Contents
Company Profile
1
Financial Highlights
2
Messages from the Board of Directors
4
Audit Committee's Report
6
Management Discussion and Analysis
7
Makro Cash and Carry
11
Makro Office Centres
14
Siam Food Services
16
Industry and Competitive Environment
17
Looking to the Future
19
Risk Factors
21
Corporate Achievements
23
Other Information
25
Report of the Board of Directors'
49
Responsibilities for Financial Statements
Financial Statements
50
Makro and Makro Office Centers' Locations
85
Makro is a Cash and Carry
selling quality Food and Non Food products
providing the best buying
conditions and solutions
for our professional customers
Company Profile
The principle business of Siam Makro Public Company Limited is the operation of Wholesale Cash and Carry Trade Centres,
registered under the name of "Makro" throughout Thailand. Currently, there are 29 Makro stores of varying sizes, 8 stores are located
within the Greater Bangkok area and 21 stores are in the provinces. Each store is ideally positioned geographically to be easily
accessible for all customers. Every store offers a product range and assortment, designed specifically for the customers' changing
needs and expectations.
With a registered customer base of over 1.8 million, the Company continues to successfully sell food and non-food products to
a multitude of Clientele. The main focus being small to medium size businesses, predominantly small retailers, HoReCa (Hotels,
Restaurants and Caterers), institutions, professionals and the service sector.
The company has three 99.9% owned subsidiary businesses. Makro Office Centre is a uniquely structured business. By
having two clearly defined business models, the 'category killer - niche retailer business' and the 'Contract Delivery' business, MOC is
able to target all segments of its customer base as a "Single Source Solution Provider" for office products, supplies, and services.
Siam Food Service, the business acquired by the Company in early 2005, is a leading provider of premium food products and logistic
services to the food service industry that specialises in the nation-wide supply of value-added services and highly specific frozen and
chilled meat, seafood, poultry, etc. Makro Properties Ltd. is a land investment company. A number of Makro stores are located on land
owned by Makro Properties Ltd.
Siam Makro Public Company Limited is controlled by SHV group, a privately held Dutch group, which operates the Makro
Cash and Carry business in Asia from a head office located in Bangkok. Makro Cash and Carry is currently trading within 5 Asian
countries and has a total of 73 stores across the region. In Thailand, an experienced professional management team based at the
head office in Bangkok manages the Company and is supported by a store management team at each of its stores.
Siam Makro Public Company Limited is listed on the Stock Exchange of Thailand and has a registered share capital of 240
million shares with a par value of Baht 10 each with a paid-up share capital - as of the 31st December 2005 - of Baht 2,400 million.
The total shareholders' equity, as of this time being Baht 8,839 million and the total revenues for the year end being Baht 52,295
million. The Net income for the year was Baht 1,136 million, an increase of 2.6% on the previous year.
Siam Makro Public Company Limited
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Annual Report
2005
As at 31 December
Unit : Baht Million
Total assets
Change (%)
2005
2004
2003
2005/2004
2004/2003
18,494
18,215
15,889
1.5
14.6
Total liabilities
9,655
8,893
7,134
8.6
24.7
Share capital
2,400
2,400
2,400
0.0
0.0
Shareholders' equity
8,839
9,323
8,756
(5.2)
6.5
Sales
48,393
43,490
38,135
11.3
14.0
Total revenues
50,456
45,290
39,708
11.4
14.1
Gross profit
2,616
2,566
2,186
1.9
17.4
Net profit for the year
1,136
1,107
944
2.6
17.3
Earnings per share for the year (Baht)
4.74
4.61
3.93
2.8
17.3
Par value per share (Baht)
10.00
10.00
10.00
0.0
0.0
Book value per share (Baht)
36.83
38.84
36.48
(5.2)
6.5
9.00
2.75
2.50
227.3
10.0
Dividend per share (Baht)
Net profit margin for the year (%)
2.3
2.4
2.4
12.5
12.2
10.7
Return on total assets (%)
6.2
6.5
5.9
Dividend pay out ratio (%)
190.1
59.6
63.5
Return on equity (%)
Remark : *
Dividend per share include the followings.
1) Interim dividend of Baht 5.00 per share was fully paid in the fourth quarter of 2005.
2) Proposed final dividend of Baht 4.00 per share for shareholders' approval on April 27, 2006 bringing total dividend
for 2005 to Baht 9.00 per share.
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Annual Report
2005
Siam Makro Public Company Limited and its subsidiaries
As at 31 December
Unit : Baht Million
Change (%)
2005
2004
2003
2005/2004
2004/2003
Total assets
18,968
18,539
16,175
2.3
14.6
Total liabilities
10,129
9,216
7,419
9.9
24.2
Share capital
2,400
2,400
2,400
0.0
0.0
Shareholders' equity
8,839
9,323
8,756
(5.2)
6.5
Sales
50,418
44,670
39,249
12.9
13.8
Total revenues
52,295
46,258
40,619
13.1
13.9
Gross profit
3,022
2,813
2,416
7.4
16.4
1,136
1,107
944
2.6
17.3
Earnings per share for the year (Baht)
4.74
4.61
3.93
2.8
17.3
Par value per share (Baht)
10.00
10.00
10.00
0.0
0.0
Book value per share (Baht)
36.83
38.84
36.48
(5.2)
6.5
9.00
2.75
2.50
227.3
10.0
Dividend per share (Baht)
Net profit margin for the year (%)
2.2
2.4
2.3
12.5
12.2
10.7
Return on total assets (%)
6.1
6.4
5.8
Dividend pay out ratio (%)
190.1
59.6
63.5
Return on equity (%)
Remark : *
Dividend per share include the followings.
1) Interim dividend of Baht 5.00 per share was fully paid in the fourth quarter of 2005.
2) Proposed final dividend of Baht 4.00 per share for shareholders' approval on April 27, 2006 bringing total dividend
for 2005 to Baht 9.00 per share.
3
Annual Report
2005
In 2005 we successfully achieved a sales growth of 12.9% despite the down turn within the retail industry in Thailand where
sales growth has shown a slip in 2005. Makro has also been able to withstand the negative effects in the market, notably rising oil
prices, severe droughts followed by flooding in the North and South of the country, unrest in the south and the continuing impacts from
the Tsunami in 2004.
During 2004 we conducted an intensive expansion plan; we increased the number of stores by 6 to give a total of 29 stores, 8
within Bangkok and 21 located within the provinces. We also successfully completed the re-modelling of 7 stores. In 2005 we
continued with an aggressive action plan, with the re-modelling of a further 9 stores. However 2005 was dedicated to stabilising and
consolidating the business after the extensive expansion programs of 2003 and 2004. Considerable effort was put into optimising and
enhancing the current working methodologies operated in stores with emphasise on standard operating procedures and processes
across the business. Investment in staff through numerous training programs was also a key activity for 2005 as well as a major review
in terms of future business strategies in order to prepare Siam Makro for a successful 2006.
In October of 2005, we hosted the first ever 'HoReCa Extravaganza' at the Impact Exhibition Centre in Muangthong Thani.
This event gave Makro the unique opportunity of bringing specialised suppliers within the hotel, restaurant and catering arena together
with our customers. More than 150 suppliers and industry experts participated in the event, offering to our customers' not only product
information and future initiatives, but an HoReCa Advisory centre, cooking demonstrations, seminars on food hygiene and lots, lots
more. This could not have been achieved without the dedication of our employees and the close partnerships that exists between
Makro and its' suppliers. We, the board of directors would like to take this opportunity to thank all participants for making the first ever
'HoReCa Extravaganza' a success and we look forward to the next 'HoReCa Extravaganza' in 2006.
The Company's trading subsidiaries have continued to perform well in 2005, with Makro Office Centre opening a further five
stores. MOC have also introduced new initiatives into the market such as the 'Contract Delivery' business, which is a dependable and
customised office supplies procurement solution for customers' to optimise efficiency and manage control. Operational efficiency has
also continued to improve in conjunction with enhanced customer care and service. This year we also saw the successful integration of
Siam Food Service, a leading provider of premium food products and logistic services to the food industry, this being strategically
important to reinforce of our position within the food professionals market.
Makro has always been and will continue to be fully committed to our responsibilities within the society. Throughout the year
the Company together with its employees participated in a number of social activities. We have supported the tremendous efforts
being made by the Khun Poom Foundation and in particular, the 'To Be Number 1' program. By allowing events to be held in our store
car parking areas the foundation organisers are able to promote social awareness against drugs. The foundation also raises funds to
foster the development of disadvantaged children and takes care of the autistic, to which we also donated funds. This is a highly
successful joint venture which we will continue to support for many years. Sustaining our drug awareness activities of 2005, we
introduced the 'Clean Factory' project, which ensures we do not employ drug addicts in our stores. Working closely with the Public
Health Authority, random drug testing of our employees is carried out. If problems are detected, a program of treatment will be offered.
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Annual Report
2005
The Company also continues to supports The 'Royal Project'. Our involvement is the countrywide distribution and sales in our
stores, of organic fruits and vegetables from the 'Nong Marg Tao Integrated Farm' located in Sakon Nakorn and Muang Ngai. This is a
special Agriculture Project, which is run under the royal patronage of HM The Queen. This project is designed to educate and promote
agricultural techniques for poor rural people. For both locations together with our suppliers we have renovated and provided fully
equipped Fruits & Vegetables preparation rooms. Future activities are also being pursued, especially within the product labelling of
organic produce. For the Tsunami relief our directors, management and employees donated funds from the monies allocated for our
annual staff events to HRH Princess Sirindhornthe. These donations were utilised initially for the purchase of medical equipment
followed by a rehabilitation project. For this project we worked closely with our suppliers and collected donations for the purchase of
household goods for the victims of the tsunami. We also feel it's extremely important to give back to the children. In conjunction with
Hewlett-Packard (Thailand) Ltd. we were able to donate 80 computers to the 'School for Educational' program.
We would like to thank the Board of Directors, employees, management, customers and suppliers for their continued support
in making Siam Makro the leading Cash and Carry in Thailand.
Mr. Arsa Sarasin
Mrs. Suchada Ithijarukul
Chairman
President
5
Annual Report
2005
Audit Committee's Report
Siam Makro Public Company Limited's Audit Committee comprise of three Outside Directors who have the required
qualifications and are independent in compliance with the SET's requirements. The members of the Audit Committee are Mr. Athaporn
Khaimarn, Chairman, Mr. Chavalit Uttasart and Mr. Thira Wipuchanin.
During the year 2005, the Audit Committee hold five meetings and the major matters discussed are as follows:
1. Review the Company's internal control systems and propose recommendations to the Company's management.
2. Review internal audit plan and audit findings for the year 2005 reported by Internal Audit Department.
3. Acknowledge the 2006 internal audit focus.
4. Select the Group external auditors and consider proposed audit fees together with the Company's Board of Directors.
5. Review the quarterly and annual financial statements and consolidated financial statements of the Company and its subsidiaries
for the year 2005 by reviewing the reports and meeting with the external auditors, as well as receiving the clarifications
from the company's management.
6. Review the Company's compliance with significant accounting policies and practices, which included procedures for preparation
of the financial statements and disclosures.
7. Jointly with the external auditors, the internal auditor and the company's management, review material issues relating to
internal controls and operations procedures of the company.
The Committee is of the opinion that the financial statements have been prepared based on the Company's operations carried
out according to the objectives and policies of the Board of Directors, with appropriate and necessary internal control systems.
(Mr. Athaporn Khaimarn)
Chairman of the Audit Committee
6
Annual Report
2005
Economics Environment
The strong economic growth that followed the 1997/98 Asian Financial crisis, seeing the Thai economy grow substantially by
6.9% in 2003 and 6.2% in 2004 has slowed in 2005 to an estimated 4.5%. This downturn being attributed to the surge in oil prices,
severe drought in rural regions, flooding the North and South of Thailand, tsunami-related declines in tourism and lower consumer
confidence. However, the Thai economy performed well beginning third quarter of 2005 growing by 5.3%, a faster rate than 4.6% of
the previous year and forecasted fourth quarterly results show a growth of 4.7%. For the first nine months of 2005, GDP stood at
4.4%. After seasonally adjustment, GDP posted the same growth rate for third quarter and second quarter of 2005 at 2.2%. This
strong growth being driven by the Government's new economic measures to boost exports and increase income, thus resulting in
higher exports, and increases in agricultural outputs after a decline for six consecutive quarters.
