operations will remain with the
retail segment of our business. We do not intend to open stand-alone bank
branches, but will have the bank's products and services offered through service
windows or mini-branches located in our stores. The bank's credit operations
will be funded through our current securitization program, deposits, and the
inter-bank and capital markets. We intend to eventually offer the services that
are currently offered through Banco Serfin through our banking subsidiary. See
Item 4. "Information on the Company--Services--Banking Services."


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<PAGE>

     Securitization Program. In June 2002, we launched a Ps.500.9 million
(nominal) four-year revolving securitization program. This program has a term of
four years, three revolving years and one year of amortization, which yields a
real rate of interest of TIIE plus 90 basis points per annum.

     Operations in Latin America. At the end of 2001, we discontinued credit
sales in the Dominican Republic and El Salvador. This had a negative impact on
sales in those countries. Our plan of action for this area includes the
divestiture of the Dominican Republic operations and the possible closing of
operations in El Salvador. As of the printing of this document, we have signed a
term sheet with a group of local investors that we expect to acquire the 23
Dominican Republic stores, subject to a definitive agreement. We believe that
this is a decision that will increase our focus and optimize returns on our most
promising assets.

     The One Stores. During 2002, we closed 10 The One Stores as part of our
strategy to increase efficiency and profitability in The One stores. See Item 4.
"Information on the Company--The One--Strategies."

Derivative Instruments

     From time to time, Grupo Elektra uses hedging instruments designed to
lessen the impact of fluctuations in foreign currency exchange rates, interest
rates and the Company's stock price. See Item 11. "Quantitative and Qualitative
Disclosure about Market Risk."

Other Items

     Income Tax

     The Mexican corporate income tax rate became 35% as of January 1, 1999. Our
income tax expense as a percentage of income before taxes and employees'
statutory profit sharing was 15.1% in 2000 and 36.1% in 2001.

     Before 2000, taxable income normally differed significantly from accounting
income due to (i) the effect of the deduction for tax purposes of inventory
purchases, offset by the non-allowable deduction of cost of sales, (ii)
differences with respect to the amounts recorded to reflect the effects of
inflation and (iii) certain nondeductible expenses.

     In accordance with this statement, the accrued tax effects as of January 1,
2000 (an increase of Ps.263.0) were recorded directly to stockholders' equity.
For the year ended December 31, 2001, we recorded a Ps.260.8 million charge to
income related to the deferred tax effects.

     Asset Tax

     Since 1995, an asset tax is payable at the rate of 1.8% on the net amount
of certain assets and liabilities, but only when the amount of asset tax thus
calculated exceeds the income tax due. Asset tax paid may be recovered in the
following ten years to the extent income tax exceeds asset tax in those years.
We were not required to pay such asset taxes for the years 1999, 2000 and 2001.

U.S. GAAP Reconciliation

     Mexican GAAP differ in certain important respects from U.S. GAAP. The
application of the latter would have affected the determination of consolidated
net income, expressed in pesos of December 31, 2001 purchasing power for each of
the three years in the period ended December 31, 2001, and the determination of
consolidated stockholders' equity at December 31, 2000 and 2001, also expressed
in pesos as of December 31, 2001 purchasing power, to the extent summarized in
Note 17 to the Consolidated Financial Statements.


                                       69

<PAGE>

Pursuant to Mexican GAAP, our financial statements recognize certain effects of
inflation in accordance with Bulletin B-10 and Bulletin B-12. These effects have
not been reversed in the reconciliation to U.S. GAAP.

     Sales and money transfer services under U.S. GAAP were Ps.10,605.3 million,
Ps.12,465.9 million and Ps.12,396.1 million for the fiscal years 1999, 2000 and
2001, respectively, compared with merchandise, service revenue and other under
Mexican GAAP of Ps.13,044.4 million, Ps.15,373.3 million and Ps.15,608.4 million
for the comparable periods. Operating income under U.S. GAAP as of December 31,
1999, 2000, and 2001 was Ps.1,958.9 million, Ps.2,392.6 million and Ps.2,474.0
million, respectively, compared to Ps.1,426.4 million, Ps.1,730.3 million and
Ps.1,858.2 million, respectively, under Mexican GAAP.

     The principal difference between merchandise, service revenues and other
under Mexican GAAP and sales and money transfer services under U.S. GAAP relates
to the exclusion from sales and money transfer services of (i) the mark-up on
installment sales and stated and penalty interest, which are included in
operating income under U.S. GAAP in the line item "interest earned from consumer
credit operations" and (ii) loss on monetary position from accounts receivable,
which is included in "other financing expense." The principal differences
between Mexican GAAP and U.S. GAAP that affect our operating income relate to
the inclusion, for purposes of calculating operating income under Mexican GAAP
but not U.S. GAAP, of the loss on monetary position from accounts receivable.

     Net income under U.S. GAAP was Ps.1,744.6 million (Ps.0.34 per share),
Ps.1,347.6 million (Ps.0.37 per share) and Ps.1,093.6 million (or Ps.30 per
share) for the fiscal years 1999, 2000, and 2001, respectively, compared with
income of majority stockholders under Mexican GAAP of Ps.887.3 million (Ps.0.26
per share), Ps.1,171.9 million (Ps.0.32 per share) and Ps.1,136.7 million
(Ps.0.31 per share) for the comparable periods. Majority stockholders' equity
under U.S. GAAP as of December 31, 2000 and 2001 was Ps.2,024.4 million and
Ps.2,572.2 million respectively, as compared to Ps.5,566.9 million and
Ps.5,956.7 million, respectively, under Mexican GAAP.

     The principal differences between Mexican GAAP and U.S. GAAP that affect
our net income relate to the treatment of the following items: (i) stock options
granted to employees; (ii) acquisition of the interest in CASA; (iii) deferred
income taxes; (iv) accounting for the acquisition of Grupo SyR; and (v)
accounting for derivative and hedging transactions. The principal differences
between Mexican GAAP and U.S. GAAP that affect our majority stockholders' equity
relate to the treatment of the following items: (i) deferred income; (ii)
deferred income taxes; (iii) goodwill relating to the acquisition of the
interest in CASA; (iv) goodwill in connection with other acquisitions; and (v)
derivative and hedging transactions.

New Accounting Pronouncements

Mexican GAAP

     In November 2001, the Mexican Institute of Public Accountants (MIPA) issued
revised Bulletin C-9, "Liabilities, Provisions, Contingent Assets and
Liabilities and Commitments" ("Bulletin C-9"), which supersedes existing
Bulletin C-9, "Liabilities" and Bulletin C-12, "Contingencies and commitments".
Bulletin C-9 establishes a methodology for valuation, presentation and
disclosure of liabilities and provisions, as well as for valuation and
disclosure of contingent assets and liabilities, and for disclosure of
commitments. Among other things, Bulletin C-9 establishes guidelines for the
recognition and non-recognition of liabilities in the event of extinguishments,
restructurings or conversion to equity. In addition, it introduces the concept
of discounting long-term provisions. With respect to contingent liabilities,
Bulletin C-9 states that all contingent liabilities that have a probability of
being realized must be accounted for and disclosed in the financial statements,
contingent liabilities that have a possibility of being realized (but are not
necessarily probable) should not be accounted for in the financial statements,
but must be disclosed, and contingent liabilities that have a remote realization
should not be accounted for in the financial statements and are not required to
be disclosed. Bulletin C-9 also requires disclosure of committed amounts when
such amounts represent


                                       70

<PAGE>

significant fixed asset additions, contracted services and goods that exceed the
Company's immediate needs or if the commitment is considered a contractual
obligation. The provisions of Bulletin C-9 are required to be applied beginning
on January 1, 2003, although early adoption is recommended. We are currently
evaluating the impact that the adoption of Bulletin C-9 will have on our
consolidated financial statements.

     In December 2001, the MIPA issued Bulletin C-8, "Intangible Assets"
("Bulletin C-8"), which defines intangible assets as costs incurred and rights
or privileges acquired that will generate a future economic benefit. Bulletin
C-8 provides a clear definition of research and development costs, requiring
that only development costs may be deferred to a future period. Furthermore,
Bulletin C-8 states that preoperating costs should be expensed as a period cost,
unless they can be classified as development costs. Bulletin C-8 requires that
goodwill and intangible assets, including previously existing goodwill and
intangible assets, with indefinite useful lives should not be amortized, but
should be tested for impairment annually. Goodwill and intangible assets with
finite useful lives should be amortized over their useful lives. The provisions
of Bulletin C-8 are required to be applied beginning on January 1, 2003,
although early adoption is recommended. We are currently evaluating the impact
that the adoption of Bulletin C-8 will have on our consolidated financial
statements.

U.S. GAAP

     In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities - a
replacement of FASB No. 125", ("SFAS 140"). SFAS 140 revises the standards for
accounting for securitizations and other transfers of financial assets and
collateral, but it carries over most of the provisions of SFAS 125 without
change. SFAS 140 is effective for transfers of financial assets occurring after
March 31, 2001. The adoption of SFAS 140 did not change the U.S. GAAP accounting
of our current securitization program.

     In July 2001, the FASB issued SFAS No. 141, "Business Combinations" ("SFAS
141") which supersedes APB Opinion No. 16, "Business Combinations" and amends or
supersedes a number of related interpretations of APB 16. The statement is
effective for all business combinations initiated after June 30, 2001 and for
all business combinations accounted for by the purchase method that are
completed after June 30, 2001. SFAS 141 addresses financial accounting and
reporting for business combinations, eliminates the pooling-of-interests method
of accounting for business combinations, and prescribes the initial recognition
and measurement of goodwill and other intangible assets, accounting for negative
goodwill and the required disclosures in respect of business combinations. The
adoption of SFAS 141 did not have a material impact on our consolidated
financial statements.

     In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"), which supersedes APB Opinion No. 17, "Intangible Assets".
SFAS 142 addresses the manner in which intangible assets that are acquired
individually or with a group of other assets (but not those acquired in a
business acquisition) should be accounted for in financial statements. SFAS 142
addresses how goodwill and other intangible assets should be accounted for both
upon their acquisition and after they have been initially recognized in the
financial statements. SFAS 142 discontinues the practice of amortizing both
existing and future acquired goodwill. Furthermore, negative goodwill must now
be reflected as a one-time extraordinary gain. In addition, SFAS 142 states that
upon adoption, any remaining negative goodwill must be written off as a change
in accounting principle. The provisions of SFAS 142 are required to be applied
starting with fiscal years beginning after December 15, 2001. SFAS 142 is
required to be applied at the beginning of an entity's fiscal year and is
required to be applied to all goodwill and other intangible assets recognized in
the financial statements at that date. We are currently evaluating the impact
that the adoption of SFAS 142 will have on our consolidated financial
statements. As of December 31, 2001, intangible assets under US GAAP consisted
of goodwill Ps331,010 and negative goodwill Ps496,234.


                                       71

<PAGE>

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"). SFAS 143 requires the recognition of a
liability for the legal obligations associated with the retirement of a tangible
long-lived asset that results from the acquisition, construction and (or) normal
operation of the asset. The liability is recognized at fair value in the period
in which it is incurred if a reasonable estimate of fair value can be made. A
corresponding asset retirement cost is added to the carrying value of the
long-lived asset and is depreciated to expense using a systematic and rational
method over its useful life. SFAS 143 is effective for fiscal years beginning
after June 15, 2002. Upon initial adoption, a liability is recognized for
existing asset retirement obligations and the associated asset retirement cost
is capitalized as an increase to the carrying value of the asset. The recognized
liability and asset are adjusted for cumulative accretion and accumulated
depreciation, respectively, from the time period when the asset retirement
obligation would have originally been recognized had this statement been in
effect to the date of initial adoption. The cumulative effect of initial
adoption of SFAS 143 is recorded as a change in accounting principle. We
estimate that the adoption of SFAS 143 will not have a material impact on our
consolidated financial statements.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 supersedes
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" and the accounting and reporting provisions
of APB Opinion No. 30, "Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions". SFAS 144 retains the
fundamental provisions of SFAS 121 for recognition and measurement of the
impairment of long-lived assets to be held and used, but resolves a number of
implementation issues and establishes a single accounting model for assets to be
disposed of SFAS 144 also retains the requirement of reporting discontinued
operations separately from continuing operations and extends that reporting
requirement to a component of an entity that either has been disposed of by
sale, abandonment or distribution to owners or is classified as being held for
sale. The provisions of SFAS 144 are effective for financial statements issued
for fiscal years beginning after December 15, 2001 and their interim periods.
The provisions of SFAS 144 for long-lived assets to be disposed of by sale or
otherwise are effective for disposal activities initiated after the effective
date of SFAS 144 or after its initial application. We are currently evaluating
the impact that the adoption of SFAS 144 will have on our consolidated financial
statements.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of SFAS Nos. 4,
44, and 64, Amendment of SFAS 13, and Technical Corrections as of April 2002."
SFAS 145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of
Debt," SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers," and
SFAS 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements." As
a result, gains and losses from extinguishment of debt will no longer be
classified as extraordinary items unless they meet the criteria of unusual or
infrequent as described in Accounting Principles Boards Opinion 30, "Reporting
the Results of Operations -Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions." In addition, SFAS 145 amends SFAS No. 13, "Accounting for
Leases," to eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. SFAS 145 also amends other existing authoritative pronouncements
by making various technical corrections and clarifying certain definitions, or
describe their applicability under changed conditions. We are presently
evaluating the impact, if any, that these new standards will have on our
consolidated financial statements.


                                       72

<PAGE>

Item 6.  Directors, Senior Management and Employees

Directors

     Our Board of Directors is composed of nine members and their alternates who
are elected for one-year terms at our ordinary meeting of shareholders. Eight of
the directors are elected by the holders of Class A Shares and Class B Shares
voting as a single class. The remaining member is appointed by the holders of
Class L Shares. Four of the directors appointed by the Class A and Class B
shareholders and the director appointed by the Class L shareholders must be
independent directors who are not employed by or affiliated with us. The
following table lists our current directors, their position, their principal
occupation and the year of their appointment to the board. On August 28, 2000,
our shareholders elected a new Board of Directors, comprised of the following
persons.
<TABLE>
<CAPTION>

Name                                   Principal Occupation                                             Director Since       Age
----                                   --------------------                                             --------------       ---
Appointed by A and B Shareholders
<S>                                   <C>                                                               <C>              <C>
Ricardo B. Salinas Pliego(1) .......   Chairman of the Board of Grupo Elektra                                1993             46
Hugo Salinas Price(2) ..............   Honorary President of Grupo Elektra                                   1993             70
Pedro Padilla Longoria .............   Chief Executive Officer of TV Azteca                                  1993             36
Elisa Salinas Gomez(1) .............   Director of Production, Azteca Digital                                1993             37
Guillermo Salinas Pliego(1) ........   President of Dataflux, S.A. de C.V.                                   1993             42
David Williams .....................   Chairman of Alliance Capital Management Corporation                   2000             70
Carlos Fernandez Gonzalez ..........   Vice Chairman & Chief Executive Officer of Grupo Modelo S.A. de       2000             36
                                       C.V.
Karen L. Hendricks .................   Retired Chairman of Baldwin Piano & Organ Company                     2002             54

Appointed by L Shareholders
Roberto Servitje Achutegui .........   Chairman of Grupo Altex, S.C                                          2000             49

---------------
(1) Child of Hugo Salinas Price.
(2) Father of Ricardo B. Salinas Pliego and Guillermo Salinas Pliego.
</TABLE>

     Statutory Auditor

     In addition to the Board of Directors, our bylaws provide for a statutory
auditor elected at the ordinary general meeting of shareholders and, if
determined at such meeting, an alternate statutory auditor. Under Mexican law,
the duties of statutory auditors include, among other things, the examination of
the operations, books, records and any other documents of a company and the
presentation of a report of such examination at the annual ordinary general
meeting of shareholders. The statutory auditor is required to attend all of our
Board of Directors and shareholder meetings. We currently have one statutory
auditor, Francisco Javier Soni Ocampo, a partner at PricewaterhouseCoopers, who
has held the position since 1993.

     Corporate Governance

     In October 1999, our shareholders approved amendments to our bylaws which
enacted significant changes in our corporate governance policies. These changes
were designed to increase our transparency and accountability to our
shareholders and to encourage good communications with our minority
shareholders. The shareholders approved a decrease in the size of the Board of
Directors, from 14 directors to 9. In addition,


                                       73

<PAGE>

the number of independent directors increased from three to four. Of the nine
directors, no more than five may be nominated by or affiliated with the
Controlling Shareholders or with our management, providing for greater
representation of minority shareholders. In addition, the shareholders approved
a corporate governance charter and a requirement that beginning with the 1999
Annual Report, our annual report will contain a section on corporate governance
and on the work of each of the Board committees during that fiscal year.

     The shareholders also authorized the creation of the following new board
committees, each of which is comprised of three members, two of whom must be
independent directors.

     o    The Investments Committee reviews any material investments we make
          outside the ordinary course of business or not included in the annual
          budget and, with regard to such investments, evaluates opportunities
          and business risks. The members of the Investments Committee are Karen
          L. Hendricks (Chairman), Carlos Fernandez Gonzalez, Guillermo Salinas
          Pliego and Alvaro Rodriguez Arregui (upon invitation).

     o    The Audit Committee reviews our financial reporting procedures and
          internal financial control systems, as well as the activities and
          independence of independent auditors and the activities of internal
          audit staff. Audit Committee meetings are attended by both external
          auditors and our controller. The members of the Audit Committee are
          Carlos Fernandez Gonzalez (Chairman), Karen L. Hendricks, Guillermo
          Salinas Pliego and Javier Soni Ocampo (non-member of the Board of
          Directors).

     o    The Management Compensation Committee reviews and makes
          recommendations to the Board of Directors with regard to the
          compensation, including incentives and bonuses, of senior executive
          officers of our company. The members of the Compensation Committee are
          Roberto Servitje Achutegui (Chairman), David Williams, and Pedro
          Padilla Longoria.

     o    The Related Party Transactions Committee reviews any material
          transactions with a related party of our company or our Controlling
          Shareholders. The members of the Related Party Transactions Committee
          are David Williams (Chairman), Roberto Servitje Achutegui and Pedro
          Padilla Longoria. In 2000, this committee considered and approved the
          decision to enter into an option agreement with CASA. See Item 4.
          "Information on the Company--Strategic Investments--CASA." In
          addition, the committee also approved the decision to enter into an
          agreement with Todito in May 2000. See Item 4. "Information on the
          Company--Our Business--Our Strategy--E-catalog" and "--Strategic
          Investments."


                                       74

<PAGE>

Executive Officers

     The following table lists each of our senior executive officers, his
position, years of service as an executive officer (with us or our predecessor
entities), and age, as of May 27, 2001:


<TABLE>
<CAPTION>
                                                                                                    Years as
Name                             Position                                                       Executive Officer              Age
----                             --------                                                       -----------------              ---
<S>                             <C>                                                             <C>                         <C>
Ricardo B. Salinas Pliego ....   Chairman of the Board and President                                   19                      46
Javier Sarro Cortina .........   Chief Executive Officer                                               11                      36
Arturo Ramos Ochoa ...........   Chief Operating Officer                                                9                      51
Mario Gonzalez Gonzalez ......   Vice President Marketing                                               2                      48
Gonzalo Garcia De Luca .......   Vice President Financial Services                                      2                      36
Manuel Gonzalez Palomo .......   Vice President Information Technology                                  2                      44
Alvaro Rodriguez Arregui .....   Chief Financial Officer                                                2                      34

Filiberto Jimenez Diaz .......   General Director of Store Operations                                   6                      31
Gabriel Roqueni Rello ........   General Counsel                                                                               40
Ricardo Martinez Cruz ........   Secretary of the Board of Grupo Elektra
                                 (not a member of the Board)                                           10                      31
</TABLE>

Director and Officer Biographies

     Ricardo B. Salinas Pliego has served as our President since 1989 and as
Chairman of our Board of Directors since 1993. Mr. Salinas is also President of
Unefon since 1998 and a director of Unefon since 1999. Prior to joining us in
1981, he worked at Arthur Andersen and The Brinkman Company. Mr. Salinas studied
public accounting at the Instituto Tecnologico y de Estudios Superiores in
Monterrey ("ITESM") and graduated with Honors in 1977. He went on to receive his
Masters in Finance from the University of Tulane in 1979. Mr. Salinas also
serves on the board of directors of numerous Mexican companies including
Dataflux, Biper, Cosmofrecuencias and Todito. Recently, Mr. Salinas Pliego
became the first foreigner to be recognized by the University of Tulane as a
Distinguished Alumni.

     Hugo Salinas Price has served as our Honorary President since 1993. From
1952 to 1987, Mr. Salinas served as a director of our company. In 1997, he
founded the Asociacion Civica Mexicana Pro-Plata A.C., for which he currently
serves as president. Mr. Salinas holds degrees from Wharton and ITESM and a
degree in Law from the Universidad Nacional Autonoma de Mexico ("UNAM").

     Pedro Padilla Longoria has served as a Series A and B Director since 1993
and served as our Chief Executive Officer from 1993 until 2001. Mr. Padilla has
been Chief Executive Officer of TV Azteca since August, 2000 and he also serves
on the board of directors of Biper, Unefon and Cosmofrecuencias. Mr. Padilla has
extensive experience in cross border financial and commodities transactions. Mr.
Padilla holds a degree in Law from UNAM.

     Elisa Salinas Gomez has served as a Series A and B Director since 1993. She
currently serves as Adjunct Vice President of Production of soap operas for
Azteca Digital. In the past, Ms. Salinas opened her own shoe store which
expanded into a chain of 32 establishments. She also opened a haute couture
boutique on Madison Avenue in New York City for the Mexican designer Enrique
Martinez.

     Guillermo Salinas Pliego has served as a Series A and B Director since
1993. He also serves on the board of directors of Television Azteca and is
Chairman of the board of Dataflux. Mr. Salinas founded Dataflux while studying
at ITESM and is currently the primary shareholder of the company. He has studied
at the Colegio Britanico de la Ciudad de Mexico and at St. Andrew's College in
Canada. Mr. Salinas holds a CPA degree from ITESM.


                                       75

<PAGE>

     David Williams has served as a Series A and B Director since 2000. Since
1977 he has been the Chairman of Alliance Capital Management Corporation, an
investment management firm. Prior to joining Alliance Capital he served as
Chairman of Mitchell, Hutchins, Inc. and Vice President of Waddell & Reed Inc.
Mr. Williams is a graduate of the University of Texas, and holds an MBA from the
Harvard Business School. He is also a Director of AXA Financial, Inc., and a
trustee of the American Federation of Arts, the Foreign Policy Association and
the Metropolitan Museum of Art.

     Carlos Fernandez Gonzalez has served as a Series A and B Director since
2000. He is Vice Chairman and CEO of Grupo Modelo, S.A. de C.V., Mexico's
largest brewer and beer distributor. Mr. Fernandez is a graduate of Anahuae
University and the Executive Management Program of the Instituto Panamericano de
Alta Direccion de Empresa ("IPADE"). Mr. Fernandez serves as a Director of
several Mexican and foreign companies including Anheuser-Busch Inc.

     Karen L. Hendricks is the retired President, CEO, and Chairman of the
Baldwin Piano & Organ Company where she served from 1995 to 2001. Prior to
joining Baldwin, she was Executive V.P. and General Manager of the Dial
Corporation's Skin Card Division. She is currently a Board member of Corn
Products International, Inc. and formerly served on the Boards of the Columbia
Energy Group and AC Nielsen Corporation.

     Roberto Servitje Achutegui has served as the Series L Director since 2000.
From 1993 until 2000, he served as an external advisor to our board of
directors. He is the Chairman of Grupo Altec S.C. Formerly he was Executive Vice
President and Director of Grupo Industrial Bimbo, Mexico's leading producer and
distributor of bakery goods, where he worked for over 28 years. Mr. Servitje
graduated from the Universidad Iberoamericana and holds an MBA from the J. L.
Kellogg Graduate School of Business at Northwestern University.

     Javier Sarro Cortina has served as our Chief Executive Officer since
January 2001. He originally joined Grupo Elektra in 1995 as Vice President for
Financial Services. Other positions he has held include the position of manager
of new product development and telecommunications division of Grupo Salinas. In
addition, he served as the first CEO of Unefon, building its management team,
strategic supplier relations and financial structure. Mr. Sarro began his career
in the financial services industry. He has an MBA from the Instituto
Panamericano de Alta Direccion de Empresas (IPADE) and completed undergraduate
law studies at the Universidad Iberoamericana.

     Arturo Ramos Ochoa has served as Chief Operating Officer since 1993. His
prior experience at our company includes positions as Director of Furniture,
Director of Merchandise, Director of Sales and Director of General Operations.
Mr. Ramos has a bachelor's degree in Accounting from the Guadalajara University.

     Mario J. Gonzalez joined our company in 1999 and currently serves as our
Vice President for Channel and Marketing. Prior to joining us, Mr. Gonzalez
spent over 23 years in marketing, marketing research, sales and operations in
both local and international markets. During this period he worked with
prominent multi-national companies including Nabisco, Gillette, Pepsico and Casa
Cuervo in the consumer goods, food and beverages, liquors and spirits and
services. Mr. Gonzalez holds a degree in Business Administration and a Marketing
Specialization from the Universidad Iberoamericana.

     Gonzalo Garcia de Luca has served as Vice President for Financial Services
since March 2000. His responsibilities include our credit sales, collection,
money transfer business and savings program. Since joining our company in 1996,
he has also been responsible for our first securitization of accounts receivable
as well as financial planning, structured finance and investor relations. Prior
to 1996, he worked for Banamex, Grupo Posadas, Bursamex, and the Mexican
Internal Revenue Service (Secretaria de Hacienda y Credito Publico). Mr. Garcia
holds an MBA from the IPADE and a bachelor's degree from the ITAM.


                                       76

<PAGE>

     Manuel Gonzalez Palomo has served as Vice President of Systems since 2000.
Since joining Electra in 1990, he held the positions of Director of Finance,
Director of Human Resources and General Director of Systems. Mr. Gonzalez holds
a bachelor's degree in accounting, an MBA and a Masters in Operations Research,
all from the Instituto Tecnologico de Estudios Superiores de Monterrey (ITESM).

     Alvaro Rodriguez Arregui has served as our Chief Financial Officer since
1999. Appointed Chief Financial Officer of Unefon in 1997, he helped raise US$1
billion to start that company, and established its accounting, administration,
budget, finance, legal and treasury departments. Before joining Unefon he worked
for several years as a banker in Latin America, Europe and the United States.
Mr. Rodriguez holds a bachelor's degree from the Instituto Tecnologico Autonomo
de Mexico (ITAM) and an MBA from Harvard Business School.

     Filiberto Jimenez Diaz has served as the General Director of Store
Operations since 2000. He joined our company in 1996 after spending two years at
a consulting firm, and has oversaw the launch of our Latin American operations
as one of his early job responsibilities. Since then, he has served as the
Director of Operations for our Elektra stores, and as the CEO of the Salinas y
Rocha after we purchased the company in March 1999. Mr. Jimenez holds a degree
in Marketing and an MBA with a major in International Business.

     Gabriel Roqueni Rello has served as our General Counsel since 2000. Since
joining our company in 1990, he previously served as a General Corporate Lawyer
and as General Director of Operations. Mr Roqueni is a graduate of The
Universidad Panamericana (UP).

     Ricardo Martinez Cruz has served as our Corporate and Legal Affairs
Director and as a non-member Secretary of our Board of Directors since 1999. He
joined our company in 1992 as a General Corporate Lawyer. Mr. Martinez holds a
Bachelor's Degree in Law from the Universidad Nacional Autonimo de Mexico
(UNAM).

Compensation of Directors and Officers

     For the year ended December 31, 2001, the aggregate compensation paid to
our executive officers (a total of 75 persons in senior and middle-level
management) for services in all capacities was approximately Ps.71.9 million
(approximately US$7.4 million). Traditionally, a token compensation was paid by
our company to each member of the Board of Directors represented by one gold
coin (centenario) per meeting attended. On January 26, 2000, our shareholders
approved a resolution to pay each director an annual fee of US$25,000. In 1994,
we established a non-contributory pension plan for our employees, including our
officers. During 1999, 2000 and 2001, the charges to income related to such
pension plan and seniority premiums were approximately Ps.7.4 million, Ps.9.5
million and Ps.7.6 million, respectively. As of December 31, 2001, the
liabilities related to seniority premiums and such pension plan were Ps.56.8
million compared to Ps.49.2 million 2000.

Stock Option Plan

     On February 28, 1994, our Board of Directors adopted an executive stock
option plan (the "Stock Option Plan") through which store managers and all
personnel senior to store managers employed prior to January 1, 1994 were
granted options to purchase CPOs at the price of Ps.2.50 per CPO. The Stock
Option Plan also allowed employees whose employment date was during 1994 or 1995
to receive options beginning in 1996 and 1997, respectively, at an exercise
price of Ps.3.25 (1994 employees) or Ps.4.00 (1995 employees) per CPO. The Stock
Option Plan authorizes the sale of up to a total of 70 million CPOs (after
giving effect to the ten-to-one split of our stock authorized on August 15,
1997). Options granted under the Stock Option Plan are exercisable ratably over
each year in the five-year period after the date on which they were granted as
long as the rate of increase in our net profits over the previous year is more
than 25%. If we fail to meet this


                                       77

<PAGE>

performance target in any given year, the options that would have been
exercisable in such year are eligible to be exercised in the following year and
the five-year term of options is extended one year.

     As of December 31, 2001, options to acquire approximately 63 million CPOs
at prices of Ps.2.50, Ps.3.25 or Ps.4.00 per CPO (depending on the relevant
employment date) had been granted to 457 executives and key employees, of which
45,678,828 had been exercised. See Note 11 to our Consolidated Financial
Statements.

     Set forth below are the number of CPO options, their exercise price and the
expiration dates of all options outstanding as of December 31, 2001:

<TABLE>
<CAPTION>

         Number of Unexercised Options        Exercise Prices     Current Expiration Dates
         ------------------------------      -----------------   --------------------------
<S>     <C>                                <C>                  <C>
                  15,755,581                        2.50              February 28, 2024
                     888,441                        3.25              February 28, 2024
                     638,337                        4.00              February 28, 2024
           -----------------
   Total          17,282,359
           =================
</TABLE>

Employees

     The following table sets forth the number of our employees, broken down by
category of employment and geographical location for the years ending December
31, 1999, 2000 and 2001.

<TABLE>
<CAPTION>
                                                         Number of Employees
                                                         as at December 31,
                                               ------------------------------------------
                                                  1999            2000            2001
                                               ---------        --------        ---------
<S>                                           <C>             <C>             <C>
Number of employees ........................     18,541          19,442          18,235

Category of activity
     Store employees .......................      9,389           9,171           7,121
     Credit and collections employees ......      4,251           4,471           5,118
     Corporate and administrative ..........      4,901           5,800           5,996

Location
     Mexico ................................     16,765          17,430          16,215
     Dominican Republic ....................        198             375             522
     El Salvador ...........................        372             314             192
     Guatemala .............................        471             518             359
     Honduras ..............................        326             336             388
     Peru ..................................        409             469             559
</TABLE>

     For a more detailed discussion of our employees and labor relations, see
Item 4. "Information on the Company--Our Business--Employees;"
"--Elektra--Elektra in Mexico--Employees;" "--Elektra--Elektra in Latin
America--Employees;" "--Grupo SyR--Employees;" "--The One--Employees."

Share Ownership

     As of May 1, 2002, the heirs of Hugo Salinas Rocha, including Ricardo B.
Salinas, our President and Chairman of the Board of Directors, and members of
his immediate family, may be deemed to have beneficial ownership of 85.92% of
our Series A Shares, 66.72% of our Series B Shares, and 11.78% of our Series L
Shares. See Item 7. "Major Shareholders and Related Party Transactions--Major
Shareholders." None of our other directors or executive officers is the
beneficial owner of more than 1% of any class of our capital stock.


                                       78

<PAGE>

Item 7.  Major Shareholders and Related Party Transactions.

                               MAJOR SHAREHOLDERS

Grupo Elektra, S.A. de C.V.

     As a result of a ten for one stock split in October 1997, at December 31,
2001, we had 4,329,459,055 shares of capital stock authorized, of which
1,495,024,470 were Series A Shares, 2,347,018,555 were Series B Shares and
487,416,030 Series L Shares. At December 31, 2001, 1,249,126,710 Series A Shares
were issued and outstanding, 2,001,705,795 Series B Shares were issued and
outstanding and 380,535,321 Series L Shares were issued and outstanding. The
following table sets forth, as of December 31, 2001, certain information with
respect to the beneficial ownership of our capital stock of (i) each person who
is known by us to own more than 5% of either the currently outstanding A Shares,
B Shares or L Shares and (ii) all executive officers and directors as a group.

<TABLE>
<CAPTION>
                                                                             SHARES OWNED
                                 -------------------------------------------------------------------------------------------------
                                      SERIES "A" SHARES           SERIES "B" SHARES             SERIES "L" SHARES
                                 --------------------------  ----------------------------   -------------------------
                                                                                                                        Aggregate
                                                                                                                       Percentage
                                                                                                                           of
                                              Percentage of                 Percentage of                 Percentage   Outstanding
Identity of Owner                  Number         Class          Number         Class         Number       of Class      Shares
-----------------                -----------  -------------  -------------  -------------   ----------    -----------  -----------
<S>                           <C>             <C>          <C>              <C>          <C>              <C>         <C>
Hugo Salinas Rocha's heirs(1)     318,229,59      25.48        512,739,174      25.78        7,101,285        1.89        23.19
Esther Pliego de Salinas(2)      650,307,870      52.06         60,570,340       3.05       30,285,170        7.97        20.49
All executive Officers and       968,537,464      77.54      1,218,681,414      61.28       44,775,590       11.92         1.67
     Directors of the Group(3)
</TABLE>
-------------
(1)  In February 1997, Mr. Hugo Salinas Rocha, our Honorary President of the
     Board of Directors, grandfather of Ricardo B. Salinas Pliego (our current
     President and Chairman of the Board of Directors), father of Mr. Hugo
     Salinas Price and father-in-law of Esther Pliego de Salinas, died,
     distributing the capital stock of Corporacion HSR, S.A. de C.V., the
     company through which he principally held shares of our company, to his
     children. Therefore, the heirs of Mr. Salinas Rocha as a group control his
     shares.

(2)  Upon Mr. Hugo Salinas Rocha's death, a hereditary trust terminated and the
     shares held in trust were delivered to Esther Pliego de Salinas.

(3)  In this item are included the shares of Hugo Salinas Rocha's heirs and
     Esther Pliego de Salinas as well as those in a trusteeship related to
     Sheung Wong Co. Ltd., a company controlled by the Controlling Shareholders.

     The capital structure of our company, as of May 31, 2002 is the same as set
forth in the above table.

     The controlling beneficial shareholders of our company are the heirs of
Hugo Salinas Rocha, including Ricardo B. Salinas and Esther Pliego de Salinas
(collectively, the "Controlling Shareholders"). The Controlling Shareholders
collectively own 968,537,464 A Shares, representing 77.54% of the currently
outstanding A Shares, and 1,218,681,414 B Shares, representing approximately
61.28% of the currently outstanding B Shares. In addition, the Controlling
Shareholders own 44,777,590 L Shares, representing approximately 11.92% of the
outstanding L Shares. The Controlling Shareholders thus control approximately
71% of our equity, while 29% is owned by outside investors. Through ownership of
these shares, the Controlling Shareholders currently have the power to determine
the outcome of substantially all actions requiring shareholder approval,
including the power to elect eight of our nine directors and to determine
whether or not dividends will be paid.


                                       79

<PAGE>

     If our single series initiative is approved by our shareholders, our equity
structure will reflect the single class of stock. See "Item 5. Operating and
Financial Review and Prospects--Recent Developments--Single Series Initiative."

U.S. Shareholders

     As most of our GDSs are held by a nominee of The Depository Trust Company,
it is not practicable for us to determine the number of GDSs or the number of
our company's Class A, B and L Shares beneficially owned in the United States.

                           RELATED PARTY TRANSACTIONS

Interest of Management in Certain Transactions

     Historically, we have engaged, and we expect to continue to engage, in a
variety of transactions with our affiliates, including entities owned or
controlled by our Controlling Shareholders. Since 1995, we have had a committee
on related party transactions to provide an independent review of transactions
with affiliates to determine whether these transactions are related to our
business and are consummated on terms that are at least as favorable to us as
terms that would be obtainable at the time for a comparable transaction or
series of similar transactions in arm's-length dealings with an unrelated third
person. In October of 1999, our shareholders approved amendments to our bylaws
which enacted significant changes in our corporate governance policies. These
changes were designed to increase our transparency and accountability to our
shareholders and to encourage good communications with our minority
shareholders. Among these changes, the shareholders approved amendments to our
bylaws which formalize the existence of the committee on related party
transactions. The committee is comprised of three members, two of whom must be
independent directors. On January 26, 2000, we appointed independent directors
to the related party transactions committee. We anticipate that we will continue
to engage in transactions with affiliates and that our current arrangements and
any future renewals of these arrangements with our affiliates will receive a
favorable review from the new committee. We have also agreed to terms governing
our indebtedness which restrict our ability to engage in transactions with
affiliates.

Loans to Affiliates

     From time to time, we have made loans to our affiliates. However, as of
April 29, 2002, there were no material loans to affiliates outstanding.

Loans from Affiliates

     On January 19, 2000, January 28, 2000 and February 15, 2000, TV Azteca made
a series of short-term loans to our company, for an aggregate amount of Ps.200.4
million (US$20 million), each accruing interest at an annual rate of 13%. We
repaid these loans on March 31, 2000.

Purchase of CASA "N" Shares

     On March 26, 1996, we purchased 35.8% of the capital stock of CASA, a
holding company through which our controlling shareholders own their interests
in TV Azteca and Grupo COTSA. CASA indirectly owns (through Azteca Holdings,
S.A. de C.V., an intermediate holding company) approximately 56.7% of the
outstanding common stock and 51% of the voting stock of TV Azteca and 26.2% of
the outstanding common stock and 50.0% of the voting stock of Grupo COTSA.