During the last half of the year, domestic demand slowed whilst external demand showed a significant growth. Domestic
demand sustained growth within private consumption and investment but there are signs for a continuing slow down. This can be
attributed to potential high interest rates, which impacts to the lower spending within durable products and a slowdown in other
products. Exports grew during the first nine months of 2005. However, prices accounted for 16% of the increase and volume just 5%,
due to the drought and downturn in the electronics cycle. Exports are expected to continue to rise in 2006 with exports to partners of
bilateral free trade agreements being accelerated. China, Japan, India and Africa are all forecasted for increases in 2006. Only
Australia will see Thai imports slowing down - from 35% growth in 2005 to 30% in 2006.
Headline consumer price inflation continued to rise, estimated at approximately 4.5% for the year, up from 2.7% in 2004. This
increase mainly reflects rising oil prices and has had a negative effect towards private and government consumption, with growth in private
consumption reducing to 4.4% compared to 5.9% in 2004. Private investment expenditure declined from 15% in 2004, to approximately 11%
in 2005, this also being attributed to a number of facts such as, surges in oil prices, southern unrest, drought and the impact from the Tsunami.
The Stock Exchange of Thailand's performance in 2005 was up on the prior year and the SET index ended the year at 713.73,
up from 668.10 at the end of the previous year.
52,295
46,258
40,619
2003
944
2004
2005
2003
Consolidated Total Revenues
(Baht Million)
1,107
1,136
2004
2005
Net Profit for the Year
(Baht Million)
7
Annual Report
2005
Revenue
Consolidated sales increased by almost 12.9% to Baht 50,418 million, up from Baht 44,670 million in the prior year. The
continuing growth in like for like sales reflects the successful repositioning and business strategy. On an overall like for like basis, sales
grew by 5.0% with a particularly strong performance in fresh and frozen food sales, which grew massively by 24.4%. This being
attributed to the re-modelling of a further 9 stores in 2005 and the first full year of operating the six new stores that opened in 2004. In
2005, the Company has continued developing our core customers, HoReCa and small retailers of which their sales rose by 20.6% and
14.4% respectively. Non-food sales performed better in 2005, giving a 3.0% growth in sales. Service income grew to Baht 1,503 million
up from Baht 1,282 million in the prior year, a 17.3% growth rate, representing some 2.9% of total revenues. Other income increased
over the prior year, 22.3% up from Baht 306 million to Baht 374 million. Total consolidated revenues were Baht 52,295 million, up from
Baht 46,258 million in the prior year, an increase of 13.1%. Thus reflecting the impact delivery of our strategy throughout our business.
Gross Profit
The absolute amount of gross profit margin rose by 7.4% from 2004. However, the percentage of gross profit margin to total
sales reduced slightly from 6.3% to 6.0%, reflecting change in sales mix and increased participation from the lower margin food
business in line with management's strategy to focus on a wholesale cash and carry business and a one-stop shop for food service.
Selling and administrative expenses
Overall the selling and administrative expenses increased by Baht 472 million to Baht 3,286 million up from Baht 2,814 million,
representing 6.3% of total revenue compared to 6.1% in 2004. This being accounted to the re-modelling program of 9 Makro stores,
first full year operating costs for the new stores, which opened in 2004, and the opening of 5 Makro Office Centres. However, the
increase in selling and administrative expenses was held at a lower rate as selling and administrative expenses per store, both at the
existing stores and at new stores, are tightly controlled. We will continue to make significant gains in productivity and efficiency and at
the year-end, the Group employed 3,173 including the employees of Makro Office Centre and Siam Food Services.
2,516
2003
2,814
2004
3,286
2,545
2005
2003
Consolidated Selling and Administrative Expenses
(Baht Million)
2,911
2004
3,173
2005
No. of Employees of the Company
and its Subsidiaries
8
Annual Report
2005
Net income
Consolidated income before interest expenses and taxation was Baht 1,612 million, up Baht 26 million from Baht 1,586 million
in 2005 representing an increase of 1.6%. Comparing to same basis without the special price received upon 2004 new store opening,
the income before interest expenses and taxation was significantly ahead of the growth in underlying sales of 12.9%. Interest rates
increased during the second half of the year improving the interest income, this positively impacts the Company, given its substantial
cash position reflecting its business as a cash and carry operator. Income after taxation was Baht 1,136 million, up some Baht 29
million or 2.6% from Baht 1,107 million in 2004.
Earnings per share
Earnings per share were Baht 4.74 per share for 2005 compared to Baht 4.61 share in 2004, this reflecting the continuing
improvement in net income for the year.
Financial status
The Company's financial status as of 31 December 2005 reflects it's strong trading position, positive cash inflows and
managed investment program. Consolidated total assets have increased in 2005 to Baht 18,968 million from Baht 18,539 million in
2004. Primarily, reflecting the impact of the continuing store investment program, which included investment in property, plant and
equipment amounting to some Baht 649 million, and increased goodwill resulted from an acquisition of Siam Food Services. Additions
to property, plant and equipment being the cost of bringing 5 new Makro Office Centres into service and the continuation of the
refurbishment and expansion of the food area within 9 existing Makro stores.
The Company has maintained its traditional strong working capital position and holds cash and cash equivalent and current
investments at the year-end of some Baht 4,363 million. The high cash and cash equivalent and current investments reflects the very
strong trading performance achieved in 2005. Operating cash flows and existing cash flows funded the store investment program of
Baht 649 million, the super dividend pay-out of some Baht 1,620 million, and the acquisition of Siam Food Service Limited.
The high cash and cash equivalent and current investments at year end also reflects a higher balance of trade accounts
payable, up from Baht 8,211 million at 2004 to Baht 9,068 million. The Company actively manages its trade payables as part of its
overall working capital management program. Other current liabilities increased over the prior year, reflecting the underlying growth in
the business, as current tax liabilities increased reflecting the increased tax arising on profits for the year, and a higher level of
accruals reflecting the increased number of stores.
Inventories have slightly increased from Baht 3,903 million to Baht 4,048 million. With the increased inventory from the acquisition
of Siam Food Services and five new MOC stores being partly offset through reduced inventory levels at existing stores. We continue to
tightly manage our inventory levels as lower value food inventory continues to become a more significant proportion of our total inventory.
The Company is equity financed. There have been no increases in share capital during the year and share capital remains
unchanged at 240 million shares with a par value of Baht 10 per share, fully paid up. The Group has adequate cash and short-term
investment funding with which to fund future expansion and business acquisitions should appropriate opportunities be identified.
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Annual Report
2005
Dividend
A dividend in respect of 2004 of Baht 1.75 per share amounting to a total of Baht 420 million was approved at the Annual
General Shareholders' Meeting on 25 April 2005 and was fully paid in the second quarter of 2005.
A 2005 interim dividend of Baht 5 per share amounting to a total of Baht 1,200 million was approved at the Extraordinary
General Shareholders' Meeting on 26 October 2005 and fully paid in the fourth quarter of 2005. At the Board of Directors' meeting of
the Company on 22 February 2006, the Board of Directors unanimously resolved to propose to the Annual General Shareholders'
Meeting for approval of the Company to declare final dividend payment for the year 2005, at the rate of Baht 4 per share bringing the
total dividend to Baht 9 per share. The proposed dividends must be approved by the shareholders at their meeting.
Share price
The closing share price for the company at 31 December 2005 was Baht 69.50, significantly increased over last year of Baht
49. The Company was capitalized at Baht 16,680 million, up Baht 4,920 million from Baht 11,760 million at the previous year-end.
Audit committee
In accordance with the regulations of the Stock Exchange of Thailand the Company has formed an audit committee
comprising three independent directors. The report of the audit committee is set out on page 6.
Corporate Governance
The Company is committed to the implementation of Good Corporate Governance practice, and a report on our application of
the Principles of Good Corporate Governance is set out on page 44.
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Annual Report
2005
Since 2001 Siam Makro PLC has undergone major restructuring. The aim has been to reposition the company back into its
original wholesale cash and carry format, whilst at the same time taking into account the unique characteristics of the indigenous
market. This was successfully achieved during 2004 by focusing more on professional customers and by ensuring the nature of the
business was understood by all. During 2005 the extensive re-modelling program of 9 stores to the new format further developed and
supported this strategy. The range of perishable goods was extended and given greater prominence in the stores and the new format
has improved the selection and the displays for the target customer.
The Customers
Knowing who our customers are is essential to ensuring the repositioning within the market successfully continues. Only when
we know who our customers are, we can clearly understand our customers' needs and expectations. This is a number one priority for
Siam Makro PLC.
The main focus area of 2005 was to increase the customer base within the HoReCa customer group. As part of this initiative,
a number of stores went through a re-modelling program, which included widening the sales space for fresh foods and increasing the
product range for the growing popularity of frozen products. This was also supported with a wider range of dry goods, beverages and
related items such as disposable food packaging and tableware. Additionally, the offering of non-food products targeted especially for
this specific market, such as household and electrical goods, has given Makro a greater opportunity to become a key player within the
market share for this customer group. Makro is a 'One-Stop for Food Services' and as oil prices continue to increase, the one-stop
experience is becoming more and more important for the customer's needs.
There are currently 29 Makro stores within the Kingdom of Thailand with each store having its' own specific customer base.
However, the needs of customers located within the Bangkok area and the needs of customers from the provinces are diverse.
Therefore, the introduction of local buyers within stores to complement the strong head office commercial team has been a continuous
activity throughout 2005.
HoReCa Extravaganza - 'One-Stop for Food Service'
2005 was a highly successful year for introducing new initiatives into the Makro business. One of the finest achievements of
the year was the hosting of a unique three-day event. The 'HoReCa Extravaganza' was held at the Impact Exhibition Center in
Muangthong Thani, which offered an exhibition area of 5,000 square meters. This event gave Makro the unique opportunity of bringing
specialised suppliers within the hotel, restaurant and catering arena together with its customers. More than 150 suppliers and industry
experts participated in the event, offering to our customers' not only product information but future initiatives, an HoReCa Advisory
center, cooking demonstrations, seminars on food hygiene and lots, lots more. Over the 3 days 50,000 people attended the event of
which 60% were from the registered customer base. The remaining 40% of visitors were potentially new future customers for Makro.
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Annual Report
2005
The Initiatives of 2005
The Management of Inventory has always been a challenging hurdle to overcome within the Wholesale business.
For example, if stock holding is too high the problem of aging stock will arise and if stock is too low then potentially sales are lost.
To alleviate the problems of stock management a number of successful commercial initiatives were implemented within the
commercial area of Food and Non-Food. By combining new working methodologies and new IT tools for the buying teams a significant
drop in the company's stock holding value has been achieved. Also the introduction of a new 'Early Warning System', which identifies
future problems within the management of stock, has given the buyers the opportunity to become more Pro-Active and less Re-Active.
Throughout 2005 working practices and relationships with suppliers continued to be strengthened. By working closely, strong
partnerships have been forged to obtain the best possible deals and opportunities for the customer. Quality supplier relationships also
enabled Makro to address and incorporate factors such as food hygiene and safety into the supply chain operation. This being of great
importance to our customers, as well as to their own customers.
Makro are constantly exploring new value added supply sources, such as the use of auctions to achieve the best pricing for
specific products. Collaboration with other Makro Asia operations and the identification of overseas sources has enables Makro to
directly import certain fruits and vegetables, not widely grown in Thailand. The increasing number of bilateral trade agreements to
which Thailand is party, further increases our opportunities in this area.
Frozen food is a relatively new product range within the Thai market but is becoming more and more popular. In 2005 Makro
introduced a new Frozen Food Catalogue and success has been achieved not only in terms of significant sales growth in 2005, but
also in customer satisfaction. Makro always strives to adhere to the changing market trends and the demands of the customers.
Assortment and Price Competitiveness
Assortment is key to our ability to attract and retain our core customer base. Our customers must be satisfied that our stores
will have the products that they want to buy, at the right price. Assortment represents not only the product range that we offer but also
the choice within that range; for example choice in terms of packaging and sizing, own brand availability and the actual choice of
brands available. Our target customer groups have special and differing buying needs - small retail shops may wish to sell certain
products in small package sizes whilst our catering and hotel customers seek access to larger pack sizes in food categories. Through
close observation of customer buying patterns, we are responsive to the different demands of our core customer base. As we expand
more into the provinces, with our increased focus on food, we can adapt our product offering to the specific needs of the customers in
each location.
Price competitiveness is pivotal to our success and to our ability to attract and stay supplier of choice for our core customer
base. The ability to price competitively is achieved through a variety of factors, not just the price at which we buy from our suppliers.
Improved cost management benefits not only our shareholders through enhanced profitability, but also our customers through
competitive pricing.
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Annual Report
2005
Moving Forward in Logistics
Logistics is a fundamental part of Makros' business strategy and in 2004 two cross-docking distribution centres were opened.
The first was temperature controlled fresh food DC in Wangnoi, just north of Bangkok. From this location Makro was able to accelerate
the distribution of Fresh and frozen products to stores, whilst maintaining the highest quality freshness of products. The second DC
was an ambient temperature DC, located near Navanakorn Industrial Estate, which handles dry food and non food products. This DC
was later move to Klonglung Truck Terminal in early 2006 for more operating space and to be more efficient in managing the growth in
volume passing through this DC. As a consequence, there are increased opportunities for obtaining handling and administrative cost
advantages as well as co-ordinated transport, shared warehousing and distribution costs and lower inventory costs throughout the
supply chain. These advantages can then be passed on to our customers by offering the best competitive prices in the market.
Success comes through our People
Makro prides itself on providing a meritocratic working environment by promoting on performance and results. Makro
understands that people are the future and for continuing success, it is imperative to have employees properly trained. Actions were
taken during 2005 to identifying training needs by introducing individual training plans for 'high' and 'young' potentials. In-house
training programs supported by both Makro training personnel and external consultants have been utilised to enhance the skill base
for employees. An extensive Customer Development Training Program was also introduced in 2005 and concentrated on all aspects of
customer management, this initiative will pay subsequently great dividend within the stores and will continue into 2006. Promoting
from within is extremely important to the success of any business and in 2005 a new extensive training program designed for potential
Store General Managers was introduced for High Achievers. Outstanding performances and results from employees are always
recognised and rewarded by means of performance-related rewards on an individually and team bases.
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Annual Report
2005
Makro Office Centre is a uniquely structured business. By having two clearly defined business models, the 'category killer niche retailer business' and the 'Contract Delivery' business, MOC is able to target all segments of its customer base as a "Single
Source Solution Provider" for office products, supplies, and services.
MOC's retail stores provide a comprehensive range of office products specialising in office supplies, office automation, office
furniture and business services. There are nineteen stores strategically located in Bangkok and the provincial areas of Thailand,
which target small businesses and walk-in consumers. To further enhance the level of service to customers, credit facilities as well as
delivery and mail order services are offered.
Alternatively the 'Contract Delivery' business, targets medium and large businesses that typically do not buy their office
supplies from a retail outlet. Once 'Contract customers' office supplies needs are identified, pricing is fixed over a defined period of
time (i.e. 12 months) with payment terms and a convenient delivery service to the customers' doorsteps. Combine periodic spend
analysis, web-based ordering and e-procurement (launch in 2006) and the result is a dependable and customised office supplies
procurement solution for customers' to optimise efficiency and manage control. Corporate Account Managers and professionally
trained Customer Service Executives are readily available to provide value-added services as a part of the single source solution.
During 2005 the emphasis was on expansion as well as transition. In Bangkok five new stores were launched; Abdulrahim
Place (January), SSP Tower 3 (March), Samsen (June), Ekkamai (November) and Phayathai in December. As this niche business
continues to grow, so too does the specialist knowledge within the operation of site selection. New store sites are selected by an inhouse committee to identify strategically significant locations.
In 2005, a number of significant management changes were made. The Company introduced clearly defined individual and
company working scopes, empowered Area and Store General Managers and created a flat, accountable working environment. MOC
also introduced a "back to basics" program and where applicable the working standards and processes from Siam Makro were
adopted. Extensive training was conducted in 2005 with the introduction of three core training programs; Phase 1 of "Consultative
Sales Training" program was introduced to the newly formed Contract Delivery sales team as well as the 'Key Success for the Retail
Business' and 'Service the Market' training programs for the Stores. The 'Retail' programs cover all aspects of the business, from
planning, marketing, merchandising, promotion, store operations and business analysis. Promoting from within is extremely important
to the success of any business and in 2005 a new extensive training program designed for potential Store General Managers was
introduced for High Achievers. Outstanding performances and results from employees are always recognised and rewarded by means
of performance-related rewards or 'recognition programs' such as employee of the month.
Communication with consumers is maintained via the monthly 12-16 paged mailer, which is sent to all customers. Building
awareness was a key strategy in 2005 and as a result, the number of targeted mailers and leaflets had increased. The annual
catalogue remains the core of the mail order business and more variety in the assortment is continually added for the customer who
prefers to purchase from his business or home. The catalogue offers some 260 pages, offering more than 8,000 articles with a
distribution of 35,000 copies. Assortment and pricing is continuously reviewed and stores offer an extensive range of international
brands as well as a comprehensive range of competitively priced "Office Centre" exclusive brands for supplies and furniture.
Additionally many stores include a business centre providing copying, printing, laminating and binding service.
14
Annual Report
2005
Performance in 2005 continued to improve with sales increasing by 13.6% for the year to Baht 1,343 million, giving a growth
margin improvement of 19.1%. However underlying profitability was Baht 37.3 million, a decrease of 25%. Many factors contributed to
this decrease, mainly increased running costs due to the five new store openings and the expansion of the Contract Delivery
business. The number of employees increased by 54 during 2005, taking the total number to 247 as of 31 December 2005.
MOC engages in several activities in aid of charitable organisations and local concerns within the society. In December 2005
all stores participated within a National campaign to donate clothing and blankets for the under privileged. Within each store donation
boxes were provided so customers and employees could donate old clothing, blankets etc. Enough clothing and blankets to fill a large
truck were collected and donated to Wat Seuan Kaew Temple located in Nonthaburi province.
2006 will be a year of investment and consolidation in order to strengthen our foundation for growth. MOC will continue to
expand the retail business by opening stores in Thailand. Major upgrading of the existing technical infrastructure will be undertaken to
enable the successful implementation of a Customer Relationship Management system to manage the Contract Delivery business and
enhancements to the existing web-based ordering system.
The extensive training programs that were introduced in 2005 will continue, including the High Achievers program. The main
focus in 2006 will be on the acquisition of major new accounts for the Contract Delivery business whilst maintaining successes within
all other areas of the business thus allowing MOC to continue to be the leading Office Supplies provider for all segments of customers
in Thailand.
15
Annual Report
2005
Siam Food Services
The food service industry in Thailand is a well-developed and competitive market with many international brands established
in the kingdom. Thailand has a large population and a growing urbanisation, higher disposable incomes together with an affinity for
trying new food experiences allow for continued market development.
This year marked the successful integration of Siam Food Services Limited (SFS) following its acquisition. The company is a
leading provider of premium food products and logistic services to the food service industry. SFS specialises in the nation-wide supply
of value-added services and highly specific frozen and chilled meat, seafood, poultry, potato, dairy, bakery, ethnic food and beverage
products. Principal customers are in the Full and Quick Service Restaurants, catering, lodging, healthcare, and retail sectors. These
include all major independent and multi-national restaurant operations, hotels and contract food service operations.
The acquisition of SFS is of strategic importance to Siam Makro Plc. (SML), as it provides the company with food service
expertise, distribution capabilities, and access to previously untapped food service channels, particularly the high-end full service
restaurant and hotel sector. In a drive to become the premier supplier to the industry, SFS's services, knowledge and portfolio can be
the differential, adding value and helping to move away from commodity orientation. This is particularly relevant in an industry that is
growing rapidly whilst leveraging buying power and placing increasing service demands on a fewer number of selected suppliers.
In the face of adverse market conditions SFS continued to deliver strong top line growth across existing and new channels.
During 2005 the business excelled in the seafood category and also performed strongly within the savoury and dairy categories.
Bakery sales were disappointing and category reposition is currently being executed. Leveraging the combined strengths of SML and
SFS further diversification towards dry groceries and new customers in catering and institutions was successfully executed. Significant
capital investment was made within Information Technology with the objective to position the company for industry leadership in terms
of Enterprise Resource Planning and Customer Relationship Management. The combat of margin erosion continued high on the
agenda during the year particularly also in the face of rising distribution and finance costs.
The management is confident regarding forward strengths on the basis of organic growth platforms and company initiatives.
Through the addition of services, the dry groceries portfolio differentiation, leveraging the strengths of SML, the company is ideally
positioned to capture market growth opportunities. Planned geographic expansion and productivity increases from Enterprise
Resource Planning (ERP) and Customer Relationship Management (CRM) implementations will further help combat margin erosion.
Performance in 2005 with sales of Baht 772 million before elimination of sales to Siam Makro Public Company Limited and
Baht 685 million after elimination of sales to Siam Makro Public Company Limited, giving a growth sales improvement of 18.9% over
last year. The underlying profitability was Baht 28 million, an increase of 12% from last year.
16
Annual Report
2005
Retail Market in Thailand
There are two types of retail business operating in Thailand. One is the unique 'mom and pop' grocery store, traditionally
located in every small community throughout the country. The other type is the modern trade store, which includes not only department
stores, but also other retail outlets. The face of the Thai market has been changing for a number of years. Small traditional
independent retailers are gradually being replaced with modern and often foreign-owned large retail operation chains. In 2005 the
number of retail outlets was more than 4,910 of which over 4,400 were convenience stores, 160 discount stores, 90 supermarkets, 50
department stores and 210 category killers. New shopping experiences are also being introduced into the market such as, the Siam
Paragon which opened in December of 2005, Central World Plaza development which is due to open mid 2006 and malls that are
located underground. All of which are forcing the key players within the market to rethink their approaches.
Key Players within the Retail Market
Discount Sector
In the discount (superstore/hypermarket) sector there are 3 major players, Tesco Lotus, Big C and Carrefour. This highly
competitive sector does not include the cash-and-carry sector, as the sector has different operating characteristics to that of the
hypermarket sector. Tesco Lotus opened 5 new stores and 2 value stores in 2005, bringing their total number of stores to 54
hypermarkets and 13 value stores. Tesco Lotus has also continued to diversify the store formats through which it does business, as
opportunities for the development of large hypermarket store has been impacted by the zoning laws. They now operate through the
Express store, Value store and supermarket formats and is currently trailing a new shop format known as 'Talad Lotus'. Big C being the
second participant within the discount sector, has a total of 45 stores in Thailand. Like Tesco Lotus, Big C has also continued to
explore variable store format opportunities, opening its first Big C "Compact" store in 2004 and a further 5 in 2005. The third major
player is Carrefour, adding more 3 stores in 2005, bringing their total number of stores to 23, the majority of which are located in
Bangkok. As the current zoning regulations continue to impact opportunities for new development, particularly of the larger size stores,
it is anticipated that operators within this sector will continue in 2006, to explore opportunities through the diversification of their
store format.
Cash and Carry Sector
The cash-and-carry sector does not focus on the end user, but on commercial business users, for whom buying is an integral
business function. The cash-and-carry operators, who compete in the same market segment as the traditional wholesalers, experience
slower growth than the hypermarkets, and compete for a different customer segment. Cash-and-carry operators do not necessarily
target the same locations as the discount hypermarkets, as their core customer base is not the same. Furthermore, core customers to
the cash-and-carry operators include the small retailers, the 'Mom and Pop' shops that actually represent competition to the discount
hypermarkets.
17
Annual Report
2005
Supermarket sector
The competitive supermarket sector is mainly concentrated in Bangkok where the higher levels of consumer income and
sophisticated customer base supports this retail format. The major players are TOPS, Foodland and Villa Market. In 2004 Central
Retail Corporation Ltd re-acquired 100% of its Tops Supermarket business. The Tops brand has strong recognition in the eyes of the
Thai consumer and experienced strong growth in 2005. Foodland is Thailand's oldest supermarket chain and currently has 10 outlets
and plans to continue opening more in the face of intensifying competition from foreign hypermarkets and Tops supermarket chain.
Villa Market provides all household essentials as well as local and imported groceries, fresh fruits, vegetables, meat, poultry, fish,
liquor, electrical, school and office supplies, local and imported magazines and a mini pharmacy. Targeting the premium market
segment, most of its shops are located in affluent areas.
Convenience sector
The convenience store sector dominated by the 7-Eleven group, continued to see very rapid expansion, with 7-Eleven adding
more stores, to exceed 3,300 stores. The second largest operator in this sector, Family Mart, also added additional stores in 2005. The
convenience store sector has continued to focus on food and beverage sales in 2005, with 7-Eleven announcing an increased
percentage of these sales in 2005 and a corresponding increase in sales area to support future growth.