     On September 1, 2000, we entered into an option agreement with CASA
pursuant to which we granted CASA a twelve-month option to purchase all of our
shares of CASA. CASA had until October 12, 2001


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<PAGE>

to exercise this option. CASA did not exercise the option and paid a penalty of
US$15.8 million to us for such failure to exercise. See "Item 4. Information on
the Company--Strategic Investments--CASA."

TV Azteca Advertising Agreements

     In connection with the investment in CASA, the shareholders of CASA caused
subsidiaries of TV Azteca to enter into a Television Advertising Time Agreement
with us on March 25, 1996 (the "Unsold Airtime Agreement"). Under the Unsold
Airtime Agreement, TV Azteca agreed to air not less than 300 commercial spots
per week for a period of 10 years, each spot with 20 seconds average duration,
totaling 5,200 minutes each year, in otherwise unsold airtime. In exchange for
such television advertising time, Elektra agreed to pay TV Azteca US$1.5 million
each year, payable in advance each year. TV Azteca may not terminate the Unsold
Airtime Agreement. However, we may terminate the Unsold Airtime Agreement at any
time upon at least 90 days' notice. Our rights under the Unsold Airtime
Agreement may be transferred to third parties. For the years ended December 31,
1999, 2000 and 2001, we recorded advertising expenses of Ps.11.1 million,
Ps.15.3 million and Ps.17.1 million, respectively, under this agreement

     On December 22, 1998, we entered into a Television Advertising Time
Agreement with TV Azteca (the "Prime Airtime Agreement"). Under the Prime
Airtime Agreement, TV Azteca has agreed to air commercial spots for Elektra at
discounted rates based on the gross rating points assigned to the airtime chosen
by us for each commercial spot. At least 60% of the commercial spots must be
aired on "stellar" airtime, i.e. from 7:00 p.m. to midnight, and half of this
60% (30%) must be aired on "prime" airtime, i.e. from 9:00 p.m. to 11:00 p.m.
The remaining 40% may be aired on airtime other than from 7:00 p.m. to midnight.
Under the Prime Airtime Agreement, we determine each year how much airtime to
purchase from TV Azteca for that particular year. In 1999, we purchased Ps.21
million of airtime under this agreement, but in 2000 and 2001, we did not
purchase any airtime under this agreement. The Prime Airtime Agreement was
executed for a term of five years. The Prime Airtime Agreement may not be
terminated by Elektra, but may be terminated at any time by TV Azteca upon at
least 15 business days' notice. Our rights under the Prime Airtime Agreement may
not be transferred to third parties.

     On February 17, 2000, we entered into an additional advertising agreement
with TV Azteca effective for one year, pursuant to which TV Azteca will air
commercial spots for us at rates based on the rating points assigned per
program. At December 31, 2001 and 2000, we purchased airtime amounting to
Ps.53.1 million and Ps.53.2, respectively, million under this contract.

     In May, 2001, Elektra del Milenio, S.A. de C.V., a subsidiary of ours,
entered into an advertising agreement with TV Azteca pursuant to which Elektra
del Milenio purchased advertising time on TV Azteca's channel 7 and channel 13
for the time period from May 2001 through December 2001. We paid a total of
Ps.54.5 million, in five monthly installments, to TV Azteca as consideration for
this agreement.

COTSA

     On September 30, 1999, Inmuebles Ardoma, S.A. de C.V. (a wholly-owned
subsidiary of Grupo SyR) acquired approximately 90% of the capital stock of
COTSA in exchange for capitalizing Ps.369.6 million of accounts receivable due
from COTSA. See Item 4. "Information on the Company--Strategic
Investments--CASA."

Unefon Agreement

     As part of our investment in CASA and through CASA, in TV Azteca, we
indirectly own 9.1% of Unefon. At the August 31, 2000 meeting of our Committee
on Related Party Transactions, it was agreed to terminate our previous agreement
with Unefon, dated October 15, 1999, and to enter into a new ten-year agreement
beginning January 1, 2000.


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<PAGE>

     Pursuant to our agreement with Unefon, we market, sell and distribute
Unefon's wireless telecommunications and other telephony products and services
through our stores. See "Item 4. Information on the Company--Additional
Services."

     On October 19, 2000, TV Azteca granted to its shareholders, including
Azteca Holdings, rights to acquire all of its shares of Unefon. See "Item 4.
Information on the Company--Strategic Investments--TV Azteca Spin-Off of
Unefon."

Biper

     Elektra's relationship with Biper, a Mexican company that provides wireless
e-mail and traditional messaging services, is governed by two separate
agreements:

     On March 31, 1996, Elektra and Biper entered into an Agency Agreement
pursuant to which Elektra acts as Biper's agent to promote Biper's paging and
message delivery services, sign-up Biper's subscribers, provide customer support
and carry out collection. In exchange, Elektra is entitled to 2.5% of every
payment received by Elektra from Biper's customers, plus an additional 5%
whenever Elektra carries out collection services. The Agency Agreement was
entered into for an undetermined duration and may be terminated by either party
upon at least 30 days notice.

     On March 15, 1997, Elektra and Biper entered into an Exclusive Distribution
Agreement. In exchange for an exclusivity commitment by Elektra, Biper makes
Elektra its first channel of distribution for new products or services. The
Exclusive Distribution Agreement was entered into for a 10-year term.

     We recorded revenues under these agreements of Ps.56.9 million, Ps.26.4
million and Ps.4.7 million for the years ended December 31, 1999, 2000 and 2001,
respectively.

     We also sell certain goods to Biper and Radiocel including electronic
devices, computers and communication equipment. Revenues from sales to Biper and
Radiocel for the years ended December 31, 1999, 2000 and 2001 amounted to
Ps.79.6 million, Ps.125.2 million and Ps.5.8 million, respectively.

Todito.com ("Todito")

     As approved by our Related Party Transactions Committee, we entered into an
agreement with Todito on May 9, 2000 for a duration of five years, pursuant to
which Elektra, Salinas y Rocha and The One rent space in their stores to Todito,
in which Todito installs Internet kiosks and offer its services through its
www.todito.com Internet portal. In addition, our stores provide Todito with
space on all their web pages (www.elektra.com.mx, www.salinasyrocha.com.mx ) to
place a fixed icon with the Todito logo, and, in return, Todito provides the
stores with space on its website to place a fixed icon, which works as a link to
the stores' web pages. The stores also grant the right to Todito to sell, on an
exclusive basis, its banner and button inventory appearing on their web pages.

     Customers may make payments for sales completed through the Todito Internet
portal at our stores, which will be paid a commission on payments received. The
stores are required to deposit the amounts collected in a Todito account within
three days following the collection.

     For the year ended December 31, 2001 we generated Ps.0.2 million of
revenues from this agreement, while in 2000 the agreement generated no revenue
for us.


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<PAGE>

Item 8.  Financial Information

Consolidated Financial Statements

     See Item 18. "Financial Statements." and pages F-1 through F-85.

Legal Proceedings

     We do not believe that any legal proceedings to which we or any subsidiary
are a party will, individually or in the aggregate, have a material adverse
effect on our business, financial condition or results of operation.

     Suspension of Payments

     In September 1983, Elektra Mexicana, S.A. de C.V. ("Elektra Mexicana") and
certain subsidiaries of Elektra Mexicana were subject to suspension of payments
proceedings in Mexico as a result of the inability to pay debts due to the
devaluation of the peso in the early 1980s. Elektra Mexicana is currently a
subsidiary of our company and was, at the time of the suspension of payments
proceedings, the owner and operator of our Elektra stores. In 1984, the Mexican
court having jurisdiction over the suspension of payments proceedings approved a
plan of reorganization (the "Plan") for Elektra Mexicana and its subsidiaries.
As a result of the suspension of payments proceedings, we and our current
operating subsidiaries were formed to operate our business. Elektra Mexicana has
paid the settlement claims stipulated in the Plan and is in the process of
proving the payment of such claims to the authorities. Once payment has been
proven, the suspension of payments process will be formally terminated. We are
aware of three creditors who did not consent to the Plan. Two of these creditors
have filed no objection to the Plan and have not sought to collect any amounts
owed to them. One financial institution (the "Financial Institution") has sought
to enforce a promissory note in the original principal amount of US$3,375,000,
together with accrued interest and penalty interest to the date of repayment.
Under the terms of the Plan, the Financial Institution is entitled to receive
Ps.444,251. The Financial Institution has instituted two separate proceedings in
the Mexican federal courts seeking to enforce the promissory note. Each of these
proceedings has been dismissed, the court holding that the suspension of
payments proceeding is the appropriate forum for the Financial Institution to
pursue its claim. The last of these proceedings was dismissed on August 12,
1993. Since such date, the Financial Institution has taken no further action to
enforce its claim, and we believe that such claim would now be barred by the
statute of limitations. We believe that the maximum amount for which Elektra
Mexicana may be liable to the three creditors who did not consent to the Plan is
Ps.1.7 million, which we have recorded as a liability. Based on the advice of
our legal counsel, we believe our potential liability does not exceed the amount
already recorded. If the Financial Institution were to prevail for amounts
significantly in excess of the amount recorded by us and if Elektra Mexicana
could not otherwise satisfy the Financial Institution's claim, a court could
order the sale of certain property leased to us (including a warehouse and a
small number of stores). There can be no assurance that we would be able to
renew any such leases on the same or similar terms.

     General

     Manufacturers of defective products in Mexico may be subject to liability
for loss and injury caused by such products, but the Mexican laws providing for
such liability have been rarely invoked. Mexican law does not recognize product
liability claims against a seller of a defective product that did not
manufacture the product. Because we do not currently manufacture any of our
products, we do not believe we will be exposed to future product liability
claims.

Dividend Policy

     For a discussion of our dividend policy, see Item 3. "Key
Information--Dividends."


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<PAGE>

Item 9.  The Offer and Listing.

                          NATURE OF THE TRADING MARKET

     Our CPOs are traded on the Mexican Stock Exchange. Each CPO represents
financial interests in, and limited voting rights with respect to, two B Shares
and one L Share. The GDSs have been issued by the Depositary. On August 15,
1997, our shareholders approved a ten-for-one split of our stock. Prior to
October 3, 1997, the effective date of this stock split, each GDS represented 2
CPOs. Thereafter and as of December 31, 2000, each GDS represented 10 CPOs, as
issued by the CPO Trustee for the CPO Trust. The GDSs are traded on the New York
Stock Exchange (the "NYSE"). The GDSs are also quoted on the Stock Exchange
Automated Quotation system of the International Stock Exchange of the United
Kingdom and the Republic of Ireland, Ltd. (SEAQ International).

     Our A, B and L Shares (together, "the Shares") are also listed on the
Mexican Stock Exchange. The A and B Shares have traded infrequently. Since the
initial issuance of L Shares on December 13, 1993, the L Shares have been traded
on Subsection "A" of the Mexican Stock Exchange. Subsequent to the restructuring
of our capital effected on July 12, 1994 (the "Recapitalization"), the CPO has
replaced the L Share as the principal form of equity security of our company
traded in Mexico. In December 1994, we completed a Level II listing in the form
of GDRs on the NYSE which is traded under the symbol "EKT". On December 18,
2000, we completed the merger of Grupo Elektra into Grupo SyR, as a result of
which all pre-merger Shares, CPOs and GDSs were technically replaced with
identical numbers of post-merger Shares, CPOs and GDSs, with identical features,
of Grupo SyR, which is now named Grupo Elektra. At December 31, 2000,
111,731,940 of our CPOs were represented by 11,173,194 GDSs. Approximately 9% of
our total number of CPOs were held in the form of GDSs in 2000. At December 2001
there were 85,437,420 of our CPOs represented by 8,543,742 GDSs. Approximately
7% of our total number of CPOs were held in the form of GDSs in 2001. As most of
the GDSs are held by a nominee of The Depository Trust Company, it is not
practicable for us to determine the number of GDSs or shares beneficially owned
in the United States.

     The following tables set forth, for the periods indicated, the reported
high and low sales prices of our principal form of equity security on the
Mexican Stock Exchange, and of GDRs on the New York Stock Exchange. Prices have
not been restated in constant currency units or to reflect the stock split
described below.
<TABLE>
<CAPTION>
                                            Mexican Stock Exchange                  New York Stock Exchange
                                            Nominal Pesos Per CPO                          US$ per GDS
                                             High            Low                      High              Low
                                             ----            ---                      ----              ---
1996                                   Ps.   6.42       Ps. 3.37                 US$ 16.38        US$  8.75
<S>                                   <C>            <C>                    <C>              <C>
1997                                        14.30           6.07                     37.12            15.00
1998                                        14.40           3.18                     18.00             2.88

1999:

        First Quarter                  Ps.   6.70       Ps. 3.80                 US$  7.06        US$  3.50
        Second Quarter                       7.42           5.22                      8.00             5.43
        Third Quarter                        5.54           4.04                      5.93             4.37
        Fourth Quarter                       9.46           4.30                      9.93             4.43

2000:

        First Quarter                  Ps.  13.20       Ps. 7.84                 US$ 14.25        US$  8.12
        Second Quarter                      11.80           6.80                     12.68             6.93
        Third Quarter                       11.30           8.00                     11.62             8.68
        Fourth Quarter                      10.80           7.84                     11.00             8.12
</TABLE>



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<PAGE>
<TABLE>
<CAPTION>
                                            Mexican Stock Exchange                  New York Stock Exchange
                                            Nominal Pesos Per CPO                          US$ per GDS
                                             High            Low                      High              Low
                                             ----            ---                      ----              ---
2001
<S>                                   <C>            <C>                    <C>              <C>
        First Quarter                  Ps  10.20        Ps. 7.64                 US$ 10.62        US$  7.87
        Second Quarter                      9.20            7.80                      9.98             8.16
        Third Quarter                       9.25            4.44                     10.07             4.70
        Fourth Quarter                      6.47            4.40                      6.95             4.55

2002

        January                        Ps. 6.88         Ps. 5.95                 US$  7.50        US$  6.40
        February                           6.77             6.01                      7.43             6.55
        March                              7.54             6.50                      8.50             7.07
        April                              8.93             7.50                      9.67             8.30
        May                                9.20             7.80                      9.98             8.44
        June                               9.22             8.28                      9.80             8.20

</TABLE>
--------------------------------
(1)  Through June 20, 2001.

     At our annual ordinary and extraordinary meeting of shareholders held on
April 25, 1998, our shareholders approved the establishment of a reserve in our
stockholders' equity account in the amount of Ps.6.7 million for the repurchase
of our stock, in accordance with rules established by the Comision Nacional
Bancaria y de Valores, the Mexican banking and securities commission (the
"CNBV"). We may purchase our CPOs on the Mexican Stock Exchange and our GDSs on
the New York Stock Exchange at prevailing prices to the extent of funds
remaining in this reserve account. Any shares so repurchased will not be deemed
to be outstanding for purposes of calculating any quorum or voting at a
shareholders' meeting during the period in which such shares are owned by us.

     At its meeting held on April 18, 2002, our Board of Directors approved the
conversion of all of our existing shares into a single class of shares. In
connection with the conversion of our existing capital stock into a single
class, we intend to terminate the trust through which certain of our CPOs are
held, after which our GDSs will directly represent the new single class of
capital stock.

     The conversion of the existing series of our capital stock into a single
series will not alter the economic rights of our shareholders. However, the
conversion will increase the voting rights of certain of our shareholders, in
particular our minority shareholders. After the conversion, our shares that are
publicly held will possess 26.5% of both our economic and voting rights. See
Item 5. "Operating and Financial Review and Prospects--Recent
Developments--Single Series Initiative."

Changes in Securities and Changes in Security for Registered Securities

     On December 18, 2000, as part of our corporate reorganization, we merged
with and into Grupo SyR. As a result, Grupo SyR, the surviving company, changed
its name to Grupo Elektra, S.A. de C.V., which, as legal successor to the former
Grupo Elektra, has assumed the obligations of our predecessor, and is now the
issuer of the 12% Guaranteed Senior Notes Due 2008.


                                       85

<PAGE>

                      TRADING ON THE MEXICAN STOCK EXCHANGE

     The Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A. de C.V.),
located in Mexico City, is the only stock exchange in Mexico. Founded in 1907,
it is organized as a corporation whose shares are held by 30 brokerage firms,
which are exclusively authorized to trade on the Exchange. Trading on the
Mexican Stock Exchange takes place principally on the Exchange through automated
systems. The Mexican Stock Exchange is open between the hours of 8:30 a.m. and
3:00 p.m. Mexico City time, each business day. Trades in securities listed on
the Mexican Stock Exchange can also be effected off the Exchange. The Mexican
Stock Exchange operates a system of automatic suspension of trading in shares of
a particular issuer as a means of controlling excessive price volatility, but
under current regulations this system does not apply to securities such as the L
Shares that are directly or indirectly (for example, through GDSs) traded on a
stock exchange (including for these purposes NASDAQ) outside Mexico.

     Settlement is effected two business days after a share transaction on the
Mexican Stock Exchange. Deferred settlement, even by mutual agreement, is not
permitted without the approval of the Mexican National Securities Commission
(CNBV). Most securities traded on the Mexican Stock Exchange, including our
shares, are on deposit with Instituciun para el Depusito de Valores, S.A. de
C.V. (Indeval), a privately owned securities depositary that acts as a
clearinghouse for Mexican Stock Exchange transactions.

Item 10.  Additional Information.

                                     BYLAWS

     Set forth below is a brief summary of certain significant provisions of our
bylaws and Mexican law. This description does not purport to be complete and is
qualified by reference to our bylaws, which have been filed as an exhibit to
this Annual Report. For a description of the provisions of our bylaws relating
to our Board of Directors, Executive Committee and statutory auditors, see Item
6. "Directors, Senior Management and Employees."

Organization and Register

     Grupo Elektra is a sociedad anonima de capital variable organized in Mexico
under the Mexican General Corporate Law (Ley General de Sociedades Mercantiles).
Our company was registered in the Public Registry of Commerce of Mexico City on
September 18, 2000 under the number 119,176-35,112.

Purposes

     The purposes of our company are set forth in Chapter 1, Article 2 of our
bylaws as follows: a) to incorporate, organize and invest in the capital stock
and patrimony of all type of mercantile and civil companies and associations,
industrial, commercial and services enterprises, radio and tourist
concessionaires and other kind of concessionaires, either national or from
abroad, as well as in certificates of participation as permitted by law; b) to
acquire, transfer and in general negotiate with all type of shares, interests of
partners, participation or interests and any other security permitted by law; c)
to issue, subscribe, accept, endorse and negotiate with all type of credit
instruments or bearer securities permitted by law; d) to obtain and grant loans,
with or without guarantee, that do not imply the execution of acts reserved to
credit institutions under the Law of Credit Institutions; e) to grant special
endorsements, bonds and guarantees of any kind, real or personal, regarding our
obligations or the obligations of third parties with which we do business; f) to
register, acquire, use and dispose of in any manner of patents, trademarks,
trade names and copyrights; g) in general, to enter into any civil or mercantile
acts and to execute all kind of agreements permitted by law for the performance
of its corporate purpose.


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<PAGE>

Voting Rights

     Each A Share and B Share entitles the holder thereof to one vote at
meetings of our shareholders. Holders of Series L Shares with limited right to
vote have the right to attend and to vote exclusively in Special Meetings of
such Series and in Extraordinary Shareholder Meetings while dealing with the
following matters:

     o    the transformation of our company from one type of company to another,

     o    any merger with other corporations or companies,

     o    cancellation of the issuance of Series L Shares in the Securities or
          Special Sections of the Registro Nacional de Valores e Intermediarios
          (National Register of Securities and of Intermediaries) or in other
          national or foreign stock exchange in which such shares are
          registered.

     Holders of L Shares have the right to designate one member of the Board of
Directors.

     Under Mexican law, holders of shares of any series are also entitled to
vote as a class on any action that would prejudice the rights of holders of
shares of such series but not rights of holders of shares or other series, and a
holder of shares of such series would be entitled to judicial relief against any
such action taken without such a vote. The determination whether an action
requires a class vote on these grounds would initially be made by the Board of
Directors or other party calling for shareholder action. A negative
determination would be subject to judicial challenge by an affected shareholder,
and the necessity for a class vote would ultimately be determined by a court.
There are no other procedures for determining whether a proposed shareholder
action requires a class vote, and Mexican law does not provide extensive
guidance on the criteria to be applied in making such a determination. See Item
5. "Operating and Financial Review and Prospects--Recent Developments--Single
Series Initiative."

Shareholders' Meetings

     General shareholders' meetings may be ordinary meetings or extraordinary
meetings. Extraordinary general meetings are those called to consider certain
matters specified in Article 182 of the Mexican General Corporate Law,
including, principally, amendments of the bylaws, liquidation, merger and
transformation from one type of company to another, as well as to consider the
removal of our company's shares from listing on the Mexican Stock Exchange or
any foreign stock exchange. General meetings called to consider all other
matters are ordinary meetings. The director elected by the holders of L Shares
is elected at a special meeting of holders of L Shares. All other matters on
which holders of L Shares are entitled to vote would be considered at an
extraordinary general meeting. Holders of L Shares are not entitled to attend or
address meetings of shareholders at which they are not entitled to vote.

     A special meeting of the holders of L Shares must be held each year for the
election of directors. An ordinary general meeting of the holders of A Shares
and B Shares must be held each year to consider the approval of the financial
statements for the preceding fiscal year, to elect directors and statutory
auditors and to determine the allocation of the profits of the preceding year.

     The quorum for an ordinary general meeting of the A Shares and B Shares is
50% of such shares, and action may be taken by a majority of the shares present.
If a quorum is not available, a second meeting may be called at which action may
be taken by a majority of the A Shares and B Shares present, regardless of the
number of such shares. Special meetings of holders of L shares are governed by
the same rules applicable to ordinary general meetings of holders of A Shares
and B Shares. The quorum for an extraordinary general meeting at which holders
of L Shares may not vote is 75% of the A Shares and B Shares, and the quorum for
an extraordinary general meeting at which holders of L Shares are entitled to
vote is 75% of the outstanding capital stock. If a quorum is not available in
either case, a second meeting may be called and action may be taken, provided a
majority of the shares entitled to vote is present. Whether on first or second
call, actions at


                                       87

<PAGE>

an extraordinary general meeting may be taken by a majority vote of the A Shares
and B Shares outstanding and, on matters which holders of L Shares are entitled
to vote, a majority vote of all the capital stock.

     Shareholders' meetings may be called by the Board of Directors, the
statutory auditors or a court. The Board of Directors or the statutory auditors
may be required to call a meeting of shareholders by the holders or 33% of the A
Shares and B Shares or, in the case of a meeting at which holders of L Shares
are entitled to vote, by the holders of 33% of the outstanding capital stock.
Notice of meetings must be published in the Diario Oficial de la Federacion or a
newspaper of general circulation in Mexico City at least fifteen days prior to
the meeting. In order to attend a meeting, shareholders must deposit their
shares with us at our office in Mexico City, with a Mexican or foreign banking
institution or with a Mexican exchange broker. If so entitled to attend the
meeting, a shareholder may be represented by proxy.

Dividend Rights

     At the annual ordinary general meeting of holders of A Shares and B Shares,
the Board of Directors submits our financial statements for the previous fiscal
year, together with a report thereon by the Board, to the holders of A Shares
and B Shares for approval. The holders of A Shares and B Shares, once they have
approved the financial statements, determine the allocation of our net profits
for the preceding year. They are required by law to allocate 5% of such net
profits to a legal reserve, which is not thereafter available for distribution
except as a stock dividend, until the amount of the legal reserve equals 20% of
our historical capital stock (before effect of restatement). The remainder of
net profits is available for distribution. All shares outstanding at the time a
dividend or other distribution is declared are entitled to share in such
dividend or other distribution.

Preemptive Rights

     In the event of a capital increase, a holder of existing shares of a given
series has a preferential right to subscribe for a sufficient number of shares
of the same series to maintain the holder's existing proportionate holdings of
shares of that series. Preemptive rights must be exercised within 15 days
following the publication of notice of the capital increase in the Diario
Oficial de la Federacion and a newspaper of general circulation in Mexico City.
Under Mexican law, preemptive rights cannot be waived in advance of the issuance
thereof and cannot be represented by an instrument that is negotiable separately
from the corresponding share. As a result, there is no trading market for the
rights in connection with a capital increase. Holders of GDSs that are U.S.
persons or located in the United States may be restricted in their ability to
participate in the exercise of such preemptive rights. See "Risk Factors--Risks
Related to Our Controlling Shareholders and Capital Structure" for a description
of the circumstances under which holders of GDSs may not be entitled to exercise
such rights.

Limitations on Share Ownership

     Ownership by non-Mexicans of shares of Mexican enterprises is regulated by
the 1993 Foreign Investment Law (the "Foreign Investment Law") and the 1998
Regulations (the "Regulations"). The National Commission on Foreign Investment
(the "Foreign Investment Commission") is responsible for administration of the
Foreign Investment Law and Regulations. In order to comply with restrictions on
the percentage of their capital stock that may be owned by non-Mexican
investors, Mexican companies typically limit particular classes of their stock
to Mexican ownership. Under the Foreign Investment Law, a trust for the benefit
of one or more non-Mexican investors may qualify as Mexican if the trust meets
certain conditions that will generally ensure that the non-Mexican investors do
not determine how the shares are voted.

     Our bylaws allow our capital stock to be acquired by Mexican or foreign
individuals or juridical persons. However, any foreigner who, at the time of
incorporation or thereafter, acquires an interest or participation in our
company shall be deemed by such acquisition to be a Mexican citizen with respect
to said


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interest or participation, as well as to the assets, rights, concessions,
participation or interests in which our company holds title, or of the rights
and obligations derived from the contracts with Mexican authorities to which our
company is a party, and shall be understood to have agreed not to invoke the
protection of its Government under penalty, upon failure to comply with such
agreement, of forfeiting such interest or participation in favor of the Mexican
government.

Other Provisions

     Variable capital. Our capital stock has a fixed minimum of Ps.556,237,160,
without right of redemption, represented by 4,329,459 055 common or ordinary,
non par value Series A and/or Series B Shares and/or Series L Shares with
limited right to vote. The variable part of our capital stock is unlimited and
is represented by shares of equal characteristics. However, no variable capital
has been subscribed as of December 31, 2001.

     Increases in the fixed minimum portion of the capital stock without the
right of retirement are carried out by resolution of the General Extraordinary
Shareholders Meeting, being necessary in those cases to amend these bylaws. The
variable part of the capital stock of our company may be increased without
modifying the bylaws, by resolution of the General Ordinary Shareholders
Meeting.

     The minimum fixed portion of the capital stock may only be reduced by
resolution of the General Extraordinary Shareholders Meeting and the consequent
amendment of the bylaws, complying in every case with what it is disposed in
article nine of the Mexican General Corporate Law. Reductions of the variable
part of the capital stock may be carried out by resolution of the General
Ordinary Shareholders Meeting.

     As required by Articles 220 and 221 of the Mexican General Corporate Law,
if there were any holders of the variable portion of our capital stock, such
holders would be entitled to require us to redeem such shares at the holder's
option at any time at a redemption price equal to the lower of (i) 95% of the
average market value of such shares on the Mexican Stock Exchange for 30 trading
days preceding the date on which the exercise of the option is effective and
(ii) the book value of such shares at the end of the fiscal year in which the
exercise of the option is effective.

     Exclusive jurisdiction. Our bylaws provide that legal actions relating to
the execution, interpretation or performance of the bylaws shall be brought only
in Mexican courts.

     Duration. The duration of the corporation is for 99 years from the date of
registration with the Public Registry of Commerce.

     Purchase by our company of our shares. According to Mexican law, we may
repurchase our shares on the Mexican Stock Exchange at any time at the then
prevailing market price. Each year, the stock repurchase policies are
established by the Board of Directors, and the amount of shares to be
repurchased must be approved by the annual general ordinary shareholders
meeting. In the event of any such repurchase, our capital stock is reduced
automatically in an amount equal to the assumed par value of each repurchased
share (determined by dividing our outstanding capital stock by the number of
shares outstanding immediately prior to such repurchase); if the purchase price
of such shares exceeds the assumed par value, the difference is charged against
amounts allocated from net earnings to a special reserve created for the
repurchase of shares. Repurchased shares are held by our company as treasury
stock, pending future sales thereof on the Mexican Stock Exchange or
cancellation. Our capital stock is automatically increased upon the resale of
such shares in an amount equal to their assumed par value; any excess amount is
allocated to the special reserve referred to above. The economic and voting
rights corresponding to repurchased shares may not be exercised during the
period in which such shares are owned by us, and such shares are not deemed to
be outstanding for purposes of calculating any quorum or vote at any
shareholders' meeting during such period.


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     If the conversion of our existing shares into a single series is approved
by our shareholders, we will make appropriate amendments to our by-laws to
reflect the single series equity structure. See Item 5. "Operating and Financial
Review and Prospects--Recent Developments--Single Series Initiative."

                               MATERIAL CONTRACTS

     On September 1, 2000, we entered into an option agreement with CASA,
pursuant to which CASA held a twelve-month option to purchase the 35.8% of CASA
stock that we currently own. CASA did not exercise the option and paid us a
penalty of US$15.8 million for such failure to exercise. See Item 4.
"Information on the Company--Strategic Investments--CASA."

                                EXCHANGE CONTROLS

     Mexico has had a free market for foreign exchange since 1991, and the
government has allowed the Peso to float freely against the U.S. dollar since
December 1994. There can be no assurance that the government will maintain its
current foreign exchange policies. See Item 3. "Key Information--Selected
Financial Data--Exchange Rates."

                     LIMITATIONS AFFECTING SECURITY HOLDERS

     Prior to June 4, 1999, our bylaws limited the ownership of Series A Shares
to eligible Mexican holders and credit institutions acting as trustees. Our
bylaws did not impose any limitations on the ownership of Series B Shares and
Series L Shares or on the ownership of CPOs.

     On June 4, 1999, we amended our bylaws and removed all foreign investment
restrictions on ownership of Series A Shares. As a result of such amendment, our
bylaws contain no restrictions on the ownership of our shares or on the
ownership of CPOs (subject to certain limitations on voting rights described
below).

     Ownership by non-Mexicans of shares of Mexican enterprises is regulated by
the Ley de Inversion Extranjera (the "Foreign Investment Law") and the
Reglamento de la Ley de Inversion Extranjera y del Registro Nacional de
Inversiones Extranjeras (the "Foreign Investment Regulations").

     The Foreign Investment Law and Regulations require that we register any
non-Mexican owner of CPOs, or the applicable depositary with respect to any
Global Depositary Shares, with the National Registry of Foreign Investment. A
non-Mexican owner of CPOs who has not been registered is not entitled to vote
any shares underlying the CPOs that he otherwise would have the right to vote or
to receive dividends with respect to the shares underlying the CPOs. We have
registered the Depositary for this purpose with respect to the GDSs and the CPOs
(and the B Shares and L Shares, as applicable, represented thereby).

     If the conversion of our existing shares into a single series and the
termination of the CPO trust is approved by our shareholders, the limitations
set forth above will be applicable to our new single series of common stock. See
Item 5. "Operating and Financial Review and Prospects--Recent
Developments--Single Series Initiative."

Limitations on Voting Rights

     Under the CPO Trust agreement, holders of CPOs who are not Eligible Mexican
Holders have no voting rights with respect to the underlying B Shares. For
Mexican law purposes, the Depositary is considered the owner of the CPOs which
are represented by the GDSs. Since the Depositary does not qualify as an
Eligible Mexican Holder, the Depositary and, consequently, the holders of GDSs
have no voting rights with respect to the underlying B Shares. The B Shares that
are held in the CPO Trust on behalf of holders of CPOs


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who are not Eligible Mexican Holders are voted in the same manner as the
respective majority of the B Shares are voted at the relevant meeting. Given
that a majority of the B Shares are owned by the Controlling Shareholders, if
the Controlling Shareholders vote the same way on a matter, the CPO Trustee will
be required to vote the B Shares held in the CPO Trust on behalf of holders of
CPOs who are not Eligible Mexican Holders in the same manner as the B Shares
held by the Controlling Shareholders are voted.

     All holders of GDSs and CPOs, whether or not they are Eligible Mexican
Holders, are entitled to give instructions as to the manner in which the CPO
Trustee shall vote the L Shares whenever the holders of L Shares are entitled to
vote. In the case of the holders of GDSs, those instructions must be given to
the Depositary (who in turn conveys them to the Common Representative). In the
case of the holders of CPOs, the instructions must be given directly to the
Common Representative. In both cases the Common Representative must receive the
voting instructions at least five business days prior to the relevant meeting.

     Under our bylaws and Mexican law, holders of L Shares are entitled to vote
only in limited circumstances. Holders of L Shares are entitled to elect, at a
special stockholders meeting of such series, one of our nine directors, and the
corresponding alternate directors. Holders of L Shares are entitled to vote at
general extraordinary stockholders meetings on the following corporate actions:
(i) transforming our company from one type of company to another, (ii) any
merger in which we are not the surviving entity, and (iii) de-listing of the L
Shares or securities representing them from the Mexican Stock Exchange or any
foreign stock exchange or cancellation of the registration of such shares with
the National Securities Registry. Holders of L Shares are also entitled to vote
at special stockholders meetings of such series on actions that would prejudice
the rights of holders of such series but not the rights of holders of other
series.

Limitation on Rights to Withdraw Underlying Securities

     Holders of CPOs may not withdraw the B Shares and L Shares underlying such
CPOs until July 1, 2004. At such time, such securities may continue to be
represented by CPOs until the expiration of the CPO Trust or, at the option of
the holder and subject to certain conditions described herein, the B Shares and
L Shares represented by the CPOs may be removed from the CPO Trust and may be
traded separately.

Restrictions Imposed by Bylaws, CPO Trust Agreement and Mexican Law

     Our bylaws provide that legal actions relating to the execution,
interpretation or performance of the Bylaws may be brought only in courts in
Mexico, D.F. The CPO Trust Agreement provides that all disputes arising
therefrom must be submitted to courts located in Mexico, D.F., and that all
parties to the CPO Trust Agreement, including CPO holders, agree that they will
not submit such disputes to any other courts.

     Our bylaws and the CPO Trust Agreement provide that non-Mexican
stockholders and CPO holders, respectively, of our company formally agree with
the Foreign Affairs Ministry (i) to be considered as Mexicans with respect to
the shares or the CPOs, as the case may be, of our company that they acquire or
hold as well as with respect to the property, rights, concessions, participation
or interests owned by us and with respect to the rights and obligations derived
from any agreements we have with the Mexican Government and (ii) not to invoke
the diplomatic protection or intervention of their own governments. If a
non-Mexican stockholder or CPO holder should invoke governmental diplomatic
protection or intervention in violation of this agreement, its shares or CPOs,
as the case may be, could be forfeited to the Mexican Government. Under Mexican
law, it is not clear what actions would constitute invoking governmental
protection or intervention that would result in forfeiture of shares or CPOs or
what process would be implemented in connection with the forfeiture provisions;
however, institution of judicial proceedings in a foreign country would not be
deemed an invocation of diplomatic protection or intervention which would result
in a forfeiture of shares.

     In the event of a capital increase, holders of existing shares have a
preferential right to subscribe for a number of shares sufficient to maintain
the holders' existing proportionate holding of shares, except in limited


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circumstances. Holders of GDSs may be restricted under Mexican law in their
ability to participate in the exercise of preemptive rights to acquire shares or
rights of any other nature and as a result their economic interest in our
company could be diluted in the event of a capital increase.

     Whenever the stockholders approve a change of corporate purposes, change of
nationality of the corporation or transformation from one form of company to
another, any stockholder entitled to vote on such change that has voted against
it has appraisal rights whereby it may withdraw from our company and receive an
amount, attributable to its shares calculated as specified under Mexican law.
Such appraisal rights must be exercised within 15 days following the relevant
shareholders meeting. Because the L Shares may vote only on certain matters,
such appraisal rights will only be available to holders of L Shares, including L
Shares underlying the CPOs (or GDSs), in the case of transformation of our
company from one type of company to another. In addition, because the CPO
Trustee is required by the terms of the CPO Trust Agreement to vote the B Shares
held by non-Mexican nationals in the CPO Trust in the same manner as the
majority of B Shares are voted at the relevant meeting, appraisal rights will
not be available to non-Mexican holders of B Shares represented by CPOs (and
GDSs).

     If approved by our security holders, the CPO Trust will be dissolved and
the CPO certificates will be cancelled in connection with our single series
initiative. See Item 5. "Operating and Financial Review and Prospects--Recent
Developments--Single Series Initiative."


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                                    TAXATION

     The following summary contains a description of the principal Mexican and
United States federal income tax consequences of the purchase, ownership and
disposition of the Notes, CPOs or the GDSs, but does not purport to be a
complete analysis of all the potential tax considerations relating thereto. This
summary is based on the tax laws of Mexico and the United States in force on the
date of this Annual Report, including the provisions of the income tax treaty
between the United States and Mexico (the "Tax Treaty"), which are subject to
change. This summary deals only with holders that will hold Notes, CPOs or GDSs
as capital assets and does not address tax considerations applicable to
investors that may be subject to special tax rules, such as banks, tax-exempt
organizations, insurance companies, dealers in securities or currencies, persons
that will hold the Notes, CPOs or GDSs as part of an integrated investment
(including a "straddle") comprised of Notes, CPOs or GDSs and one or more other
positions, persons that have a "functional currency" other than the U.S. Dollar
and persons that own or are treated as owning 10% or more of our voting shares
(including CPOs), nor does it address the tax treatment of holders of Notes who
did not acquire the Notes at their issue price as part of their initial
distribution.

     Holders of Notes, CPOs or GDSs should consult their own tax advisors as to
the United States federal, Mexican or other tax consequences of the purchase,
ownership and disposition of Notes, CPOs or GDSs, including, in particular, the
effect of any foreign, state or local tax laws.