Department store sector
The department store sector is dominated by two major players. 'Central' and 'The Mall' are owned by the Central Retail
Corporation and The Mall Group Company Limited, respectively. Although continuing to face competition from the discount/
hypermarket stores, the different shopping environments, promotional campaigns and marketing activities of the department stores
continue to retain a strong customer base and both operators saw sales growth in 2005. The Central Retail Corporation has been
active in the development of speciality retail businesses, for example health and beauty, office products, and electrical goods. Both
these major department store groups are involved in the significant new luxury retail outlets in central downtown Bangkok. A result of
which should be the making of Rama 1/Ploenchit area of Bangkok a comparable retail experience to Singapore's Orchard Road.
Now and the Future
The Thai retail market experienced a decrease in sales growth in 2005 reflecting the negative effects of the surge in oil prices,
severe drought in rural regions, flooding the North and South of Thailand, tsunami-related declines in tourism and lower consumer
confidence. However, the retail market observed a distinct increase in new investments both by local and foreign companies.
Investment forecasts for 2006 are set to be lower than 2005, since many retailers have upgraded or built their outlets ahead of their
plans. New zoning laws have yet to be clarified forcing some retail chains. The competitive sectors in the Thai economy are much
more clearly defined now and the modern retail trade has grown much stronger. The Thai consumer is more sophisticated, however
both traditional and modern sectors of the retail trade continue to hold an important place in the buying habits of the Thai consumer.
The modern consumer is selective, and uses various alternative retail outlets to satisfy their needs, for example combining monthly
visits to the hypermarket with more frequent visits to the wet market and the convenience store.
18
Annual Report
2005
Siam Makro is a Cash and Carry Wholesaler with a strategy focused on consolidating the Company's position as the leading
cash and carry wholesaler in Thailand. This means ensuring that the Company understands and delivers what the core customer
group expects and ensuring customers, suppliers and other stakeholders understand the nature of the business and their part in it.
S
sustainable growth
T
team work
O
open for opportunity
R
risk taking
M
minimum hierarchy
and bureaucracy
The main focus of 2006 will be 'Growth Through Performance'. The company will endeavour to
achieve this by taking advantage of and making the most of opportunities brought about by
change. Siam Makro will continue to optimise the business and look for new opportunities whilst
in parallel working as a team for better results keeping the hierarchy and bureaucracy to a
minimum. Shareholders are not looking for "puffed up" quarterly or annual results, but for
sustainable growth and shareholders accept the risks of new endeavours. Therefore, 2006 will be
the year of the STORM for Siam Makro PLC.
In 2006 we will continue to focus on meeting the customers' needs as a core area for development. We will review the
services provided in stores, not just in terms of range, assortment and pricing but also in other areas, such as presentation and
display. We will also review value-added services provided for customers.
Although we are a wholesale cash and carry business, customer service is still an important element of the overall offering.
To support this, an extensive training program was instigated in 2005, which concentrated on 'Customer Management Methodology'.
This will continue throughout 2006 in conjunction with other specifically targeted customer training programs, such as customer
relationship and marketing skills. Customer satisfaction is an important factor within the business and to measure this customer panels
will be introduced within the business.
We will continue to review the product range and focus on the development of own-brand ranges. This will include premium
'aro' brand for food service operators and the value 'savepak' brand. House-brand products are a good alternative at a time when
energy prices are high and also provide customers with value for money whilst generating a positive impact on margin. This brand mix
will ensure we are constantly adhering to our customers' needs and expectations.
Continuing on from 2005, Siam Makro will actively target the professional customer group HoReCa (hotel, restaurants and
catering) to enhance the number of active customers registered within this sector. This will be achieved by putting into practice
Customer Management methodologies and continuing with specific business activities such as hosting the second 'HoReCa
Extravaganza'.
The store re-modelling program, which commenced in 2003 will be completed early 2006 with the remaining two stores,
Ubonratchatani & Surin being re-modelled to the new format.
Initiatives introduced during 2005 will continue throughout 2006. In particular the Stock Management methodology, which
covers all aspects of stock control and stock management. Key areas such as, effective margin control, aging stocks and stock
financing will be addressed during 2006 and practices enhanced where possible. The company will also continue to look for new and
better value added supply sources to achieve the best pricing for specific products.
19
Annual Report
2005
Further developments within the logistics operation will be made. A larger platform will be opened in early 2006 to
accommodate and support increasing volumes. The increased use of cross docking has improved supply chain management,
particularly in respect of the smaller scale suppliers. Stronger supply chain management adds value through the ability to better
manage inventory holdings at store level, therefore reflecting a more constant supply and replenishment into stores, thus reducing out
of stock situations and increasing service level.
We will also continue to invest in Information Technology, both from a technical and operational perspective. Enhancements to
the current logistics system will be made to incorporate the Fresh Food operation. These enhancements will also include new working
methodologies and practices to optimise the business. The main operational host system will also be upgraded in 2006 to ensure
future reliability and expansion capabilities both from a technical and operational perspective.
2006 will also see the implementation of the Makro Business Intelligence project. Business intelligence (BI) is a category of
applications and technologies for gathering, storing, analyzing, and providing access to data, to help enterprise users make better
business decisions. BI applications include decision support systems, query and reporting, online analytical processing, statistical
analysis, forecasting, and data mining. This project aims to provide the right information, at the right time, for the right people.
Efficiency in operations is always a key factor to a successful business. A new project has been initiated whereby the technical
department along with the operational department will work closely together to optimise business processes. Primarily, the project will
cover all aspects of the store operation, such as goods receiving and shelf replenishment. The objective is to analyse the current
working methods and supporting IT tools available and where possible identify and implement new supporting IT tools to further
enhance working practices. This will also be supported with refined working methods and clearly defined procedures.
Our people development programme is ongoing, through training and skill development courses, through discussion and
feedback, and through sharing business and customer knowledge within the company. As a meritocracy company we reward people
for performance and over recent years we have paid close attention to the need to develop and bring through our own people, at the
stores and in the head office. Going forward this will continue with a focus on development and succession from within.
As a cash and carry wholesaler the growth of the business aligns closely with the customers. We have been successful in
refocusing the core business towards the core customer group and this has been reflected in the positive results for 2005. The year
ahead will be challenging but through hard work we will continue to grow sales through business expansion within the target customer
group and grow the margin through closer relationships with suppliers. This will be achieved by stronger supply chain management
and greater operational efficiency and through the identification of opportunities in complementary businesses.
20
Annual Report
2005
Risk Factors
Risk, complexity and uncertainty define all business environments. Risks to a business can be strategic, financial, compliance,
regulatory, natural or operational and systems derived in nature. Risks change constantly as the internal and external dynamics within
a business's operating environment change. There is internal risk within the business itself, ranging through the spectrum. From the
more traditional risks in the form of hazards, such as fire and flooding, to risks in our operating environment, such as our reliance on
information technology, to risk in our employee workforce, for example in our ability to skill and retain our employees. There is also risk
from external factors; from our interactions with others, our relationships as supplier, customer, employer and investee - factors outside
our control, which have significant impact to the environment we operate in and the results we achieve. Major risks we currently face
include stock market risk, shareholder risk, economic risk, competitive risks such as the actions of our competitors, regulatory and
legislative risk, employee risk and information technology risk.
The Company is listed on the Stock Exchange of Thailand, and its share price is, therefore, impacted by market sentiment,
locally, regionally and internationally. Local market sentiment is driven by political and economic conditions in Thailand, regionally and
internationally, and by speculation. The market closed for the year with an improvement of 6.8% from the previous year. However, the
Company's shares have performed well, with our share price closing the year at Baht 69.50, up from Baht 49, reflecting retail sector
sentiment and our strong performance. There have been many negative factors impacting market sentiment in 2005, both at the
national and international level. Severe drought in rural regions and continued regional unrest in the south of Thailand have impacted
on the local economy, whilst major international factors have the significant increase in world oil prices to unprecedented highs and the
constant demand for commodities. These factors pose substantial risks to the Thai market, as does the potential for a correction in the
Thai market following a period of high growth, expansion in consumer credit and property speculation.
Although we are a public listed company a significant proportion of our equity is held by a limited number of shareholders,
primarily the SHV group of the Netherlands that, jointly with some other shareholders, controls us. The Company has had a long
relationship with the SHV group, and through this relationship has conducted a cash and carry business in Thailand for 16 years. Our
management team comprises a highly skilled and experienced team, with both international and Thai experience, and has, therefore, a
high level of knowledge, understanding and competence in the Thai retail and supply chain industries. We do, however, consult with
SHV in all aspects of our business, for example in areas as diverse as procurement, finance and information technology. Furthermore,
we also have certain software and license agreements with members of the SHV group. Such agreements are subject to annual
renewal and we are not aware of any factors that would impact such renewal. We are not reliant upon any other shareholder in the
ordinary course of our business and do not consider that changes in shareholding interests, other than those made by SHV, our
principal shareholder, would significantly impact our business.
As a cash and carry wholesaler we believe that we are less exposed to downturns in consumer confidence than the discount
and hypermarket operators as our core customer base are not end-users. However, all businesses are sensitive to the economic
environment in which they operate and deterioration in Thailand's economic performance in future would impact us. As a cash and
carry operator our commercial structure partly mitigates such risks, as we are not exposed to bad debt risk, as sales are substantially
all in cash and our working capital position is favourable. As a food wholesaler, particularly with our focus on fresh food, we are
exposed to potential negative impact on sales arising from food scares, for example the negative impact on chicken sales that arises
from outbreaks of bird flu or similar diseases in the region. The increasing attention paid to food safety and food hygiene by our
customers is becoming more evident as the consumer becomes more sophisticated. Although, we source our fresh food from reliable
and certified suppliers and impose strict cleanliness and hygiene standards on our stores and staff, we are exposed to potential
negative sentiment and corresponding adverse impact on sales from general scares and alerts within the region.
21
Annual Report
2005
Risk Factors
Competition in the modern retail sector remains aggressive, with many operators having undertaken rapid expansion through
building new stores in recent years such that the overall retail trade now is fundamentally different to that of 10 years ago. The impact
of new retail zoning laws, which were introduced in 2003, has significantly curtailed operators' ability to grow through expansion within
built up urban areas. These laws have yet to be clarified and for some retail chains, especially within the cash and carry sector,
expansion plans have been put on hold. However, some operators have pursued growth expansion through alternative formats such
as the convenience store sized mini outlets.
The growth of the modern retail sector in Thailand in the last decade, whilst benefiting the Thai consumer by expanding their
choice, and the quality and value of retail offerings, has been perceived to have significantly impacted other sectors of the economy,
including the traditional retail sector. This perceived adverse impact encouraged calls for legislative and regulatory intervention, and
2003 saw the implementation of a significant Notifications regarding zoning, the impact of which is discussed above, and anticompetition legislation. The reinforcement of Competition Act in 2003 focus in respect of market domination and unfair trade practices,
carrying penalties for violation of both fines and imprisonment, and was introduced with retrospective application to March 1999.
Certain aspects of the regulation and its implementation continue to require clarification and the process of implementation remains
unclear. Our business is, and will continue to be, exposed to changes in the regulatory, legislative or compliance environments that
adversely impact our performance.
Compliance, operational and systems risk management is ongoing, and subject to continual review. We have skilled
employees across all aspects of the business, who are up to date with global developments in retail and management and the Board
of Directors actively review our risk exposure in these areas. We continually train and invest in our employees but must compete
against other employers in Thailand to secure the best employees out of a relatively small pool of skilled labour. There is continued
demand for skilled employees, especially in the provincial areas, and there is risk that we will be unable to recruit and retain
employees with the levels of skills that we require. Furthermore the modern retail trade represents a highly challenging work
environment, in which both succession and continuity in our employee base are important to achieve the growth that we seek. As
investment in employee development continues there is also increased risk that we will invest resources in our staff, but be unable to
reap the benefits if those employees leave us for our competitors. We believe that the meritocratic environment that we offer, the
support and training programmes that we provide, the feeling of teamwork coupled with the family environment that exist amongst our
staff group, reduces our risk in obtaining and retaining the quality of staff that we need to manage and grow our business.