     As used herein, the term "United States Holder" means the beneficial owner
of Notes, CPOs or GDSs that is, for United States income tax purposes, (i) an
individual citizen or resident of the United States, (ii) a United States
domestic corporation or (iii) otherwise subject to United States federal income
tax on a net income basis in respect of Notes, CPOs or GDSs.

     As used herein, the term "Foreign Holder" means a holder that is not a
resident of Mexico and that will not hold Notes, CPOs or GDSs or a beneficial
interest therein in connection with the conduct of a trade or business through a
permanent establishment in Mexico.

     For purposes of Mexican taxation, an individual is a resident of Mexico if
he has established his domicile in Mexico, unless he has resided in another
country for more than 183 calendar days, whether consecutive or not, (except for
public officers or governmental employees) in any one calendar year and can
demonstrate that he has become a resident of that country for tax purposes, and
a legal entity is a resident of Mexico if it is incorporated under Mexican law
or if it has its principal place of business or its place of effective
management in Mexico. A Mexican citizen pursuant to Mexican law is presumed to
be a resident of Mexico for tax purposes unless such person or entity can
demonstrate otherwise. If a person has a permanent establishment or fixed base
in Mexico, such permanent establishment or fixed base shall be required to pay
taxes in Mexico on income attributable to such permanent establishment or fixed
base in accordance with relevant tax provisions.

     In general, for United States federal income tax purposes, holders of GDSs
or CPOs will be treated as the beneficial owners of the Series B Shares and
Series L Shares represented by those GDSs or CPOs.

     Tax Considerations Relating to the Notes

     Mexican Taxation

     Taxation of Interest and Principal

     As of January 1, 2001, under Mexico's Income Tax law, payments of interest
made by us in respect of the Notes (including payments of principal in excess of
the issue price of such Notes, which, under Mexican law, are deemed to be
interest) to a non-resident holder will generally be subject to a Mexican
withholding tax


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assessed at a rate of 4.9% if (i) the relevant Notes are registered with the
Special Section of the National Registry of Securities and Intermediaries
maintained by the National Banking and Securities Commission, (ii) the Notes are
placed, through banks or brokerage houses, in a country which has entered into a
treaty to avoid double taxation with Mexico, and (iii) no party related to us
(defined under the applicable law as parties that are (x) shareholders of our
company that own, directly or indirectly, individually or collectively, with
related persons (within the meaning of the applicable law) more than ten percent
(10%) of our voting stock or (y) corporations more than twenty percent (20%) of
the stock of which is owned, directly or indirectly, individually or
collectively, with related persons of our company), directly or indirectly, is
the effective beneficiary of five percent (5%) or more of the aggregate amount
of each such interest payment.

     Apart from the Mexican income tax law discussed in the preceding paragraph,
other provisions reducing the rate of Mexican withholding taxes may also apply.
Under the Tax Treaty, the rate would be 4.9% for certain holders that are
residents of the United States (within the meaning of the Tax Treaty).
Notwithstanding the foregoing, under Rule 3.25.15 of the General Rules issued by
the Ministry of Finance published in the Diario Official de la Federacion on May
30, 2002, the tax rate applicable under tax treaties generally, including the
Tax Treaty, will be applicable only if (i) the Notes continue to be registered
in the Special Section of the RNVI, (ii) the Company timely files with the
Ministry of Finance within the first 15 business days of July and October 2002,
and January and April 2003, information regarding the amount of interest paid on
the Notes and the date of such payment, and a statement representing that no
party related to the Company (as such terms are defined in the Rules), jointly
or individually, directly or indirectly, is the effective beneficiary of 5.0% or
more of the aggregate amount of each such interest payment, and (iii) the
Company maintains records which evidence compliance with items (i) and (ii)
above. The Company expects that such conditions will be met during the effective
time of such Rule. If the requirements under such rule are not complied with,
withholding tax on the payment of interest on the Notes will be assessed at a
rate of 10% for holders other than parties related to the Company as described
in item (ii) above, in which case payments of interest will be assessed at a
rate of 35%. The Rules, together with other tax regulations, are promulgated on
an annual basis, and therefore, no assurances can be given that the Rules will
be extended or that equivalent Rules will be enacted.

     Under the law, payments of interest made by us with respect to the Notes to
non-Mexican pension or retirement funds will be exempt from Mexican withholding
taxes, provided that the fund (i) is duly incorporated pursuant to the laws of
its country of origin, (ii) is exempt from income tax in such country and (iii)
is registered with the Ministry of Finance for that purpose, (iv) is the
effective beneficiary of such payments of interest.

     We have agreed, subject to specified exceptions and limitations, to pay
additional amounts to the holders of the Notes in respect of the Mexican
withholding taxes mentioned above ("Additional Amounts"). If we pay Additional
Amounts in respect of such Mexican withholding taxes, any refunds received with
respect to such Additional Amounts will be for our account.

     Holders or beneficial owners of Notes may be requested to provide certain
information or documentation necessary to enable us to establish the appropriate
Mexican withholding tax rate applicable to such holders or beneficial owners. In
the event that the specified information or documentation concerning the holder
or beneficial owner, if requested, is not provided on a timely basis, our
obligation to pay Additional Amounts will be limited.

     Under existing Mexican law and regulations, a Foreign Holder will not be
subject to any Mexican taxes in respect of payments of principal made by us with
respect to the Notes.


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     Taxation of Dispositions

     Capital gains resulting from the sale or other disposition of the Notes by
a Foreign Holder will not be subject to Mexican income or other taxes.

     Transfer and Other Taxes

     There are no Mexican stamp, registration, or similar taxes payable by a
Foreign Holder in connection with the purchase, ownership or disposition of the
Notes. A Foreign Holder of Notes will not be liable for Mexican estate, gift,
inheritance or similar tax with respect to the Notes.

     United States Taxation

     Taxation of Interest and Additional Amounts

     A United States Holder will treat the gross amount of interest and
Additional Amounts (i.e., without reduction for Mexican withholding taxes)
received in respect of the Notes as ordinary interest income at the time such
interest and Additional Amounts is received or accrued, in accordance with such
Holder's method of accounting for United States federal income tax purposes.
Mexican withholding taxes paid at the appropriate rate applicable to the United
States Holder will be treated as foreign income taxes eligible for credit
against such United States Holder's United States federal income tax liability,
subject to generally applicable limitations and conditions, or, at the election
of such United States Holder, for deduction in computing such United States
Holder's taxable income. Interest and Additional Amounts will constitute income
from sources without the United States for foreign tax credit purposes. Such
income generally will constitute "passive income" or, in the case of certain
United States Holders, "financial services income" for United States foreign tax
credit purposes unless the Mexican withholding tax rate applicable to the United
States Holder is imposed at a rate of at least 5%, in which case such income
generally will constitute "high withholding tax interest."

     The calculation of foreign tax credits and, in the case of a United States
Holder that elects to deduct foreign taxes, the availability of deductions,
involves the application of rules that depend on a United States Holder's
particular circumstances. Under new rules enacted by Congress in 1997 and other
guidance recently released by the United States Treasury, foreign tax credits
may not be allowed for withholding taxes imposed in respect of certain
short-term or hedged positions in securities or in respect of arrangements in
which a United States Holder's expected economic profit is insubstantial. United
States Holders should consult their own tax advisors regarding the availability
of foreign tax credits and the treatment of Additional Amounts in light of their
particular circumstances.

     A holder or beneficial owner of Notes that is, with respect to the United
States, a foreign corporation or a nonresident alien individual (a "Non-United
States Holder") generally will not be subject to United States federal income or
withholding tax on interest income or Additional Amounts earned in respect of
Notes, unless such income is effectively connected with the conduct by the
Non-United States Holder of a trade or business in the United States.

     Taxation of Dispositions

     Upon the sale, exchange (other than an exchange for registered 2008 Notes
as provided above), retirement (including a redemption by us) or other
disposition of a Note, a United States Holder generally will recognize capital
gain or loss equal to the difference between the amount realized on the sale,
exchange, redemption or other disposition (except to the extent such amount is
attributable to accrued interest, which will be treated as such) and such
Holder's adjusted tax basis in the Note. A United States Holder's adjusted tax
basis in a Note generally will equal the cost of such Note to such holder. Such
capital gain or loss will be long-term capital gain or loss if, at the time of
the disposition, the United States Holder's holding period in the


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Note is more than one year. The distinction between capital gain or loss and
ordinary income or loss is important for purposes of the limitations on a United
States Holder's ability to offset capital losses against ordinary income and
because United States Holders that are individuals may be entitled to a
preferential rate on long-term capital gains. Long-term capital gain realized by
a United States Holder that is an individual generally is subject to a maximum
rate of 20 percent in respect of property held for more than one year.

     A Non-United States Holder of Notes will not be subject to United States
federal income or withholding tax on gain realized on the sale or other
disposition of Notes unless (i) such gain is effectively connected with the
conduct by the Non-United States Holder of a trade or business in the United
States or (ii) in the case of gain realized by an individual Non-United States
Holder, the Non-United States Holder is present in the United States for 183
days or more in the taxable year of the sale and certain other conditions are
met.

     Tax Considerations Relating to CPOs or GDSs

     Taxation of Dividends

     Mexican Tax Considerations.

     Effective January 1, 2002, dividends paid to Foreign Holders with respect
to CPOs or GDSs will not be subject to Mexican withholding tax.

     U.S. Tax Considerations

     Cash dividends paid with respect to the Shares represented by GDSs or CPOs,
to the extent paid out of our current or accumulated earnings and profits, as
determined for United States tax purposes, generally will be includible in the
gross income of a United States Holder as ordinary income on the day on which
the dividends are received by the CPO Trustee and will not be eligible for the
dividends received deduction allowed to corporations. Dividends paid in pesos
will be included in the income of a United States Holder in a U.S. dollar amount
calculated in general by reference to the exchange rate in effect on the day
they are received by the CPO Trustee. United States Holders should consult their
own tax advisors regarding the treatment of foreign currency gain or loss, if
any, on any pesos that are converted into U.S. dollars on a date subsequent to
the date of receipt by the CPO Trustee. Dividends generally will constitute
foreign source "passive income" or, in the case of certain United States
Holders, "financial services income" for United States foreign tax credits
purposes.

     Distributions to Holders of additional Shares with respect to their GDSs or
CPOs that are made as part of a pro rata distribution to all of our shareholders
generally will not be subject to United States federal income tax.

     A Non-United States Holder of CPOs or GDSs generally will not be subject to
United States federal income or withholding tax on dividends received on CPOs or
GDSs, unless such income is effectively connected with the conduct by the
Non-United States Holder of a trade or business in the United States.

     Taxation of Capital Gains

     Mexican Tax Considerations

     Gain on the sale or other disposition of GDSs by Foreign Holders will not
be subject to Mexican tax. Deposits of CPOs in exchange for GDSs and withdrawals
of CPOs in exchange for GDSs will not give rise to any Mexican tax or transfer
duties.


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     The sale of CPOs by a non-resident individual holder will not be subject to
any Mexican tax if the transaction is carried out through the Mexican Stock
Exchange or other securities markets approved by the Mexican Ministry of
Finance. Sales or other dispositions of CPOs made in other circumstances
generally would be subject to Mexican tax, regardless of the nationality or
residence of the transferor.

     Non-resident legal entities are subject to a 5% withholding tax on the
gross sales price received upon the sale of CPOs through the Mexican Stock
Exchange or other securities markets approved by the Mexican Ministry of
Finance. Alternatively, non-resident legal entities may elect to be subject to a
20% tax rate on their gains from the sale as calculated by the Mexican Income
Tax Law provisions. In both cases, the financial institutions involved in the
transfers must withhold the tax.

     On April 11, 2002, a general ruling was issued by the Mexican Ministry of
Finance allowing non-resident legal entities to elect not to pay the tax
discussed in the previous paragraph. On May 30, 2002 the Mexican Ministry of
Finance extended the effect date of this ruling until February 28, 2003, but it
should be noted that the Mexican Ministry of Finance may withdraw this tax
benefit after such extension has expired. Certain restrictions will apply if the
CPOs are transferred as a consequence of public offerings.

     Gain on sales or other dispositions of CPOs or Shares made in other
circumstances generally would be subject to Mexican Tax, regardless of the
nationality or residence of the transferor. However, under the Tax Treaty, a
holder that is eligible to claim the benefits of the Tax Treaty will be exempt
from Mexican tax on gains realized on a sale or other disposition of CPOs or
Shares in a transaction that is not carried out through the Mexican Stock
Exchange or such other approved securities markets, so long as the holder did
not own, directly or indirectly, 25% or more of the capital stock of the company
(including ADSs) within the 12 month period proceeding such sale or other
disposition.

     U.S. Tax Considerations

     Upon the sale, exchange or other disposition of GDSs or CPOs, a United
States Holder generally will recognize gain or loss in an amount equal to the
difference between the amount realized on the disposition of such GDSs or CPOs
and such United States Holder's tax basis in the GDSs or CPOs. Such gain or loss
recognized by such United States Holder generally will be long-term capital gain
or loss if the United States Holder has held the GDS or CPO for more than one
year at the time of the disposition. The distinction between capital gain or
loss and ordinary income or loss is important for purposes of the limitations on
a United States Holder's ability to offset capital losses against ordinary
income and because United States Holders that are individuals may be entitled to
a preferential tax rate on long-term capital gains. Long-term capital gain
realized by a United States Holder that is an individual generally is subject to
a maximum rate of 20 percent.

     Gain, if any, realized by a U.S. holder on the sale or other disposition of
GDSs or CPOs will be treated as U.S. source income for U.S. foreign tax credit
purposes. Consequently if a Mexican withholding tax is imposed on the sale or
disposition of CPOs, a U.S. holder that does not receive significant foreign
source income from other sources may not be able to derive effective U.S.
foreign tax credit benefits in respect of these Mexican taxes. U.S. holders
should consult their own tax advisors regarding the application of the foreign
tax credit rules to their investment in, and disposition of CPOs.

     Deposits and withdrawals of CPOs by United States Holders in exchange for
GDSs will not result in the realization of gain or loss for United States
federal income tax purposes.

     A Non-United States Holder of CPOs or GDSs will not be subject to United
States federal income or withholding tax on gain realized on the sale of CPOs or
GDSs, unless (i) such gain is effectively connected with the conduct by the
Non-United States Holder of a trade or business in the United States or (ii) in
the case


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of gain realized by an individual Non-U.S. Holder, the Non-United States Holder
is present in the United States for 183 days or more in the taxable year of the
sale and certain other conditions are met.

     United States Backup Withholding and Information Reporting

     A United States Holder of Notes, CPOs or GDSs may, under certain
circumstances, be subject to "backup withholding" with respect to certain
payments to such United States Holder, such as dividends or interest paid by us
or the proceeds of a sale or disposition of Notes, CPOs or GDSs, unless such
holder (i) is a corporation or comes within certain exempt categories, and
demonstrates this fact when so required, or (ii) provides a correct taxpayer
identification number, certifies that it is not subject to backup withholding
and otherwise complies with applicable requirements of the backup withholding
rules. Any amount withheld under these rules will be allowed as a refund or
credit against the holder's United States federal income tax liability provided
the required information is furnished to the Internal Revenue Service. While
Non-United States Holders generally are exempt from backup withholding, a
Non-United States Holder may, in certain circumstances, be required to comply
with certain information and identification procedures in order to prove this
exemption.

     Other Mexican Taxes

     There are no inheritance, gift, succession or value added taxes applicable
to the ownership, transfer, exchange or disposition of GDSs or CPOs by Foreign
Holders, although gratuitous transfers of CPOs may, in certain circumstances,
cause a Mexican federal tax to be imposed upon the recipient. There are no
Mexican stamp, issue, registration or similar taxes or duties payable by holders
of GDSs or CPOs.

Commissions paid in brokerage transactions for the sale of CPOs on the Mexican
Stock Exchange are subject to a value added tax of 15%.


                                       98

<PAGE>

                              DOCUMENTS ON DISPLAY

     We are subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended. In accordance with these requirements, we file reports and
other information with the U.S. Securities and Exchange Commission. These
materials, including this Annual Report and the exhibits thereto, may be
inspected and copied at the SEC's public reference room at 450 Fifth Street,
N.W., Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference room and their copy charges.


                                       99

<PAGE>

Item 11.  Quantitative and Qualitative Disclosure about Market Risk

     We are exposed to market risk from changes in interest rates and foreign
currency exchange rates. Additionally, as of December 31, 2001, we held
derivative contracts, forward exchange and interest rate contracts to hedge a
portion of our outstanding indebtedness and equity derivative contracts for
investment purposes. Our risks and the potential gains and losses associated
with these risks and instruments, are discussed below.

     Interest Rate Risk

     Interest rate risk exists principally with respect to our indebtedness that
bears interest at floating rates. At December 31, 2001, we had outstanding
Ps.4,604.3 million (US$502.9 million) of indebtedness compared with Ps.4,294.5
million (US$469.0 million) in 2000, of which 61.4% bore interest at fixed
interest rates in 2001, compared with 66.7% in 2000 and 38.6% bore interest at
variable rates in 2001, compared with 33.3% in 2000. Of the total variable rate
debt, 81.7% was denominated in United States dollars in 2001, compared with
56.1% in 2000, 18.3% was denominated in pesos in 2001, compared with 28.4% in
2000 and 0% was denominated in other currencies in 2001, compared with 15.5% in
2000.

     A hypothetical instantaneous 10% increase in the average interest rate
applicable to our variable rate debt held at December 31, 2001, would have
increased our interest expense for 2001 by approximately Ps.87.1 million. A
hypothetical instantaneous 10% increase in the average interest rate applicable
to our variable rate debt held at December 31, 2000 would have increased our
interest expense in 2000 by approximately Ps.20.8 million.

     We manage our interest rate risk by entering into swaps and caps contracts
that hedge our variable interest rate exposure.

     At December 31, 2001, we had caps and swaps interest rate contracts that
hedge a monthly average amount of Ps.1,816.1 million. The last period covered
matures on January 1, 2003. The estimated fair value of these contracts as of
December 31, 2001 totaled Ps.49.5 million. The applicable TIIE was 8.22%. At
December 31, 2000, we had entered into no hedging or derivative transactions
with respect to our interest rate risk exposure.

     The potential gain or loss in the fair value contract position of our
interest rate hedge instruments held at December 31, 2001 that would have
resulted from a hypothetical instantaneous 10% change in the value of the
interest rate would have been approximately Ps.0.7 million.

     Foreign Exchange Risk

     Our principal foreign currency exchange risk involves changes in the value
of the peso relative to the United States dollar. Provided below is a summary of
our net foreign currency exposure. U.S. dollar denominated assets represent
principally cash and cash equivalents and accounts receivable. The U.S. dollar
denominated liabilities represent primarily bank loans and long-term notes and
amounts due to our suppliers.

<TABLE>
<CAPTION>
                                              At December 31, 2001            At December 31, 2000
                                          -----------------------------  -----------------------------
                                           (in millions of US dollars)    (in millions of US dollars)

<S>                                      <C>                            <C>
U.S. dollar denominated assets .......            US$131.2                           US$84.3
U.S. dollar denominated liabilities ..               497.9                             413.6

Net liability position ...............               366.7                             329.3
</TABLE>


                                       100

<PAGE>

     The cash flow required to service our liabilities is generated primarily in
Mexican pesos. A hypothetical, instantaneous devaluation of the Mexican peso to
Ps.10.50 from the December 31, 2001 Noon Buying Rate (Ps.9.156 per U.S. dollar)
would have resulted in estimated exchange losses based on our net U.S. dollar
liability position at December 31, 2001 of Ps.492.8 million.

     We manage our exchange rate risk on our net liability position by entering
from time to time into forward exchange contracts and options to hedge a portion
of our net liability position.

     At December 31, 2001, we had forward exchange contracts to purchase US$25
million at a cost of Ps.267.7 million. The contracts mature in January and April
2002. The estimated fair value of these contracts was determined using the
current exchange rate as of December 31, 2001 of Ps.9.156, and totaled Ps.36.1
million.

     We also had a U.S. call Mexican Peso put option contract that give us the
right to purchase on September 25, 2002 an amount of US$8.3 million at a strike
price of 10.10.

     The potential gain or loss in the fair value contract positions of our
foreign exchange hedge instruments held at December 31, 2001 that would have
resulted from a hypothetical instantaneous 10% change in the value of the peso
against the U.S. dollar would have been approximately Ps.15.9 million. The
potential gain or loss in the fair value contract positions of our foreign
exchange hedge instruments held at December 31, 2000 that would have resulted
from a hypothetical instantaneous 10% change in the value of the peso against
the U.S. dollar would have been approximately Ps.15.2 million

     Equity Swaps

     As of December 31, 2001, we had two U.S. dollar denominated equity swap
agreements that are currently outstanding. We were authorized by our
stockholders to repurchase up to Ps.350 million (nominal pesos as of 1996) of
our own stock through a stock repurchase fund. In order to comply with
corresponding tax and legal requirements, we regularly sell stock from the
repurchase fund. Our way of doing this is by selling the stock thus repurchased,
and engaging in limited equity swap transactions whereby we transfer to the swap
counterparty a number of shares against payment of a notional amount,
established on the basis of the market price of the shares transferred. Over the
term of the swap contract (which may vary from a couple of months to up to three
years), we pay interest, or interest accrues on the notional amount, typically
at a floating rate. Upon expiration of the transaction, a cash settlement
payment is made equal to the difference between the notional amount (plus, as
the case may be, accreted interest, minus dividends) and the end-date market
value of the underlying stock, from Grupo Elektra to the counterparty if
positive, and from the counterparty to us, if negative. In both transactions, a
collar feature is included so that our upside or downside risk of increases or
decreases in our share price is limited to the specified floor and cap. Our
maximum market risk under our equity swap portfolio is equal to the initial
market value of the underlying shares, subject to the cap provided under the
embedded collar. In both dollar-denominated transactions, we also bear the
currency risk of the devaluation of the peso. Set forth below is our maximum
market risk exposure under our equity swap portfolio at December 31, 2001.

<TABLE>
<CAPTION>
                                                 At December 31, 2001
-------------------------------------------------------------------------------------------------------------------
                                                            Maximum
                          Initial                           risk scenario     Maximum market
Underlying shares         Price       Notional amount       price             risk exposure          Fair Value
-------------------------------------------------------------------------------------------------------------------
<S>                      <C>         <C>                    <C>              <C>                  <C>
6,822,600 Elektra CPOs    US$ 0.68    US$4.6 million           0.41           US$1.9 million       US$(0.3) million
14,400,000 Elektra CPOs   US$ 0.93    US$13.3 million          0.65           US$4 million         US$(4.0) million
</TABLE>


                                       101

<PAGE>

     The potential gain or loss in the fair value of our equity derivative
instruments held at December 31, 2001 that would have resulted from a
hypothetical instantaneous 10% change in the stock market price of our CPOs
would have been approximately US $0 of loss in case of a decrease in the price
(as the price of the underlying shares was below the floor strike price) and
US$1.2 million of gain in case of an increase in the price.

     Set forth below is our maximum market risk exposure under our equity swap
portfolio at December 31, 2000.
<TABLE>
<CAPTION>
                                                 At December 31, 2000
-------------------------------------------------------------------------------------------------------------------
                                                            Maximum
                          Initial                           risk scenario     Maximum market
Underlying shares         Price       Notional amount       price             risk exposure         Fair Value
-------------------------------------------------------------------------------------------------------------------
<S>                      <C>         <C>                    <C>              <C>                 <C>
6,822,600 Elektra CPOs    US$ 0.68    US$4.6 million            0.41          US$1.9 million      US$(0.9) million
12,878,712 Elektra CPOs   Ps. 9.15    Ps.117.9 million          0.00          Ps.117.9 million    Ps.(16.9) million
</TABLE>

     The potential gain or loss in the fair value of our equity derivative
instruments held at December 31, 2000 that would have resulted from a
hypothetical instantaneous 10% change in the stock market price of our CPOs
would have been approximately Ps.16.1 million.


                                       102

<PAGE>

Items 12-17.  Not Applicable

Item 18.  Financial Statements

     Reference is made to Item 19(a) for a list of all financial statements
filed as part of this Annual Report.

Item 19.  Financial Statements and Exhibits

     (a) List of Financial Statements

Consolidated Financial Statements for Grupo Elektra, S.A. de C.V. and
Subsidiaries
<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----
<S>                                                                                                        <C>
Report of Independent Accountants                                                                           F-2
Consolidated Balance Sheets as of December 31, 2000 and 2001                                                F-3
Consolidated Statements of Income for the Years Ended December 31, 1999, 2000 and 2001                      F-4
Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 1999,
     2000 and 2001                                                                                          F-5
Consolidated Statements of Changes in Financial Position for the Years Ended December 31, 1998,
     1999, 2000 and 2001                                                                                    F-6
Notes to Consolidated Financial Statements                                                                  F-7

Financial Statements for Compania Operadora de Teatros, S.A. de C.V.
(subsidiary of Grupo Elektra, S.A. de C.V.)
                                                                                                            Page
                                                                                                            ----
Report of Independent Accountants                                                                           F-74 and F-75
Balance Sheets as of December 31, 1999,2000 and 2001                                                        F-76
Statements of Income (Loss) for the Years Ended December 31, 1998, 1999, 2000 and 2001                      F-77
Statements of Changes in Stockholders' Equity for the Years Ended December 31, 1998, 1999,
     2000 and 2001                                                                                          F-78
Statements of Changes in Financial Position for the Years Ended December 31, 1998, 1999,
     2000 and 2001                                                                                          F-79
Notes to the Financial Statements                                                                           F-80
</TABLE>

     The registrant agrees to furnish to the Securities and Exchange Commission,
upon request, copies of any instruments that define the rights of holders of
long-term debt of the registrant that are not filed as exhibits to this Annual
Report.


                                       103

<PAGE>

     (b) List of Exhibits

Exhibit No:    Description
-----------    -----------

Exhibit 1.1    Public Instrument of Merger, including the English translation of
               the Amended and Restated Bylaws of Grupo Elektra, S.A. de C.V.*

Exhibit 2.1    Indenture, dated as of March 22, 2000, between Grupo Elektra, the
               Guarantors, and The Bank of New York, as Trustee.**

Exhibit 3.1    English translation of Amendment to form of CPO Trust Deed.***

Exhibit 4.1    Option Agreement between Grupo Elektra and CASA, dated
               September 1, 2000, together with English translation.*

Exhibit 4.2    English translation of Current Option Plan for Grupo Elektra
               employees.***

Exhibit 4.3    List of Grupo Elektra's Significant Subsidiaries.

----------------------------
*    Incorporated by reference to Grupo Elektra's Annual Report on Form 20-F
     filed on July 2, 2001 (File No. 1-13200)
**   Incorporated by reference to Grupo Elektra's Registration Statement on Form
     F-4 filed on September 15, 2000 (File No. 333-12536).
***  Incorporated by reference to Grupo Elektra's Annual Report on Form 20-F
     filed on June 27, 2000 (File No. 1-13200).


                                       104

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 2001

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 2001

                                      INDEX

Contents                                                                Page

Report of independent accountants                                        F-2

Consolidated financial statements:

Balance sheets                                                           F-3

Statements of income                                                     F-4

Statements of changes in stockholders' equity                            F-5

Statements of changes in financial position                              F-6

Notes to the consolidated financial statements                           F-7






                                       F-1

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

Mexico City, February 28, 2002, except for Note 15, as to which the date is
April 4, 2002.

To the Stockholders of
Grupo Elektra, S. A. de C. V. and subsidiaries:

We have audited the consolidated balance sheets of Grupo Elektra, S. A. de C. V.
and subsidiaries (collectively the "Company") as of December 31, 2000 and 2001,
and the related consolidated statements of income, of changes in stockholders'
equity and of changes in financial position for each of the three years in the
period ended December 31, 2001, all expressed in constant pesos of December 31,
2001 purchasing power. These financial statements have been prepared in
accordance with accounting principles generally accepted in Mexico and are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we 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. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the consolidated financial position of Grupo
Elektra, S. A. de C. V. and subsidiaries as of December 31, 2000 and 2001, and
the results of their operations, the changes in their stockholders' equity and
in their financial position for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in Mexico.

Accounting principles generally accepted in Mexico vary in certain significant
respects from generally accepted accounting principles in the United States of
America. The application of generally accepted accounting principles in the
United States of America would have affected the determination of consolidated
net income, for each of the three years in the period ended December 31, 2001
and the determination of consolidated stockholders' equity as of December 31,
2000 and 2001 to the extent summarized in Note 17 to the consolidated financial
statements.

As mentioned in Note 3k. to the financial statements, commencing January 1, 2000
the Company adopted the provisions of Statement D-4, "Accounting Treatment of
Income Tax, Asset Tax and Employees' Profit Sharing".

PricewaterhouseCoopers

/s/ Ruben Rivera Rodriguez
--------------------------
Ruben Rivera Rodriguez


                                       F-2

<PAGE>

GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES
                                    (Note 1)

                           CONSOLIDATED BALANCE SHEETS

                 Thousands of Mexican pesos of December 31, 2001
                                purchasing power

<TABLE>
<CAPTION>
                                                                                     December 31,
                                                            ----------------------------------------------------------------

                                                                 2000                                2001
                                                                 ----               ----------------------------------------

                                                                                                             Thousands of
Assets                                                                                                      US dollars (*)
------                                                                                                      --------------

<S>                                                         <C>                     <C>                     <C>
CURRENT ASSETS:
Cash and cash equivalents                                   Ps      800,348         Ps    1,913,761         US$      208,698
                                                            ---------------         ---------------         ----------------

Accounts receivable:
Customers - Net (Note 5)                                          3,853,671               3,387,136                  369,371
Amounts due from related parties - Net (Note 9)                     180,428                 262,784                   28,657
Other receivables                                                   431,780                 353,053                   38,501
                                                            ---------------         ---------------         ----------------

                                                                  4,465,879               4,002,973                  436,529
                                                            ---------------         ---------------         ----------------

Prepaid expenses                                                     39,948                  56,912                    6,206
                                                            ---------------         ---------------         ----------------

Inventories (Note 6)                                              2,987,301               2,881,457                  314,226
                                                            ---------------         ---------------         ----------------

Total current assets                                              8,293,476               8,855,103                  965,659

PROPERTY, FURNITURE, EQUIPMENT AND
INVESTMENT IN STORES - Net (Note 7)                               3,837,198               3,657,123                  398,814

GOODWILL, less accumulated amortization of Ps554,099 in
2000 and Ps647,879 in 2001                                        1,321,143               1,366,525                  149,021

INVESTMENT IN SHARES (Note 8)                                       864,999               1,031,889                  112,529

OTHER ASSETS                                                        434,665                 447,824                   48,836

DEFERRED TAXES (Note 13)                                             47,695
                                                            ---------------         ---------------         ----------------

                                                            Ps   14,799,176         Ps   15,358,464         US$    1,674,859
                                                            ===============         ===============         ================
Liabilities and Stockholders' Equity

CURRENT LIABILITES WITH FINANCIAL COST:
Debt and derivative financial instruments  (Note 10)        Ps    1,538,299         Ps      890,479         US$       97,108
Capitalized lease obligations (Note 11)                             106,693                 148,674                   16,213
                                                            ---------------         ---------------         ----------------

                                                                  1,644,992               1,039,153                  113,321
                                                            ---------------         ---------------         ----------------

CURRENT LIABILITIES WITHOUT FINANCIAL COST:
Accounts payable to suppliers                                     2,612,196               2,428,692                  264,851
Accrued expenses and taxes payable                                1,075,638               1,007,755                  109,897
                                                            ---------------         ---------------         ----------------

                                                                  3,687,834               3,436,447                  374,748
                                                            ---------------         ---------------         ----------------

Total current liabilities                                         5,332,826               4,475,600                  488,069
                                                            ---------------         ---------------         ----------------

LONG-TERM LIABILITIES WITH FINANCIAL COST:
Debt and other financing (Note 10)                                2,756,160               3,713,850                  405,000
Capitalized lease obligations (Note 11)                             149,848                  54,277                    5,919
                                                            ---------------         ---------------         ----------------

                                                                  2,906,008               3,768,127                  410,919
                                                            ---------------         ---------------         ----------------
LONG-TERM LIABILITIES WITHOUT FINANCIAL COST:
Deferred taxes (Note 13)                                          -                         213,145                   23,244
Other liabilities                                                    84,088                  88,701                    9,673
                                                            ---------------         ---------------         ----------------

                                                                     84,088                 301,846                   32,917
                                                            ---------------         ---------------         ----------------

DEFERRED CREDITS:
Unearned income from extended warranties                            659,316                 652,727                   71,181
Negative goodwill (Note 2a.)                                        112,519                  77,901                    8,495
                                                            ---------------         ---------------         ----------------

                                                                    771,835                 730,628                   79,676
                                                            ---------------         ---------------         ----------------

Total liabilities                                                 9,094,757               9,276,201                1,011,581
                                                            ---------------         ---------------         ----------------

STOCKHOLDERS' EQUITY (Note 12):

Capital stock                                                       629,423                 619,772                   67,587
Paid-in capital                                                   1,668,253               1,320,864                  144,042
Retained earnings                                                 5,386,982               6,366,625                  694,288
Legal reserve                                                        96,874                  96,874                   10,564
Reserve for repurchase of shares                                    475,536                 676,040                   73,723
Effect of translation of foreign subsidiaries                        13,576                  (2,568)                    (280)
Loss from holding nonmonetary assets                             (2,703,671)             (3,120,875)                (340,335)
                                                            ---------------         ---------------         ----------------

Majority stockholders                                             5,566,973               5,956,732                  649,589
Minority stockholders                                               137,446                 125,531                   13,689
                                                            ---------------         ---------------         ----------------

Total stockholders' equity                                        5,704,419               6,082,263                  663,278

SUBSEQUENT EVENT (Note 15)
COMMITMENT (Note 16)
                                                            ---------------         ---------------         ----------------

                                                            Ps   14,799,176         Ps   15,358,464         US$    1,674,859
                                                            ===============         ===============         ================
</TABLE>

(*) The U.S. dollar figures represent the Mexican pesos amounts of December 31,
2001 translated at the exchange rate of December 31, 2001 of Ps9.17 per U.S.
dollar and are unaudited.

The accompanying eighteen notes are an integral part of these consolidated
financial statements.


                                       F-3

<PAGE>

GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES
                                    (Note 1)

                        CONSOLIDATED STATEMENTS OF INCOME

                 Thousands of Mexican pesos of December 31, 2001
                   purchasing power (except per share amounts)

<TABLE>
<CAPTION>
                                                                                          Year ended December 31,
                                                                        -----------------------------------------------------------

                                                                             1999                 2000                 2001
                                                                             ----                 ----            -----------------





<S>                                                                     <C>                  <C>                  <C>
Merchandise, services and other revenues (Note 3b.)                     Ps    13,044,408     Ps   15,373,282      Ps    15,608,432
Cost of merchandise sold and of services (Note 3b.)                            7,716,141           8,807,592             8,977,093
                                                                        ----------------     ---------------      ----------------

Gross profit                                                                   5,328,267           6,565,690             6,631,339
                                                                        ----------------     ---------------      ----------------

Administrative and selling expenses                                            3,352,222           4,203,712             4,065,760
Depreciation and amortization                                                    549,612             631,663               707,399
                                                                        ----------------     ---------------      ----------------

                                                                               3,901,834           4,835,375             4,773,159
                                                                        ----------------     ---------------      ----------------

Operating income                                                               1,426,433           1,730,315             1,858,180
                                                                        ----------------     ---------------      ----------------

Comprehensive financing cost:
Interest income                                                                  179,031             204,717               131,294
Interest expense                                                                (809,431)           (685,441)             (781,261)
Foreign exchange gain (loss) - Net                                                26,114            (114,059)               (8,561)
Gain on net monetary position                                                    292,280             297,119               170,655
Other - Net (Note 8)                                                                                                       135,501
                                                                        ----------------     ---------------      ----------------

                                                                                (312,006)           (297,664)             (352,372)
                                                                        ----------------     ---------------      ----------------

Income before taxes and employees' statutory profit
sharing and equity in the results of affiliate                                 1,114,427           1,432,651             1,505,808

Taxes and employees' statutory profit sharing (Note 13)                         (109,867)           (216,278)             (543,112)
                                                                        ----------------     ---------------      ----------------

Income before equity in the results of affiliate                               1,004,560           1,216,373               962,696
Equity in the results of Comunicaciones Avanzadas,
S. A. de C. V. - Net (Note 3i.)                                                  (92,386)            (23,262)              186,969
                                                                        ----------------     ---------------      ----------------

Consolidated net income                                                 Ps       912,174     Ps    1,193,111      Ps     1,149,665
                                                                        ================     ===============      ================

Income of minority stockholders                                         Ps        24,861     Ps       21,256      Ps        12,963
                                                                        ================     ===============      ================

Income of majority stockholders                                         Ps       887,313     Ps    1,171,855      Ps     1,136,702
                                                                        ================     ===============      ================

Basic and diluted earnings per share (Note 3o.)                         Ps         0.258     Ps        0.320      Ps         0.309
                                                                        ================     ===============      ================


<CAPTION>
                                                                       Year ended December 31,
                                                                       -----------------------

                                                                                 2001
                                                                        -------------------

                                                                             Thousands of

                                                                            US dollars (*)

<S>                                                                       <C>
Merchandise, services and other revenues (Note 3b.)                       US$     1,702,119
Cost of merchandise sold and of services (Note 3b.)                                 978,963
                                                                          -----------------

Gross profit                                                                        723,156
                                                                          -----------------

Administrative and selling expenses                                                 443,376
Depreciation and amortization                                                        77,143
                                                                          -----------------

                                                                                    520,519
                                                                          -----------------

Operating income                                                                    202,637
                                                                          -----------------

Comprehensive financing cost:
Interest income                                                                      14,318
Interest expense                                                                    (85,197)
Foreign exchange gain (loss) - Net                                                     (934)
Gain on net monetary position                                                        18,610
Other - Net (Note 8)                                                                 14,777
                                                                          -----------------

                                                                                    (38,426)
                                                                          -----------------

Income before taxes and employees' statutory profit
sharing and equity in the results of affiliate                                      164,211

Taxes and employees' statutory profit sharing (Note 13)                             (59,227)
                                                                          -----------------

Income before equity in the results of affiliate                                    104,984
Equity in the results of Comunicaciones Avanzadas,
S. A. de C. V. - Net (Note 3i.)                                                      20,389
                                                                          -----------------

Consolidated net income                                                   US$       125,373
                                                                          =================

Income of minority stockholders                                           US$         1,415
                                                                          =================

Income of majority stockholders                                           US$       123,958
                                                                          =================

Basic and diluted earnings per share (Note 3o.)                           US$         0.034
                                                                          =================
</TABLE>


(*) The U.S. dollar figures represent the Mexican pesos amounts of December 31,
2001 translated at the exchange rate of December 31, 2001 of Ps9.17 per U.S.
dollar and are unaudited.


The accompanying eighteen notes are an integral part of these consolidated
financial statements.


                                       F-4

<PAGE>

GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES
                                (Notes 1 and 12)

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 1999, 2000 AND 2001

                 Thousands of Mexican pesos of December 31, 2001
                   purchasing power (except per share amounts)

<TABLE>
<CAPTION>

                                            Number of                   Authorized but
                                          common shares      Capital     unsubscribed                  Paid-in        Retained
                                           outstanding        stock          stock        Total        capital        earnings
                                           -----------        -----          -----        -----        -------        --------

<S>                                       <C>             <C>             <C>          <C>          <C>             <C>
Balances at January 1, 1999               3,565,921,779   Ps  700,572    (Ps 79,886)   Ps  620,686  Ps 2,016,815    Ps 3,362,278

Reduction of paid-in capital resulting
from repurchase of shares of subsidiaries                                                                           (196,612)
(196,612)

Issuance of capital stock                    11,526,831                         446            446        11,120
Payment of dividends                                                                                                    (141,058)
Sale of repurchased shares - Net             84,439,560                                                 (205,370)
Gain on derivative transactions                                                                           58,178
Increase in minority interest as a result of
the acquisition of Grupo SyR and Cotsa
Comprehensive income                                                                                                     887,313
                                         --------------   -----------     ---------    -----------  ------------    ------------

Balances at December 31, 1999             3,661,888,170       700,572       (79,440)       621,132     1,684,131       4,108,533

Reduction of paid-in capital resulting
from repurchase of shares of subsidiaries                                                               (142,318)
Issuance of capital stock                    17,103,036                         626            626        16,753
Payment of dividends                                                                                                    (146,128)
Repurchased shares - Net                    (62,690,864)
Comprehensive income                                                                                                   1,429,539 (1)
Gain on derivative transactions                                                                          101,982
Increase in equity accounts as a result
of merger                                     4,613,065         7,665                        7,665         7,705          (4,962)
                                         --------------   -----------     ---------    -----------  ------------    ------------

Balances at December 31, 2000             3,620,913,407       708,237       (78,814)       629,423     1,668,253       5,386,982

Reduction of paid-in capital resulting
from repurchase of shares of subsidiaries                                                               (130,214)
Issuance of capital stock                    24,283,401                         820            820        11,454
Payment of dividends                                                                                                    (157,059)
Cancellation of repurchased shares          (61,882,461)                    (10,471)       (10,471)     (154,086)
Sale of repurchased shares                   62,488,280                                                   (8,635)
Loss on derivative transactions                                                                          (65,908)
Comprehensive income                                                                                                   1,136,702
                                         --------------   -----------     ---------    -----------  ------------    ------------

Balances at December 31, 2001             3,645,802,627   Ps  708,237    (Ps 88,465)   Ps  619,772  Ps 1,320,864    Ps 6,366,625
                                         ==============   ===========     =========    ===========  ============    ============



<CAPTION>
                                                                           Loss         Effect of
                                                         Reserve for   from holding    translation
                                            Legal        repurchase     nonmonetary    of foreign     Minority
                                           reserve        of shares       assets       subsidiaries  stockholders         Total
                                           -------        ---------       ------       ------------  ------------         -----

<S>                                       <C>            <C>           <C>             <C>           <C>             <C>
Balances at January 1, 1999               Ps 96,846      Ps 330,112    (Ps 1,767,355)   Ps   7,467   Ps   109,593    Ps  4,776,442

Reduction of paid-in capital resulting
from repurchase of shares of subsidiaries
(196,612)

Issuance of capital stock                                                                                                   11,566
Payment of dividends                                                                                                      (141,058)
Sale of repurchased shares - Net                            359,792                                                        154,422
Gain on derivative transactions                                                                                             58,178
Increase in minority interest as a result
of the acquisition of Grupo SyR and Cotsa                                                                 159,790           159,790
Comprehensive income                                                        (283,417)       (13,266)      (81,553)          509,077
                                          ---------     -----------    -------------      ---------    ----------      ------------

Balances at December 31, 1999                96,846         689,904       (2,050,772)        (5,799)      187,830         5,331,805

Reduction of paid-in capital resulting
from repurchase of shares of subsidiaries                                                                                 (142,318)
Issuance of capital stock                                                                                                   17,379
Payment of dividends                                                                                                      (146,128)
Repurchased shares - Net                                   (214,441)                                                      (214,441)
Comprehensive income                                                        (647,566)        19,375       (50,384) (1)      750,964
Gain on derivative transactions                                                                                            101,982
Increase in equity accounts as a result
of merger                                        28              73           (5,333)                                         5,176
                                          ---------     -----------    -------------      ---------    ----------      ------------

Balances at December 31, 2000                96,874         475,536       (2,703,671)        13,576       137,446         5,704,419

Reduction of paid-in capital resulting
from repurchase of shares of subsidiaries                                                                                 (130,214)
Issuance of capital stock                                                                                                   12,274
Payment of dividends                                                                                                      (157,059)
Cancellation of repurchased shares                          164,557
Sale of repurchased shares                                   35,947                                                         27,312
Loss on derivative transactions                                                                                            (65,908)
Comprehensive income                                                        (417,204)       (16,144)      (11,915)          691,439
                                          ---------     -----------    -------------      ---------    ----------      ------------

Balances at December 31, 2001             Ps 96,874      Ps 676,040    (Ps 3,120,875)     (Ps 2,568)   Ps 125,531      Ps 6,082,263
                                          =========     ===========    =============      =========    ==========      ============
</TABLE>


<TABLE>
<CAPTION>
                                                                                              Year ended December 31,

                                                                                     1999              2000              2001
                                                                                     ----              ----              ----


                                           <S>                                   <C>               <C>             <C>
                                           Current year net (loss) income:
                                           Parent company                        (Ps  41,004)      Ps    43,228   (Ps   307,471)
                                           Subsidiaries                              928,317          1,128,627       1,444,173
                                                                                 -----------       ------------    ------------

                                                                                 Ps  887,313       Ps 1,171,855    Ps 1,136,702
                                                                                 ===========       ============    ============
</TABLE>


The accompanying eighteen notes are an integral part of these consolidated
financial statements.

(1) Includes Ps257,684 and Ps5,258, respectively of accumulated effect of
deferred taxes.






                                       F-5

<PAGE>

GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES
                                    (Note 1)

            CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION

                 Thousands of Mexican pesos of December 31, 2001
                                purchasing power

<TABLE>
<CAPTION>
                                                                                             Year ended December 31,
                                                                          ---------------------------------------------------------

                                                                               1999                 2000                 2001
                                                                               ----                 ----            ---------------



Operations:
----------

<S>                                                                       <C>                  <C>                  <C>
Consolidated net income                                                   Ps     912,174       Ps   1,193,111       Ps   1,149,665
Charges (credits) to income not affecting resources:
Depreciation and amortization                                                    549,612              631,663              707,399
Allowance for doubtful accounts                                                  482,538              599,659              654,764
Accruals for seniority premiums and pension plan                                   7,461                9,517                7,582
Equity in the results of Comunicaciones Avanzadas, S. A. de
C. V. - Net                                                                       92,386               23,262             (186,969)
Provision for deferred taxes                                                                          215,248              260,840
Other provisions                                                                  29,710               49,015               62,104
Provision for derivative transactions                                                                  34,622               84,282
Net change in accounts receivable, inventories, other assets,
accounts payable, related parties and unearned income from
extended warranties                                                             (507,736)          (2,337,135)            (873,297)
                                                                          --------------       --------------       --------------

Resources provided by operations                                               1,566,145              418,962            1,866,370
                                                                          --------------       --------------       --------------

Financing:
---------

Paid-in capital (own and subsidiaries' shares)                                  (196,612)            (142,318)            (130,214)
Bank loans and other debt - Net                                                 (223,571)             185,778              260,209
Capitalized lease obligations                                                                         245,452              (53,590)
Increase in capital stock accounts as a result of merger with
Grupo SyR                                                                                               5,176
Issuance of capital stock                                                         11,565               17,379               12,274
Payment of dividends                                                            (141,058)            (146,128)            (157,059)
Gain (loss)  on derivative transactions                                           58,178              101,982              (65,908)
Sale (repurchase) of shares - Net                                                154,421             (214,441)              27,312
Debt issuance and receivable securitization costs                                                    (112,665)             (35,971)
                                                                          --------------       --------------       ---------------

Resources used in financing activities                                          (337,077)             (59,785)            (142,947)
                                                                          --------------       --------------       --------------

Investing:
---------

Acquisition of property, furniture, equipment and investment
in stores - Net                                                                 (520,831)            (461,130)            (557,050)
Acquisition of Mericolor, S. A. de C. V. (Note 2c.)                                                                        (52,960)
Acquisition of Grupo SyR, S. A. de C. V., net of assets
acquired (Note 2a.)                                                             (991,240)
Acquisition of Compania Operadora de Teatros, S. A. de C. V.,
net of assets acquired (Note 2b.)                                               (526,187)
Increase in minority stockholders as a result of the acquisition
of Grupo SyR and Cotsa                                                           181,136
                                                                          --------------       --------------       --------------

Resources used in investing activities                                        (1,857,122)            (461,130)            (610,010)
                                                                          --------------       --------------       --------------

(Decrease) increase in cash and cash equivalents                                (628,054)            (101,953)           1,113,413
Cash and cash equivalents at beginning of year                                 1,530,355              902,301              800,348
                                                                          --------------       --------------       --------------

Cash and cash equivalents at end of year                                  Ps     902,301       Ps     800,348       Ps   1,913,761
                                                                          ==============       ==============       ==============

<CAPTION>
                                                                          Year ended December 31,
                                                                          ---------------------

                                                                                    2001
                                                                          ---------------------

                                                                                 Thousands of

Operations:                                                                     US dollars (*)
----------                                                                      --------------

<S>                                                                             <C>
Consolidated net income                                                         US$    125,372
Charges (credits) to income not affecting resources:
Depreciation and amortization                                                           77,143
Allowance for doubtful accounts                                                         71,403
Accruals for seniority premiums and pension plan                                           827
Equity in the results of Comunicaciones Avanzadas, S. A. de
C. V. - Net                                                                            (20,389)
Provision for deferred taxes                                                            28,445
Other provisions                                                                         6,773
Provision for derivative transactions                                                    9,191
Net change in accounts receivable, inventories, other assets,
accounts payable, related parties and unearned income from
extended warranties                                                                    (95,235)
                                                                                --------------

Resources provided by operations                                                       203,530
                                                                                --------------

Financing:
---------

Paid-in capital (own and subsidiaries' shares)                                         (14,200)
Bank loans and other debt - Net                                                         28,376
Capitalized lease obligations                                                           (5,844)
Increase in capital stock accounts as a result of merger with
Grupo SyR
Issuance of capital stock                                                                1,338
Payment of dividends                                                                   (17,127)
Gain (loss)  on derivative transactions                                                 (7,187)
Sale (repurchase) of shares - Net                                                        2,978
Debt issuance and receivable securitization costs                                       (3,923).
                                                                                ----------------

Resources used in financing activities                                                 (15,589)
                                                                                --------------

Investing:
---------

Acquisition of property, furniture, equipment and investment
in stores - Net                                                                        (60,747)
Acquisition of Mericolor, S. A. de C. V. (Note 2c.)                                     (5,775)
Acquisition of Grupo SyR, S. A. de C. V., net of assets
acquired (Note 2a.)
Acquisition of Compania Operadora de Teatros, S. A. de C. V.,
net of assets acquired (Note 2b.)
Increase in minority stockholders as a result of the acquisition
of Grupo SyR and Cotsa
                                                                                --------------

Resources used in investing activities                                                 (66,522)
                                                                                --------------

(Decrease) increase in cash and cash equivalents                                       121,419
Cash and cash equivalents at beginning of year                                          87,279
                                                                                --------------

Cash and cash equivalents at end of year                                        US$    208,698
                                                                                ==============
</TABLE>

(*) The U.S. dollar figures represent the Mexican pesos amounts of December 31,
2001 translated at the exchange rate of December 31, 2001 of Ps9.17 per U.S.
dollar and are unaudited.

The accompanying eighteen notes are an integral part of these consolidated
financial statements.


                                       F-6

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1999, 2000 AND 2001

          (Monetary figures expressed in thousands of Mexican pesos of
      December 31, 2001 purchasing power, except foreign currency figures,
      exchange rates in Note 4 and per share amounts mentioned in Note 12)


NOTE 1 - COMPANY OPERATIONS:

The main activities of Grupo Elektra, S. A. de C. V. ("Grupo Elektra") and its
subsidiaries (collectively the "Company") are the purchase and sale,
distribution, importation and exportation of consumer electronics, major
appliances, household furniture and clothing. A significant portion of the
Company's revenues arises from installment sales. Additionally, the Company
offers a series of complementary products and services, the most important of
which are money transfer services from the United States to Mexico and within
Mexico, and extended warranty services for electronics and appliances. The
Company operates the following stores:

                                              December 31,
                                              ------------

                                      2000                    2001
                                      ----                    ----

Elektra Mexico                         598                     629
Elektra Latin America                  102                     101
Salinas y Rocha                         89                      90
The One                                134                     130
Hecali                                  27                       3
                                     -----                   -----
                                       950                     953
                                     =====                   =====

At December 31, 2001, the Company's main subsidiaries and affiliates are the
following:


<TABLE>
<CAPTION>
                             Company                                          Percentage
                             -------                                         of equity (%)
                                                                             -------------
<S>                                                                          <C>
Elektra del Milenio, S. A. de C. V. (Elektra) (see Note 3b.)                      99.5
Elektrafin Comercial, S. A. de C. V. (Elektrafin) (see Note 3b.)                  99.1
Salinas y Rocha, S. A. de C. V. (SyR)                                            100.0
Inmuebles Ardoma, S. A. de C. V. and subsidiaries (Ardoma)                       100.0
Comunicaciones Avanzadas, S. A. de C. V. (CASA)                                   35.8
</TABLE>






                                       F-7

<PAGE>

NOTE 2 - ACQUISITION OF SUBSIDIARIES AND INTERCOMPANY REORGANIZATION:

a. Acquisition of Grupo SyR, S. A. de C. V. (Grupo SyR) -

On April 8, 1999, Grupo Elektra acquired the rights to Grupo SyR's debt and
94.3% of the outstanding shares of Grupo SyR for US$77.7 million (Ps793 million
nominal). Grupo SyR is a specialty retailer in Mexico and its main activities
are the purchase and sale of consumer electronics, major appliances, household
furniture and clothing. At the date of acquisition, Grupo SyR operated 97
stores, of which 86 were traditional stores and 11 were department stores.

The Grupo SyR acquisition was recorded under the purchase method of accounting.

Net Grupo SyR assets acquired were as follows:

<TABLE>
<S>                                                                            <C>
Working capital, other than cash acquired                                      Ps  208,843
Property, furniture and equipment                                                1,102,233
Excess of net assets acquired over the purchase price (negative goodwill)         (408,662)
                                                                               -----------
                                                                                   902,414

Expenses related to the acquisition                                                 88,827
                                                                               -----------

Net cash used to acquire Grupo SyR                                             Ps  991,241
                                                                               ===========
</TABLE>

In June 1999, the Company sold certain assets and leasing rights of certain
department stores owned by Grupo SyR. The Company recorded a Ps229,752 loss on
the sale against the negative goodwill.

The consolidated financial statements of the Company as of and for the year
ended December 31, 1999 include the assets, liabilities and results of
operations of Grupo SyR from the acquisition date through December 31, 1999.
However, for comparative purposes, the following unaudited pro forma information
presents the combined results of operations of the Company and Grupo SyR as if
the acquisition of Grupo SyR had occurred on January 1, 1999.


                                       F-8

<PAGE>

<TABLE>
<CAPTION>
                                                                                                          Year ended
                                                                                                         December 31,
                                                                                                         ------------
                                                                                                             1999
                                                                                                             ----

<S>                                                                                                 <C>
Merchandise, services and other revenues                                                            Ps 13,379,884
Costs and expenses                                                                                     11,964,532
                                                                                                    -------------
Operating income                                                                                        1,415,352
Comprehensive financing cost                                                                             (241,742)
Taxes and statutory profit sharing                                                                       (119,946)
Equity in the results of Comunicaciones Avanzadas, S. A. de C. V. - Net                                   (92,386)
                                                                                                    -------------
Consolidated net income                                                                             Ps    961,278 .(*)
                                                                                                    =============
</TABLE>

(*) This pro forma information does not purport to be indicative of the results
of operations which would have actually been realized had the acquisition
occurred on January 1, 1999.

b. Acquisition of Compania Operadora de Teatros, S. A. de C. V. ("Cotsa") -

On September 30, 1999, Inmuebles Ardoma, S. A. de C. V. (a wholly-owned
subsidiary of Grupo SyR) acquired 90% of the capital stock of Compania Operadora
de Teatros, S. A. de C. V. (a former wholly-owned subsidiary of Grupo Cotsa, S.
A. de C. V.), a company controlled by certain stockholders of Grupo Elektra,
through the capitalization of Ps369,640 in receivables due the Company. Cotsa's
main assets were represented by 86 buildings and related land. The buildings
have been used to open Elektra and The One stores. The accompanying consolidated
financial statements include the assets, liabilities and results of operations
of Cotsa beginning October 1, 1999. At the date of acquisition, the book value
of the assets acquired was Ps526,187.

c. Acquisition of Mericolor, S. A. de C. V. -

On July 10, 2001, the Company acquired all the outstanding shares of Mericolor,
S. A. de C. V. (Mericolor) for US$5.4 million. Mericolor operated 35 La Curacao
stores located in Mexico which were converted into Elektra, The One and Salinas
y Rocha stores. No unaudited pro forma information presenting the combined
results of operations of the Company and Mericolor as if the acquisition of
Mericolor had occurred on January 1, 2001 is included due to the immateriality
of the acquisition.

d. Intercompany reorganization -

In 1999, the Company initiated an intercompany reorganization as follows:

i. On July 30, 1999, Salinas y Rocha, S. A. de C. V. spun-off its assets into
three operating subsidiaries: Salinas y Rocha, Elektra Comercial and Elektrafin
Comercial.





                                       F-9

<PAGE>

ii.     On November 12, 1999, Corporacion Diprofin, S. A. de C. V. and Articulos
        Domesticos al Mayoreo, S. A. de C. V., former subsidiaries of Grupo
        Elektra, merged with and into Grupo SyR with Grupo SyR as the surviving
        entity.

iii.    On December 8, 1999, Elektra, S. A. de C. V. and Elektrafin, S. A. de C.
        V., former subsidiaries of Corporacion Diprofin, S. A. de C. V., merged
        with and into the newly created subsidiaries of SyR, Elektra Comercial
        and Elektrafin Comercial, respectively, with Elektra Comercial and
        Elektrafin Comercial as the surviving entities. In the following notes
        to the financial statements, all references to Elektra and Elektrafin
        are to Elektra Comercial and Elektrafin Comercial.

iv.     As a result of the above reorganization, Grupo Elektra increased its
        equity in Grupo SyR from 94.3% to 99.9%. As the final step of the
        intercompany reorganization described above, the stockholders approved
        the merger of Grupo Elektra into its subsidiary Grupo SyR (see Note
        12a.).

v.      On December 26, 2001, Elektra Comercial merged with and into Elektra del
        Milenio (formerly Grupo Hecali, S. A. de C. V.), with Elektra del
        Milenio as the surviving entity.

e. Hecali

In 1999 and 2000, the Company converted 76 and 56 Hecali stores, respectively,
to The One stores format. No Hecali stores were converted in 2001.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Following is a summary of the significant accounting policies, including the
concepts, methods and criteria related to the recognition of the effects of
inflation on the financial statements:

a. Recognition of the effects of inflation

The consolidated financial statements and the notes thereto are expressed in
constant pesos of purchasing power as of December 31, 2001 and have been
prepared in conformity with accounting principles generally accepted in Mexico,
in accordance with the following policies:

- Investments in marketable securities are stated at market value.

- Inventory and cost of sales are restated by the replacement cost method.

-  Property, furniture, equipment, investment in stores, goodwill and the
   components of stockholders' equity are restated by applying factors derived
   from the National Consumer Price Index (NCPI).

-  The gain on net monetary position represents the effect of inflation, as
   measured by the NCPI,


                                       F-10

<PAGE>

   on the monthly net monetary liabilities and assets during the year, restated
   to pesos of purchasing power as of the end of the most recent period.

-  The loss from holding nonmonetary assets represents the amount by which
   nonmonetary assets have increased less than the inflation rate measured in
   terms of the NCPI, and is included in stockholders' equity under the caption
   "loss from holding nonmonetary assets".

-  The NCPI used to recognize the effects of inflation in the financial
   statements was 308.919, 336.596 and 351.418 as of December 31, 1999, 2000 and
   2001, respectively.

b. Presentation of the statement of income

In order to allow for better matching of revenues with the costs needed to
produce them, revenues include income resulting from the sale of merchandise and
from the installment sales program (that is, accrued mark-up, stated interest
and penalty interest, less the monetary loss on receivables).

Cost of sales includes the cost of merchandise sold, the allowance for doubtful
accounts and the cost of financing the installment sales program, less the
monetary gain on financing of receivables.

Following is an analysis of revenues and cost of sales:

<TABLE>
<CAPTION>
                                                                            Year ended December 31,
                                                  ---------------------------------------------------------------------------

Revenues:                                                 1999                       2000                       2001
--------                                                  ----                       ----                       ----

<S>                                               <C>                        <C>                        <C>
Sales of merchandise                              Ps        10,110,937       Ps         11,704,212      Ps        11,681,352
Accrued income from extended warranties                         99,030                     163,266                   208,105
Accrued mark-up                                              2,347,603                   2,772,365                 2,997,339
Penalty interest                                               369,105                     373,686                   367,704
Loss on monetary position from accounts
receivable                                                    (277,652)                   (238,743)                 (152,719)
Revenues from money transfer services (*)                      395,385                     598,496                   506,651
                                                  --------------------       ---------------------      --------------------

                                                  Ps        13,044,408       Ps         15,373,282      Ps        15,608,432
                                                  ====================       =====================      ====================

Costs:
-----

Cost of merchandise sold                          Ps         7,057,015       Ps          7,979,031      Ps         8,039,694
Other provisions                                                29,710                      49,015                    62,104
Interest expense on loans                                      310,619                     320,816                   308,551
Allowance for doubtful accounts                                482,538                     599,659                   654,764
Interest on money transfer funding                              16,732                      14,257                    11,248
Gain on monetary position on loans
obtained to finance the installment sales
program                                                       (180,473)                   (155,186)                  (99,268)
                                                  ---------------------      ---------------------      --------------------

                                                  Ps         7,716,141       Ps          8,807,592      Ps         8,977,093
                                                  ====================       =====================      ====================
</TABLE>





                                       F-11

<PAGE>

(*)     In January 1996, Elektra entered into a ten-year Exclusive Services
        Agreement with Western Union for the transfer of money from the United
        States to Mexico, under which Elektra will receive US$14.2 million
        annually over ten years. For this purpose, Western Union deposited
        US$142 million into an escrow account, which in turn invested this
        amount by purchasing 2% of the shares of three consolidated subsidiaries
        of Grupo Elektra. Each year, the escrow sells a portion of the shares
        equivalent to US$14.2 million, which are paid annually to Elektra for
        the exclusive services.

c. Principles of consolidation

The consolidated financial statements include the accounts of the Company and
its majority-owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

d. Cash and cash equivalents

The Company considers all highly liquid investments with original maturities of
less than three months to be cash equivalents.

e. Revenue recognition

The Company recognizes revenue on the accrual basis when goods are delivered to
customers. Interest and installment sales mark-up are credited to income on the
straight-line basis over the life of the respective installment contracts
(normally from 13 to 53 weeks).

Revenues from money transfer services represent the commissions paid by Western
Union to Elektra arising from money transfers collected in Elektra, SyR and The
One/Hecali stores plus a share of foreign exchange gain, as well as commissions
paid by Elektra's customers for money transfers within Mexico. Both types of
commissions are recorded as services are provided.

Revenues from extended warranty services are recorded as deferred income on the
date the corresponding warranty certificates are sold, and are credited to
income using the straight-line method over the terms of the extended warranties
(from two to five years).

Revenues from penalty interest are recorded as collected.

f. Allowance for doubtful accounts

The Company increases the allowance for doubtful accounts at the time of any
installment sale by an amount equal to five percent of the cash price of the
merchandise sold, plus the mark-up, less the down payment, if any. This method
is based on the historical experience of the Company and represents management's
best estimate of losses derived from accounts receivable. The Company follows
the policy of writing-off all customer balances outstanding more than ninety
days against the allowance for doubtful accounts.


                                       F-12

<PAGE>

g. Inventories and cost of sales

Inventories and cost of sales are originally determined by the average cost
method and are restated as mentioned in Note 3a. Amounts of inventories so
determined do not exceed current market value (see Note 6).

h. Property, furniture, equipment and investment in stores

Property, furniture and equipment are expressed at acquisition cost and are
restated as explained in Note 3a. Investment in stores represents major
improvements necessary for the opening of stores, and is restated as mentioned
in Note 3a. At December 31, 1999, 2000 and 2001, the Company owned 79, 70 and 83
stores, and leased 867, 880 and 870 stores, respectively.

Depreciation is calculated by the straight-line method, based on the estimated
useful lives and the values of the Company's fixed assets. Amortization of
investment in stores is calculated by the straight-line method over periods no
longer than five years (see Note 7).

i. Investments in shares

The investment in Comunicaciones Avanzadas, S. A. de C. V. (CASA) is accounted
for by the equity method. The equity in the results of CASA is shown net of the
amortization of the related goodwill, in the consolidated statements of income.
The amortization of CASA goodwill amounted to Ps58,450 in each of the years
ended December 31, 1999, 2000, and 2001.

Investments in marketable equity securities are recorded at market value with
gains and losses recognized in earnings.

Other investments in non-marketable equity securities in which the Company's
interest is less than 10% are stated originally at cost, and restated as
mentioned in Note 3a. The Company periodically reviews the carrying value of
these investments, which are written down upon evidence of impairment.

j. Goodwill and negative goodwill

The excess of cost over the book value of the shares of subsidiaries and equity
investees acquired (goodwill) and negative goodwill are amortized over twenty
and five years, respectively, and are restated as mentioned in Note 3a.

The related negative goodwill amortization for the years ended December 31,
1999, 2000 and 2001 amounted to Ps25,966, Ps34,618 and Ps34,618 respectively,
and is included in the depreciation and amortization expense.

k. Income tax and employees' statutory profit sharing

Beginning on January 1, 2000 the Company adopted Statement D-4 "Accounting
Treatment of


                                       F-13

<PAGE>

Income Tax, Asset Tax and Employees' Profit Sharing". Under this statement,
deferred taxes are initially recognized for all differences between book and tax
values of assets and liabilities and for tax loss carryforwards and asset tax
carryforwards that have a high probability of realization. The adoption of this
statement resulted in an increase in stockholders' equity of Ps262,942,
including Ps5,258 corresponding to minority interest.

For the years ended December 31, 2000 and 2001, the Company recorded provisions
for deferred income tax including the loss on monetary position amounting to
Ps215,248 and Ps260,840, respectively. (See Note 13)

Through December 31, 1999, deferred taxes were recognized for non-recurring
timing differences between financial pretax income and taxable income, which
were expected to reverse in an identifiable period.

l. Labor obligations

Seniority premiums to which employees are entitled upon termination of
employment after 15 years of service, as well as benefits from the
noncontributory retirement plans established by the Company's subsidiaries for
their employees, are recognized as expenses of the years in which the services
are rendered, based on actuarial studies.

Plan benefits are primarily based on employees' years of service, which the
Company estimates to be an average of 25 years, and on remuneration at
retirement. At December 31, 2000 and 2001, the respective liability amounted to
Ps49,180 and Ps56,762, respectively, and is included in other long-term
liabilities.

For the years ended December 31, 1999, 2000 and 2001 the net cost for the period
charged to income amounted to Ps7,461, Ps9,517 and Ps7,582, respectively.

Other severance compensation to which employees may be entitled in the event of
dismissal or death, in accordance with the Mexican Federal Labor Law, is charged
to income in the year in which it becomes payable.

m. Impairment of long-lived assets

The Company periodically evaluates the carrying value of its fixed assets,
goodwill and other intangible assets to determine whether there are any
impairment losses. If indicators of impairment were present, and future cash
flows were not expected to be sufficient to recover the assets' carrying amount,
an impairment loss determined using discounted cash flows would be charged to
expense in the period identified. No event has been identified that would
indicate an impairment of the value of material long-lived assets recorded in
the accompanying consolidated financial statements.


                                       F-14

<PAGE>

n. Transactions in foreign currencies and translation of foreign operations

Transactions in foreign currencies are recorded at the rates of exchange
prevailing on the dates they are entered into. Assets and liabilities
denominated in these currencies are stated at the Mexican peso equivalents
resulting from applying the year-end rates. Exchange differences arising from
fluctuations in the exchange rates between the dates on which transactions are
entered into and those on which they are settled, or the balance sheet dates,
are charged or credited to income (see Note 4).

The figures of the subsidiaries in Central and South America are translated by
using the methodology established in Statement B-15 "Transactions in Foreign
Currency and Translation of Financial Statements of Foreign Subsidiaries". In
accordance with the provisions of that statement, the figures of those
subsidiaries are restated by applying inflation factors of the country of
origin. The resulting monetary and nonmonetary assets and liabilities, as well
as the income and expenses, are translated at the exchange rate in effect on the
balance sheet date. Differences arising from the translation of the
subsidiaries' financial statements as of December 31, 1999, 2000 and 2001
amounted to (Ps13,266), Ps19,375 and (Ps16,144), respectively, and were recorded
as part of stockholders' equity.

o. Earnings per share

Earnings per share is computed in accordance with Statement B-14, "Earnings per
Share", by dividing the income of majority stockholders by the weighted average
number of shares outstanding in 1999 (3,440,460,171), 2000 (3,662,810,268) and
2001 (3,682,898,252). Diluted earnings per share reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then share in the earnings of the entity. The effect of stock options
granted to the Company's employees on earnings per share did not have a material
effect on the calculation of diluted earnings per share.

p. Derivative financial instruments

Effective on January 1, 2001, the Company adopted the guidelines of amended
Statement C-2, "Financial Instruments" ("Statement C-2") . Statement C-2 states
that instruments used for hedging purposes, be recorded in the balance sheet and
valued using the same valuation criteria used to value the hedged asset or
liability. Furthermore, Statement C-2 requires for instruments not designated as
a hedge, the recognition of asset or liability derived from the acquisition cost
and fair value of these instruments. Subsequent fair value adjustments are
reflected in the statement of income. (See Note 10).

Derivative financial instruments are used by the Company primarily to manage its
(i) foreign exchange rate risk and (ii) interest rate risk. Realized and
unrealized gains and losses on forward currency contracts are recognized in
income of the period and are included in comprehensive financing cost. For the
years ended December 31, 1999, 2000 and 2001, these operations generated losses
of Ps66,920, Ps134,154 and Ps51,102, respectively. Realized gains and losses


                                       F-15

<PAGE>

on options and interest-rate swaps designated as a hedge are recognized in
income of the period and are included in comprehensive financing cost. At the
end of the period, these financial instruments are valued with the same
valuation criteria applied to the assets and liabilities being covered.

In addition, the Company entered into transactions involving instruments indexed
to the Company's stock. Through December 31, 2000, gains and losses on
instruments indexed to the Company's stock were recognized in the financial
statements when realized. Beginning on January 1, 2001, unrealized gains and
losses are recognized in the balance sheet as either assets or liabilities. Any
resulting gain or loss is recorded in paid-in capital because these transactions
are carried out with the Company's own shares. Interest expense on the
transactions, as well as dividends pertaining to these shares, are recorded in
the results of the year in which they accrue. For the years ended December 31,
1999, 2000 and 2001, the Company credited or (charged) to equity Ps58,178,
Ps101,882 and (Ps65,908), respectively.

Counterparties to derivative transactions are normally major financial
institutions, which also participate in the Company's bank credit facilities.
Credit loss from counterparty non-performance is not anticipated.

q. Comprehensive income

In 2001, the Company adopted Statement B-4 "Comprehensive Income". This
statement establishes new standards for reporting and displaying comprehensive
income and its components in the statement of stockholders' equity. Under this
statement, comprehensive income means the net income of the year plus any items
which according to other statements are required to be recorded directly in
stockholders' equity and are not capital contributions, reductions or
disbursements (see Note 12).

r. Description of leasing arrangements

The Company conducts a major part of its operations from leased facilities,
which include 870 stores, seven warehouses and the building housing the
Company's headquarters. These facilities are under operating leases that expire
over the next ten years. Most of the operating leases are renewable for periods
of three to five years.

Some of the rental payments on store facilities are based on a minimum rental or
a percentage of the store's sales (contingent rentals).

In most cases, management expects leases to be renewed or replaced by other
assets.

s. Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements. Actual results could
differ from those estimates.


                                       F-16

<PAGE>

t. Reclassifications

Certain reclassifications have been made to prior period amounts for them to
conform to the current presentation.

u. Recently issued accounting standards

In November 2001, the Mexican Institute of Public Accountants (MIPA) issued
revised Statement C-9, "Liabilities, Provisions, Contingent Assets and
Liabilities and Commitments" ("Statement C-9"), which supersedes existing
Statement C-9, "Liabilities" and Bulletin C-12, "Contingencies and Commitments".
Statement C-9 establishes a methodology for valuation, presentation and
disclosure of liabilities and provisions, as well as for valuation and
disclosure of contingent assets and liabilities, and for disclosure of
commitments. Among other things, Statement C-9 establishes guidelines for the
recognition of liabilities and non-recognition of liabilities in the event of
extinguishments, restructurings or conversion to equity. In addition, in the
case of provisions, it introduces the concept of discounting long-term
provisions. With respect to contingent liabilities, Statement C-9 states that
all contingent liabilities that have a probable realization must be accounted
for and disclosed in the financial statements, contingent liabilities that have
a possible realization cannot be accounted for in the financial statements, but
must be disclosed, and contingent liabilities that have a remote realization
cannot be accounted for in the financial statements and are not required to be
disclosed. Statement C-9 requires disclosure of committed amounts when they
represent significant fixed asset additions, contracted services and goods that
exceed the Company's immediate needs or if the commitment is considered a
contracted obligation. The provisions of Statement C-9 are required to be
applied beginning on January 1, 2003, although early adoption is recommended.
Management is currently evaluating the impact that the adoption of Statement C-9
will have on its consolidated financial statements.

In December 2001, the MIPA issued Statement C-8, "Intangible Assets" ("Statement
C-8"), which defines intangible assets as costs incurred and rights or
privileges acquired that will generate a future economic benefit. Statement C-8
provides a clear definition of research and development costs, requiring that
only development costs may be deferred to a future period. Furthermore,
Statement C-8 states that preoperating costs should be expensed as a period
cost, unless they could be classified as development costs. Statement C-8
requires that goodwill and intangible assets, including previously existing
goodwill and intangible assets, with indefinite useful lives should not be
amortized, but should be tested for impairment annually. Goodwill and intangible
assets with finite useful lives should be amortized over its useful life. The
provisions of Statement C-8 are required to be applied beginning on January 1,
2003, although early adoption is recommended. Management is currently evaluating
the impact that the adoption of Statement C-8 will have on its consolidated
financial statements.

NOTE 4 - FOREIGN CURRENCY POSITION:

The following information is expressed in thousands of U.S. dollars, since this
is the currency in


                                       F-17

<PAGE>

which most of the Company's foreign currency transactions are carried out.

The Company had the following foreign currency monetary assets and liabilities:

<TABLE>
<CAPTION>
                                           (Thousands of US dollars)
                                                December 31, 2000
                                 -----------------------------------------------

                                                  Central and
                                                     South
                                Mexico            America (*)          Total
                                ------            -----------          -----

<S>                             <C>               <C>               <C>
Assets                          US$ 84,343        US$43,458         US$127,801
Liabilities                       (413,687)         (48,831)          (462,518)
                                ----------        ---------         ----------

Net short position             (US$329,344)      (US$ 5,373)       (US$334,717)
                                ==========        =========         ==========

                                                December 31, 2001
                                 -----------------------------------------------

                                                  Central and
                                                     South
                                Mexico            America (*)          Total
                                ------            -----------          -----

Assets                          US$131,159        US$39,287         US$170,446
Liabilities                       (497,880)         (16,637)          (514,517)
                                ----------        ---------         ----------

Net (short) long position      (US$366,721)       US$22,650        (US$344,071)
                                ==========        =========         ==========
</TABLE>

(*) Denominated in various currencies, which were translated to US dollars at
the exchange rates in effect on December 31, 2000 and 2001.

At December 31, 2001, the exchange rate was Ps9.17 to the U.S. dollar (Ps9.60 at
December 31, 2000). At April 4, 2002, date of issuance of the consolidated
financial statements, the exchange rate was Ps9.04 to the U.S. dollar.

At December 31, 2000 and 2001, the Company had entered into forward currency
exchange contracts to hedge the amount borrowed from the Euro Commercial Paper
Program as mentioned in Note 10.