We use information technology throughout our organisation and it is fundamental to our ability to do business. Our use of
information technology includes links with parties' external to our organisation, for example through our B2B platform, and through the
use of email and such communication tools. Furthermore, our operational systems are fully computerised. We are, therefore, exposed
to potential adverse impact on our business should our information technology fail, or otherwise become corrupted, for example
through exposure to electronically communicated viruses. Our information technology department is active in ensuring that the
Company is properly and effectively safeguarded against such risk.
22
Annual Report
2005
1988
:
Setting up the Company with the registered capital of Baht 750 million.
1989
:
Opening 1st Makro store in Lardprao.
1990
:
Opening Makro stores in Chaengwattana, Srinakarin and Bangbon.
Setting up its subsidiary company namely Makro Properties Ltd.
1993
:
Opening Makro stores in Chon Buri and Chiang Mai.
1994
:
Increasing its registered capital to Baht 2,400 million.
:
Opening Makro stores in Nakhon Ratchasima, Rangsit and Hat Yai.
:
Becoming a listed company on the Stock Exchange of Thailand.
:
Opening Makro store in Udon Thani.
:
Opening 1st Makro Office Centre in Seacon Square.
:
Opening Makro stores in Phitsanulok, Khon Kaen, Surat Thani and Ubon Ratchathani.
:
Setting up the company namely Makro Office Centre Co., Ltd.
:
Opening 3 Makro Office Centres at United Centre Building, Sindhorn Building and Royal City Avenue.
:
Opening Makro store in Rayong.
:
Spin-off Makro Office Centre business.
:
Opening 2 Makro Office Centres at Rama III Road and Lardprao Road.
1998
:
Opening Makro store in Nakhon Sawan.
1999
:
Opening Makro store in Charansanitwongse, Bangkok.
:
Opening 1 Makro Office Centre at Phaholyothin Road.
:
Opening Makro stores in Sathorn, Bangkok and Nakhon Pathom.
:
Opening 1 Makro Office Centre at Wong Wean Yai.
2001
:
Opening Makro store in Surin.
2002
:
Opening Makro store in Samsen.
:
Opening 1 Makro Office Centre at Sukhumvit Road.
1995
1996
1997
2000
23
Annual Report
2005
2003
:
Opening Makro stores in Nakhon Si Thammarat and Chiang Rai.
:
Re-modelling 3 existing stores (Lardprao, Chaengwattana and Srinakarin) to have new format
to focus on a wholesale cash and carry business and a one-stop shop for food service.
2004
:
Opening 1 Makro Office Centre at Pattaya.
:
Opening Makro stores in Sakon Nakhon, Suphan Buri, Chanthaburi, Phuket, Roi Et and Trang.
:
Remodelling 7 existing stores (Bangbon, Chon Buri, Chiang Mai, Hat Yai, Nakorn Sawan, Sathorn and Samsen)
to have new format.
2005
:
Opening 4 Makro Office Centres at Rangsit, Phuket, Chaengwattana and Sathorn.
:
1 January 2005, acquired 100% shares of Siam Food Services Limited.
:
Re-modelling 9 existing stores (Charansanitwongse, Surat Thani, Nakorn Pathom, Phisanulok, Udon Thani, Rangsit,
Nakorn Ratchasima, Khon Kaen and Rayong) to have new format.
:
Opening 5 Makro Office Centres at Abdulrahim Place, SSP Tower 3, Samsen, Ekkamai and Phayathai.
24
Annual Report
2005
Other Information
1.
General Information of the Company, Subsidiaries and Associated Company
1.1 Siam Makro Public Company Limited
Company registration No.
:
Bor Mor Jor. 299
Date of incorporation
:
May 10, 1988
Head office
:
3498 2nd Floor, Lardprao Road, Klongchan, Bangkapi, Bangkok 10240
Tel. 0-2375-7000, 0-2723-1000 Fax. 0-2375-2927
Home Page www.siammakro.co.th
Type of business
:
Operating cash and carry wholesale business, selling both food and
non-food products to registered members
Type and No. of shares
:
Registered ordinary shares with number of shares 240,000,000 shares
Registered capital
:
240,000,000 shares at a par value of Baht 10 each, totalled Baht 2,400,000,000
Issued and paid-up capital
:
240,000,000 shares at a par value of Baht 10 each, totalled Baht 2,400,000,000
1.2 The Subsidiary and Associated Companies
The Subsidiary Companies
(1) Makro Properties Ltd.
:
4000/2533
:
April 5, 1990
Head office
:
3498 Lardprao Road, Klongchan, Bangkapi, Bangkok 10240
Tel. 0-2375-7000, 0-2723-1000 Fax. 0-2375-2927
Type of business
:
Land investment and property leasing
:
Registered capital
:
7,000,000 shares at a par value of Baht 100 each, totalled Baht 700,000,000
:
:
(4) 445/2539
:
October 11, 1996
Head office
:
1705, 2nd Floor, Phaholyothin Road, Chatuchak, Chatuchak, Bangkok 10900
(2) Makro Office Centre Co., Ltd.
Tel. 0-2939-5700 Fax. 0-2939-5903-5
Home Page www.officecentre.co.th
Type of business
:
Retailing of office supplies, office equipment, office furniture and business services centre
:
Registered capital
:
:
25
Annual Report
2005
Other Information
(3) Siam Food Services Limited
:
0105527032739 (Former no. 3276/2527)
:
September 7, 1984
Head office
:
2439 Old Paknam Railway Road, Prakhanong, Klongtoey, Bangkok 10110
Tel. 0-2240-4000 Fax. 0-2249-7294
Home Page www.siamfoodservices.com
Type of business
:
Specializing in the import and distribution of value added, temperature controlled, high specification
meats, seafood, poultry, potato, dairy, bakery and ethnic food products of both international and
domestic brand owners. Distribution reach is nationwide to all provinces of Thailand.
:
Registered ordinary shares with number of shares 100,000 shares
Registered capital
:
100,000 shares at a par value of Baht 100 each, totalled Baht 10,000,000
:
100,000 shares at a par value of Baht 100 each, totalled Baht 10,000,000
:
Thailand Securities Depository Co., Ltd.
The Associated Company
- None -
1.3 Reference Persons
Share Registrar
62 Stock Exchange of Thailand Building 4,
6-7th Floor, Ratchadaphisek Road, Klongtoei, Klongtoei, Bangkok 10110
Tel. 0-2229-2800, 0-2654-5599 Fax. 0-2359-1262-3
Auditor
:
Mr. Somchai Jinnovart
C.P.A Reg. No. 3271
Ms. Nangnoi Charoenthaveesub
C.P.A Reg. No. 3044
Mr. Prasan Chuapanich
C.P.A Reg. No. 3051
PricewaterhouseCoopers ABAS Ltd.
15th Floor, Bangkok City Tower, 179/74-80 South Sathorn Road,
Tung Mahamek, Sathorn, Bangkok 10120
Tel. 0-2286-9999, 0-2344-1000 Fax. 0-2286-5050
Legal Counsel
:
Siam City Law Offices Limited
26th Floor, Rajanakarn Building, 183 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120
Tel. 0-2676-6667-8 Fax. 0-2676-6188-9
International Legal Counsellors Thailand Ltd.
18th Floor, Sathorn City Tower, 175 South Sathorn Road, Tung Mahamek, Sathorn, Bangkok 10120
Tel. 0-2679-6005, 0-2679-6015
Fax. 0-2679-6041, 0-2679-6042
Dej Udom & Associates Ltd.
9th Floor, Charn Issara Tower, 942/142-3 Rama IV Road, Suriyawong, Bangrak, Bangkok 10500
Tel. 0-2233-0055 Fax. 0-2236-6681
26
Annual Report
2005
Other Information
2.
Nature of Business
Revenue Structure of Company Group (Revenue net of inter-group transactions)
Activities/Products/Services
Operate by
Shareholding of
2004
Mil. Baht
-
50,174
95.9
45,018
97.3
39,456
97.1
50,174
95.9
45,018
97.3
39,456
97.1
1,397
2.7
1,231
2.7
1,155
2.9
1,397
2.7
1,231
2.7
1,155
2.9
8
-
9
-
8
-
8
-
9
-
8
-
716
1.4
-
-
-
-
716
1.4
-
-
-
-
52,295
100
46,258
100
40,619
100
Siam Makro Plc.
%
2003
Company (%)
Sales of consumer goods
2005
Mil. Baht
%
Mil. Baht
%
and other income
Total
Makro Office Centre
Sales of goods
Makro Office
and services
Centre Co., Ltd.
99.99
and other income
Total
Property Rental
Property rental
Makro Properties Ltd.
99.99
and services
and other income
Total
Importing and trading frozen foods
*Sales of goods
Siam Food
and services
Services Limited
99.99
and other income
Total
Grand total
Remark : * After elimination of sales to Siam Makro Plc.
27
Annual Report
2005
Other Information
3.
Shareholding Structure and Management
3.1 Shareholders
Major Shareholders
Major shareholders as at the latest book closing date (October 6, 2005)
Name
No. of shares
% of all shares
132,015,140
55.01
14,898,160
6.21
3.) Investors Bank and Trust Company
9,055,000
3.77
4.) Mellon Bank, N.A.
7,603,177
3.17
5.) The Bank of New York (Nominees) Limited
6,815,310
2.84
6.) State Street Bank and Trust Company, for London
4,972,500
2.07
7.) BNP Paribas Securities Services Dublin Branch
4,050,500
1.69
8.) American International Assurance Company, Limited-AIA5E
4,000,000
1.67
9.) Aberdeen Growth Fund
3,769,300
1.57
10.) Thai Banks Mutual Fund
2,829,700
1.18
1.) Siam Makro Holding (Thailand) Ltd.
2.) Orkam Holding Asia N.V.
Major Shareholder Groups
The major shareholder groups as stated on the latest book closing date on October 6, 2005 are as follows :
Name
No. of shares
% of all shares
14,898,160
6.21
132,015,140
55.01
1. SHV Group
- Orkam Holding Asia N.V.
2. Joint venture among SHV Group
and other shareholders
- Siam Makro Holding (Thailand) Ltd.
Remark :
1. SHV Group has control over the plan and the policies of the Company and its subsidiaries.
2. Investors can visit SET's website www.set.or.th for more update information before Annual General
Shareholders' Meeting.
28
Annual Report
2005
Other Information
3.2 Management
(1) Management Structure
The Company's management structure comprised the Board of Directors, Executive Board and Audit Committee.
Board of Directors
Name of Members of the Board of Directors as at December 31, 2005
1. Mr. Dhanin Chearavanont
Honorary Chairman
2. Mr. Arsa Sarasin
Chairman
3. Mrs. Suchada Ithijarukul
Vice Chairman
4. Mr. Prasert Jarupanich
Director
5. Mr. Francisco Henrique Passos Fernandes
Director
6. Mr. Ruurd Jacobus Faber*
Director
7. Mrs. Saowaluck Thithapant
Director
8. Mr. Athaporn Khaimarn
Outside Director and Chairman of the Audit Committee
9. Mr. Chavalit Uttasart
Outside Director and Member of the Audit Committee
10. Mr. Thira Wipuchanin
11. Mr. David Thomas Binnion
Outside Director
Remark :
1. * Appointed to replace the director who resigned during the year.
2. Outside Director means director who is not an executive director, major shareholder of the company
and does not involve in the day-to-day operations of the company.
Functions and Responsibilities of Directors
1. To comply with all laws and regulations, all objects and articles of association of the Company, and carry out
their duties in line with the resolutions of shareholders' meeting in good faith and with care to preserve the
interests of the Company and to ensure the management's accountability to shareholders.
2. To implement and direct the Company's policies, as well as monitor and supervise its operations.
3. To follow and monitor the business's performance and the operations of the Company continuously, according to
its by-laws and regulations and to be notified by the management of any significant matters regarding the
Company's business.
4. To maintain the effectiveness of the Company's internal control and internal audit.
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Annual Report
2005
Other Information
Executive Board
Name of Members of the Executive Board as at December 31, 2005
1. Mr. Arsa Sarasin
Chairman of the Executive Board
Vice Chairman and President
Executive Director
Executive Director
5. Mr. Ruurd Jacobus Faber*
Executive Director
Executive Director
Remark :
* Appointed to replace the executive director who resigned during the year.
Functions and Responsibilities of the Executive Board
1. To determine the Company's strategy and business plans of each business including investment, human
resources, performance appraisals and remuneration.
2. To prepare budgets and investment projects of each business and submit to the Board of Directors for
approval.
3. To follow and monitor the operating performance and the progress of investment projects in each
business together with performance report, problems and obstacles encountered and possible solutions to
the Board of Directors.