                                       F-18

<PAGE>

Below is a summary of the principal foreign currency transactions carried out by
the Company's subsidiaries in 1999, 2000 and 2001:

<TABLE>
<CAPTION>
                                                       Year ended December 31,
                                                       -----------------------

                                              1999             2000               2001
                                              ----             ----               ----

<S>                                      <C>                <C>                 <C>
Revenues from money transfer services    US$  27,140        US$  46,667         US$ 37,885
Sale of merchandise                           82,911             88,434            104,381
Imported merchandise                         (66,766)           (94,121)           (24,485)
Interest expense                             (33,229)           (49,096)           (50,235)
Fees                                         (25,192)           (15,733)            (5,784)
Other                                        (10,437)           (27,986)           (23,594)
                                          ----------         ----------         ----------

Net                                      (US$ 25,573)       (US$ 51,835)        US$ 38,168
                                          ==========         ==========         ==========
</TABLE>

NOTE 5 - NET BALANCES DUE FROM CUSTOMERS AND SECURITIZATION OF RECEIVABLES:

Customer account balances at December 31, 2000 and 2001 were as follows:

<TABLE>
<CAPTION>
                                                                       December 31,
                                                                       ------------

                                                           2000                        2001
                                                           ----                        ----

<S>                                                     <C>                        <C>
Retail receivables - Net of securitization              Ps 2,967,156               Ps 2,969,093
Less: Past due receivables written - off in the year        (558,536)                  (667,428)
                                                        ------------               ------------

Net retail receivables                                     2,408,620                  2,301,665
Wholesale receivables                                          5,238                      5,380
                                                        ------------               ------------

Total                                                      2,413,858                  2,307,045

Less - Allowance for doubtful accounts                      (136,886)                  (124,222)
                                                        ------------               ------------

                                                           2,276,972                  2,182,823
Deposits on securitized receivables - Net                  1,576,699                  1,204,313
                                                        ------------               ------------

                                                        Ps 3,853,671               Ps 3,387,136
                                                        ============               ============
</TABLE>


Accounts receivable from retail customers are shown net of the unearned
installment sales mark-up. The unearned installment sales mark-up was Ps465,140
and Ps630,958 at December 31, 2000 and 2001, respectively.


                                       F-19

<PAGE>

The movement of the allowance for doubtful accounts is as follows:

                                          Year ended December 31,
                                          -----------------------

                                 1999              2000               2001
                                 ----              ----               ----

Beginning balance             Ps105,235          Ps 95,763          Ps136,886
Provisions                      482,538            599,659            654,764
Write-offs                     (492,010)          (558,536)          (667,428)
                              ---------          ---------          ---------

Ending balance                Ps 95,763          Ps136,886          Ps124,222
                              =========          =========          =========

Securitization of receivables

Elektrafin has established a revolving securitization program to securitize its
receivables through the transfer of a portion of its receivable collection
rights to a trust fund in exchange for cash resources obtained from the public
offering of "Ordinary and Amortizable Participation Certificates" ("CPOs"). The
public offering is effected by the issuance of preferred and subordinated CPOs
acquired by public investors and Elektrafin, respectively. In each public
offering, the Company is required to transfer an additional portion of its
portfolio to guarantee the issue, which is represented by the subordinated CPOs
owned by Elektrafin. The subordinated CPOs are referred to as deposits on
securitized receivables and are included in customer account balances.

At December 31, 2001, the following issues were outstanding:

<TABLE>
<CAPTION>
                                                                           Amount of
                     Date of                      Maturity                 the issue            Interest                  Fitch
 Issue              issuance                        date               at nominal value         rate (**)             Mexico grade
------              --------                        ----               ----------------         ---------             ------------

<S>             <C>                              <C>                   <C>                     <C>                    <C>
 99-1           September 1999                   August 2002             Ps 200,000            IICR + 1.5                   AA +
 00-1U          April 2000                       April 2004                 388,020 (*)        8.35%                        AAA
 01-1           March 2001                       March 2004                 650,000            IICR + 2.0                   AAA
 01-2           July 2001                        June 2005                  550,000            IICR + 0.7                   AAA
</TABLE>

(*)  Equivalent to 127 million Unidades de Inversion (UDIs). UDIs are a unit of
     measurement which considers the effects of inflation.

(**) Interbank Interest Compensation Rate (IIRC).






                                       F-20

<PAGE>

On February 14, 2002, Elektrafin completed its most recent securitization of
receivable through the public issuance of CPOs amounting to Ps750,000 payable in
four years, which was graded AAA by Fitch Mexico, S. A. de C. V. The applicable
interest rate will be IICR plus 0.65%.

In December 2001, Elektrafin settled the 98-1 issue which originally matured in
April 2002. In March 2002, Elektrafin settled the 99-1 issue with original
maturity date of August 2002.

Elektrafin collects the securitized receivables on behalf of the trust and
deposits such collections in the trust fund, which periodically pays interest to
the holders of the preferred CPOs. Over the term of the issue, Elektrafin makes
revolving transfers of receivables in exchange for cash from the collections
previously deposited in the trust. When the maturity of the issue approaches,
Elektrafin is not allowed to continue making revolving transfers of receivables,
because the trust needs to accumulate the proceeds from the collections to repay
the preferred CPO holders and to pay the remaining funds to Elektrafin, the
subordinated CPOs holder. The preferred CPOs are repaid at their nominal value,
and the subordinated CPOs at their adjusted value, arrived at by dividing the
remaining cash held by the trust by the number of subordinated CPOs outstanding.

NOTE 6 - INVENTORIES:

<TABLE>
<CAPTION>
                                                              December 31,
                                                              ------------

                                                      2000                  2001
                                                      ----                  ----

<S>                                                <C>                   <C>
Brand name merchandise                             Ps2,713,114           Ps2,733,346
Elektra brand name merchandise                          54,815                41,792
Other merchandise                                       38,009                 6,641
Merchandise in transit                                  21,018                 9,818
                                                   -----------           -----------

                                                     2,826,956             2,791,597
Less - Allowance for obsolete inventories              (23,440)               (1,840)
                                                   -----------           -----------

                                                     2,803,516             2,789,757
Advances to suppliers                                  183,785                91,700
                                                   -----------           -----------

                                                   Ps2,987,301           Ps2,881,457
                                                   ===========           ===========
</TABLE>






                                       F-21

<PAGE>

NOTE 7 - PROPERTY, FURNITURE, EQUIPMENT AND INVESTMENT IN STORES:

<TABLE>
<CAPTION>
                                                                           Average annual
                                                   December 31,             depreciation
                                                   ------------           and amortization
                                         2000                 2001             rate (%)
                                         ----                 ----             --------

<S>                                  <C>                  <C>             <C>
Buildings                            Ps 2,195,479         Ps 2,184,992             3
Computer equipment                      1,355,990            1,394,155            30
Communication equipment                   360,980              369,435            10
Transportation equipment                  397,751              366,091            23
Furniture and fixtures                    610,409              655,598            14
Machinery and equipment                   375,447              391,661            10
                                     ------------          -----------

                                        5,296,056            5,361,932
Less - Accumulated depreciation        (2,943,368)          (3,337,486)
                                     ------------         ------------

                                        2,352,688            2,024,446
Land                                      918,938              916,855
                                     ------------         ------------

                                        3,271,626            2,941,301
Investment in stores - Net                565,572              715,822            20
                                     ------------         ------------

                                     Ps 3,837,198         Ps 3,657,123
                                     ============         ============
</TABLE>

NOTE 8 - INVESTMENT IN SHARES:

<TABLE>
<CAPTION>
                                                    December 31,                 Percentage
                                          ---------------------------------          of
                                             2000                   2001           equity
                                             ----                   ----           ------

<S>                                        <C>                  <C>              <C>
Comunicaciones Avanzadas, S. A. de
C. V. (CASA)                               Ps625,971            Ps  796,087        35.8%
Other                                        239,028                235,802
                                           ---------            -----------

                                           Ps864,999            Ps1,031,889
                                           =========            ===========
</TABLE>

On March 26, 1996, the Company purchased 35.8% of the capital stock of CASA,
through the capitalization of accounts receivable amounting to US$45.4 million
and a cash payment amounting to US$62.2 million. CASA is a holding company which
owns 90% of the equity of Azteca Holdings, S. A. de C. V. ("AH"), which in turn
owns 56.7% of the equity of TV Azteca and 26.2% of the equity of Grupo Cotsa, S.
A. de C. V. The Company has the right to exchange all or a portion of its shares
of CASA at any time before March 26, 2006, for the 226.4 million CPOs of TV
Azteca owned by AH. This exchange right allows the Company to acquire up to


                                       F-22

<PAGE>

approximately 7.6% of the capital stock of TV Azteca. Through the Company's
indirect investment in TV Azteca, the Company indirectly owns 9.1% of
Todito.com., S. A. de C. V. and 9.1% of Operadora Unefon, S. A. de C. V. (see
Note 9).

In July 2000, the Company's Board of Directors' Committee on Related Party
Transactions approved an agreement granting CASA or its assignee, a call option
to acquire the Company's 35.8% interest in CASA, or a portion thereof (not less
than 50%), at any time prior to October 13, 2001 for a total cash payment of
approximately US$316.4 million. In connection with the requirements of section
4.14 of the Indenture governing the issuance of the US$275 million 12% Senior
Notes due 2008 mentioned in Note 10, the Company obtained a written opinion from
a recognized United States investment banking firm certifying that the financial
terms of the option were fair from a financial point of view to Grupo Elektra.

Due to the fact that CASA and its assignee did not exercise the option, the
Company received US$15.8 million, which was recorded as other in comprehensive
financing cost in 2001.

Included below is the summarized financial information of CASA:

                                                       December 31,
                                                       ------------

                                                2000                  2001
                                                ----                  ----

Current assets                              Ps 6,867,235           Ps 7,171,603

Non-current assets                            13,889,737             14,496,216
                                            ------------           ------------

                                            Ps20,756,972           Ps21,667,819
                                            ============           ============

Current liabilities                         Ps 1,879,509           Ps 2,371,695
Long term liabilities                         16,048,536             15,271,567
                                            ------------           ------------

                                              17,928,045             17,643,262
                                            ------------           ------------

Majority stockholders                          1,748,522              2,223,707
Minority stockholders                          1,080,405              1,800,850
                                            ------------           ------------

Total stockholders' equity                     2,828,927              4,024,557
                                            ------------           ------------

                                            Ps20,756,972           Ps21,667,819
                                            ============           ============






                                       F-23

<PAGE>

                                                Year ended December 31,
                                                -----------------------

                                         1999           2000           2001
                                         ----           ----           ----

Net revenue                           Ps4,770,929    Ps5,669,517    Ps5,769,640
Operating (loss) income                      (576)     1,242,218      1,681,108
Net (loss) income                        (181,004)       209,011      1,274,089

NOTE 9 - ACCOUNTS RECEIVABLE (PAYABLE) AND SIGNIFICANT TRANSACTIONS WITH RELATED
PARTIES:

<TABLE>
<CAPTION>
                                                                December 31,
                                                                ------------

                                                          2000               2001
                                                          ----               ----

<S>                                                     <C>               <C>
Azteca Holdings, S. A. de C. V. and subsidiaries        Ps 44,949         Ps 51,150
Biper, S. A. de C. V. and subsidiaries ("Biper")           27,886            55,780
Mobil Digital, S. A. de C. V. and subsidiaries             20,516            35,283
Unefon, S. A. de C. V. and subsidiaries - Net             (18,992)           43,919
Other                                                     106,069            76,652
                                                        ---------         ---------

                                                        Ps180,428         Ps262,784
                                                        =========         =========
</TABLE>


The principal transactions with related parties are as follows:

Merchandise sales

Revenues from sales of electronic devices and equipment to related parties
amounted to Ps79,530 Ps125,198 and Ps48,467 for the years ended December 31,
1999, 2000 and 2001, respectively.

Advertising agreements signed with Azteca Holdings, S. A. de C. V. and
subsidiaries

In March 1996 the Company entered into a ten-year agreement with TV Azteca
whereby Elektra will purchase at least 5,200 minutes per year of advertising
time from TV Azteca, to be aired during otherwise unsold time. The price is a
minimum of US$1.5 million per year for ten years. For the years ended December
31, 1999, 2000 and 2001, the Company recorded advertising expenses of Ps11,049,
Ps15,396 and Ps17,142, respectively, under this arrangement.

In 1998, Elektra and TV Azteca entered into a separate five-year agreement
pursuant to which TV Azteca will air commercial spots for Elektra at commercial
rates based on the gross rating points assigned during premium airtime, i.e.,
from 7:00 p.m. to 12:00 a.m. Under the 1998 agreement, Elektra determines each
year how much airtime to purchase from TV Azteca for that particular year. In
1999, Elektra purchased Ps20,880 of airtime under the 1998 agreement. Elektra
did not purchase any airtime in 2000 and 2001 under this agreement.


                                       F-24

<PAGE>

On February 17, 2000, Elektra and TV Azteca entered into an additional
advertising agreement, pursuant to which TV Azteca will air commercial spots for
Elektra at rates based on the rating points assigned per schedule. In 2000
Elektra purchased airtime amounting to Ps53,237 under this contract. Elektra did
not purchase any airtime in 2001 under this agreement.

On May 2, 2001, Elektra del Milenio entered into another advertising agreement
with TV Azteca for Ps54,500. Pursuant to the agreement, Elektra del Milenio has
the right to air advertising spots on Channels 13 and 7 and their national
networks from May 2, 2001 through December 31, 2001. At the end of the period,
any remaining advertising balance will be forfeited and TV Azteca will have no
further obligations to Elektra del Milenio.

Agreements signed with Biper, S. A. de C. V. and subsidiaries (Biper)

The Company's relationship with Biper is governed by two separate agreements
dated March 31, 1996, and March 15, 1997, pursuant to which Elektra acts as
Biper's agent to promote Biper's paging and message delivery services, sign up
Biper subscribers, provide customer support and carry out collections.

The Company's income for the years ended December 31, 1999, 2000 and 2001,
corresponding to the aforementioned services amounted to Ps56,873, Ps26,439 and
Ps4,691, respectively.

Agreement signed with Operadora Unefon, S.A. de C.V. (Unefon)

At the August 31, 2000 meeting of the Company's Board of Directors' Committee on
Related Party Transactions, it was agreed to terminate the agreement with Unefon
dated October 15, 1999, and to sign a new agreement with a mandatory ten-year
duration for both parties, beginning January 1, 2000.

In accordance with this new agreement, Elektra, SyR, The One and Hecali are
required to:

i.      Promote among their customers the telephone services provided by Unefon,
ii.     Sell, for credit or cash, the telephones acquired by the companies from
        Unefon.
iii.    Allow Unefon to install towers, antennas, shelters, or other
        transmission equipment at each of the stores of the companies.

For the year ended December 31, 2001, revenues corresponding to this contract
were Ps31,069, while during 2000 were not significant. The liability as of
December 31, 2000 represents the purchase of telephones from Unefon.

Option on Unefon shares

On October 19, 2000, TV Azteca granted, on a pro rata basis to certain of its
shareholders, including Azteca Holdings, rights to acquire all of the shares of
Unefon owned by TV Azteca. The rights to acquire the Unefon shares were subject
to the receipt of consents from the Holders


                                       F-25

<PAGE>

of the TV Azteca and Azteca Holdings Senior Secured Notes 2002, which were
obtained on March 27, 2001, the receipt of regulatory approvals and third
parties approvals, including the approval of Nortel. In addition, the Rights are
subject to the effectiveness of a registration statement filed with the U.S.
Securities and Exchange Commission that registers the Unefon shares underlying
the rights

Of the 601,042,247 Series A shares of Unefon that Azteca Holdings may acquire
pursuant to the rights, as a shareholder of TV Azteca, 511,743,120 shares are
subject to a right to purchase granted in favor of Ricardo B. Salinas Pliego and
Elisa Salinas Gomez, Mr. Salinas Pliego's aunt. Mr. Salinas and Mrs. Salinas
Gomez paid a US$6.65 million non-refundable premium to Azteca Holding for these
purchase rights. However, in order to exercise these purchase rights, Mr.
Salinas Pliego and/or his affiliates must first have directly or indirectly
acquired the CASA shares or all of our outstanding capital stock, or the Company
must have exercised its right to exchange all of the shares of CASA for
226,492,629 CPOs of TV Azteca pursuant to the terms of the share exchange
agreement dated March 26,1996 between Grupo Elektra and Azteca Holdings. If Mr.
Salinas Pliego and Mrs. Salinas Gomez have not so acquired the CASA shares, and
the Company has not exercised its share exchange right, then Grupo Elektra will
have the right, in lieu of Mr. Salinas Pliego and Mrs. Salinas Gomez, to
exercise up to 34% of Azteca Holdings rights to acquire Unefon shares. If the
Company or Mr. Salinas Pliego and Mrs. Salinas Gomez, if applicable, exercise
the purchase right and acquire the Unefon shares, such shares, together with any
cash proceeds or securities received upon the sale of such shares or acquired
with such cash proceeds, will be pledged as collateral to secure the senior
notes issued by Azteca Holdings amounting to US$255 million that mature in 2003
and 2005. The rights are exercisable only on December 11, 2002, unless the time
of exercise is extended by TV Azteca or an acceleration event occurs. Any rights
that are not exercised on the exercise date will expire and TV Azteca will
retain ownership of the shares underlying the rights. At December 31, 2001, the
grant of the rights are still subject to the effectiveness of a registration
statement of Unefon with the U.S. Securities and Exchange Commission.

Agreement signed with Todito.com, S. A. de C. V. (Todito)

At the May 3, 2000 meeting of the Company's Board of Directors' Committee on
Related Party Transactions, it was agreed to enter into an agreement with Todito
dated May 9, 2000 with a duration of five years from the date the agreement was
signed.

In accordance with this agreement, the Company is to rent space in its stores to
Todito. Todito will install sales modules and offer its services consisting of
sales through the www.todito.com Internet portal. The Company will also provide
Todito with space on its Web pages (www.elektra.com.mx,
www.salinasyrocha.com.mx) to place a fixed icon with the Todito logo. In return,
Todito will provide the Company with space on its portal to place a fixed icon,
which will work as a link to the Company's Web pages.

The Company can receive at its stores all payments pertaining to sales made
through the Todito Internet portal, and will be paid a commission on collections
made. The Company will deposit the amounts collected in a Todito account within
three days following the collection.


                                       F-26

<PAGE>

In 2000 and 2001, the amounts derived from this agreement were not significant.

Interest income

During the year ended December 31, 1999, the Company extended short-term loans
to Biper and Radiocel, S. A. de C. V. (subsidiary of Mobil Digital, S. A. de C.
V.). Interest income under these arrangements amounted to Ps15,970 and Ps11,360,
respectively. No additional loans were made in 2000 and 2001.

NOTE 10 - DEBT AND DERIVATIVE FINANCIAL INSTRUMENTS:

<TABLE>
<CAPTION>
       December 31,
       ------------

                                                      2000                 2001
                                                      ----                 ----

<S>                                                <C>                  <C>
12.0% Senior Notes US$275 million due 2008         Ps2,756,160          Ps2,521,750
Syndicated Loan for US$130 million                                        1,192,100
Euro Commercial Paper                                  651,456              233,835
Unsecured loans in Mexican pesos                       385,758              316,273
Unsecured loans in U.S. dollars                        141,391              139,366
Loans in other currencies                              217,510
Derivative financial instruments                        34,622               84,282
Interest                                               107,562              116,723
                                                   -----------          -----------

                                                     4,294,459            4,604,329
Less current portion                                 1,538,299              890,479
                                                   -----------          -----------

Long-term debt                                     Ps2,756,160          Ps3,713,850
                                                   ===========          ===========
</TABLE>


US$100 million 12.75% Senior Notes due 2001

In May 1996, Grupo Elektra issued Senior Notes for US$100 million on
international markets, payable in May 2001, subject to interest at 12.75% per
annum, payable semiannually, and guaranteed by Elektra and Elektrafin. The
indenture governing these Senior Notes includes certain financial covenants, the
most significant of which are "Consolidated Cash Flow Coverage Ratio" and
"Consolidated Operating Cash Flow". At December 31, 2000, US$100 million of
these Senior Notes have been considered extinguished through defeasance. On May
15, 2001, the Company repaid these Senior Notes.

US$275 million 12.0% Senior Notes due 2008

On March 22, 2000, Grupo Elektra completed a private placement of US$275 million
in Senior Notes due 2008, resulting in net proceeds of US$268.1 million. The
Senior Notes were subsequently publicly registered in the United States of
America. Interest on the Notes are


                                       F-27

<PAGE>

payable semi-annually on April 1 and October 1, commencing on October 1, 2000.

A portion of the proceeds was used to prepay the US$120 million outstanding
balance on the syndicated guaranteed revolving credit facility and to purchase
commercial paper and certificates of deposits of US$110.9 million, which were
placed in an irrevocable trust and were used to pay the scheduled interest and
principal at maturity on the US$100 million 12.75% Senior Notes due May 2001.

The Indenture governing the Senior Notes imposes significant operating and
financial restrictions on the Company. Such restrictions affect, and in many
respects limit or prohibit, among other things, the Company's ability to pay
dividends, incur indebtedness, create liens, enter into transactions with
affiliates and consummate certain asset sales. The notes are guaranteed by all
of the Company's subsidiaries.

Syndicated loan for US$130 million

On July 25, 2001, the Company entered into a five-year US$130 million credit
agreement with a syndicate of financial institutions and with Citibank, N.A. as
agent. The loan is divided in two Tranches of US$65 million each. During the
first year of the loan Tranche "A" bears interest at LIBOR plus 2.75% and
Tranche "B" at LIBOR plus 3.25%. Thereafter the applicable margin will be
determined based on the results of the "Interest Coverage Ratio". This loan is
guaranteed by Elektra, Elektrafin and SyR, and includes certain financial
covenants with which the Company complied at December 31, 2001, the most
significant of which being "Interest Coverage Ratio", "Leverage Ratio", "Current
Assets Ratio" and "Fixed Charge Coverage Ratio".

For the year ended December 31, 2001 the average interest rate was 6.88%. This
loan is payable as follows:

          Date                                     Thousands of U.S. dollars
          ----                                     -------------------------

January 30, 2003                                           US$ 24,375
July 30, 2003                                                  24,375
January 30, 2004                                               24,375
July 30, 2004                                                  24,375
January 30, 2005                                                8,125
July 30, 2005                                                   8,125
January 30, 2006                                                8,125
July 30, 2006                                                   8,125
                                                           ----------

                                                           US$130,000
                                                           ==========


                                       F-28

<PAGE>

Euro Commercial Paper Program

Grupo Elektra and Elektra have a Euro Commercial Paper Program which provides
for unsecured short-term borrowings up to an aggregate of US$150 million or its
equivalent in alternative currencies. The Euro Commercial Paper Program is
unconditionally and irrevocably guaranteed by Grupo Elektra, Elektra,
Elektrafin, SyR, Hecali and Ardoma. At December 31, 2001, the Company has drawn
down US$25.5 million (US$65 million at December 31, 2000), payable in the year
2002. For the years ended December 31, 2000 and 2001, the average interest rates
were 10.18% and 8.95%, respectively.

Loans in other currencies

These loans are as follows:


                                                             Average

                                    December 31,          interest rate

                                       2000                    2000
                                       ----                    ----


Quetzales (Guatemala)               Ps 79,662                  21.0
Lempiras (Honduras)                    29,270                  21.3
Colones (El Salvador)                  31,215                  17.5
Pesos Dominicanos (Dominican
Republic)                              36,991                  27.7
Soles (Peru)                           40,372                  18.4
                                    ---------

                                    Ps217,510

Derivative financial instruments

a. Transactions with derivative financial instruments indexed to the Company's
   own stock

Grupo Elektra has entered into certain derivative operations under which it
swapped the future appreciation of its shares and CPO's for floating interest
payments. At December 31, 2001, the liability for these transactions amounted to
Ps41,285.

b. Forward currency exchange contracts

Grupo Elektra and Elektra have entered into short-term forward currency exchange
contracts to protect themselves from changes in the exchange rate between the
Mexican peso and the U.S.


                                       F-29

<PAGE>

dollar. At December 31, 2000 and 2001, the Company has hedged liabilities from
the Euro Commercial Paper with forward currency exchange contracts amounting to
US$50 million and US$25 million, respectively. At December 31, 2000 and 2001,
the related liability amounted to Ps34,622 and Ps38,415, respectively.


                                       F-30

<PAGE>

c. Interest rate swaps and options

Certain loans require the Company to pay interest at variable rates, while the
Company provides credit to its customers at fixed rates. As a result, in 2001,
Grupo Elektra and Elektrafin entered into interest rate swaps and options to
protect themselves from changes in interest rates, mainly the 28-day IICR. These
transactions resulted in losses of Ps59,460.

At December 31, 2001, the liability for these transactions amounted to Ps4,582.

NOTE 11 - OPERATING AND FINANCIAL LEASES:


Following is a schedule of future minimum rental payments required under
operating leases that have initial or remaining noncancellable lease terms in
excess of one year as of December 31, 2001:

       Year ending December 31:
       ------------------------

               2002                                  Ps  309,513
               2003                                      274,827
               2004                                      244,804
               2005                                      214,592
               2006 and thereafter                       466,481
                                                     -----------

               Total minimum payments required       Ps1,510,217
                                                     ===========


The following schedule shows the composition of total rental expense for all
operating leases:

                                        Year ended December 31,
                                        -----------------------

                                 1999            2000            2001
                                 ----            ----            ----

Minimum rentals               Ps336,036       Ps321,816       Ps314,117
Contingent rentals               32,821          23,894          21,759
                              ---------       ---------       ---------

                              Ps368,857       Ps345,710       Ps335,876
                              =========       =========       =========





                                       F-31

<PAGE>

The Company has acquired computer equipment amounting to Ps387,565 under capital
leases in U.S. dollars with purchase options after two to three years. At
December 31, 2000 and 2001 the accumulated depreciation of that equipment
amounted to Ps70,161 and Ps164,268, respectively. The liabilities under these
capital lease contracts have the following maturities:

Year
----

2002                                                         Ps152,768
2003                                                            61,454
2004                                                             8,852
                                                             ---------

Total liability                                                223,074
Less amount representing interest                               20,123
                                                             ---------

Net liability                                                  202,951
Less current portion                                           148,674
                                                             ---------

Long-term portion                                            Ps 54,277
                                                             =========

NOTE 12 - STOCKHOLDERS' EQUITY:

a. Company merger

At the Extraordinary Meeting held on August 28, 2000, the stockholders approved
the merger of Grupo Elektra into its subsidiary Grupo SyR, whose name was
subsequently changed to Grupo Elektra, S. A. de C. V. The merger was effected
through the exchange of shares in Grupo Elektra for equivalent shares in Grupo
SyR. As a result of the merger, the Company recorded a net increase in equity of
Ps5,176. For accounting purposes, the merger has been accounted for as a
recapitalization of Grupo Elektra.

b. Capital structure

The Company's by-laws provide that all series of shares are without par value
and unrestricted as to ownership. Common shares are divided into Series "A"
shares, Series "B" shares, and Series "L" shares. Series "L" shares have
restricted voting rights. No variable capital has been subscribed at December
31, 2001. For trading purposes in the Mexican and U.S. stock exchanges, the
Company has issued Ordinary Participation Certificates (CPOs) comprising two
Series "B" shares and ones Series "L" share and "American Depositary Receipts"
("ADRs") comprising ten CPOs.


                                       F-32

<PAGE>

The fixed minimum capital stock was represented as follows:

<TABLE>
<CAPTION>
                                                                 December 31,
                                                                 ------------

                                                   1999              2000              2001
                                                   ----              ----              ----

<S>                                            <C>                <C>               <C>
Series "A" Shares                              Ps  49,834         Ps 51,718         Ps 51,718
Series "B" Shares                                  78,080            81,190            81,190
Series "L" Shares                                  16,247            16,861            16,861
                                               ----------         ---------         ---------

Fixed minimum capital stock                       144,161           149,769           149,769
Subscribed but unpaid capital stock               (21,210)          (21,548)          (21,894)
                                               ----------         ---------         ---------

Capital stock expressed in nominal pesos          122,951           128,221           127,875
Effect of restatement                             498,181           501,202           491,897
                                               ----------         ---------         ---------

Capital stock expressed in Mexican pesos
of December 31, 2001 purchasing power          Ps 621,132         Ps629,423         Ps619,772
                                               ==========         =========         =========
</TABLE>

The capital stock is represented as shown below:

<TABLE>
<CAPTION>
                                                                         December 31,
                                                                         ------------

Authorized shares:                                               2000                     2001
                                                                 ----                     ----

<S>                                                         <C>                      <C>
Series "A" Shares                                           1,495,024,470            1,495,024,470
Series "B" Shares                                           2,347,018,555            2,347,018,555
Series "L" Shares                                             487,416,030              487,416,030
                                                           --------------           --------------

                                                            4,329,459,055            4,329,459,055
                                                           --------------           --------------

Less: authorized but unsubscribed and/or unpaid shares:

Series "A" Shares                                            (220,279,440)            (220,279,440)
Series "B" Shares                                            (309,658,336)            (334,724,376)
Series "L" Shares                                             (89,267,588)            (101,800,608)
                                                           --------------           --------------

                                                             (619,205,364)            (656,804,424)
Repurchased shares                                            (89,340,284)             (26,852,004)
                                                           --------------           --------------

                                                             (708,545,648)            (683,656,428)
                                                           --------------           --------------

Net authorized shares subscribed and paid                   3,620,913,407            3,645,802,627
                                                           ==============           ==============
</TABLE>






                                       F-33

<PAGE>

In the event that dividends are paid from retained earnings not arising from the
Net Taxed Profit Account (CUFIN) a 35% tax will be paid on the amount exceeding
the balance of the CUFIN multiplied by a factor of 1.5385. The applicable tax
will be payable by the Company, and it may be credited against income tax owed
by the Company in the following three years. Additionally, dividends paid to
individuals or to parties resident abroad are subject to a maximum tax
withholding equivalent to 7.69%, regardless of any previous taxation of such
dividends. Capital stock reductions in excess of the sum of the balances of the
capital contribution accounts, net taxed profit and reinvested net taxed profit,
inflation-indexed in accordance with the procedures established by the Income
Tax Law, are accorded the same tax treatment as dividends. At December 31, 2001,
the balance of previously taxed retained earnings and the capital contribution
accounts, determined in accordance with the tax regulations in effect, was
Ps168,134 and Ps4,176,356, respectively.

In the years ended December 31, 1999, 2000 and 2001 the Company paid dividends
for Ps141,058 (Ps0.125 per CPO), Ps146,128 (Ps0.113 per CPO) and Ps157,059
(Ps0.121 per CPO), respectively.

c. Stock option plans

In February 1994, the Company and its stockholders approved the creation of the
Partner 2000 Stock Option Plan ("the Plan") for key employees of the Company and
its subsidiaries. Under the Plan, the Company may grant employees options to
acquire up to 70 million CPOs of the Company at a price of Ps2.5, Ps3.25 or
Ps4.0 (nominal) per CPO. Options granted under the Plan vest ratably over a
five-year period from the date of grant, if the Company achieves annual
established performance goals, mainly related to net income increase. If the
annual established performance goals are not achieved, the vesting of the
options may be postponed or limited, but not beyond February 28, 2004. The
option price per CPO was determined based on each employee's employment date. At
December 31, 2001, 62,961,187 CPOs had been assigned, of which 45,678,828 had
been exercised as follows:

Stock options under the plan              Number of CPOs
----------------------------              --------------

Outstanding on December 31, 1998            34,870,115
Exercised                                   (3,842,277)
                                           -----------

Outstanding on December 31, 1999            31,027,838
Granted                                         50,000
Exercised                                   (5,701,012)
                                           -----------

Outstanding on December 31, 2000            25,376,826
Exercised                                   (8,094,467)
                                           -----------

Outstanding on December 31, 2001            17,282,359
                                           ===========

Exercisable at December 31, 2001            14,983,736
                                           ===========







                                       F-34

<PAGE>

The following table summarizes information concerning stock options outstanding
and exercisable at December 31, 2001:

                                                       Number of
                                     Options          exercisable
          Exercise price           outstanding          options
          --------------           -----------          -------

              2.50                  15,755,581         14,245,315
              3.25                     888,441            455,064
              4.00                     638,337            283,357
                                   -----------        -----------

                                    17,282,359         14,983,736
                                   ===========        ===========

In October 2000, the Board of Directors approved a new Stock Option Plan
pursuant to which, the Company will grant options to acquire up to 5.4 million
ADRs of Grupo Elektra to 120 employees eligible at the beginning of the plan,
and new participants. As a result, the Company's Compensation Committee approved
a 4.5% total dilution. The grant price of the option will be the average stock
price for the last 30 trading days of the ADR preceding the date of grant. The
strike price will be denominated in U.S. dollars. Options granted under the New
Option Plan will vest over a seven-year period.

At December 31, 2001, no options had been granted under this plan, since it is
in process of being implemented.

d. Restricted earnings of CASA

At December 31, 2001, retained earnings include Ps471,610 corresponding to
retained earnings of CASA. In order for Grupo Elektra to pay a dividend from
profits derived from CASA earnings, the earnings must be previously declared as
dividends by CASA.

e. Comprehensive income

Comprehensive income is analyzed as follows (See Note 3q.):

<TABLE>
<CAPTION>
                                                                 Year ended December 31,
                                                                 -----------------------

                                                       1999               2000               2001
                                                       ----               ----               ----

<S>                                                 <C>               <C>                <C>
Income of majority stockholders                     Ps 887,313        Ps1,171,855        Ps1,136,702
Initial recognition of deferred taxes (Note 3k.)                          257,684
Effect of translation of foreign subsidiaries          (13,266)            19,375            (16,144)
Effects of minority interest                           (81,553)           (50,384)           (11,915)
Loss from holding nonmonetary assets                  (283,417)          (647,566)          (417,204)
                                                    ----------        -----------        -----------

                                                    Ps 509,077        Ps  750,964        Ps  691,439
                                                    ==========        ===========        ===========
</TABLE>





                                       F-35

<PAGE>

NOTE 13 - INCOME TAX, ASSET TAX AND EMPLOYEES' STATUTORY PROFIT SHARING:

Income tax and employees' statutory profit sharing charged to income are as
follows:

<TABLE>
<CAPTION>
                                                       Year ended December 31,
                                                       -----------------------

                                                 1999            2000            2001
                                                 ----            ----            ----

<S>                                            <C>             <C>             <C>
Income tax                                     Ps109,867                       Ps278,227
Deferred income tax                                            Ps215,248         260,840
Employees' statutory profit sharing                                1,030           4,045
                                               ---------       ---------       ---------

                                               Ps109,867       Ps216,278       Ps543,112
                                               =========       =========       =========
</TABLE>


For the years ended December 31, 1999, 2000 and 2001, the differences between
taxable and financial income are mainly due to the effect of the deduction of
inventory purchases for tax purposes, offset by the non-allowable deduction of
cost of sales, to the difference between the effect of the inflationary
component determined for book and tax purposes, to installment sales revenues
for tax purposes and to nondeductible expenses.

Effective January 1, 1999, the corporate income tax rate was increased from 34%
to 35%. In accordance with the tax law amendments in effect as from January 1,
2002, the corporate income tax rate will be gradually reduced by 1% per annum
beginning in the year 2003 until it reaches 32% in 2005. Consequently, this
gradual decrease in the income tax rate will reduce the related income tax
liability.

At December 31, 2001, the Company had tax loss carryforwards that expire as
shown below:

                Year of
              expiration                                   Amount
              ----------                                   ------

                 2005                                   Ps  120,005
                 2006                                       327,221
                 2007                                       283,226
                 2008                                        61,895
                 2009                                        32,556
                 2010                                       413,028
                 2011                                       747,175
                                                        -----------

                                                        Ps1,985,106
                                                        ===========


                                       F-36

<PAGE>

The tax loss carryforwards are restated by applying factors derived from the
NCPI until they are utilized. The Company prepares a consolidated income tax
return, including all its subsidiaries. Additionally the Company's subsidiaries
file individual income tax returns. As from 1999, the Mexican Income Tax Law
limits the tax consolidation to 60% of the parent's equity interest (previously
100%).

At December 31, 2001, the Company had Ps361,633 (restated) of recoverable asset
tax, for which a refund can be requested if income tax determined in any of the
following ten years exceeds asset tax for those years. Recoverable asset tax
expires as shown below:

               Year of
             expiration                          Amount
             ----------                          ------

                2004                         Ps117,812
                2005                           106,033
                2006                            80,416
                2007                            35,305
                2008                            22,067
                                             ---------

                                             Ps361,633
                                             =========

Significant items comprising the Company's net deferred tax assets and
liabilities at December 31, 2001, are as follows:

<TABLE>
<CAPTION>
                                                                         December 31,
                                                                         ------------

Deferred income tax liabilities:                                 2000                  2001
-------------------------------                                  ----                  ----

<S>                                                         <C>                   <C>
Inventories                                                 (Ps   962,355)        (Ps   901,930)
Property, furniture, equipment and investment in stores          (144,532)             (101,663)
Prepaid expenses                                                  (97,992)              (99,457)
Installment sales                                                                      (224,096)
Other                                                              (5,491)               (6,016)
                                                             ------------          ------------

                                                               (1,210,370)           (1,333,162)
                                                             ------------          ------------

Deferred income tax assets:
--------------------------

Operating loss carryforwards                                      827,215               694,787
Asset tax carryforwards                                           361,633               361,633
Allowance for doubtful accounts                                    47,088                38,422
Other                                                              22,129                25,175
                                                             ------------          ------------

                                                                1,258,065             1,120,017
                                                             ------------          ------------

Net deferred income tax assets (liabilities)                 Ps    47,695         (Ps   213,145)
                                                             ============          ============
</TABLE>





                                       F-37

<PAGE>

NOTE 14 - SEGMENT INFORMATION:

Following is a summary of financial information by segments in which the Company
carried out business at December 31, 1999, 2000 and 2001:

<TABLE>
<CAPTION>
As of and for the year ended                     Commercial      Credit   International     CASA           Other       Consolidated
----------------------------                     ----------      ------   -------------     ----           -----       ------------
December 31, 1999

<S>                                            <C>            <C>           <C>           <C>           <C>            <C>
Revenues from external customers               Ps 8,680,309   Ps2,191,069   Ps  895,042                 Ps 1,277,988   Ps13,044,408
Depreciation and amortization                        37,630        17,401        85,569                      409,012        549,612
Operating income (loss)                           1,125,105     1,227,850       (27,839)                    (898,683)     1,426,433

Total assets                                      2,600,196     1,574,632     1,103,824   Ps  719,996      7,444,373     13,443,021

As of and for the year ended

December 31, 2000

Revenues from external customers               Ps10,271,930   Ps2,725,675   Ps  881,706                 Ps 1,493,971   Ps15,373,282
Depreciation and amortization                        37,100        19,791        91,682                      483,090        631,663
Operating income (loss)                           1,409,208     1,588,803       (99,331)                  (1,168,365)     1,730,315

Total assets                                      2,494,378     3,570,474     1,081,126   Ps  625,971      7,027,227     14,799,176

As of and for the year ended

December 31, 2001

Revenues from external customers               Ps10,429,651   Ps2,973,120   Ps  957,177                 Ps 1,248,484   Ps15,608,432
Depreciation and amortization                       124,755        21,157        84,962                      476,525        707,399
Operating income (loss)                           1,615,692     1,863,423       (53,391)                  (1,567,544)     1,858,180

Total assets                                      3,913,412     3,156,253       637,390   Ps  796,087      6,855,322     15,358,464
</TABLE>

The Company is reporting segment sales and services and operating income in the
same format reviewed by the Company's management. An operating segment is
defined as a component of the Company that engages in business activities from
which it may earn revenues and incur expenses, and concerning which separate
financial information is regularly evaluated by the Company's management in
deciding how to allocate resources. The accounting policies of the segments are
the same as those described in the summary of significant accounting policies.

Certain assets and expenses, such as property, furniture and equipment and other
assets, corporate overhead, depreciation, intangible amortization, interest
expense and income taxes are not allocated to the segments and have been
included in the Other column. The Company evaluates segment performance based
upon income or loss before the aforementioned expenses. All the Company's
operations are located in Mexico, except for the Latin American operations,
which are located in Guatemala, El Salvador, Dominican Republic, Honduras and
Peru.

The Commercial Business Unit includes sales of a wide variety of brand name
consumer electronics, major appliances and household furniture in Mexico.

The Credit Business Unit consists of expenses incurred to finance the Company's
installment sales program and to administer the installment sales operations, as
well as the mark-up and stated or penalty interest earned by the Company.


                                       F-38

<PAGE>

The International Business Unit represents the Company's electronics, appliance
and furniture retail operations in five countries of Latin America: Guatemala,
El Salvador, Honduras, Dominican Republic and Peru.

The CASA Business Unit includes the Company's investment in CASA stated by the
equity method net of the corresponding goodwill amortization.

The Company's other operating segment includes a chain of clothing stores
(Hecali and The One) that offer a broad range of basic and sports apparel and
sport shoes for men, ladies and children; Money Transfer Services from abroad,
primarily the United States, to Mexico, and within Mexico; Extended Warranties
and Photo Products and Processing Services.

NOTE 15 - SUBSEQUENT EVENT:
--------------------------

On April 4, 2002, the Mexican Ministry of Finance awarded Grupo Elektra a bank
license. The bank, will be a subsidiary of the Company and its initial capital
stock will amount to Ps227,500.

NOTE 16 - COMMITMENT:

At December 31, 2001, Grupo Elektra and Elektrafin have entered into interest
rate swap contracts and options as follows:

<TABLE>
<CAPTION>
                                    Notional                                     Notional                   Fixed
                                    amount               Strike                  amount                     interest
                                    Month                options                 price (%)                  swaps rate (%)

<S>                                 <C>                  <C>                     <C>                        <C>
January 2002                        Ps 577,000           13.50                   Ps 1,224,000               13.29
February 2002                       610,000              13.50                   1,158,000                  13.27
March 2002                          627,000              13.50                   1,005,000                  13.22
April 2002                          697,000              13.50                   977,000                    13.19
May 2002                            787,000              13.50                   1,067,000                  13.17
June 2002                           803,000              13.50                   1,083,000                  13.17
July 2002                           822,000              13.50                   1,102,000                  13.17
August 2002                         827,000              13.50                   1,107,000                  13.17
September 2002                      820,000              13.50                   1,100,000                  13.17
October 2002                        825,000              13.50                   825,000                    13.00
November 2002                       825,000              13.50                   825,000                    13.00
December 2002                       850,000              13.50                   850,000                    13.00
January 2003                        1,108,000            13.50                   1,108,000                  13.00
</TABLE>

At December 31, 2001 and at April 4, 2002, date of issuance of the consolidated
financial statements, the IICR was 7.9% and 7.43%, respectively.


                                       F-39

<PAGE>

NOTE 17 - RECONCILIATION BETWEEN MEXICAN (MEXICAN GAAP) AND UNITED STATES OF
AMERICA GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (U.S. GAAP):

The Company's consolidated financial statements are prepared in accordance with
Mexican GAAP, which differs in certain significant respects from U.S. GAAP. The
Mexican GAAP consolidated financial statements include the effects of inflation
as provided for under Statement B-10 "Recognition of the Effects of Inflation on
Financial Information". The application of this statement represents a
comprehensive measure of the effects of price level changes in the Mexican
economy, which for many years was hyperinflationary, and is considered to result
in a more meaningful presentation than historical cost-based financial reporting
for both Mexican and U.S. accounting purposes. Therefore the following
reconciliations to U.S. GAAP do not include the reversal of such inflationary
effects.

The principal differences between Mexican GAAP and U.S. GAAP are summarized
below with an explanation, where appropriate, of the effects on consolidated net
income and stockholders' equity. The various reconciling items are presented net
of any price level gain (loss):

a. Reconciliation of consolidated net income:

<TABLE>
<CAPTION>
                                                                                          Year ended December 31,
                                                                                          -----------------------

                                                                                   1999           2000             2001
                                                                                   ----           ----             ----

<S>                                                                            <C>            <C>              <C>
Net income related to majority stockholders under Mexican GAAP                 Ps  887,313    Ps1,171,855      Ps1,136,702
Deferred income tax effects                                                       (101,358)       (14,180)         (20,449)
Amortization of goodwill relating to other subsidiaries acquisitions                24,588         24,588           24,588
Amortization of goodwill relating to CASA acquisition                               58,450         58,450           58,450
Difference in equity in earnings of CASA                                            77,683       (118,060)        (225,172)
Capitalized exchange losses and interest expense                                     4,121          4,121            4,121
Stock options granted to employees                                                 (84,264)        (3,019)            (146)
Reversal of depreciation of property, furniture and equipment
acquired in the Grupo SyR acquisition                                               44,817         59,756           59,756
Additional amortization of negative goodwill from the Grupo SyR
acquisition                                                                        117,986        158,325          158,325
Net gain (loss) on instruments indexed to the Company's stock                      145,997          5,852          (57,596)
Net loss on interest rate swaps and options                                                                        (44,875)
Effect on minority stockholders of U.S. GAAP adjustments                              (733)           (82)             (82)
                                                                               -----------    -----------      -----------

Net income under U.S. GAAP                                                     Ps1,174,600    Ps1,347,606      Ps1,093,622
                                                                               ===========    ===========      ===========

Basic and diluted earnings per share (in pesos)                                Ps     0.34    Ps     0.37      Ps     0.30
                                                                               ===========    ===========      ===========

Basic weighted average number of common shares outstanding
(in millions)                                                                     3,440.50       3,662.80         3,682.90
                                                                               ===========    ===========      ===========
</TABLE>






                                       F-40

<PAGE>

b. Reconciliation of consolidated stockholders' equity:

<TABLE>
<CAPTION>
                                                                                           December 31,
                                                                                           ------------

                                                                                  2000                     2001
                                                                                  ----                     ----

<S>                                                                           <C>                      <C>
Majority stockholders' equity under Mexican GAAP                              Ps 5,566,973             Ps 5,956,732
Deferred income tax effects                                                        322,222                  301,773
Negative goodwill resulting from the recognition of deferred
tax benefits acquired from Grupo SyR                                            (1,540,517)              (1,382,192)
Participation in net equity of CASA                                               (136,546)                (356,848)
Goodwill relating to CASA acquisition                                             (899,069)                (840,619)
Goodwill relating to other subsidiaries acquisitions                              (233,750)                (209,162)
Capitalized exchange losses and interest expense                                   (16,317)                 (12,196)
Deferred income                                                                 (1,162,420)              (1,032,206)
Net loss on instruments indexed to the Company's stock                              (8,312)
Net loss on interest rate swaps and options                                                                 (44,875)
Reversal of depreciation of property, furniture and equipment
acquired in the Grupo SyR acquisition                                              104,573                  164,329
Effect on minority stockholders of U.S. GAAP adjustments                            27,560                   27,478
                                                                              ------------             ------------

Stockholders' equity under U.S. GAAP                                          Ps 2,024,397             Ps 2,572,214
                                                                              ============             ============
</TABLE>

An analysis of the changes in consolidated stockholders' equity under U.S. GAAP
is shown below:

<TABLE>
<CAPTION>
                                                       1999             2000             2001
                                                       ----             ----             ----

<S>                                                  <C>             <C>             <C>
Balance at beginning of year                         Ps  392,136     Ps1,402,135     Ps2,024,397
Net income                                             1,174,600       1,347,606       1,093,622
Loss from holding nonmonetary assets                    (260,529)       (409,724)       (412,334)
Repurchase and sale of Grupo Elektra shares              154,422        (214,441)         27,312
Payment of dividends                                    (141,058)       (146,128)       (157,059)
Exercise of stock options                                 11,566          17,379          12,274
Stock options granted to employees                        84,264           3,019             146
Increase in equity as a result of the merger
with Grupo SyR                                                             5,176
Effect of translation of foreign subsidiaries            (13,266)         19,375         (16,144)
                                                     -----------     -----------     -----------

Balance at end of year                               Ps1,402,135     Ps2,024,397     Ps2,572,214
                                                     ===========     ===========     ===========
</TABLE>






                                       F-41

<PAGE>

c. Significant differences between U.S. GAAP and Mexican GAAP:

i. Acquisition of subsidiaries and affiliates:

1. CASA

As mentioned in Note 8, the Company acquired a 35.8% interest in CASA in 1996.
For U.S. GAAP purposes, this acquisition is considered to be of a company under
common control and was accounted for at recorded amounts in a manner similar to
a pooling of interest. Consequently no goodwill would be reflected under U.S.
GAAP. For Mexican GAAP purposes, the acquisition has been accounted for as a
purchase of shares generating goodwill of Ps1,169,472 amortized on a straight
line basis over 20 years.

The reconciliations of net income and stockholders' equity also include
adjustments in order to reconcile the equity in the income of CASA under Mexican
GAAP to U.S. GAAP. The principal reconciling items between the equity in the
income of CASA under Mexican GAAP and U.S. GAAP are: (i) the deferred tax
effects, (2) the compensation cost from stock options, and (3) the effect of
fifth amendment to Statement "B-10".

Also in the Mexican GAAP financial statements the equity in the income (loss) of
CASA is presented net of the related goodwill amortization.

2. Other subsidiaries

In 1991, the Company acquired various companies controlled by the principal
stockholders, and under Mexican GAAP recorded goodwill amounting to Ps491,760
for the excess of the amounts paid over the book value of the companies
acquired. Under U.S. GAAP these acquisitions would have been recorded as
combinations of companies under common control and no goodwill would have been
recorded.

3. Acquisition of Grupo SyR

On April 8, 1999, the Company acquired 94.3% of the capital stock of Grupo SyR
and replaced the syndicate of banks as creditor on Grupo SyR's bank loans for an
aggregate payment of US$77.7 million (approximately Ps966 million) plus
transaction costs of Ps89 million. For U.S. GAAP purposes, the Company recorded
the transaction using the purchase method of accounting.

The total purchase cost of Ps1,055 million was initially allocated to the assets
acquired (including tax loss carryforwards of Ps4,157,638 and recoverable asset
tax of Ps361,633) and liabilities assumed based on their estimated fair values
at the acquisition date and to the recognition of the acquired deferred tax
assets that became realizable as a result of the acquisition and planned
reorganization of the Company. The initial purchase price allocation resulted in
the generation of negative goodwill, a portion of which was allocated to reduce
the


                                       F-42

<PAGE>

noncurrent assets (other than the deferred tax assets and the assets sold to
Liverpool and other third parties) to zero. The assets sold to Liverpool and
other third parties were recorded at their sale price. The remaining excess
negative goodwill will be amortized over five years. The final purchase price
allocation at the acquisition date is as follows:

Purchase price                                            Ps   1,055,377
                                                          ==============

Allocated to:
Current assets                                                   675,731
Property, furniture and equipment                                193,070
Deferred tax assets                                            1,816,827
Negative goodwill                                                (965,487)
                                                          ---------------

Total assets                                                   1,720,141

Liabilities                                                      (664,764)
                                                          ---------------

Net assets acquired                                       Ps   1,055,377
                                                          ==============

The reconciliation to U.S. GAAP net income and stockholders' equity as of and
for the year ended December 31, 1999, 2000 and 2001 include: 1) a net adjustment
to reflect the differences in basis between Mexican and U.S. GAAP; 2) an
adjustment to the negative goodwill amortization as a result of the basis
difference; and 3) an adjustment to reverse the depreciation expense recorded on
the property, plant and equipment that were allocated a reduced or zero value.

ii. Employees' profit sharing

Under U.S. GAAP, employees' profit sharing would be considered an operating
expense.

iii. Deferred income tax and employees' profit sharing

As stated in Note 3k., through December 31, 1999 income tax and employees'
profit sharing were recorded under Mexican GAAP following interperiod allocation
procedures under the partial liability method. Under this method, deferred tax
and profit sharing were recognized only in respect of nonrecurring timing
differences between taxable and book income which were expected to reverse at a
definite future date. This substantially eliminated all deferred taxes under
Mexican GAAP. Also, under Mexican GAAP the benefit from utilizing tax loss
carryforwards and asset tax credits were not recognized until utilized, at which
time it was presented as an extraordinary item. Commencing January 1, 2000, the
Company adopted Statement D-4 "Accounting Treatment of Income Tax, Asset Tax and
Employees' Profit Sharing". Under this statement, deferred tax assets or
liabilities are initially recognized for all differences between book and tax
value of assets and liabilities and for tax loss carryforwards and asset tax
carryforwards that have a high probability of realization. The cumulative effect
of


                                       F-43

<PAGE>

adopting Statement D-4 as of January 1, 2000 was to record a deferred tax asset
of Ps262,942, increase majority stockholders' equity by Ps257,684 and minority
stockholders' equity by Ps5,258.

U.S. GAAP Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes" ("FAS No. 109"), requires an asset and liability approach for
financial accounting and reporting for income tax under the following basic
principles: (a) a current tax liability or asset is recognized for the estimated
taxes payable or refundable on tax returns for the current year, (b) a deferred
tax liability or asset is recognized for the estimated future tax effects
attributable to temporary differences and carryforwards, (c) the measurement of
current and deferred tax liabilities and assets is based on provisions of the
enacted tax law and the effects of future changes in tax laws or rates are not
anticipated, and (d) the measurement of deferred tax assets is reduced, if
necessary, by the amount of any tax benefits that, based on available evidence,
are not expected to be realized.

Under this method, deferred tax and profit sharing are recognized in respect of
all temporary differences, and the benefit from utilizing tax loss carryforwards
and asset tax credits is recognized in the year in which the loss or credits
arise (subject to a valuation allowance in respect of any tax benefits not
expected to be realized). The subsequent realization of this benefit does not
affect income. Consequently, they do not represent extraordinary items for U.S.
GAAP purposes.

The temporary differences under FAS No. 109 are determined based on the
difference between the indexed tax-basis amount of the asset or liability and
the related stated amount reported in the financial statements. Except as
indicated in the following paragraph, the deferred tax expense or benefit is
calculated as the difference between: (a) the deferred tax assets and
liabilities at the end of the current period determined as indicated above, and
(b) the deferred tax assets and liabilities reported at the end of the prior
period remeasured to units of current general purchasing power at the end of the
current period. The deferred profit sharing expense or benefit is calculated
similarly.

Gains and losses from holding non-monetary assets are recorded in stockholders'
equity. It is the Company's policy to reflect the deferred income taxes and
profit sharing that arise as a result of such gains (losses) from assets or
liabilities which do not currently affect income in the results of operations.

The significant components of income tax expense under U.S. GAAP are as follows:

                                     Year ended December 31,
                                     -----------------------
                         1999                 2000                 2001
                         ----                 ----                 ----

Current               Ps109,867                                  Ps278,227
Deferred                102,115             Ps230,387              281,289
                      ---------             ---------            ---------

                      Ps211,982             Ps230,387            Ps559,516
                      =========             =========            =========





                                       F-44

<PAGE>

The following items represent the principal differences between income tax
computed under U.S. GAAP at the statutory tax rate and the Company's provision
for income tax in each year:

                                            Year ended December 31,
                                            -----------------------

                                    1999             2000               2001
                                    ----             ----               ----

Statutory income tax rate            35%              35%                35%
Effects of inflation                 (9%)            (11%)               (6%)
Non deductible expenses              (5%)             (8%)                2%
Other                                (6%)             (2%)                3%
                                  ------           ------             -------

Effective income tax rate            15%              14%                34%
                                  ======           ======             ======

The tax and profit sharing effects of significant items comprising the Company's
net deferred tax and profit sharing assets and liabilities under U.S. GAAP are
shown below:

<TABLE>
<CAPTION>
                                                                      Year ended December 31,
                                                                      -----------------------

                                                                     2000                 2001
                                                                     ----                 ----
Deferred income tax liabilities:
-------------------------------

<S>                                                             <C>                  <C>
Inventories                                                     (Ps  962,355)        (Ps   901,930)
Property, furniture, equipment and investment in stores              177,690               200,110
Prepaid expenses                                                     (97,992)              (99,457)
Installment sales                                                                         (224,096)
Other                                                                 (5,491)               (6,016)
                                                                 -----------          ------------

                                                                    (888,148)           (1,031,389)
                                                                 -----------          ------------

Deferred income tax assets:
--------------------------

Operating loss carryforwards                                         827,215               694,787
Asset tax carryforwards                                              361,633               361,633
Allowance for doubtful accounts                                       47,088                38,422
Other                                                                 22,129                25,175
                                                                 -----------          ------------

                                                                   1,258,065             1,120,017
                                                                 -----------          ------------

Net deferred income tax assets under U.S. GAAP                   Ps  369,917          Ps    88,628
                                                                 ===========          ============
</TABLE>






                                       F-45

<PAGE>

iv. Revenue recognition

Under Mexican GAAP the mark-up on installment sales is deferred and amortized
over the life of the installment sales contracts for all years, and is included
as part of merchandise, services and other revenues since it is included in the
sales price. Under Mexican GAAP any stated and penalty interest is also included
in merchandise, services and other revenues.

Under U.S. GAAP the installment sales mark-up earned along with stated and
penalty interest would be classified as interest earned from consumer credit
operations. During the years ended December 31, 1999, 2000 and 2001 the amount
of installment sales mark-up earned for U.S. GAAP purposes was Ps2,347,603,
Ps2,772,365 and Ps2,997,339, respectively.

Under Mexican GAAP the loss on monetary position from accounts receivable is
included in merchandise, services and other revenues since such accounts
receivable relate to the installment sales contracts. Under U.S. GAAP the loss
on monetary position from accounts receivable would not be part of operating
income, but would be classified as other financing expense. For the years ended
December 31, 1999, 2000, and 2001 the loss on monetary position from accounts
receivable was Ps277,652, Ps238,743 and Ps152,719, respectively.

v. Consumer credit operations

The results of the Company's consumer credit operations which are included in
the consolidated results of operations are as follows:

<TABLE>
<CAPTION>
                                                                                     Year ended December 31,
                                                                                     -----------------------

Consumer credit income:                                                1999                 2000                  2001
----------------------                                                 ----                 ----                  ----

<S>                                                                 <C>                  <C>                  <C>
Mark-up from installment sales                                      Ps2,347,603          Ps2,772,365          Ps2,997,339
Finance charges                                                         369,105              373,686              367,704
                                                                    -----------          -----------          -----------

                                                                      2,716,708            3,146,051            3,365,043
                                                                    -----------          -----------          -----------
Consumer credit expenses:
------------------------

Interest                                                                310,619              320,816              308,551
Payroll                                                                 298,598              358,940              273,172
Provision for doubtful accounts                                         482,538              599,659              654,764
Other credit and collection expenses                                    149,868              104,688               93,714
                                                                    -----------          -----------          -----------

Total operating expenses                                              1,241,623            1,384,103            1,330,201
                                                                    -----------          -----------          -----------

Earnings from consumer credit
operations                                                          Ps1,475,085          Ps1,761,948          Ps2,034,842
                                                                    ===========          ===========          ===========
</TABLE>





                                       F-46

<PAGE>

vi. Deferred income

As described in Note 3b., the Company received US$142 million in 1996 relating
to the Company's revised contractual agreements with Western Union, which was
deposited in an escrow fund and subsequently (at the direction of the Company)
transferred to the Company via purchase, by the escrow account, of shares of
various consolidated subsidiaries. Under Mexican GAAP, the escrow fund is
treated as an independent, unconsolidated entity and the US$142 million relating
to the shares purchased by the escrow fund is accounted for as minority interest
(US$5.6 million) and the remainder (US$136.4 million) is treated as additional
paid-in capital which are both components of consolidated stockholders' equity.
The minority interest and additional paid-in capital will be reduced annually by
an aggregate of US$14.2 million with a corresponding credit to revenue, as
escrowed amounts are released to the Company under terms of the escrow
agreement. Income tax expense will be recorded at the time of revenue
recognition.

Under U.S. GAAP, the escrow arrangement would be treated as a special purpose
consolidated entity, with the US$142 million accounted for as deferred income to
be recognized as revenue over periods up to ten years in accordance with the
contractual agreements. Income taxes will be recorded, as appropriate, under FAS
No. 109.

vii. Securitization of receivables

Under Mexican GAAP the Company accounted for the 1999, 2000 and 2001
securitizations of receivables as sales of the receivables and derecognized from
its balance sheets the receivables transferred under the programs against the
proceeds received.

Under U.S. GAAP, the transfer of the receivables in the 1999, 2000 and 2001
securitization programs have been accounted for as secured borrowings in
accordance with Statement of Financial Accounting Standards No. 125 "Accounting
for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities" and No.140 "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities - a replacement of SFAS No. 125".
Consequently, under U.S. GAAP the Company reestablished on its balance sheets as
of December 31, 2000 and 2001, receivables of Ps1,238,437 and Ps1,410,208
respectively.

The Company also recorded as of December 31, 2000 and 2001 liabilities of
Ps1,422,411 and Ps1,622,476, respectively.

viii. Capitalized interest

The Company capitalized exchange losses and interest incurred from borrowings
obtained for construction projects in 1994. For the years ended December 31,
1999, 2000 and 2001 the Company did not capitalize exchange losses or interest.
Under U.S. GAAP exchange losses are not capitalized and interest is capitalized
by applying the weighted average interest rate paid by the Company to the
capitalized costs related to the construction projects.


                                       F-47

<PAGE>

Amount capitalized under Mexican GAAP:

Interest (net of monetary gain)             Ps  7,355
Exchange losses                                46,505
                                            ---------

                                               53,860

Amount capitalizable under U.S. GAAP          (12,657)
                                            ---------

Difference                                     41,203
Accumulated depreciation                      (29,007)
                                            ---------

                                            Ps 12,196

The depreciation of this item amounted to Ps4,121 in each of the years ended
December 31, 1999, 2000 and 2001.

ix. Employee stock option plan

The Company's stock option plan under U.S. GAAP would be considered a variable
plan since the number of shares exercisable is contingent on the Company
achieving its performance goals. Once the Company has determined the number of
options to be exercisable in a particular year compensation expense is
determined as the difference between the quoted market price and the option
exercise price times the number of shares exercisable during the year.
Compensation expense relating to the Employee Stock Option Plan determined under
Accounting Principles Board Opinion No. 25 for the years ended December 31,
1999, 2000, and 2001 was Ps84,264, Ps3,019, and Ps146, respectively.

Had compensation cost for the Company's Employee Stock Option Plan been
determined based on the fair value at the grant dates for awards under those
plans consistent with the method of Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation", ("FAS No. 123"), the
Company's compensation expense for the years ended December 31, 1999, 2000 and
2001 would have been Ps18,690, Ps49,545, and Ps53,501 respectively, and the net
income per share would have been reduced or increased to the pro forma amounts
as follows:

<TABLE>
<CAPTION>
                                                Year ended December 31,
                                                -----------------------

                                  1999                  2000                  2001
                                  ----                  ----                  ----

<S>                            <C>                   <C>                   <C>
Net income as reported         Ps1,174,600           Ps1,347,606           Ps1,093,622
                               ===========           ===========           ===========

Net income proforma            Ps1,240,174           Ps1,301,080           Ps1,040,267
                               ===========           ===========           ===========
</TABLE>





                                       F-48

<PAGE>

<TABLE>
<CAPTION>
                                                                       Year ended December 31,
                                                                       -----------------------

                                                   1999                         2000                          2001
                                                   ----                         ----                          ----

<S>                                         <C>                         <C>                           <C>
Basic and diluted earnings per share
as reported                                 Ps      0.34                Ps        0.37                Ps         0.30
                                            =================           ===================           ===============

Basic and diluted earnings per share
proforma                                    Ps      0.36                Ps        0.36                Ps         0.28
                                            =================           ===================           ===============
</TABLE>

The effect on net income and net income per share is not expected to be
indicative of the effects in future years. The fair value of each option grant
is estimated on the date of grant using the weighted average Black-Scholes
option pricing model and simple binomial model with the assumptions presented
below:

                                             Year ended December 31,
                                             -----------------------

                                     1999                2000            2001
                                     ----                ----            ----

Expected volatility                 0.5137              0.5749          0.5107
Risk-free interest rate             18.67%              17.01%           9.60%
Expected life of options in years     1.00                1.00            1.00
Expected dividend yield                15%                 15%             15%

The Black-Scholes option valuation model and simple binomial model were
developed for use in estimating the fair value of traded options. In addition,
option valuation models require the input of highly subjective assumptions
including the expected stock price volatility.

For Mexican GAAP purposes stock options granted to employees are given effect
when exercised by crediting to paid-in capital stock the exercise price. Under
Mexican GAAP the granting of the options has no effect on the Company's results
of operations, cash flow or financial condition.

x. Concentration of credit risk

The Company is a retailer of consumer electronics, major appliances, household
furniture and other products with 852 stores in Mexico and 101 Elektra stores in
several Latin American countries at December 31, 2001. The Company regularly
makes installment sales to its customers and credit operations are managed by
each store based on established credit policies developed by the Company.

Due to the significant number of installment sales customers and store locations
the Company believes that it is not dependent on any geographical area or
customer base and therefore has no significant concentration of credit risk.


                                       F-49

<PAGE>

The Company currently has a network of approximately 170 suppliers for its
electronics, appliances and furniture products and directly imports
approximately 5% of these products. Three of the Company's suppliers together
accounted for more than 45% of its aggregate purchases of merchandise in the
year ended December 31, 2001.

xi. Fair value information

The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of Statement of Financial Accounting
Standards No. 107 "Disclosures about Fair Value of Financial Instruments" ("FAS
No. 107"). The estimated fair value amounts have been determined by the Company,
using available market information and appropriate valuation methodologies.
However, considerable judgment is required in interpreting market data to
develop estimates of fair value.

The carrying value of cash and cash equivalents, accounts receivable and
accounts payable is a reasonable estimate of their fair value.

The carrying value of commercial paper and certificates of deposit held in
escrow approximate fair value.

The carrying value of loans to related parties at December 31, 2000 and 2001 is
a reasonable estimate of their fair value based on the interest rates that are
currently available to the related parties for issuance of notes with similar
terms and remaining maturities.

The Company's bank loans, secured borrowings from the securitization of
receivables, and other debt bear interest at variable rates and their terms are
generally representative of those which were available to the Company at
December 31, 2000 and 2001 for the issuance of debt with similar terms and
remaining maturities, and therefore the carrying values of these loans and other
debt are a reasonable estimate of their fair value.

The carrying amount of Euro Commercial Paper approximated its fair value as of
December 31, 2000 and 2001. The fair value of Euro Commercial Paper was
estimated based on quoted market rates for instruments with similar terms and
remaining maturities.

The fair value of the Company's long-term notes is based on quoted market
prices. The estimated fair value of these instruments are as follows:

                                            December 31,
                                            ------------
                                   2000                  2001
                                   ----                  ----
Carrying value           US$ 100,000,000
Fair value               US$ 103,500,000
Carrying value           US$ 275,000,000                US$ 275,000,000
Fair value               US$ 252,450,000                US$ 276,375,000





                                       F-50

<PAGE>

The long-term notes are thinly-traded financial instruments accordingly, their
market price at any balance sheet date may not be representative of the price
which would be derived from a more active market.

Forwards exchange contracts

As of December 31, 2000, the estimated fair value of forward exchange contracts
to purchase US$50 million at a cost of Ps534.7 million, was determined using the
current exchange rate as of December 31, 2000 of Ps9.60 and totaled Ps33.6
million. The contracts mature in February 2001, May 2001, October 2001 and
January 2002.

As of December 31, 2001, the estimated fair value of forward exchange contracts
to purchase US$25.5 million at a cost of Ps267.7 million, was determined by
independent financial institutions and totaled Ps36.1. The contracts mature in
January 2002 and April 2002.

Instruments indexed to the Company's stock

As of December 31, 2000 and 2001, Grupo Elektra had entered into equity swap
agreements. Set forth below is the fair value of the Company's equity swap
portfolio at December 31, 2000 and 2001:

<TABLE>
<CAPTION>
                                           Initial              Notional
Year     Underlying shares                  price                Amount                    Fair value
----     -----------------                  -----                ------                    ----------

<S>    <C>                               <C>               <C>                           <C>
2000    6,822,660      Elektra CPOs      US$ 0.68          US$   4.6 million             US$ 0.9  million
       12,878,712      Elektra CPOs      Ps  9.15          Ps  117.9 million            (Ps 16.9) million

2001    6,822,660      Elektra CPOs      US$ 0.68          US$   4.6 million            (US$ 0.3) million
       14,400,000      Elektra CPOs      US$ 0.93          US$  13.3 million            (US$ 4.0) million
</TABLE>

Interest rate swaps and options

As of December 31, 2001, the estimated fair value of interest rate swaps and
options was determined by independent financial institutions and totaled
Ps49,457. The contracts mature monthly from January 2002 through January 2003.

xii. Derivative financial instruments

As mentioned in Note 3p., the Company entered derivative financial instruments
primarily to manage its (i) foreign exchange rate risk and (ii) interest rate
risk. In addition, the Company entered into transactions involving instruments
indexed to the Company's stock. Effective January 1, 2001, the Company adopted
Statement of Financial Accounting Standards No. 133,


                                       F-51

<PAGE>

"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") as
amended by SFAS 137, "Deferral of the Effective Date of SFAS No. 133" and SFAS
138, "Accounting for Derivative Instruments and Hedging Activities - an
amendment of SFAS 133." Under SFAS 133 as amended, derivatives that are not
designated as hedges must be adjusted to fair value through income. If the
derivative is designated as a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of the hedged assets, liabilities, or firm commitments
through earnings or recognized in accumulated other comprehensive income until
the hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value is immediately recognized in earnings. Formal
documentation designating the relationship between the hedging instrument and
the hedged underlying transaction must be in place at inception, and hedge
effectiveness must be reassessed regularly. The derivative instruments indexed
to the Company's stock and the option issued to CASA (see Note 8) are outside
the scope of SFAS 133.

Forward foreign currency exchange contracts

Under Mexican GAAP, the Company has recorded in earnings the gains and losses on
forward foreign currency exchange contracts resulting from the differences in
fair value as of December 31, 1999, 2000 and 2001. In 1999, the Company also
granted to a third party the option to enter into a forward foreign currency
contract at pre-established exchange rates. No amounts were recorded in the
financial statements for this option.

Prior to the adoption of SFAS 133, under U.S. GAAP, the differences between the
forward peso rates and the spot rates on the dates the forward foreign currency
exchange contracts were entered into (premium or discount) were amortized to
earnings over the contract term. In addition, gains and losses were recognized
in earnings for the gain or loss resulting from the differences between the
forward peso rates and the peso spot rate as of December 31, 1999 and 2000.
These differences did not result in a material reconciling item as of December
31, 1999 and 2000. Also, under U.S. GAAP in 1999, the Company recognized a
liability and a loss of Ps41,634 for the difference between the option contract
forward rate and spot rate on December 31, 1999. This loss was recorded under
Mexican GAAP when realized in 2000.

In 2001, there is no reconciling difference between Mexican GAAP and U.S. GAAP
for the Company's forward foreign currency exchange contracts and options.

Instruments indexed to the Company's stock

Under Mexican GAAP through December 31, 2000, gains or losses on instruments
indexed to the Company's stock were recognized in the financial statements when
realized. Under U.S. GAAP, contracts that are indexed to a Company's stock that
require settlement in cash are reflected in earnings. An asset or liability with
a corresponding gain or loss would be recorded for the difference between the
market price of Grupo Elektra stock and the contract price (as defined) as of
December 31, 1999, 2000 and 2001. The Company recorded a receivable of Ps129,453
at December 31, 1999 and a liability of Ps35,782 at December 31, 2000 on these


                                       F-52

<PAGE>

contracts. In addition, for U.S. GAAP purposes, the payment received in partial
settlements of one of the contracts of Ps58,178 in 1999 was recorded in
earnings. The settlement payment received in 2000 amounted to Ps101,982 and was
recorded in the December 31, 1999 receivable and earnings for the period.

Under Mexican GAAP, beginning on January 1, 2001, unrealized gains and losses on
instruments indexed to the Company's stock are recognized on the balance sheet
as either assets or liabilities. Any resulting gain or loss is recorded in
stockholders' equity. As mentioned above, under U.S. GAAP, these unrealized
gains and losses are reclassified and reflected in earnings.

The following table illustrates the differences between Mexican and U.S. GAAP in
the method of accounting for the instruments indexed to the Company's stock for
the year ended December 31, 2001:

Loss on derivative transactions recognized
in stockholders' equity under Mexican GAAP             (Ps 65,908)
Settlement of net liabilities previously
recognized under U.S. GAAP                                 8,312
                                                          ------

Loss recognized in earnings under U.S. GAAP            (Ps 57,596)
                                                        =========

Interest rate swaps and options

Interest rate swaps and options are used to reduce the Company's exposure to
interest rate fluctuations. While the Company provides credit to its customers
on a fixed rate basis, some of the Company's obligations are provided at
variable interest rates.

Under Mexican GAAP, these instruments are classified as hedging instruments and
are valued by applying the same valuation criteria that is used for the
respective assets and liabilities for which these instruments cover. However,
the Company's obligations related to these instruments are not carried at their
fair value, and therefore, the instruments were not valued at year-end.

Under U.S. GAAP, these derivative instruments do not qualify for hedge
accounting. As a result, for the year ended December 31, 2001, the Company
recognized the change in fair value of these derivative instruments as a charge
to earnings of Ps44,875 with a corresponding credit to derivative financial
instruments liability.

xiii. Defeasance of the US$100 million 12.75% Senior Notes

As mentioned in Note 10, under Mexican GAAP the US$100 million 12.75% Senior
Notes have been considered extinguished through defeasance, and consequently the
Senior Notes and the investments held in escrow were removed from the Company's
balance sheet.

Under U.S. GAAP the US$100 million 12.75% Senior Notes and the investments
purchased by


                                       F-53

<PAGE>

the Company are presented gross on the balance sheet and have not been defeased
for accounting purposes.


                                       F-54

<PAGE>

xiv. Advances to suppliers

Under U.S. GAAP, advances to suppliers would be classified as prepayments. At
December 31, 2000 and 2001, the Company had advances of Ps183,785 and Ps91,700,
respectively.

xv. Recently issued accounting standards

In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a replacement
of FASB No. 125", ("SFAS 140"). SFAS 140 revises the standards for accounting
for securitizations and other transfers of financial assets and collateral, but
it carries over most of the provisions of SFAS 125 without change. SFAS 140 is
effective for transfers of financial assets occurring after March 31, 2001. The
adoption of SFAS 140 did not change the U.S. GAAP accounting of the Company's
current securitization program.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations" ("SFAS 141")
which supersedes APB Opinion No. 16, "Business Combinations" and amends or
supersedes a number of related interpretations of APB 16. The statement is
effective for all business combinations initiated after June 30, 2001 and for
all business combinations accounted for by the purchase method that are
completed after June 30, 2001. SFAS 141 addresses financial accounting and
reporting for business combinations, eliminates the pooling-of-interests method
of accounting for business combinations, and prescribes the initial recognition
and measurement of goodwill and other intangible assets, accounting for negative
goodwill and the required disclosures in respect of business combinations. The
adoption of SFAS 141 did not have a material impact on the Company's
consolidated financial statements.