4. To follow and monitor developments in management and risk management system of each business.
5. To follow and monitor human resource development, management promotion and rotation in each business
according to the Company's plans.
6. Being the authorised directors whose signatures bind the Company (Joint signatures of two directors affixed by the
Company seal).
Audit Committee
Name of Members of the Audit Committee as at December 31, 2005
Chairman of the Audit Committee
Member of the Audit Committee
Member of the Audit Committee
Functions and Responsibilities of the Audit Committee
1. To review the Company's financial reporting process to ensure accuracy and adequacy;
2. To ensure that the Company has suitable and efficient internal control system and internal audit;
3. To review the performance of the Company to ensure compliance with the securities and exchange law, regulations
of the SET or laws relating to business of the Company;
4. To consider, select, nominate and recommend remuneration of the Company's external auditor;
5. To review the disclosure of information of the Company in case of connected transaction or transaction that
may lead to conflict of interest to ensure the accuracy and completeness;
6. To prepare a report on monitoring activities of the Audit Committee and disclose it in an annual report of the
Company, and have such report signed by the Chairman of the Audit Committee; and
7. To perform any other act as assigned by the Board of Directors with approval of the Audit Committee.
30
Annual Report
2005
Other Information
The Criteria of Outside Director Selection
Qualifications of the Outside Director
The Outside Director must possess qualifications according to the criteria as follows :
1. Holding shares not more than 5 per cent of paid-up capital of the company, affiliated company, associated
company or related company, which shall be inclusive of the shares held by related persons.
2. - Being the director who does not take part in the management of the company, affiliated company, associated
company, related company or majority shareholder of the company.
- Not being an employee, staff member or advisor who receives a regular salary from the company, affiliated
company, associated company or related company or majority shareholder of the company.
3. - Being a director who has no direct or indirect benefit or interest in finance and management of the company,
affiliated company, associated company or majority shareholder of the company.
- Being a director who has benefit or interest of the said nature during the period of 1 year before his appointment
as a Outside Director except where the Board of Directors has carefully considered that such previous
benefit or interest does not affect the performance of duties and the giving of independent opinions.
4. Being a director who is not a related person or close relative of any management member or majority shareholder
of the company.
5. Being a director whom is not appointed as a representative to safeguard interests of the company's directors,
majority shareholders or shareholders who are related to the company's majority shareholders.
6. Being capable of performing duties, giving opinions or reporting the results of performance of work according
to the duties delegated by the Board of Directors free and clear of the control of the management or the
majority shareholders of the company including related persons or close relatives of the said persons.
Remark :
Related persons mean to include persons who have relationship with or are related to the company to
the extent that they cannot perform their duties independently or in a flexible manner.
Outside Director Nomination
Outside Director nomination is as in the clause of Directors Nomination on page 39.
31
Annual Report
2005
Other Information
Biographical Information of the Company’s Directors and Executives
Directors
Mr. Dhanin Chearavanont (66)
Position
Honorary Chairman
Shareholding
10 shares (no change)
Relationship with Executives
None
Education
Commercial School, Hong Kong
National Defence College
Certificate in Director Accreditation Program initiated by the Thai Institute of Directors
Working Experience
1988-1999
Chairman, Siam Makro Plc.
1989-present
Chairman & CEO, Charoen Pokphand Group of Companies
1993-present
Chairman, True Corporation Plc.
1999-present
Honorary Chairman, Siam Makro Plc.
Mr. Arsa Sarasin (69)
Position
Chairman
Shareholding
18,900 shares (no change)
None
Education
B.A. in Business Administration, Boston University, U.S.A.
Working Experience
1994-1999
Honorary Chairman and Outside Director, Siam Makro Plc.
1992-present
Chairman, Thai-Asia Pacific Brewery Co., Ltd.
1998-present
Chairman, Padaeng Industry Plc.
1999-present
Chairman, Siam Makro Plc.
Mrs. Suchada Ithijarukul (53)
Position
Vice Chairman and President
Shareholding
None
None
Education
Bachelor degree in Accountancy, Chulalongkorn University
Certificate in Directors Certification Program initiated by the Thai Institute of Directors
Working Experience
1995-2001
Finance Director, Siam Makro Plc.
1996-present
Director, Siam Makro Plc.
Director, Makro Properties Ltd.
Director, Makro Office Centre Co., Ltd.
2001-present
Vice Chairman and President, Siam Makro Plc.
2005-present
Director, Siam Food Services Limited
Note : ( ) age at December 31, 2005
32
Annual Report
2005
Other Information
Mr. Prasert Jarupanich (57)
Position
Director
Shareholding
10 shares (no change)
None
Education
Ph. D. in Industrial Engineering and Management, Oklahoma State University
Working Experience
1988-present
Deputy Managing Director, Marketing and Distribution,
Charoen Pokphand Group of Companies
Director, C.P. Seven Eleven Plc.
Mr. Francisco Henrique Passos Fernandes (59)
Position
Director
Shareholding
None
None
Education
Bachelor of Science in Accounting
Working Experience
1995-2002
Audit and Consulting Client Service Partner for
Multinational Companies, PricewaterhouseCoopers
2002-present
Director, Makro Asia Management Ltd.
Mr. Ruurd Jacobus Faber (46)
Position
Director
Shareholding
None
None
Education
B.A. Human Resources, Hojeschool of Amsterdam
Working Experience
1995-1999
Human Resources Director, NCR Corp.
2000-present
Human Resources Director, Makro Asia Management Ltd.
2005-present
Director, Makro Asia Management Ltd.
33
Annual Report
2005
Other Information
Mrs. Saowaluck Thithapant (50)
Position
Director and Finance Director
Shareholding
None
None
Education
Bachelor degree in Accountancy, Thammasart University
Bachelor degree in Laws, Thammasart University
Master degree in Accountancy, Thammasart University
Working Experience
1997-1999
Vice President-Accounting and Finance, Premier Enterprise Plc.
1999-2002
Senior Vice President-Accounting and Finance, Premier Group of Companies
2002-present
Finance Director, Siam Makro Plc.
2004-present
2005-present
Mr. Athaporn Khaimarn (61)
Position
Outside Director and Chairman of the Audit Committee
Shareholding
None
None
Education
Associate member of the Institute of Chartered Accountants in Australia
Associateship in Accounting from Western Australia Institute of Technology
(Now, Curtin University of Technology)
Working Experience
1992-1996
Managing Director, Price Waterhouse, Bangkok
1999-present
Outside Director and Chairman of the Audit Committee, Siam Makro Plc.
Mr. Chavalit Uttasart (57)
Position
Shareholding
None
None
Education
LL.B. Honors, Chulalongkorn University
Barrister-At-Law, The Institute of Legal Education
Barrister-At-Law, Gray’s Inn, London
Working Experience
1977-2005
Director, International Legal Counsellors Thailand Ltd.
1999-present
Outside Director and Member of the Audit Committee, Siam Makro Plc.
2005-present
Managing Director, Siam City Law Offices Limited
34
Annual Report
2005
Other Information
Mr. Thira Wipuchanin (56)
Position
Shareholding
None
None
Education
B.Sc. in Economic and Business Administration,
University of Wisconsin-Stevents Point, U.S.A.
Certificate in Audit Committee Program initiated by the Thai Institute of Directors
Working Experience
1990-1994
Thailand Representative,
Prudential Asset Management Asia Ltd.
1995-1997
Senior Vice President, Premier Group of Companies
1998-Jan 2004
Senior Executive Vice President,
Export - Import Bank of Thailand
2003-present
Outside Director and Member of the Audit Committee, Siam Makro Plc.
Mr. David Thomas Binnion (48)
Position
Outside Director
Shareholding
None
None
Education
Leeds University, U.K. B.Sc. Hons., Biochemistry/ Pharmacology
Manchester Business School, U.K. MBA
Kennedy-Western University, U.S.A. Ph.D., International Business (external)
Working Experience
1996-1997
Regional Director Asia, Fresenius GMBH
1998-2003
Director, Hay Group Thailand
2004-present
Partner, Indigo Consulting Group Co., Ltd.
Outside Director, Siam Makro Plc.
35
Annual Report
2005
Other Information
Executives
Mrs. Suchada Ithijarukul (53)
Details as mentioned in Biographical Information of the Company's Directors.
Mr. Philip William Cox (60)
Position
Commercial Director (Dry Food)
Shareholding
None
None
Education
Attended the Sydney University to study Business Administration
Working Experience
1989-1997
Managing Director,
Mah Boonkrong Sirichai Supermarket Co., Ltd.
1997-present
Commercial Director (Dry Food), Siam Makro Plc.
2005-present
Mr. Louis Lin (42)
Position
Commercial Director (Fresh Food)
Shareholding
None
None
Education
Business Manager Courses, Chung-Shin University
Working Experience
1990-2001
Fresh Food Manager, Wellcome Taiwan Dairy Farm
2001-2003
Commercial Director (Food), Makro Taiwan
2003-present
Commercial Director (Fresh Food), Siam Makro Plc.
Mr. David Yvon Joseph Francois Poussier (35)
Position
Operations Director
Shareholding
None
None
Education
DEUG Sciences Economics, University of CAEN
Working Experience
1999-2000
Fresh Supervisor, Makro Portugal
2000-2005
Store Manager, Makro Portugal
2005-Dec 2005
Senior Operations Manager, Makro Asia Management Ltd.
Jan 2006-present
Operations Director, Siam Makro Plc.
Mrs. Saowaluck Thithapant (50)
Details as mentioned in Biographical Information of the Company's Directors.
36
Annual Report
2005
Other Information
Mrs. Boonsin Srilertchaipanij (52)
Position
Personnel Director
Shareholding
None
None
Education
B.A. Faculty of Arts, Chulalongkorn University
Certificate in Finance for Non-Finance Director initiated by the Thai Institute of Directors
Working Experience
1992-1997
Vice President-Administration & Personnel
Christiani & Nielsen (Thai) Plc.
1998-present
Personnel Director, Siam Makro Plc.
2000-present
2001-2004
2005-present
Mr. Chertchai Thirakul (45)
Position
Information Services Director
Shareholding
None
None
Education
Bachelor Degree in Electrical Engineering,
King Mongkut Institute of Technology, Ladkrabang
Master Degree in Computer Science, University of Southwestern Louisiana, U.S.A.
Working Experience
1994-1997
Country Sales Manager, Oracle Systems (Thailand) Co., Ltd.
1997-present
Information Services Director, Siam Makro Plc.
37
Annual Report
2005
Other Information
Details of the Board of Directors and Executives in the Company and its Subsidiaries and or Related Companies as at December 31, 2005
Name
Siam Makro Plc.
Subsidiary
Companies
A
Mr. Dhanin Chearavanont
Mr. Arsa Sarasin
B
Related Companies
C
1
D
E
F
2
2
7
2, 3
4, 5, 6
G
9, 11
2
2
2
Mr. Prasert Jarupanich
7, 8
Mr. Francisco Henrique
Passos Fernandes
7, 8
7
Mr. Ruurd Jacobus Faber
7, 8
7
Mrs. Saowaluck Thithapant
7, 8
Mr. Athaporn Khaimarn
9, 10
Mr. Chavalit Uttasart
9, 11
Mr. Thira Wipuchanin
9, 11
Mr. David Thomas Binnion
7
7
7
7
7
7
9
Mrs. Boonsin Srilertchaipanij
Mr. Philip William Cox
7
Remark :
Positions
1 = Honorary Chairman
2 = Chairman
3 = Chairman of the Executive Board
4 = Vice Chairman
5 = Vice Chairman of the Executive Board
6 = President
7 = Director
8 = Executive Director
9 = Outside Director
10 = Chairman of the Audit Committee
11 = Member of the Audit Committee
Subsidiary Companies
A = Makro Properties Ltd.
B = Makro Office Centre Co., Ltd.
C = Siam Food Services Limited
Related Companies
D = Charoen Pokphand Group Co., Ltd. E = Charoen Pokphand Foods Plc.
F = Perfect Companion Co., Ltd.
G = Makro Asia Management Ltd.
38
Annual Report
2005
Other Information
Details of Directors of Subsidiary Companies as at December 31, 2005
Subsidiary
Companies
Makro
Properties Ltd.
Makro
Office Centre Co.,Ltd.