Also in July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"), which supersedes APB Opinion No. 17, "Intangible Assets".
SFAS 142 addresses how intangible assets that are acquired individually or with
a group of other assets (but not those acquired in a business acquisition)
should be accounted for in financial statements upon their acquisition. SFAS 142
also addresses how goodwill and other intangible assets should be accounted for
after they have been initially recognized in the financial statements. SFAS 142
discontinues the amortization of both existing and future acquired goodwill and
negative goodwill. Furthermore, negative goodwill will be reflected as a
one-time extraordinary gain. In addition, SFAS 142 states that upon adoption,
any remaining negative goodwill will be written off as a change in accounting
principle. The provisions of SFAS 142 are required to be applied starting with
fiscal years beginning after December 15, 2001. SFAS 142 is required to be
applied at the beginning of an entity's fiscal year and to be applied to all
goodwill and other intangible assets recognized in its financial statements at
that date. Management is currently evaluating the impact that the adoption of
SFAS 142 will have on its consolidated financial statements. As of December 31,
2001, intangible assets under US GAAP consisted of Ps331,010 of goodwill and
Ps496,234 of negative goodwill.


                                       F-55

<PAGE>

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS 143"). SFAS 143 requires the recognition of a liability for
the legal obligations associated with the retirement of a tangible long-lived
asset that results from the acquisition, construction and (or) normal operation
of the asset. The liability is recognized at fair value in the period in which
it is incurred if a reasonable estimate of fair value can be made. A
corresponding asset retirement cost is added to the carrying value of the
long-lived asset and is depreciated to expense using a systematic and rational
method over its useful life. SFAS 143 is effective for fiscal years beginning
after June 15, 2002. Upon initial adoption, a liability is recognized for
existing asset retirement obligations and the associated asset retirement cost
is capitalized as an increase to the carrying value of the asset. The recognized
liability and asset are adjusted for cumulative accretion and accumulated
depreciation, respectively, from the time period when the asset retirement
obligation would have originally been recognized had this statement been in
effect to the date of initial adoption. The cumulative effect of initial
adoption of SFAS 143 is recorded as a change in accounting principle. Management
estimates that the adoption of SFAS 143 will not have a material impact on the
consolidated financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" and the accounting and reporting provisions of APB Opinion No.
30, "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions". SFAS 144 retains the fundamental provisions of SFAS
121 for recognition and measurement of the impairment of long-lived assets to be
held and used, but resolves a number of implementation issues and establishes a
single accounting model for assets to be disposed of. SFAS 144 also retains the
requirements to report discontinued operations separately from continuing
operations and extends that reporting to a component of an entity that either
has been disposed of by sale, abandonment or distribution to owners or is
classified as held for sale. The provisions of SFAS 144 are effective for
financial statements issued for fiscal years beginning after December 15, 2001
and their interim periods. The provisions of SFAS 144 for long-lived assets to
be disposed of by sale or otherwise are effective for disposal activities
initiated after the effective date of SFAS 144 or after its initial application.
Management is currently evaluating the impact that the adoption of SFAS 144 will
have on the consolidated financial statements.

xvi. Condensed balance sheets and income statements under U.S. GAAP

The following condensed balance sheets and statements of income reflect the
effects of the principal differences between Mexican GAAP and U.S. GAAP.





                                       F-56

<PAGE>

                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   December 31,
                                                                   ------------

                                                             2000               2001
                                                             ----               ----

<S>                                                      <C>                <C>
Cash and cash equivalents                                Ps   800,348       Ps 1,913,761
Restricted investments                                      1,040,866
Accounts receivable due from customers - Net                5,084,014          4,797,344
Related parties                                               180,428            262,784
Inventories                                                 2,803,516          2,789,757
Other current assets                                          872,848            713,933
                                                         ------------       ------------

Total current assets                                       10,782,020         10,477,579

Property, furniture and equipment - Net                     2,961,595          2,845,397
Deferred income tax                                         1,383,177          1,051,593
Other assets                                                  871,347          1,000,370
Investment in CASA                                            489,425            439,239
Negative goodwill                                            (689,177)          (496,234)
                                                         ------------       ------------

Total assets                                             Ps15,798,387       Ps15,317,944
                                                         ============       ============

Short-term debt                                          Ps 2,612,610       Ps 1,118,484
Deferred income - Current portion                             193,737            206,441
Suppliers                                                   2,612,196          2,428,692
Deferred income tax                                         1,013,259            962,965
Other current liabilities                                   1,191,793          1,007,755
                                                         ------------       ------------

Total current liabilities                                   7,623,595          5,724,337

Long-term debt                                              4,328,420          5,356,147
Other long-term liabilities                                   743,403            741,428
Deferred income                                               968,684            825,765
                                                         ------------       ------------

Total liabilities                                          13,664,102         12,647,677
                                                         ------------       ------------

Minority interest                                             109,888             98,053
                                                         ------------       ------------

Majority stockholders                                       2,024,397          2,572,214
                                                         ------------       ------------

Total liabilities and stockholders' equity               Ps15,798,387       Ps15,317,944
                                                         ============       ============
</TABLE>






                                       F-57

<PAGE>

                       CONDENSED STATEMENTS OF INCOME AND
                              COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
                                                                                          Year ended December 31,
                                                                                          -----------------------

                                                                         1999                  2000                  2001
                                                                         ----                  ----                  ----
<S>                                                                  <C>                   <C>                   <C>
Revenues:
Sales of merchandise                                                 Ps 10,169,026         Ps 11,809,645         Ps 11,681,352
Money transfer and other services                                          436,326               656,329               714,756
Interest earned from consumer credit
operations                                                               2,716,708             3,146,051             3,365,043
                                                                     -------------         -------------         -------------

                                                                        13,322,060            15,612,025            15,761,151
                                                                     -------------         -------------         -------------
Costs and expenses:
Cost of sales                                                           (7,085,968)           (8,028,118)           (8,101,798)
Selling, general and administrative                                     (3,794,588)           (4,591,604)           (4,530,560)
Allowance for doubtful accounts                                           (482,538)             (599,659)             (654,764)
                                                                     -------------         -------------         -------------

                                                                       (11,363,094)          (13,219,381)          (13,287,122)
                                                                     -------------         -------------         -------------

Operating income                                                         1,958,966             2,392,644             2,474,029
Interest paid for consumer credit operations                              (310,619)             (320,816)             (308,551)
Other financing expense                                                   (279,920)             (389,625)             (519,542)
                                                                     -------------         -------------         -------------

Income before taxes, equity in earnings
and minority interest                                                    1,368,427             1,682,203             1,645,936

Income tax                                                                (211,982)             (230,387)             (559,516)
                                                                     -------------         -------------         -------------

Income before equity in earnings and
minority interest                                                        1,156,445             1,451,816             1,086,420

Equity in income (loss) of CASA                                             43,750               (82,872)               20,247
                                                                     -------------         -------------         -------------

Income before minority interest                                          1,200,195             1,368,944             1,106,667
Minority interest                                                          (25,594)              (21,338)              (13,045)
                                                                     -------------         -------------         -------------

Net income of majority stockholders                                      1,174,601             1,347,606             1,093,622

Effect of translation of foreign subsidiaries                              (13,266)               19,375               (16,144)
Loss from holding non-monetary assets                                     (157,999)             (627,655)             (584,094)
                                                                     -------------         -------------         -------------

Comprehensive income                                                 Ps  1,003,336         Ps    739,326         Ps    493,384
                                                                     =============         =============         =============
</TABLE>

The Company has not separately presented costs of money transfer and other
services as these costs cannot be separately distinguished from other costs in
operating the Company's stores. Management does not believe these costs to be
material.


                                       F-58

<PAGE>

xviii. Cash flow information

Under US GAAP a statement of cash flow is prepared based on provisions of
Statement of Financial Accounting Standards No. 95 "Statement of Cash Flows"
("FAS No. 95"). This statement does not provide guidance for the preparation of
cash flow statements for price level adjusted financial statements.


                                       F-59

<PAGE>

Presented below are statements of cash flow for the years ended December 31,
1999, 2000 and 2001 prepared after considering the impact of U.S. GAAP
adjustments. The cash flow statements present nominal cash flow during the
periods, adjusted to pesos of December 31, 2001, purchasing power.

<TABLE>
<CAPTION>
                                                                                          Year ended December 31,
                                                                                          -----------------------

Cash flows from operating activities:                                            1999               2000               2001
------------------------------------                                             ----               ----              ----

<S>                                                                         <C>               <C>                <C>
Net income                                                                  Ps 1,174,601      Ps  1,347,606      Ps 1,093,622
                                                                            ------------      -------------      ------------

Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization                                                    476,086            543,197           460,609
Amortization of negative goodwill                                               (117,986)          (158,325)         (158,325)
Allowance for doubtful accounts                                                  482,538            599,659           654,764
Equity in (income) loss of CASA                                                  (43,750)            82,872           (20,247)
Other provisions                                                                  29,710             49,015            62,104
Minority stockholders                                                             25,594             21,338            13,045
Accrual for seniority premiums                                                     7,461              9,517             7,582
Monetary gain from financing activities                                         (195,101)          (213,562)         (117,204)
Deferred income tax and employees' profit sharing                                101,357            229,427           281,289
Compensation expense from stock options granted to employees                      84,264              3,019               146
Recognition of deferred income from Western Union agreement                     (153,292)          (142,318)         (130,214)
Unrealized exchange loss (gain) - Net                                           (158,857)           103,356          (110,281)
Unrealized net (gain) loss on derivative and hedging transactions                (87,818)            (5,852)           92,555
Unearned income from extended warranties                                         264,162            315,334            21,198
Net changes in working capital                                                (1,349,826)        (2,124,777)         (205,996)
                                                                            ------------      -------------      ------------

Net cash provided by operating activities                                        539,143            659,506         1,944,647
                                                                            ------------      -------------      ------------

Cash flows from financing activities:

Short-term and long-term loans received                                        5,449,208         13,137,075         5,814,853
Repayment of short-term and long-term debt                                    (5,437,406)       (14,207,676)       (7,313,881)
Proceeds from issuance of US$275 million Senior Notes                             -               2,664,288            -
Repayment of Syndicated Loan                                                      -              (1,162,598)           -
Euro Commercial Paper                                                             -                 651,456          (390,165)
Proceeds from securitization of receivables                                      220,790            385,719         1,200,000
Repayment of securitization of receivables                                        -                (208,800)         (260,013)
Issuance of capital stock                                                         11,566             17,379            12,274
Repurchase and sale of Grupo Elektra shares                                      154,422           (214,441)           27,312
Payment of dividends                                                            (141,058)          (146,128)         (157,059)
Gain (loss) on instruments indexed to the Company's stock                         58,178            101,982          (22,810)
Debt issuance costs                                                               -                (112,664)          (35,971).
                                                                            ------------      -------------      --------------

Net cash provided by (used in) financing activities                              315,700            905,592        (1,125,460)
                                                                            ------------      -------------      -------------

Cash flows from investing activities:

Acquisition of property, furniture, equipment and
investment in stores                                                            (498,639)          (218,873)         (533,573)
Acquisition of Mericolor, S. A. de C. V.                                          -                  -                (50,728)
Restricted investments                                                            -              (1,040,865)        1,095,021
Proceeds from disposal of assets                                                 527,057             -                  -
Acquisition of Grupo SyR, net of cash acquired                                (1,004,635)            -                  -
                                                                            ------------      -------------      ------------

Net cash used in investing activities                                           (976,217)        (1,259,738)         (510,720)
                                                                            ------------      -------------      ------------

Effects of inflation and exchange rate changes on cash                          (506,680)          (407,313)         (216,494)
                                                                            ------------      -------------      ------------

(Decrease) increase in cash and cash equivalents                                (628,054)          (101,953)        1,113,413
Cash and cash equivalents at beginning of year                                 1,530,355            902,301           800,348
                                                                            ------------      -------------      ------------

Cash and cash equivalents at end of year                                    Ps   902,301      Ps    800,348      Ps 1,913,761
                                                                            ============      =============      ============
</TABLE>





                                       F-60

<PAGE>

<TABLE>
<CAPTION>
                                                         Year ended December 31,
                                                         -----------------------

                                              1999             2000               2001
                                              ----             ----               ----

<S>                                       <C>              <C>              <C>
Supplemental disclosure:
Cash paid during the year for:
Interest                                  Ps  613,256      Ps  794,722      Ps  1,053,091
                                          ===========      ===========      =============

Income and asset tax                      Ps  138,659      Ps  120,658      Ps    105,392
                                          ===========      ===========      =============
</TABLE>

Non cash transactions:

The Company recorded capital lease obligations of Ps224,766 in 2000, related to
the acquisition of property.

In the year ended December 31, 1999, the Company acquired 90% of the capital
stock of Cotsa through the capitalization of Ps369,640 in receivables due to the
Company.

NOTE 18 - SUPPLEMENTAL GUARANTOR INFORMATION:

The Senior Notes are fully and unconditionally guaranteed, by each of the
Company's subsidiaries. Each of the guarantor subsidiaries was a wholly owned
subsidiary except for Grupo SyR, Elmex Superior, S. A. de C. V. (Elmex), and
Cotsa as of and for the year ended December 31, 1999. As of and for the years
ended December 31, 2000 and 2001 only Cotsa remains a non-wholly owned guarantor
subsidiary. The financial statements of Cotsa are presented separately. The
following condensed consolidating financial data presents the separate condensed
financial data of the Guarantor Subsidiaries and the Parent Company. It is
management's opinion that separate complete financial statements of the
respective Guarantors (other than Cotsa) would not provide material information
to the investor and thus are not presented.

Investments in subsidiaries are accounted for by the Parent Company on the
equity method for purposes of the supplemental consolidating presentation.
Earnings of subsidiaries are therefore reflected in Parent Company's investment
account and earnings. The principal elimination entries eliminate the Parent
Company's investment in subsidiaries and intercompany balances and transactions.

Reconciliations of net income and stockholders' equity from Mexican GAAP to U.S.
GAAP are also included after the condensed financial statements.


                                       F-61

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                             AS OF DECEMBER 31, 2000

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                      Parent          Guarantor
                                  Company Issuer     Subsidiaries      Eliminations     Consolidated
                                  --------------     ------------      ------------     ------------

<S>                               <C>               <C>               <C>               <C>
Cash and cash equivalents         Ps   383,904      Ps   416,444                        Ps   800,348
Accounts receivable                    130,615         7,011,379      (Ps 2,676,115)       4,465,879
Other Prepaid Expenses                                    39,948                              39,948
Inventories                                            2,987,301                           2,987,301
                                  ------------      ------------       ------------     ------------

Total current assets                   514,519        10,455,072         (2,676,115)       8,293,476

Property, furniture, equipment

and investment in stores             1,151,182         2,686,016                           3,837,198
Goodwill                             1,173,625           147,518                           1,321,143
Investment in shares                 8,489,673                           (7,624,674)         864,999
Other assets                           539,917           584,997           (642,554)         482,360
                                  ------------      ------------       ------------     ------------

                                  Ps11,868,916      Ps13,873,603      (Ps10,943,343)    Ps14,799,176
                                  ============      ============       ============     ============

Bank loans and other short-term
debt                              Ps   324,525      Ps 1,320,467                        Ps 1,644,992
Other current liabilities            2,756,312         3,607,637      (Ps 2,676,115)       3,687,834
                                  ------------      ------------       ------------     ------------

Total current liabilities            3,080,837         4,928,104         (2,676,115)       5,332,826

Long-term notes and other
long-term debt                       2,823,951            82,057                           2,906,008
Other long-term liabilities            284,636            84,088           (284,636)          84,088
Deferred credits                       112,519           659,316                             771,835
Stockholders' equity                 5,566,973         8,120,038         (7,982,592)       5,704,419
                                  ------------      ------------       ------------     ------------

                                  Ps11,868,916      Ps13,873,603      (Ps10,943,343)    Ps14,799,176
                                  ============      ============       ============     ============
</TABLE>





                                       F-62

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                             AS OF DECEMBER 31, 2001

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                      Parent          Guarantor
                                  Company Issuer     Subsidiaries     Eliminations      Consolidated
                                  --------------     ------------     ------------      ------------

<S>                               <C>               <C>              <C>                <C>
Cash and cash equivalents         Ps   483,323      Ps 1,430,438                        Ps 1,913,761
Accounts receivable                     66,201         6,788,855     (Ps 2,852,083)        4,002,973
Other Prepaid Expenses                                    56,912                              56,912
Inventories                                            2,881,457                           2,881,457
                                  ------------      ------------      ------------      ------------

Total current assets                   549,524        11,157,662        (2,852,083)        8,855,103

Property, furniture,
equipment and investment
in stores                            1,043,835         2,613,288                           3,657,123
Goodwill                             1,088,210           278,315                           1,366,525
Investment in shares                 9,812,912            94,734     (Ps 8,875,757)        1,031,889
Other assets                           577,555           470,085          (599,816)          447,824
                                  ------------      ------------      ------------      ------------

                                  Ps13,072,036      Ps14,614,084     (Ps12,327,656)     Ps15,358,464
                                  ============      ============      ============      ============

Bank loans and other
short-term debt                   Ps   282,786      Ps   756,367                        Ps 1,039,153
Other current liabilities            2,910,553         3,377,977     (Ps 2,852,083)        3,436,447
                                  ------------      ------------      ------------      ------------

Total current liabilities            3,193,339         4,134,344        (2,852,083)        4,475,600

Long-term notes and other
long-term debt                       3,713,850            54,277                           3,768,127
Other long-term liabilities            130,214           301,846          (130,214)          301,846
Deferred credits                        77,901           652,727                             730,628
Stockholders' equity                 5,956,732         9,470,890        (9,345,359)        6,082,263
                                  ------------      ------------      ------------      ------------

                                  Ps13,072,036      Ps14,614,084     (Ps12,327,656)     Ps15,358,464
                                  ============      ============      ============      ============
</TABLE>





                                       F-63

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

            SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                               Year ended December 31, 1999
                                                        ----------------------------------------------------------------------

                                                             Parent          Guarantor
                                                         Company Issuer     Subsidiaries        Eliminations      Consolidated
                                                         --------------     ------------        ------------      ------------

<S>                                                      <C>                <C>                 <C>               <C>
Merchandise, services and other
revenues                                                                     Ps 13,044,408                        Ps13,044,408
Cost of merchandise sold and of
services                                                                         7,716,141                           7,716,141
                                                                             -------------                        ------------

Gross profit                                                                     5,328,267                           5,328,267

Operating expenses                                         Ps 119,666            3,782,168                           3,901,834
                                                           ----------        -------------                        ------------

Operating (loss) income                                      (119,666)           1,546,099                           1,426,433
Comprehensive financing cost                                   90,852             (402,858)                           (312,006)
Taxes and employees' statutory
profit sharing                                                (38,157)             (71,710)                           (109,867)
                                                           ----------        -------------                        ------------

Income before equity in the results
of subsidiaries and affiliated
companies                                                     (66,971)           1,071,531                           1,004,560
Equity in the results of subsidiaries
and affiliated companies                                      954,284                           (Ps1,046,670)          (92,386)
Income of minority stockholders                                                    (24,861)                            (24,861)
                                                           ----------        -------------      ------------      ------------

Income of majority stockholders                            Ps 887,313        Ps  1,046,670      (Ps1,046,670)     Ps   887,313
                                                           ==========        =============       ===========      ============
</TABLE>





                                       F-64

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

            SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                               Year ended December 31, 2000
                                                        ----------------------------------------------------------------------

                                                             Parent          Guarantor
                                                         Company Issuer     Subsidiaries       Eliminations      Consolidated
                                                         --------------     ------------       ------------      ------------

<S>                                                      <C>                <C>                <C>               <C>
Merchandise, services and other
revenues                                                  Ps   432,462      Ps 15,373,282      (Ps   432,462)     Ps15,373,282
Cost of merchandise sold and of
services                                                                        8,807,592                            8,807,592
                                                          ------------      -------------       ------------      ------------

Gross profit                                                   432,462          6,565,690           (432,462)        6,565,690

Operating expenses                                             331,934          4,935,903           (432,462)        4,835,375
                                                          ------------      -------------       ------------      ------------

Operating (loss) income                                        100,528          1,629,787                            1,730,315
Comprehensive financing cost                                  (108,603)          (189,061)                            (297,664)
Taxes and employees' statutory
profit sharing                                                 109,754           (326,032)                            (216,278)
                                                          ------------      -------------       ------------      ------------

(Loss) income before equity in the
results of subsidiaries and affiliated
companies                                                      101,679          1,114,694                            1,216,373
Equity in the results of subsidiaries
and affiliated companies                                     1,070,176                            (1,093,438)          (23,262)
Income of minority stockholders                                                                      (21,256)          (21,256)
                                                          ------------      -------------       ------------      ------------

Income of majority stockholders                           Ps 1,171,855      Ps  1,114,694      (Ps 1,114,694)     Ps 1,171,855
                                                          ============      =============       ============      ============
</TABLE>





                                       F-65

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

            SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                               Year ended December 31, 2001
                                                        ----------------------------------------------------------------------

                                                             Parent          Guarantor
                                                         Company Issuer     Subsidiaries       Eliminations       Consolidated
                                                         --------------     ------------       ------------       ------------

<S>                                                      <C>                <C>                <C>                <C>
Merchandise, services and other
revenues                                                    Ps  102,804     Ps15,608,432       (Ps   102,804)     Ps15,608,432
Cost of merchandise sold and of
services                                                                       8,977,093                             8,977,093
                                                            -----------     ------------        ------------      ------------

Gross profit                                                    102,804        6,631,339            (102,804)        6,631,339

Operating expenses                                              395,765        4,480,198            (102,804)        4,773,159
                                                            -----------     ------------        ------------      ------------

Operating (loss) income                                        (292,961)       2,151,141                             1,858,180
Comprehensive financing cost                                    (19,212)        (333,160)                             (352,372)
Taxes and employees' statutory
profit sharing                                                   63,152         (606,264)                             (543,112)
                                                            -----------     ------------        ------------      ------------

(Loss) income before equity in the
results of subsidiaries and affiliated
companies                                                      (249,021)       1,211,717                               962,696
Equity in income of subsidiaries and
affiliated companies                                          1,385,723         (151,399)         (1,047,355)          186,969
Income of minority stockholders                                                                      (12,963)          (12,963)
                                                            -----------     ------------        ------------      ------------

Income of majority stockholders                             Ps1,136,702     Ps 1,060,318       (Ps 1,060,318)     Ps 1,136,702
                                                            ===========     ============        ============      ============
</TABLE>





                                       F-66

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

                 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT
                        OF CHANGES IN FINANCIAL POSITION

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                        Year ended December 31, 1999
                                                  ---------------------------------------------------------------------------

                                                        Parent          Guarantor
Operations:                                        Company Issuer      Subsidiaries         Eliminations       Consolidated
----------                                         --------------      ------------         ------------       ------------

<S>                                                <C>                 <C>                  <C>                <C>
Net income                                           Ps 887,313        Ps 1,046,670         (Ps1,046,670)       Ps   887,313
Charges (credits) to income not
affecting resources:
Depreciation and amortization                            56,742             492,870                                  549,612
Allowance for doubtful accounts                                             482,538                                  482,538
Accruals for seniority premiums and
pension plan                                                                  7,461                                    7,461
Income of minority stockholders                                              24,861                                   24,861
Equity in the results of subsidiaries and
affiliated company                                     (954,284)                               1,046,670              92,386
Other provisions                                                             29,710                                   29,710
Net changes in working capital                          223,474            (731,210)                                (507,736)
                                                     ----------        ------------         ------------        ------------

Resources provided by operations                        213,245           1,352,900                                1,566,145
                                                     ----------        ------------         ------------        ------------

Financing:
---------

Paid-in capital (own and subsidiaries'
shares)                                                (196,612)                                                    (196,612)
Bank loans and other debt - Net                         377,835            (601,406)                                (223,571)
Loans collected from (granted) to
affiliated companies                                    458,311            (458,311)
Issuance of capital stock                                11,565                                                       11,565
Payment of dividends                                   (141,058)                                                    (141,058)
Dividends received from (paid to)
affiliated companies                                     56,529             (56,529)
Gain derivative transactions                             58,178                                                       58,178
Sale of repurchased shares                              154,421                                                      154,421
                                                     ----------        ------------         ------------        ------------

Resources (used in) provided by
financing activities                                    779,169          (1,116,246)                                (337,077)
                                                     ----------        ------------         ------------        ------------

Investing:
---------

Acquisition of property, furniture,
equipment and investment in stores - Net                                   (520,831)                                (520,831)
Acquisition of Grupo SyR, S. A. de C. V.,
net of cash acquired                                   (991,240)                                                    (991,240)
Acquisition of Compania Operadora de
Teatros, S. A. de C. V., net of cash acquired                              (526,187)                                (526,187)
Increase in minority stockholders as a
result of the acquisition of Grupo SyR
and Cotsa                                                                   181,136                                  181,136
                                                     ----------        ------------         ------------        ------------

Resources used in investing activities                 (991,240)           (865,882)                              (1,857,122)
                                                     ----------        ------------         ------------        ------------

Increase (decrease) in cash and cash
equivalents                                               1,174            (629,228)                                (628,054)
Cash and cash equivalents at beginning
of year                                                 204,980           1,325,375                                1,530,355
                                                     ----------        ------------         ------------        ------------


Cash and cash equivalents at end of year             Ps 206,154        Ps   696,147          Ps                 Ps   902,301
                                                     ==========        ============          ===========        ============
</TABLE>





                                       F-67

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

                 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT
                        OF CHANGES IN FINANCIAL POSITION

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                        Year ended December 31, 2000
                                                  ---------------------------------------------------------------------------

                                                        Parent          Guarantor
Operations:                                        Company Issuer      Subsidiaries       Eliminations       Consolidated
----------                                         --------------      ------------       ------------       ------------

<S>                                                <C>                 <C>                <C>                <C>
Net income                                         Ps  1,171,855       Ps  1,114,694      (Ps 1,114,694)     Ps   1,171,855
Charges (credits) to income not affecting
resources:
Depreciation and amortization                            216,504             415,159                                631,663
Allowance for doubtful accounts                                              599,659                                599,659
Accruals for seniority premiums and
pension plan                                                                   9,517                                  9,517
Income of minority stockholders                                                                  21,256              21,256
Equity in the results of subsidiaries and
affiliated company                                    (1,070,176)                             1,093,438              23,262
Provision for deferred taxes                            (109,754)            325,002                                215,248
Other provisions                                                              49,015                                 49,015
Provision for derivative transactions                                         34,622                                 34,622
Net changes in working capital                           521,559          (2,858,694)                            (2,337,135)
                                                   -------------       -------------       ------------      --------------

Resources provided by operations                         729,988            (311,026)                               418,962
                                                   -------------       -------------       ------------      --------------

Financing:
---------

Paid-in capital (own and subsidiaries'
shares)                                                 (142,318)                                                  (142,318)
Bank loans and other debt - Net                          651,532            (465,754)                               185,778
Capitalized lease obligations                            100,997             144,455                                245,452
Issuance of capital stock                                 17,379                                                     17,379
Payment of dividends                                    (146,128)                                                  (146,128)
Gain on derivative transactions                          101,982                                                    101,982
Dividends received from (paid to)
affiliated companies                                     146,128            (146,128)
Sale of repurchased shares                              (214,441)                                                  (214,441)
Debt issuance cost                                      (112,665)                                                  (112,665)
Other                                                      5,176                                                      5,176
                                                   -------------       -------------       ------------      --------------

Resources provided by (used in) financing
activities                                               407,642            (467,427)                               (59,785)
                                                   -------------       -------------      -------------      --------------

Investing:
---------

Acquisition of property, furniture,
equipment and investment in stores - Net                (275,143)           (185,987)                              (461,130)
Capital stock increased in subsidiaries
(received by parent company)                            (684,737)            684,737                                 -
                                                   -------------       -------------      -------------      -------------

Resources (used in) provided by
investing activities                                    (959,880)            498,750                               (461,130)
                                                    ------------       -------------      -------------      --------------

Decrease in cash and cash equivalents                    177,750            (279,703)                              (101,953)
Cash and cash equivalents at
beginning of year                                        206,153             696,148                                902,301
                                                    ------------       -------------      -------------      --------------

Cash and cash equivalents at end of
year                                                Ps   383,903       Ps    416,445       Ps                Ps     800,348
                                                    ============       =============       ============      ==============
</TABLE>




                                       F-68

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

                 SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT

                        OF CHANGES IN FINANCIAL POSITION

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                        Year ended December 31, 2001
                                                  ---------------------------------------------------------------------------

                                                        Parent          Guarantor
Operations:                                        Company Issuer      Subsidiaries        Eliminations       Consolidated
----------                                         --------------      ------------        ------------       ------------

<S>                                                <C>                 <C>                 <C>                <C>
Net income                                          Ps  1,136,702      Ps 1,060,318        (Ps  1,060,318)    Ps 1,136,702
Charges (credits) to income not
affecting resources:
Depreciation and amortization                             308,563           398,836                                707,399
Allowance for doubtful accounts                                             654,764                                654,764
Accruals for seniority premiums and
pension plan                                                                  7,582                                  7,582
Income of minority stockholders                                                                    12,963           12,963
Equity in the results of subsidiaries and
affiliated company                                     (1,385,723)          151,399             1,047,355         (186,969)
Provision for deferred taxes                              (63,989)          324,829                                260,840
Other provisions                                                             62,104                                 62,104
Provision for derivative transactions                      43,603            40,679                                 84,282
Net changes in working capital                           (479,994)         (429,274)                              (909,268)
                                                    -------------      ------------        --------------     ------------

Resources (used in) provided by operations               (440,838)        2,271,237                              1,830,399
                                                    -------------      ------------        --------------     ------------

Financing:
---------

Paid-in capital (own and subsidiaries'
shares)                                                  (130,214)                                                (130,214)
Bank loans and other debt - Net                           848,160          (587,951)                               260,209
Capitalized lease obligations                              21,454           (75,044)                               (53,590)
Issuance of capital stock                                  12,274                                                   12,274
Payment of dividends                                     (157,059)                                                (157,059)
Loss on derivative transactions                           (65,908)                                                 (65,908)
Dividends received from (paid to)
affiliated companies                                      157,059          (157,059)
Sale of repurchased shares                                 27,312                                                   27,312
                                                   --------------      ------------        --------------     ------------

Resources provided by (used in)
financing activities                                      713,078          (820,054)                              (106,976)
                                                    -------------      ------------        --------------     ------------

Investing:
---------

Acquisition of property, furniture,
equipment and investment in stores - Net                 (172,821)         (384,229)                              (557,050)
Acquisition of Mericolor, S. A. de C. V.
 (Note 2c.)                                                                 (52,960)                               (52,960)
                                                    -------------      -------------       --------------     -------------

Resources used in investing activities                   (172,821)         (437,189)                              (610,010)
                                                    -------------      ------------        --------------     ------------

Decrease in cash and cash equivalents                      99,419         1,013,994                              1,113,413
Cash and cash equivalents at beginning
of year                                                   383,904           416,444                                800,348
                                                    -------------      ------------        --------------     ------------

Cash and cash equivalents at end of year            Ps    483,323      Ps 1,430,438        Ps                 Ps 1,913,761
                                                    =============      ============        ==============     ============
</TABLE>





                                       F-69

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

               SUPPLEMENTAL CONDENSED CONSOLIDATING RECONCILIATION
                       BETWEEN MEXICAN GAAP AND U.S. GAAP

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                        For the year ended December 31, 1999
                                             -----------------------------------------------------------------

                                                 Parent          Guarantor
                                             Company Issuer     Subsidiaries   Eliminations     Consolidated
                                             --------------     ------------   ------------     ------------

<S>                                          <C>                <C>            <C>              <C>
Net income related to majority
stockholders under Mexican GAAP                Ps  887,313      Ps1,046,670    (Ps1,046,670)     Ps  887,313
                                               -----------      -----------     -----------      -----------

Deferred income tax effects                         (5,208)         (96,150)                        (101,358)
Amortization of goodwill relating to other
subsidiaries acquisitions                           23,343            1,245                           24,588
Amortization of goodwill relating to
CASA acquisition                                    58,450                                            58,450
Difference in equity in earnings of CASA            77,683                                            77,683
Capitalized exchange losses and interest
expense                                                               4,121                            4,121
Stock options granted to employees                 (84,264)                                          (84,264)
Reversal of depreciation of property,
furniture and equipment acquired in the
Grupo SyR acquisition                                                44,817                           44,817
Additional amortization of negative
goodwill from the Grupo SyR acquisition            117,986                                           117,986
Net gain on derivative and hedging
transactions                                       145,997                                           145,997
Effect on minority stockholders of
U.S. GAAP adjustments                                 (733)                                             (733)
Equity in income of subsidiaries and
affiliated companies                               (45,967)                          45,967
                                              ------------      -----------     -----------      -----------

                                                   287,287          (45,967)         45,967          287,287
                                              ------------      -----------     -----------      -----------

Net income under U.S. GAAP                     Ps1,174,600      Ps1,000,703    (Ps1,000,703)     Ps1,174,600
                                               ===========      ============    ===========      ===========
</TABLE>






                                       F-70

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

               SUPPLEMENTAL CONDENSED CONSOLIDATING RECONCILIATION
                       BETWEEN MEXICAN GAAP AND U.S. GAAP

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                           As of and for the
                                                                     year ended December 31, 2000
                                                  ----------------------------------------------------------------------

                                                     Parent           Guarantor
                                                 Company Issuer     Subsidiaries       Eliminations        Consolidated
                                                 --------------     ------------       ------------        ------------

<S>                                              <C>                <C>                <C>                 <C>
Net income related to majority
stockholders under Mexican GAAP                   Ps 1,171,855       Ps1,114,694       (Ps1,114,694)       Ps 1,171,855
                                                  ------------       -----------        -----------        ------------

Deferred income tax effects                             24,252           (38,432)                               (14,180)
Amortization of goodwill relating to other
subsidiaries acquisitions                               24,588                                                   24,588
Amortization of goodwill relating to CASA
acquisition                                             58,450                                                   58,450
Difference in equity in earnings of CASA              (118,060)                                                (118,060)
Capitalized exchange losses and interest
expense                                                                    4,121                                  4,121
Stock options granted to employees                      (3,019)                                                  (3,019)
Reversal of depreciation of property, furniture
and equipment acquired in the Grupo SyR
acquisition                                             59,756                                                   59,756
Additional amortization of negative
goodwill from the Grupo SyR acquisition                158,325                                                  158,325
Net gain on derivative and hedging
transactions                                             5,852                                                    5,852
Effect on minority stockholders of
U.S. GAAP adjustments                                                        (82)                                   (82)
Equity in income of subsidiaries and
affiliated companies                                   (34,393)                              34,393
                                                  ------------       -----------        -----------        ------------

                                                       175,751           (34,393)            34,393             175,751
                                                  ------------       -----------        -----------        ------------

Net income under U.S. GAAP                        Ps 1,347,606       Ps1,080,301       (Ps1,080,301)       Ps 1,347,606
                                                  ============       ===========        ===========        ============

Majority stockholders' equity under
Mexican GAAP                                      Ps 5,566,973       Ps7,982,592       (Ps7,982,592)       Ps 5,566,973

Deferred income tax effects                            322,222                                                  322,222
Negative goodwill resulting from the
recognition of deferred tax benefits
acquired from Grupo SyR                             (1,540,517)                                              (1,540,517)
Participation in net equity of CASA                   (136,546)                                                (136,546)
Goodwill relating to CASA acquisition                 (899,069)                                                (899,069)
Goodwill relating to other subsidiaries
acquisition                                           (233,750)                                                (233,750)
Capitalized exchange losses and interest
expense                                                                  (16,317)                               (16,317)
Deferred income                                     (1,162,420)                                              (1,162,420)
Net gain on derivative and hedging
transactions                                            (8,312)                                                  (8,312)
Reversal of depreciation of property,
furniture  and equipment acquired in the
Grupo SyR acquisition                                  104,573                                                  104,573
Effect on minority stockholders of
U.S. GAAP adjustments                                                     27,560                                 27,560
Effect of U.S. GAAP adjustments in
subsidiaries                                            11,243                              (11,243)
                                                  ------------       -----------        -----------        ------------

Stockholders' equity under U.S. GAAP              Ps 2,024,397       Ps7,993,835       (Ps7,993,835)       Ps 2,024,397
                                                  ============       ===========        ===========        ============
</TABLE>





                                       F-71

<PAGE>

                 GRUPO ELEKTRA, S. A. DE C. V. AND SUBSIDIARIES

               SUPPLEMENTAL CONDENSED CONSOLIDATING RECONCILIATION
                       BETWEEN MEXICAN GAAP AND U.S. GAAP

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                           As of and for the
                                                                     year ended December 31, 2001
                                                  ----------------------------------------------------------------------

                                                     Parent           Guarantor
                                                 Company Issuer     Subsidiaries       Eliminations        Consolidated
                                                 --------------     ------------       ------------        ------------

<S>                                              <C>                <C>                <C>                 <C>
Net income related to majority
stockholders under Mexican GAAP                  Ps 1,136,702       Ps1,030,318       (Ps1,030,318)       Ps 1,136,702
                                                 ------------       -----------        -----------        ------------

Deferred income tax effects                           (20,913)              464                                (20,449)
Amortization of goodwill relating to
other subsidiaries acquisitions                        24,588                                                   24,588
Amortization of goodwill relating to
CASA acquisition                                       58,450                                                   58,450
Difference in equity in earnings of
CASA                                                 (225,172)                                                (225,172)
Capitalized exchange losses and
interest expense                                                          4,121                                  4,121
Stock options granted to employees                       (146)                                                    (146)
Reversal of depreciation of property,
plant and equipment acquired in the Grupo
SyR acquisition                                        59,756                                                   59,756
Additional amortization of negative
goodwill from the Grupo SyR
acquisition                                           158,325                                                  158,325
Net loss on instruments indexed on the
Company's stock                                       (57,596)                                                 (57,596)
Net loss on interest rate swaps and options            (6,964)          (37,911)                               (44,875)
Effect on minority stockholders of
U.S. GAAP adjustments                                                       (82)                                   (82)
Equity in income of subsidiaries
and affiliated companies                              (33,408)                              33,408
                                                 -------------      -----------       ------------        ------------

                                                      (43,080)          (33,408)            33,408             (43,080)
                                                 -------------      ------------      ------------        -------------

Net income under U.S. GAAP                       Ps 1,093,622       Ps  996,910       (Ps  996,910)       Ps 1,093,622
                                                 ============       ===========        ============       ============

Majority stockholders' equity under
Mexican GAAP                                     Ps 5,956,732       Ps9,345,359       (Ps9,345,359)       Ps 5,956,732

Deferred income tax effects                           301,307               466                                301,773
Negative goodwill resulting from the
recognition of deferred tax benefits
acquired from Grupo SyR                            (1,382,192)                                              (1,382,192)
Participation in net equity of CASA                  (356,848)                                                (356,848)
Goodwill relating to CASA acquisition                (840,619)                                                (840,619)
Goodwill relating to other subsidiaries
acquisition                                          (209,162)                                                (209,162)
Capitalized exchange losses and interest
expense                                                                 (12,196)                               (12,196)
Deferred income                                    (1,032,206)                                              (1,032,206)
Net loss on interest rate swaps and options            (6,964)          (37,911)                               (44,875)
Reversal of depreciation of property,
plant and equipment acquired in the Grupo
SyR acquisition                                       164,329                                                  164,329
Effect on minority stockholders of
U.S. GAAP adjustments                                                    27,478                                 27,478
Effect of U.S. GAAP adjustments in
subsidiaries                                          (22,163)                              22,163
                                                 -------------      -----------       ------------        ------------

Stockholders' equity under U.S. GAAP             Ps 2,572,214       Ps9,323,196       (Ps9,323,196)       Ps 2,572,214
                                                 ============       ===========        ============       ============
</TABLE>






                                       F-72

<PAGE>

                         COMPANIA OPERADORA DE TEATROS,
                                 S. A. DE C. V.