Siam Food
Services Limited
Director
Director
Director
Directors Name
Mrs. Boonsin Srilertchaipanij
Director
Director
Director
Mrs. Saowaluck Thithapant
Director
Director
Director
Mrs. Supornsri Naktanasukarn
-
Director
-
Mr. Anthony Young Kyun Chung
-
Director
-
Mr. Pieter Jan Frederik Nuboer
-
-
Director
Mr. Philip William Cox
-
-
Director
(2) Directors Nomination
(2.1) Unless otherwise provide in clause (2.2), a general meeting of shareholders shall elect directors in accordance
with the following rules and procedures:
a) A shareholder shall have a number of votes which is equivalent to the number of shares held by him;
b) Each shareholder may exercise all the votes he has under clause a), to elect one or more persons as
directors but he may not split his votes among any such persons;
c) The persons receiving the highest number of votes in the respective order of the votes shall be elected
as directors up to the total number of directors required or to be elected at such time. In the event that a
number of persons receives an equal number of votes for the last directorship exceeds the number of
directors the Company required or to be elected at such time, the chairman of the meeting shall have a
casting vote;
(2.2) If the directorship become vacant for any reason other than by rotation, the board of directors shall elect
a person who is qualified and not having a prohibited characteristics as provided in Section 68 of the Public
Limited Company Act B.E. 2535 as director to fill the vacancy at the subsequent board of directors meeting
unless the remaining term of the director is less than 2 months. The director who fills the vacancy shall
retain his office only for the remaining term of the office of the director whom he replaces.
The resolution of the board of directors under the first paragraph shall consist of not less than three-fourth
of the votes of the remaining directors.
In addition, the Company has never appointed a Nominating Committee and defined the numbers of directors
from major shareholders. Therefore, an election of the Company’s directors is in compliance with the Company’s
articles of association as above mentioned on Directors Nomination.
39
Annual Report
2005
Other Information
(3) Remuneration of the Executives in 2005
Financial Remuneration
(a) The 7 directors of the total 12 directors (including director who resigned during the year) of the Company
received fee of Baht 6.2 million. As being the full-time employees of the Company or affiliated company, the
remaining 5 directors did not receive such remuneration. The directors' remuneration rates in 2005 are as follow.
Honorary Chairman
100,000 Baht/ Month
Chairman
100,000 Baht/ Month
Vice Chairman
None (full-time employee)
Directors
60,000 Baht/ Month (except the directors were the full-time
employees of the Company or affiliated company)
Outside Director and Chairman of
80,000 Baht/ Month
the Audit Committee
Outside Director and Member of
60,000 Baht/ Month
the Audit Committee
Other Remuneration of Directors
None
(b) The 6 directors of the Executive Board have received the remuneration as member of the Board of Directors
or executive employees of the Company or affiliated company.
(c) The 8 executives (including executives who resigned during the year) received remuneration in the form of
salary and bonus with total amount of Baht 61.6 million.
Other Remuneration
In 2005 the Company paid 8 executives other remuneration in the amount of Baht 17.1 million (including
executives who resigned during the year). The remuneration consists of the Company’s contributed provident
fund (3% of salary) and the expatriate executives’ expenses i.e. house rent, utility bills, telephone expenses,
income tax payable and travelling expenses etc.
Directors and Executives’ Shareholding Status in the Company and Affiliated Companies
As at December 31, 2005
Name and Position
Company/Affiliated Companies
No. of shares held
Increase/Decrease
1.) Mr. Dhanin Chearavanont
Honorary Chairman
-
Siam Makro Plc.
10
No change
1
No change
Siam Makro Plc.
18,900
No change
Siam Makro Plc.
10
No change
1
No change
2.) Mr. Arsa Sarasin
Chairman
3.) Mr. Prasert Jarupanich
Director
-
40
Annual Report
2005
Other Information
(4) Practice of Best Code for Directors of Listed Companies
In compliance with the Code of Best Practice for Directors of Listed Companies of the Stock Exchange of Thailand,
the Company’s Board of Directors has been performing their duties according to the roles and responsibilities in
compliance with laws and regulations, objectives and articles of association of the Company as well as the
resolutions of shareholders’ meetings with honesty and care to preserve the interests of the Company, and have
accountability to shareholders. The Board of Directors has implemented and directed the Company’s policies,
monitored and supervised its operations as well as continuously followed and monitored the business’s
performance and the operations of the Company, according to its by laws and regulations. In addition, the Board of
Directors has maintained the adequacy of the Company’s internal control and internal audit in order to ensure the
effectiveness of the Company’s operation.
(5) Supervision on Insider Trading
In order to prevent securities trading by using inside information and to prevent criticism on the appropriateness of
insider purchases or sales, the Company has supervisions and limitations on the use of the Company’s
information for personal benefit, as well as for securities trading. The Company will keep confidential, material
information which are not known to the public, and will be revealed only to related senior executives. Senior
executives who are able to access material information which is not known to the public must report their
purchases and sales of the Company’s securities pursuant to the regulations of the SEC and SET, Re: Rules,
Conditions and Procedures Governing the Preparation and Disclosure of Reports on Securities Holding.
Furthermore, the preparation and distribution of documents related to such secret information will be done only by
appropriate and related officers of the Company.
In addition, the Company has policy and made regular internal and public announcements and notifications on the
core values of the Company relating to the lawful and ethical conduct. In particular, the use of material secret
information, which may affect the trading of securities, as well as gaining of personal benefit when dealing in
securities. Such misconduct by revealing material and internal information of the Company for personal benefit is
strictly prohibited. According to the Company's policy, it is prohibit for the management and employee to use the
inside information for their own benefit. Our policy stipulate that each employee avoid any abuse of insider
knowledge and any mixing of personal and business interests, and the appearance of such an abuse or conflict of
interest. A strict obligation of secrecy applies.
(6) The opinion of the Board of Directors Concerning Internal Control of the Company
and Its Subsidiaries
The Company’s Board of Directors, which compose of the Company’s Audit Committee, opined that the financial
systems, financial reports and financial audit of the Company and its subsidiaries are reliable under adequate and
appropriate internal control system. The Company internal audit department continuously monitors its internal
control system to ensure the adequacy and effective implementation of the internal process in accordance with the
Company’s policy.
41
Annual Report
2005
Other Information
(7) Dividend Payment Policy
Unless it is feasible to do so, the Company’s Board of Directors intends to propose to shareholder’s meeting for
approval of the Company to pay dividend not less than 40 percent of its net profit after income tax, subject to
annual operating performance. Starting from the financial year of December 31, 1994.
In addition, the dividend payment policy of the subsidiaries, the Board of Directors of the subsidiaries shall
consider paying the dividend on occasion.
4.
Related Transactions with the Conflict of Interested Persons
In 2005 the Company had incurred transactions with the conflict of interested persons. The related transactions are shown on
page 75 in clause 19 “Related Party Transactions” of Note to the Consolidated and Company Financial Statements for the
years ended 31 December 2005 and 2004 which is audited by external auditor and reviewed by the Company’s Audit
Committee.
Feature of Relationships and Related Transactions
1.
Purchases of goods
The Company purchased goods from the companies that are related parties through the same directorship persons
and/or shareholding interests as follows :
The related companies in the Charoen Pokphand Group are C.P. Consumer Products Co., Ltd., C.P. Retailing and
Marketing Co., Ltd., CP-Meji Co., Ltd., C.P. Inter Food (Thailand) Co., Ltd., Bangkok Agro-Industrial Products Plc.,
Charoen Pokphand Northeastern Plc., Charoen Pokphand Industry Co., Ltd., Perfect Companion Co., Ltd., Seafood
Enterprise Co., Ltd., Vee Food Products Co., Ltd. and Universal Food and Marketing Co., Ltd.
2.
Service expenses
The Company has been granted rights to use the software, trademarks and received consultant services in relation to own
brand development, management services technical assistance in auction purchasing and maintenance services for
application software from local and overseas affiliated companies, being members of SHV Group, which are Orkam Asia
Management AG, Orkam Asia Trademark AG, and Makro Cash & Carry Distribution (M) SDN.BHD. and Makro Asia
Management Ltd. respectively.
Pricing Policy of Related Transactions
1.
Goods purchased transactions are in line with normal business condition and treated in the same manner as other unrelated
manufacturers and/or distributors of merchandises and with reference to the market price.
2.
Software license fees, royalty fees, consultant service fees, management fees and maintenance service fees for the use of
such trademarks and services are as specified in agreements and are on a reasonable basis for the Company and its
subsidiaries as follows.
42
Annual Report
2005
Other Information
a) Royalty fee for the use of trademarks is 0.5 percent of sales volume of the first-10 stores of the Company and all stores of
its subsidiaries subtracted by value of goods return and VAT. The agreement is valid for 1 year. However, the Company
and its subsidiaries reserve the right to renew the agreement every year and have the right to use such trademarks and
service marks in business operations.
b) Software license fee is NLG 50,000 (or EUR 22,689 in equivalent) for each Makro's new store. The payment is made once
a new store is open. The agreement is valid for 1 year and is renewable annually. Regarding the benefit from this
license, the Company will obtain the specific IT software which is necessary to the business operations.
c) Consultant service fee in relation to own brand development is R.M. 12,320 per month. The agreement is valid for 1 year.
Regarding the benefit from this service agreement, the Company will receive consultant services in relation to own brand
development.
d) Yearly maintenance fee is 20% of the total user licence fee. The agreement is for unlimited period of time, unless party
shall terminate the agreement by written notice. The Company will receive maintenance services for the application software.
e) Annual fee for management services and technical assistance in auction purchasing is charged in Thai Baht equivalent
to USD 110,000 and annual membership fees in relation to cost sharing for the shared use of auction tools at a fixed part
amounting to USD 160,000 and a variable part amounting to USD 160,000 which will be shared between group company
under regional management depending on the volume of auctions realised. The agreement is valid for 1 year and is
renewable annually. The Company will receive management services and technical assistance regarding auction purchasing.
Necessity and Reasons of Related Transactions
1. In respect of goods purchased transactions, the Company followed its practice under the procurement system i.e. selection
of goods, manufacturers and/or distributors of merchandises, negotiation of price, term of payment, delivery and return of
merchandises, etc. These are corresponded to the customers' need and the Company's focus on providing maximum
benefit for customers and the Company.
2. In respect of the use of software license, trademarks and consultant services in relation to own brand development, management
services technical assistance in auction purchasing and maintenance services for application software, the Company has
been supported in technical service and management for the Company's core business operations by local and overseas
affiliated companies.
Measures or Procedures for Approving Transactions and Policy for Future Transactions
The related transactions are incurred only when required as normal course of doing business and for the benefit of the
Company. The goods purchased transactions from Charoen Pokphand Group refer to the market price which is a normal
trading convention under the Company's management procedures and internal control system. The use of software license,
trademarks and consultant services in relation to own brand development, management services technical assistance in
auction purchasing and maintenance services for application software are necessary for business operations. The such
transactions are prior approved by our Board of Directors which is in line with the Company's Articles of Association as
specified in the agreements on a reasonable basis for the Company and its subsidiaries. In the future, the Company has policy
to incur the related transactions when and only if its business operations are required to do so and receive the approval from
the Board of Directors before entering into those related transactions. Terms and conditions of all transactions will be treated in
the same manner as the other third-party transactions.
43
Annual Report
2005
Other Information
5.
Corporate Governance
1. Policy on Corporate Governance
The Board of Directors has established and is committed to a policy regarding corporate governance where strategic
directions of the Company’s operations have been defined and the Board of Directors works to ensure that such policy
has been implemented efficiently by the Management for the ultimate benefits of the Company and its shareholders in a
transparent and fair manner. These will be achieved under legislative and regulatory framework as well as business codes
of conduct. Moreover, emphasis has been placed on the Company’s internal control and audit system.
2. Shareholders : Rights and Equitable Treatment
In 2005 there were Annual General Shareholders' Meeting and Extraordinary General Shareholders' Meeting, which were
held at Monthathip Room, Radisson Hotel, No. 92, Rama 9 Road, Bangkapi Subdistrict, Huay Khwang District, Bangkok.
The meeting notices were delivered together with supporting documents to the agenda in advance to shareholders as
required by law for their prior review. The shareholders may appoint proxies to attend the meeting and vote for them or,
alternatively, delegate the Company's outside directors as their proxies. The Company also provides to the shareholders
to vote under the agenda which is in line with the Company's Articles of Association. In this regard, we have equally
facilitated and treated all shareholders with respect to the shareholders' meeting.