                              FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 2001

                                      INDEX

Contents                                                         Page

Report of Independent Accountants                            F-74 and F-75

Financial Statements:

Balance sheets                                                   F-76

Statements of loss                                               F-77

Statements of changes in stockholders' equity                    F-78

Statements of changes in financial position                      F-79

Notes to financial statements                                    F-80






                                       F-73

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

Mexico City, June 3, 2002


To the Stockholders of
Compania Operadora de Teatros, S. A. de C. V.


We have audited the accompanying balance sheets of Compania Operadora de
Teatros, S. A. de C. V. (the Company) as of December 31, 2000 and 2001 and the
related statements of loss, changes in stockholders' equity and of changes in
financial position for each of the three years in the period ended December 31,
2001 all expressed in constant pesos of December 31, 2001 purchasing power.
These financial statements have been prepared in accordance with accounting
principles generally accepted in Mexico and are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we 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. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of Compania Operadora de Teatros, S.
A. de C. V. as of December 31, 2000 and 2001, and the results of its operations,
changes in stockholders' equity and changes in its financial position for each
of the three years in the period ended December 31, 2001 in conformity with
accounting principles generally accepted in Mexico.





                                       F-74

<PAGE>

Accounting principles generally accepted in Mexico vary in certain significant
respects from generally accepted accounting principles in the United States of
America. The application of generally accepted accounting principles in the
United States of America would have affected the determination of net loss, for
each of the three years in the period ended December 31, 2001 and the
determination of stockholders' equity as of December 31, 2000 and 2001 to the
extent summarized in Note 8 to the financial statements. As discussed in Note 8,
the U. S. GAAP stockholders' equity and net income amounts as of and for the
year ended December 31, 1999 have been restated.

As mentioned in Note 2c. to the financial statements, commencing January 1, 2000
the Company adopted the provisions of Statement D-4 "Accounting Treatment of
Income Tax, Asset Tax and Employees' Profit Sharing".

PricewaterhouseCoopers

/s/ Ruben Rivera Rodriguez
--------------------------
Ruben Rivera Rodriguez


                                       F-75

<PAGE>

COMPANIA OPERADORA DE TEATROS, S. A. DE C. V.

                                 (Notes 1 and 2)

                                 BALANCE SHEETS

                          Thousands of Mexican pesos of
                       December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                     December 31,
                                                                     ------------

Assets                                                        2000                2001
------                                                        ----                ----

<S>                                                         <C>                <C>
Current assets:
Cash                                                        Ps   1,896         Ps     453
Customers and other accounts receivable                          3,279              2,613
Recoverable taxes                                                8,683             10,481
Amounts due from related parties (Note 4)                       35,857             46,506
                                                            ----------         ----------

Total current assets                                            49,715             60,053

Property and equipment - Net (Note 3)                          466,654            439,303
                                                            ----------         ----------

                                                            Ps 516,369         Ps 499,356
                                                            ==========         ==========

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable and accrued expenses                       Ps   4,017         Ps   1,447
Amounts due to related parties (Note 4)                         23,987             29,557
                                                            ----------         ----------

Total current liabilities                                       28,004             31,004

Deferred income tax (Note 6)                                    15,977             21,282
                                                            ----------         ----------

Total liabilities                                               43,981             52,286
                                                            ----------         ----------

Stockholders' equity (Note 5):

Capital stock                                                  623,100            623,100
Accumulated deficit                                           (889,030)          (914,348)
Cumulative effect of deferred income tax                       (21,721)           (21,721)
Excess in the restatement of capital                           760,039            760,039
                                                            ----------         ----------

Total stockholders' equity                                     472,388            447,070

COMMITMENT (Note 7)
                                                            ----------         ----------

                                                            Ps 516,369         Ps 499,356
                                                            ==========         ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       F-76

<PAGE>

                  COMPANIA OPERADORA DE TEATROS, S. A. DE C. V.

                               STATEMENTS OF LOSS

                          Thousands of Mexican pesos of
                       December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                         Year ended
                                                                         December 31,
                                                          ----------------------------------------

                                                          1999              2000              2001
                                                          ----              ----              ----
<S>                                                    <C>               <C>               <C>
Revenues:
Rentals                                                Ps 33,839         Ps 12,598         Ps 13,109
Other                                                      2,566
                                                       ---------         ---------         ---------

                                                          36,405            12,598            13,109
Operating expenses:
Administrative expenses                                   50,886            15,608             7,336
Depreciation                                              62,335            25,036            25,036
                                                       ---------         ---------         ---------

Operating loss                                            76,816            28,046            19,263
                                                       ---------         ---------         ---------

Other expenses                                            (4,016)           (6,496)           (2,653)
Other income                                               6,496             1,237             2,889
                                                       ---------         ---------         ---------

                                                           2,480            (5,259)              236
                                                       ---------         ---------         ---------

Comprehensive financing result (cost):

Interest expense                                          (5,721)              (16)              (11)
Interest income                                           19,430                16                 6
Foreign exchange loss - net                               (1,410)
Gain (loss) on monetary position                          10,423               543              (803)
                                                       ---------         ---------         ---------

                                                          22,722               543              (808)
                                                       ---------         ---------         ---------

Loss before equity in earnings of joint venture
and taxes                                                (51,614)          (32,762)          (19,835)

Deferred income tax benefit (expense)                                        4,873            (5,483)
                                                       ---------         ---------         ---------

Loss before equity in earnings of joint venture          (51,614)          (27,889)          (25,318)

Equity in joint venture (Note 1)                         (22,179)
                                                       ---------         ---------         ---------

Net loss for the year                                  Ps 73,793)       (Ps 27,889)       (Ps 25,318)
                                                       =========         =========         =========
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       F-77

<PAGE>

                  COMPANIA OPERADORA DE TEATROS, S. A. DE C. V.


                  STATEMENTS OF CHANGES IN STOCKHOLDERS'EQUITY

        Thousands of Mexican pesos of December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                                      Cumulative
                                                                                       effect of      Excess in the       Total
                                                        Capital         Accumulated    deferred        restatement    stockholders'
                                                         stock            deficit     income tax       of capital        equity
                                                         -----            -------     ----------       ----------        ------

<S>                                                    <C>             <C>            <C>             <C>             <C>
Balances at January 1, 1999                            Ps 798,703     (Ps2,346,258)                   Ps 2,257,294      Ps 709,739

Effect of assets and liabilities transfers on
equity (Note 5)                                          (530,576)       1,558,910                      (1,497,255)       (468,921)

Increase in capital stock through the
  capitalization of liabilities                           354,973                                          354,973
                                                       ----------      ------------    -----------     -----------      ----------

Comprehensive loss (Note 2e.)                                              (73,793)                                        (73,793)
                                                       ----------      ------------    -----------     -----------      ----------

Balances at December 31, 1999                             623,100         (861,141)                        760,039         521,998

Comprehensive loss (Note 2e.)                                              (27,889)     (Ps21,721)                         (49,610)
                                                       ----------      ------------    -----------     -----------      ----------

Balances at December 31, 2000                             623,100         (889,030)       (21,721)         760,039         472,388

Comprehensive loss (Note 2e.)                                              (25,318)                                        (25,318)
                                                       ----------      ------------    -----------     -----------      ----------

Balances at December 31, 2001                          Ps 623,100      (Ps 914,348)    (Ps 21,721)     Ps  760,039      Ps 447,070
                                                       ----------      ------------    -----------     -----------      ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       F-78

<PAGE>

                  COMPANIA OPERADORA DE TEATROS, S. A. DE C. V.


                   STATEMENTS OF CHANGES IN FINANCIAL POSITION

                          Thousands of Mexican pesos of
                       December 31, 2001 purchasing power

<TABLE>
<CAPTION>
                                                                             Year ended
                                                                             December 31,
                                                               -----------------------------------------

Operation:                                                    1999              2000             2001
---------                                                     ----              ----             ----

<S>                                                      <C>                <C>               <C>
Net loss                                                 (Ps  73,793)       (Ps 27,889)       (Ps25,318)
Charges (credits) to results not  affecting resources:
Depreciation                                                  62,335            25,036           25,036
Equity in joint venture                                       22,179
Deferred income tax (benefit) expense                                           (4,873)           5,483
Net change in accounts receivable, other assets,
related parties, accounts payable and accrued
expenses                                                     (25,637)          (15,674)          (8,959)
                                                         -----------        ----------        ---------

Resources used in operations                                 (14,916)          (23,400)          (3,758)
                                                         -----------        ----------        ---------

Financing:
---------

Payments of promissory notes                                 (27,836)              (47)
Increase in capital stock                                    354,973
                                                         -----------        ----------        ---------

Resources provided by (used in) financing activities         327,137               (47)
                                                         -----------        ----------        ---------

Investment:
----------

Sale of property and equipment - Net                         156,664            25,162            2,315

Effect of assets and liabilities transfers on equity        (468,921)
                                                         -----------        ----------        ---------

Resources (used in) generated by investment
activities                                                  (312,257)           25,162            2,315
                                                         -----------        ----------        ---------

(Decrease) increase in cash                                      (36)            1,715           (1,443)
Cash at beginning of year                                        217               181            1,896
                                                         -----------        ----------        ---------

Cash at end of year                                      Ps      181        Ps   1,896        Ps    453
                                                         ===========        ==========        =========
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       F-79

<PAGE>

                  COMPANIA OPERADORA DE TEATROS, S. A. DE C. V.

                        NOTES TO THE FINANCIAL STATEMENTS

                        DECEMBER 31, 1999, 2000 AND 2001

                    (amounts in thousands of Mexican pesos of
                     purchasing power of December 31, 2001)


NOTE 1 - DESCRIPTION OF BUSINESS:

The main business of Compania Operadora de Teatros, S. A. de C. V. ("Cotsa" or
the "Company") is property leasing, primarily to affiliates including Grupo
Elektra, S. A. de C. V. ("Grupo Elektra") and its operating companies. Cotsa
does not have employees, and all administrative and operating services are
rendered by related parties. (See Note 4).

Through December 31, 1998 the Company earned revenues from three joint ventures
with related parties. The three joint venture agreements were cancelled on
December 31, 1998 and not renewed in 1999. This cancellation resulted in a
charge to income amounting to Ps22,179 which is shown in the statement of loss.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Following is a summary of the significant accounting policies including the
concepts, methods and criteria related to the recognition of the effects of
inflation on the financial statements:

a. Recognition of the effects of inflation

The financial statements and the notes thereto are expressed in constant pesos
of purchasing power as of December 31, 2001 and have been prepared in conformity
with accounting principles generally accepted in Mexico, in accordance with the
following policies:

-  Property and equipment, and the components of stockholders' equity are
   restated by applying factors derived from the National Consumer Price Index
   ("NCPI").

-  The gain (loss) on net monetary position represents the effect of inflation,
   as measured by the NCPI, on the monthly net monetary liabilities and assets
   during the year, restated to pesos of purchasing power as of the end of the
   most recent period.

-  The NCPI used to recognize of the effects of inflation in the financial
   statements were 308.919, 336.596 and 351.418 as of December 31, 1999, 2000
   and 2001, respectively.


                                       F-80

<PAGE>

b. Income from rentals

Income from rentals is recognized ratably over the period of the related
contract.

c. Income tax

Beginning on January 1, 2000, the Company adopted Statement D-4, "Accounting
Treatment of Income Tax, Asset Tax and Employees' Profit Sharing". Under this
statement, deferred taxes are initially recognized for all differences between
book and tax values of assets and liabilities and for tax loss carryforwards and
asset tax carryforwards that have a high probability of realization. The
adoption of this statement resulted in a net decrease in stockholders' equity of
Ps21,721.

For the years ended December 31, 2000 and 2001, the Company recorded provisions
for deferred income tax, including the loss on monetary position, amounting to
Ps4,873 and (Ps5,483), respectively. (See Note 6).

Through December 31, 1999, deferred taxes were recognized for non-recurring
timing differences between financial pretax income and taxable income, which
were expected to reverse in an identifiable period.

d. Property and equipment

Property and equipment are recorded at acquisition cost and are restated as
explained in Note 2a.

Depreciation is calculated by the straight-line method, based on the useful
lives of assets and the assets restated values.

The annual depreciation rate for building and construction is 2.1%.

e. Comprehensive income (loss)

In 2001, the Company adopted Statement B-4 "Comprehensive Income". This
statement establishes new standards for reporting and displaying comprehensive
income and its components in the statement of stockholders' equity. Under this
statement, comprehensive income consists of the net income of the year plus any
items which, according to other statements, are required to be recorded directly
in stockholders' equity and are not capital contributions, reductions or
disbursements (see Note 5).


                                       F-81

<PAGE>

f. Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements. Actual results could
differ from those estimates.

g. Reclassifications

Certain reclassifications have been made to prior period amounts for them to
conform to the current presentation.

NOTE 3 - PROPERTY AND EQUIPMENT:

                                                 December 31,
                                                 ------------

                                          2000                 2001
                                          ----                 ----

Buildings and constructions          Ps 1,192,187         Ps 1,191,562
Accumulated depreciation               (1,121,629)          (1,146,665)
                                     ------------         ------------

                                           70,558               44,897
Land                                      396,096              394,406
                                     ------------         ------------

                                     Ps   466,654         Ps   439,303
                                     ============         ============

NOTE 4 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES:

Cotsa has the following balances receivable and payable with related parties:

                                                 December 31,
                                                 ------------

Receivables:                              2000                 2001
-----------                               ----                 ----

Alternativas Cotsa, S. A. de C. V.      Ps35,356             Ps45,299
Other                                        501                1,207
                                        --------             --------

                                        Ps35,857             Ps46,506
                                        ========             ========
Payables:
--------

Elektra del Milenio, S. A. de C. V.     Ps16,951             Ps22,131
Other                                      7,036                7,426
                                        --------             --------

                                        Ps23,987             Ps29,557
                                        ========             ========





                                       F-82

<PAGE>

Transactions carried out with related parties are listed below:

                                                   Year ended
                                                  December 31,
                                                  ------------

                                      1999            2000         2001
                                      ----            ----         ----

Administrative service expenses (1)   Ps  7,505       Ps 1,214     Ps   301
Rental expenses(2)                        1,031            988          946
Interest earned (3)                      15,410
Interest paid (3)                         3,929

(1)   As mentioned in Note 1, Cotsa does not have employees, consequently
      administrative and operating services are rendered by related parties.

(2)   Since January 1999, a related party's building is rented for Cotsa's
      offices.

(3)   The interest earned and paid correspond to several short-term borrowings
      and loans to related parties during 1999, mainly with Corporacion de
      Medios de Comunicacion, S. A. de C. V., Corporacion RBS, S. A. de C. V.,
      Elektra del Milenio, S. A. de C. V. and Grupo Elektra, S. A. de C. V. The
      average interest rate was 25% annually for the year ended December 31,
      1999. The short-term borrowings from Elektra del Milenio, S. A. de C. V.
      and Grupo Elektra, S. A. de C. V. were transferred to Inmuebles Ardoma, S.
      A. de C. V. (Ardoma) and subsequently capitalized. For the year ended
      December 31, 2000 and 2001, the Company did not paid or collected interest
      from related parties.

NOTE 5 - STOCKHOLDERS' EQUITY:

At a stockholders' meeting held on October 1, 1999, Cotsa's stockholders decided
to increase the variable portion of common stock by Ps354,973 (Ps311,463 nominal
thousands of Mexican pesos), through the capitalization of liabilities with
Ardoma, a subsidiary of Grupo Elektra. As a result of this transaction, Grupo
Elektra, through Ardoma, has a 91% interest in the Cotsa's capital stock.


                                       F-83

<PAGE>

The common stock of Cotsa at December 31, 2000 and 2001 is represented by
342,658,270 common nominative shares, with a par value of one Mexican peso each,
comprised as follows:

<TABLE>
<CAPTION>
       Shares                        Description                                   Amount
       ------                        -----------                                   ------

<C>                      <S>                                                     <C>
       50,000            Represent the fixed portion of the capital              Ps      50

  342,608,270            Represent the variable portion of the capital              342,608
  -----------                                                                    ----------

  342,658,270                                                                       342,658
  ===========
                         Restatement increase                                       280,442
                                                                                 ----------
                         Capital stock in Mexican pesos as of
                         December 31, 2001 purchasing power                      Ps 623,100
</TABLE>

Under Mexican Corporate Law, interested third parties can request the
dissolution of Cotsa if accumulated losses exceeded two-thirds of capital stock.
At December 31, 2001, Cotsa's accumulated losses exceeded its capital stock.
Although Cotsa believes it is unlikely such actions will occur, Cotsa obtained
from its shareholders a commitment to provide financial support to the Company
for a period of one year from the balance sheet date, in proportion to their
respective ownership interests, if required, to avoid such action.

Capital stock reductions in excess of the sum of the balances of the capital
contribution accounts, net taxed profit and reinvested net taxed profit,
inflation indexed in accordance with the procedures established by the Income
Tax Law, are accorded the same tax treatment as dividends.

Comprehensive income is analyzed as follows (see Note 2e.):

<TABLE>
<CAPTION>
                                                          Year ended December 31,
                                                          -----------------------

                                                  1999                2000              2001
                                                  ----                ----              ----

<S>                                            <C>                <C>                <C>
Net loss                                       (Ps73,793)         (Ps 27,889)        (Ps25,318)
Initial recognition of deferred taxes                                (21,721)
                                                --------          ----------          --------

                                               (Ps73,793)         (Ps 49,610)        (Ps25,318)
                                                ========           =========          ========
</TABLE>

Effective October 1, 1999, certain assets and liabilities of Cotsa were
transferred to Inmobiliaria Cotsa, S. A. de C. V. and Alternativas Cotsa, S. A.
de C. V., two newly created subsidiaries of Grupo Cotsa, S. A. de C. V., Cotsa's
former parent company.





                                       F-84

<PAGE>

The assets and liabilities transferred consisted of the following:

Assets
------

Cash                                                        Ps      8
Accounts receivable                                           470,744
Other assets                                                    7,663
Land, buildings and furniture                                 144,853
                                                            ---------

Total assets                                                Ps623,268
                                                            =========

Liabilities and stockholders' equity
------------------------------------

Liabilities                                                 Ps154,347
Stockholders' equity                                          468,921
                                                            ---------

Total liabilities and stockholders' equity                  Ps623,268
                                                            =========





                                       F-85

<PAGE>

NOTE 6 - INCOME TAX ("IT") AND ASSETS TAX ("AT"):

During the years ended December 31, 1999, 2000 and 2001, Cotsa had taxable loss
(income) of Ps8,675, Ps5,753, and (Ps4,096), respectively. Prior years' tax-loss
carryforwards were amortized in the year ended December 31, 2001.

The main temporary differences for which deferred IT recognized are shown below:

                                                    Year ended December 31,

Deferred income tax asset:                         2000                 2001
-------------------------                          ----                 ----

Tax loss carryforwards                           Ps  1,639
Rental collected in advance                            889           Ps     13
Recoverable asset tax                                3,287
Allowance for doubtful accounts                                            354
                                                 ---------           ---------

                                                     5,815                 367
                                                 ---------           ---------
Deferred income tax liability:
-----------------------------

Property and equipment                             (21,792)            (21,649)
                                                 ---------           ---------

Net deferred income tax liability               (Ps 15,977)         (Ps 21,282)
                                                 =========           =========

AT is computed by fiscal year applying a 1.8% rate to the average value of
certain assets and liabilities. The AT corresponding to the year ended December
31, 2001 amounted to Ps5,030.

According to the AT Law, the difference between the IT and AT in the previous
three years (when IT is higher than AT in the same year) can be carried forward
against future AT annual or AT prepayments. According to this rule, the AT at
December 31, 1999 and 2000, amounting to Ps5,334 (Ps4,689 nominal) and $5,151
($4,699 nominal), respectively, were credited against the IT payable.

NOTE 7 - COMMITMENT:

In 2000, Cotsa signed several building lease agreements. The rental income under
these operating leases amounted to Ps12,598 and Ps13,109 for the years ended
December 31, 2000 and 2001, respectively.


                                       F-86

<PAGE>

Below is a schedule (by years) of future minimum rental payments to be received
as of December 31, 2001:

Year ending December 31:
------------------------

2002                                      Ps 9,742
2003                                         1,958
2004                                           849
2005 and thereafter                            640
                                          --------

Total                                     Ps13,189
                                          ========

NOTE 8 - RECONCILIATION BETWEEN MEXICAN (MEXICAN GAAP) AND UNITED STATES OF
AMERICA GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP):

Cotsa's financial statements are prepared in accordance with Mexican GAAP, which
differs in certain significant respects from US GAAP. The Mexican GAAP financial
statements include the effects of inflation as provided for under Statement
B-10, "Recognition of the Effects of Inflation on Financial Information". The
application of this statement represents a comprehensive measure of the effects
of price level changes in the Mexican economy, which for many years was
hyperinflationary and is considered to result in a more meaningful presentation
than historical cost-based financial reporting for both Mexican and U. S.
accounting purposes. Therefore, the following reconciliations to US GAAP do not
include the reversal of such inflationary effects.

The principal differences between Mexican GAAP and US GAAP are summarized below
with an explanation, where appropriate, of the effects on net loss and
stockholders' equity. The various reconciling items are presented net of any
price level gain (loss).

a. Reconciliation of net loss:

<TABLE>
<CAPTION>
                                                     Year ended December 31,
                                                     -----------------------

                                            1999               2000              2001
                                            ----               ----              ----

<S>                                      <C>                <C>               <C>
     Net loss under Mexican GAAP         (Ps73,793)         (Ps27,889)        (Ps25,318)
     Deferred income taxes                  28,974
                                          --------          ---------          --------

     Net loss under US GAAP              (Ps44,819)         (Ps27,889)        (Ps25,318)
                                          ========           ========          ========
</TABLE>






                                       F-87

<PAGE>

b. Reconciliation of stockholders' equity:

                                             December 31,
                                             ------------

                                        2000             2001
                                        ----             ----

     Balance under Mexican GAAP       Ps472,388        Ps447,070
                                      ---------        ---------

     Balance under US GAAP            Ps472,388        Ps447,070
                                      =========        =========

c. An analysis of the changes in stockholders' equity under US GAAP is shown
   below:

<TABLE>
<CAPTION>
                                                                  Year ended December 31,
                                                                  -----------------------

                                                           1999             2000             2001
                                                           ----             ----             ----

<S>                                                     <C>               <C>              <C>
     Balance at beginning of year                       Ps 654,467        Ps495,700        Ps472,388
     Net loss                                              (44,819)         (27,889)         (25,318)
     Recoverable assets tax                                                   4,577
     Effect of assets and liabilities transfers
     on equity                                            (468,921)
     Increase in capital stock                             354,973
                                                        ----------        ---------        ---------

     Balance at end of year                             Ps 495,700        Ps472,388        Ps447,070
                                                        ==========        =========        =========
</TABLE>

d. Significant differences between US GAAP and Mexican GAAP:

i. Deferred income tax

As stated in Note 2c., through December 31, 1999 income tax was recorded under
Mexican GAAP following interperiod allocation procedures under the partial
liability method. Under this method, deferred tax was recognized only in respect
of nonrecurring timing differences between taxable and book income which were
expected to reverse at a definite future date. This substantially eliminated all
deferred taxes under Mexican GAAP. Also, under Mexican GAAP the benefit from
utilizing tax loss carryforwards and asset tax credits were not recognized until
utilized, at which time it was presented as an extraordinary item. Beginning on
January 1, 2000, the Company adopted Statement D-4 "Accounting Treatment of
Income Tax, Asset Tax and Employees' Profit Sharing". Under this statement,
deferred tax assets or liabilities are


                                       F-88

<PAGE>

initially recognized for all differences between book and tax value of assets
and liabilities and for tax loss carryforwards and asset tax carryforwards that
have a high probability of realization. The cumulative effect of adopting
Statement D-4 as of January 1, 2000 resulted in a net decrease in stockholders'
equity of Ps21,721.

U.S. GAAP Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes" ("FAS No. 109"), requires an asset and liability approach for
financial accounting and reporting for income tax under the following basic
principles: (a) a current tax liability or asset is recognized for the estimated
taxes payable or refundable on tax returns for the current year, (b) a deferred
tax liability or asset is recognized for the estimated future tax effects
attributable to temporary differences and carryforwards, (c) the measurement of
current and deferred tax liabilities and assets is based on provisions of the
enacted tax law and the effects of future changes in tax laws or rates are not
anticipated, and (d) the measurement of deferred tax assets is reduced, if
necessary, by the amount of any tax benefits that, based on available evidence,
are not expected to be realized.

Under this method, deferred tax and profit sharing are recognized in respect of
all temporary differences, and the benefit from utilizing tax loss carryforwards
and asset tax credits is recognized in the year in which the loss or credits
arise (subject to a valuation allowance in respect of any tax benefits not
expected to be realized). The subsequent realization of this benefit does not
affect income. Consequently, they do not represent extraordinary items for U.S.
GAAP purposes.

The temporary differences under FAS No. 109 are determined based on the
difference between the indexed tax-basis amount of the asset or liability and
the related stated amount reported in the financial statements. Except as
indicated in the following paragraph, the deferred tax expense or benefit is
calculated as the difference between: (a) the deferred tax assets and
liabilities at the end of the current period determined as indicated above, and
(b) the deferred tax assets and liabilities reported at the end of the prior
period remeasured to units of current general purchasing power at the end of the
current period. The deferred profit sharing expense or benefit is calculated
similarly.

The significant components of income tax (expense) benefit under US GAAP are as
follows:

<TABLE>
<CAPTION>
                                                  Year ended December 31,
                                                  -----------------------

                                         1999               2000              2001
                                         ----               ----              ----

<S>                                    <C>                <C>               <C>
Deferred income tax benefit (expense)  Ps28,974           Ps4,873          (Ps5,483)
                                       --------           -------           -------

                                       Ps28,974           Ps4,873          (Ps5,483)
                                       ========           =======           =======
</TABLE>





                                       F-89

<PAGE>

The following items represent the principal differences between income tax
computed under US GAAP at the statutory rate and Cotsa's provision for income
tax in each period:

<TABLE>
<CAPTION>
                                                        Year ended December 31,
                                                        -----------------------

                                               1999             2000              2001
                                               ----             ----              ----

<S>                                         <C>              <C>              <C>
Loss before income tax expense              (Ps73,793)       (Ps32,762)       (Ps 19,835)
                                             ========         ========         =========

Income tax benefit at statutory rate         Ps25,828         Ps11,467         Ps  6,942
Property and equipment                           (298)          (8,233)          (10,786)
Tax loss carryforwards                          3,444            1,639            (1,639)
                                             --------         --------         ---------

Net income tax - benefit (expense)           Ps28,974         Ps 4,873        (Ps  5,483)
                                             ========         ========         =========
</TABLE>

The income tax effects of significant items comprising the Cotsa's net deferred
tax assets and liabilities under US GAAP are as follows:

                                                     Year ended December 31,
                                                     -----------------------

Deferred income tax asset:                           2000              2001
-------------------------                            ----              ----

Tax loss carryforwards                             Ps 1,639
Rental collected in advance                             889         Ps    13
Recoverable asset tax                                 3,287
Allowance for doubtful accounts                                          354
                                                   --------         --------

                                                      5,815              367
                                                   --------         --------

Deferred income tax liability:
-----------------------------

Property and equipment                            (Ps21,792)       (Ps21,649)
                                                   --------         --------

Net deferred income tax liability                 (Ps15,977)       (Ps21,282)
                                                   ========         ========

ii. Fair value information

The carrying amounts of cash, current receivables, accounts payable and accrued
expenses, due from and to related companies, approximate fair value, due to the
short term maturity of these instruments.


                                       F-90

<PAGE>

iii. Effect of recently issued accounting standards
     ----------------------------------------------


In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a replacement
of FASB No. 125", ("SFAS 140"). SFAS 140 revises the standards for accounting
for securitizations and other transfers of financial assets and collateral, but
it carries over most of the provisions of SFAS 125 without change. SFAS 140 is
effective for transfers of financial assets occurring after March 31, 2001. The
adoption of SFAS 140 did not have a material impact on the Company's financial
statements.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations" ("SFAS 141")
which supersedes APB Opinion No. 16, "Business Combinations" and amends or
supersedes a number of related interpretations of APB 16. The statement is
effective for all business combinations initiated after June 30, 2001 and for
all business combinations accounted for by the purchase method that are
completed after June 30, 2001. SFAS 141 addresses financial accounting and
reporting for business combinations, eliminates the pooling-of-interests method
of accounting for business combinations, and prescribes the initial recognition
and measurement of goodwill and other intangible assets, accounting for negative
goodwill and the required disclosures in respect of business combinations. The
adoption of SFAS 141 did not have a material impact on the Company's financial
statements.

Also in July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"), which supersedes APB Opinion No. 17, "Intangible Assets".
SFAS 142 addresses how intangible assets that are acquired individually or with
a group of other assets (but not those acquired in a business acquisition)
should be accounted for in financial statements upon their acquisition. SFAS 142
also addresses how goodwill and other intangible assets should be accounted for
after they have been initially recognized in the financial statements. SFAS 142
discontinues the amortization of both existing and future acquired goodwill.
Furthermore, negative goodwill will be reflected as a one-time extraordinary
gain. In addition, SFAS 142 states that upon adoption, any remaining negative
goodwill will be written off as a change in accounting principle. The provisions
of SFAS 142 are required to be applied starting with fiscal years beginning
after December 15, 2001. SFAS 142 is required to be applied at the beginning of
an entity's fiscal year and to be applied to all goodwill and other intangible
assets recognized in its financial statements at that date. As of December 31,
2001, the Company does not have intangible assets under US GAAP.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS 143"). SFAS 143 requires the recognition of a liability for
the legal obligations associated with the retirement of a tangible long-lived
asset that results from the acquisition, construction and (or) normal operation
of the asset. The liability is recognized at fair value in the period in which
it is incurred if a reasonable estimate of fair value can be made. A
corresponding asset retirement cost is added to the carrying value of the
long-lived asset and is depreciated to expense using a systematic and rational
method over its useful life. SFAS 143 is effective for fiscal years beginning
after June 15, 2002. Upon initial adoption, a liability is recognized for


                                       F-91

<PAGE>

existing asset retirement obligations and the associated asset retirement cost
is capitalized as an increase to the carrying value of the asset. The recognized
liability and asset are adjusted for cumulative accretion and accumulated
depreciation, respectively, from the time period when the asset retirement
obligation would have originally been recognized had this statement been in
effect to the date of initial adoption. The cumulative effect of initial
adoption of SFAS 143 is recorded as a change in accounting principle. Management
estimates that the adoption of SFAS 143 will not have a material impact on the
financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" and the accounting and reporting provisions of APB Opinion No.
30, "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions". SFAS 144 retains the fundamental provisions of SFAS
121 for recognition and measurement of the impairment of long-lived assets to be
held and used, but resolves a number of implementation issues and establishes a
single accounting model for assets to be disposed of. SFAS 144 also retains the
requirements to report discontinued operations separately from continuing
operations and extends that reporting to a component of an entity that either
has been disposed of by sale, abandonment or distribution to owners or is
classified as held for sale. The provisions of SFAS 144 are effective for
financial statements issued for fiscal years beginning after December 15, 2001
and their interim periods. The provisions of SFAS 144 for long-lived assets to
be disposed of by sale or otherwise are effective for disposal activities
initiated after the effective date of SFAS 144 or after its initial application.
Management is currently evaluating the impact that the adoption of SFAS 144 will
have on the financial statements.

iv. Concentrations

Financial instruments which potentially subject Cotsa to significant
concentrations of credit risk consist primarily of cash and cash equivalents,
customers and other accounts receivable. Cotsa maintains its cash and cash
equivalents with various major financial institutions. Concentrations of credit
risk with respect to customers and other accounts receivable is limited due to
the fact that there are several customers mainly related parties. Cotsa
maintains allowances for doubtful accounts based on the expected collectibility
of all receivables.

v. Cash flow information


Under US GAAP, a statement of cash flow is prepared based on provisions of
Statement of Financial Accounting Standards No. 95, "Statement of Cash Flows"
(FAS No. 95). This statement does not provide guidance for the preparation of
cash flow statements for price level adjusted financial statements.


                                       F-92

<PAGE>

Presented below are statements of cash flows for the years ended December 31,
1999, 2000 and 2001, prepared after considering the impact of US GAAP
adjustments. The cash flow statements below present nominal cash flow during the
periods, adjusted to pesos of December 31, 2001, purchasing power.

<TABLE>
<CAPTION>
                                                                    Year ended December 31,
                                                                    -----------------------

Cash flow from operating activities:                  1999                    2000                      2001
-----------------------------------                   ----                    ----                      ----

<S>                                                <C>                     <C>                       <C>
Net loss                                           (Ps 44,819)             (Ps 27,889)               (Ps 25,318)
Adjustments to reconcile net loss to net
 cash used in operating activities:

Depreciation                                           62,335                  25,036                    25,036
Deferred income tax                                   (28,974)
Equity in joint venture                                22,179
(Gain) loss on monetary position                      (10,423)                   (543)                      803
Net changes in working capital                       (129,069)                (20,292)                   (4,466)
                                                   -----------             -----------               -----------

Net cash used in operating activities                (128,771)                (23,688)                   (3,945)
                                                   -----------             -----------               -----------

Cash flow from investing activities:
-----------------------------------

Transfer of cash                                           (8)
Sale of property and equipment                        156,664                  25,162                     2,315
                                                   -----------             -----------               -----------

Net cash generated by investing activities            156,656                  25,162                     2,315

Cash flows from financing activities:
------------------------------------

Payments of promissory notes                          (27,836)                    (47)                     -
                                                   -----------             -----------               -----------

Effects of inflation                                      (85)                    288                       187
                                                   -----------             -----------               -----------

(Decrease) increase in cash                               (36)                  1,715                    (1,443)
Cash at beginning of the year                             217                     181                     1,896
                                                   -----------             -----------               -----------

Cash at end of the year                             Ps    181               Ps  1,896                 Ps    453
                                                   ===========             ===========               ===========

Supplemental disclosure:
Cash paid during the period for:
Interest                                           (Ps  5,721)             (Ps     16)               (Ps     11)
                                                   -----------             -----------               -----------

Income tax and asset tax                            Ps   -                  Ps   -                    Ps  2,891
                                                   ===========             ===========               ===========
</TABLE>


                                       F-93

<PAGE>

Non cash activities:
Increase in capital stock   Ps    354,974
Effect of asset and liabilities transfers on equity          (468,921)

Restatement of 1999 results:

The Company has restated previously issued U. S. GAAP results for the year ended
December 31, 1999. The restated result reflects the correction for the
computation of the deferred tax liability, as of December 31, 1999 which took,
into consideration on incorrect tax bases for certain property and equipment.
The following summarizes the impact of the restatement:

                                     As previously
                                       reported             As restated
                                       --------             -----------

Deferred income tax liability         Ps 56,925              Ps 26,299

Net loss                                (75,445)               (44,819)

Stockholders' equity                    465,074                495,700






                                       F-94

<PAGE>

List of Exhibits
Exhibit No:         Description

Exhibit 1.1     Public Instrument of Merger, including the English
                translation of the Amended and Restated Bylaws of Grupo Elektra,
                S.A. de C.V.*

Exhibit 2.1     Indenture, dated as of March 22, 2000, between Grupo Elektra,
                the Guarantors, and The Bank of New York, as Trustee.**

Exhibit 3.1     English translation of Amendment to form of CPO Trust Deed.***

Exhibit 4.1     Option Agreement between Grupo Elektra and CASA, dated September
                1, 2000, together with English translation.*

Exhibit 4.2     English translation of Current Option Plan for Grupo Elektra
                employees.***

Exhibit 4.3     List of Grupo Elektra's Significant Subsidiaries.

----------------------------

*    Incorporated by reference to Grupo Elektra's Annual Report on Form 20-F
     filed on July 2, 2001 (File No. 1-13200)
**   Incorporated by reference to Grupo Elektra's Registration Statement on Form
     F-4 filed on September 15, 2000 (File No. 333-12536).
***  Incorporated by reference to Grupo Elektra's Annual Report on Form 20-F
     filed on June 27, 2000 (File No. 1-13200).

                                   SIGNATURES

            Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused this Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized, in Mexico
City, Mexico, D.F.

June 25, 2002

                                        GRUPO ELEKTRA, S.A. DE C.V.


                                        /s/ Ricardo Martinez Cruz
                                        ---------------------------------------
                                        Ricardo Martinez Cruz, Esq.
                                        General Legal Affairs Counsel