3. Various groups of Stakeholders
The Company respects the rights of all interested parties, both internal ones, e.g. employees and management of the
Company and its subsidiaries, or external ones, e.g. customers, creditors, competitors, as well as relevant government
agencies and other authorities. We have realised that their support is vital in strengthening our competitiveness and
profitability which are fundamental to our long-term success.
4. Shareholders’ Meetings
The 2005 Annual General Shareholders' Meeting and Extraordinary General Shareholders' Meeting were attended by the
Company's directors including audit committee. All shareholders were treated equally with respect to their rights in making
inquiries and comments regarding businesses under the agenda and proposals.
5. Leadership and Vision
The Board of Directors works closely with the Company to establish objectives, business plans and budgets and to ensure
efficient and effective implementation of the business plans and budgets in order to optimise economic benefits to the
Company and stability to its shareholders. Roles, duties and responsibilities of the Board of Directors, Executive
Committee and Audit Committee have been discussed under 'Management Structure' on page 29. The Board of Directors
also approves financial transactions with respect to investment of the Company other than those required approval of
shareholders pursuant to regulations of the SEC, SET and Public Limited Companies Act B.E. 2535.
44
Annual Report
2005
Other Information
6. Conflict of Interests
a) Transactions with potential conflict of interest have been discussed under 'Related Transactions with the conflict of
Interested Persons' on page 42. Such transactions are disclosed in the notes to quarterly and annual financial
statements under 'Related Party Transactions'. The financial statements have been reviewed by the Audit Committee
and approved by the Board of Directors.
b) Transactions falling under the category of interconnected transactions must be reviewed and approved by the Board
of Directors and must be in compliance with relevant SET regulations.
c) Supervision on use of internal information has been discussed under 'Supervision on Insider Trading' on page 41.
7. Business Ethics
The Business Ethics was established by the Company for strict compliance by the management and employees to ensure
that they conduct their duties to the Company, interested parties, the public and society in an honest, just and
unprejudiced manner. The Company closely monitors compliance with the Business Ethics and disciplinary actions are
imposed against any violators.
8. Balance of Power for Non-Executive Directors
The Board of Directors comprises 11 directors:
a) 4 executive directors
b) 3 non-executive director
c) 1 outside director was not member of the audit committee
d) 3 outside directors were members of the audit committee
The Company had 4 outside directors, equivalent to 36.36% of total number of directors
9. Aggregation or Segregation of Positions
The Chairman of the Board of Directors neither has any relationship with, nor is the same person as the Managing
Director, in order to ensure complete division of corporate governance duties and managerial duties.
10. Remuneration for Directors and the Management
a) Directors’ remuneration
Directors’ remuneration has been fixed in a clear and transparent manner by obtaining approval from the meeting of
shareholders.
b) Management’s remuneration
Management’s remuneration has been fixed in compliance with the principle and policy of the Company with reference
to its performance and performance of respective management.
c) Remuneration for directors and management in 2005
This has been discussed in ‘Remuneration of the Executives in 2005’ on page 40.
45
Annual Report
2005
Other Information
11. Board of Directors’ Meetings
The Board of Directors meets every 3 months and extra meetings are held depending on necessity. The agenda of the
meetings must be clearly set out prior to the meeting, including an agenda to approve reports of the Audit Committee and
financial statements of the Company. Thus the Company arranged for the notice of meeting together with agendas for the
meeting and other documents to be delivered to the Board of Directors 7 days prior to the meeting so that the Board of
Directors will have time to examine the information. In 2005 the Board of Directors had total 6 ordinary meetings. The
follow is a summary of the Board of Directors’ meeting attendance.
Name
Meeting attendance
1. Mr. Dhanin Chearavanont
-
2. Mr. Arsa Sarasin
6
6
5
6
6. Mr. Antonio Carlos Pereira Melo (resigned)
-
Mr. Ruurd Jacobus Faber* (new appointed)
-
6
8. Mr. David Thomas Binnion
4
6
4
6
Remark : * Appointed to replace the director who resigned during the year according to the resolution of the Board of
Directors' Meeting No. 4/2005
As such, the minutes of all the meetings were recorded in writing certified by the Board of Directors and sufficient for the
Board of Directors or other related parties to examine.
12. Committees
The Board of Directors set a sub-committee to help manage the activities of the Company, e.g. an audit committee that
was made up of three independent directors which include Mr. Athaporn Khaimarn who is the Chairman of the Audit
Committee, Mr. Chavalit Uttasart and Mr. Thira Wipuchanin who are the Members of the Audit Committee and senior
division manager-internal audit who is the secretary general of the audit committee respectively. Further details can be
found under the heading Audit Committee’s Report page 6 and under the heading Audit Committee at page 30. The
management of Internal Audit Department directly reports to the audit committee.
46
Annual Report
2005
Other Information
13. Controlling System and Internal Audit
a) Controlling System and Internal Audit
The Company has given importance to the system of internal control both at the management level and at the
operations level. Therefore it has allocated duties and powers of the employees and management in writing, these
persons have the responsibility of control the use of assets of the Company to yield the greatest benefits possible and
to divide the duties of the employees from the control and evaluation committee in order to obtain balance and fairness
as each side will review the other. The Company has internal control in relation to financial system as the Company
has arranged there to be a system of financial report to the management. Apart from this the Company has an internal
audit department to ensure that the main activities and behaviours in relation to major finances of the Company is of
quality moving in the planned direction.
b) Risk Management
The Company has given great importance to risk management. It has set and evaluated the risk of the operation of the
Company. The Company has its own self risk assessment questionnaires in all areas concerned and has the
management to respond to these questions. Subsequently, those completed questionnaires were reviewed by our
external auditor to ensure that these answering in the questionnaires are documentary evident. In addition, it has set
protection measures and has arranged for risks to include risks to the operation of the Company as a protection
measure to ensure the stability of the Company.
14. Directors’ Reporting
A report of the Board of Directors’ Responsibilities for Financial Statements is set out on page 49.
15. Relations with Investors
The Company has given importance to the accurate, complete, transparent and thorough disclosure of both general and
financial information up to information which could have an impact on the market price of the shares of the Company. It
has disclosed such information to investors and related parties through channels and other routes of the SET.
Furthermore the Company has consented for the finance director to have the duty of communication with institutional
investors, shareholders, general analysts and relevant government agencies. The Company has regularly organise the
investor analyst meeting once in a quarter after the disclosure of reviewed or audited financial statements to SET.
47
Annual Report
2005
Other Information
6.
Auditors' Remuneration in 2005
Audit fee
The Company and its subsidiaries paid audit fee to the audit firm; namely, PricewaterhouseCoopers ABAS Ltd. for the fiscal
year 2005 as the following details.
Company
Audit Firm
Audit Fee (Baht)
Siam Makro Plc.
3,335,908*
Subsidiary Companies
1,563,091*
Remark : * Excluding the remuneration in the case of the auditors attending the observation on the stock count during the year
at each branch and internal control review of new stores opening of the Company and its subsidiaries of Baht 646,041.
Non-audit fee
The Company paid non-audit fee i.e. risk assessment to the audit firm; namely, PricewaterhouseCoopers ABAS Ltd. for the
fiscal year 2005 as the following details.
Company
Non Audit Service
Service Providers
Paid
Contingent
(Baht)
Expenses
(Baht)
Siam Makro Plc.
Risk Assessment
PricewaterhouseCoopers
190,000
-
190,000
-
ABAS Ltd.
Total
48
Annual Report
2005
Report of the Board of Directors' Responsibilities for Financial Statements
The Board of Directors of Siam Makro Public Company Limited has provided the financial statements showing the Company’s
financial status and business operation result for the year 2005 under the Public Company Act B.E. 2535 (A.D. 1992) and Rules and
Regulations of the Stock Exchange of Thailand. The Board of Directors is responsible for the consolidated and company financial
statements presented in this annual report. The Board of Directors confirms that the aforementioned financial statements are in
accordance with Thai Generally Accepted Accounting Principles, using appropriate accounting policy consistently employed by the
Company as well as applying careful judgement and best estimation. Important information is adequately disclosed in the notes to
financial statements.
The Board of Directors has provided and maintained an efficient internal control system to ensure that accounting records are
accurate, complete and adequate to protect its assets and uncover weaknesses in order to prevent fraud or materially irregular
operations.
The Board of Directors has appointed an Audit Committee, which consists of Non-Executive Directors responsible for the quality
of financial statements and internal control system, whose comments on these issues are readily included in the Audit Committee
Report in this annual report.
The Board of Directors is of opinion that the Company’s overall internal control system has functioned up to the satisfactory level
and rendered credibility and reliability to the consolidated and company financial statements for the year ended December 31, 2005.
Mr. Arsa Sarasin
Chairman
President
49
Annual Report
2005
Consolidated and Company
Financial Statements
31 December 2005
50
Annual Report
2005
Auditor's Report
To the Shareholders of Siam Makro Public Company Limited
I have audited the accompanying consolidated and Company balance sheets as at 31 December 2005, and the related consolidated
and Company statements of income, changes in shareholders' equity and cash flows for the year then ended of Siam Makro Public
Company Limited and its subsidiaries, and of Siam Makro Public Company Limited, respectively. The Company's management is
responsible for the correctness and completeness of information in these financial statements. My responsibility is to express an
opinion on these financial statements based on my audit. The consolidated and Company financial statements of Siam Makro Public
Company Limited and its subsidiaries and of Siam Makro Public Company Limited, respectively, for the year ended 31 December
2004, presented herewith for comparative purposes, were audited by another auditor of the same firm as myself whose report dated
18 February 2005, expressed an unqualified opinion on those statements.
I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the consolidated and Company financial statements referred to above present fairly, in all material respects, the
consolidated and Company financial position as at 31 December 2005, and the consolidated and Company results of operations, and
cash flows for the years ended of Siam Makro Public Company Limited and its subsidiaries, and of Siam Makro Public Company
Limited, respectively, in accordance with generally accepted accounting principles.
SOMCHAI JINNOVART
Certified Public Accountant
(Thailand) No. 3271
PricewaterhouseCoopers ABAS Limited
Bangkok
22 February 2006
51
Annual Report
2005
Balance Sheets
As at 31 December 2005 and 2004
Consolidated
Notes
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
ASSETS
Current Assets
Cash and cash equivalents
3
4,038,633,732
4,449,897,259
3,885,847,009
4,290,356,698
Current investments
4
324,858,920
49,440,038
324,858,920
49,440,038
Trade accounts receivable, net
5
180,831,684
56,443,046
30,781,001
30,334,569
19
471,845
4,385
125,432,645
222,916,833
6
4,048,131,694
3,902,943,571
3,750,712,121
3,750,708,753
351,964,361
317,540,105
328,146,293
302,826,011
582,147,998
519,415,276
573,787,546
512,397,297
9,527,040,234
9,295,683,680
9,019,565,535
9,158,980,199
8
-
-
2,718,936,887
2,276,923,852
19
-
-
500,000,000
500,000,000
9
9,044,569,269
9,046,325,954
6,075,903,483
6,105,819,548
10
143,663,688
143,663,688
-
-
8, 11
187,076,696
-
-
-
Other intangible assets, net
12
18,613,016
7,885,517
15,501,382
5,674,817
Deposits
19
46,983,082
44,996,917
164,009,983
167,797,903
9,440,905,751
9,242,872,076
9,474,351,735
9,056,216,120
18,967,945,985
18,538,555,756
18,493,917,270
18,215,196,319
Advance payment and short-term loans
to related parties
Inventories, net
Purchase discount receivable
Other current assets
7
Total Current Assets
Non-Current Assets
Investments - equity method
Long-term loans to a related party
Property, plant and equipment, net
Land held for sale
or future development, net
Goodwill, net
Total Non-Current Assets
Total Assets
The notes to the consolidated and company financial statements form an integral part of these financial statements.
52
Annual Report
2005
Balance Sheets
As at 31 December 2005 and 2004
Consolidated
Notes
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term loans from financial institutions
53,514,433
-
-
-
8,991,430,707
8,127,341,346
8,671,531,776
7,909,057,741
76,807,650
83,341,594
96,588,853
83,341,594
9,068,238,357
8,210,682,940
8,768,120,629
7,992,399,335
69,032,145
62,813,853
65,091,308
59,792,131
Non-trade accounts payable
250,511,208
280,718,013
221,460,950
253,203,967
Current tax liabilities
217,376,748
247,197,460
171,235,491
205,587,362
Accrued expenses
280,582,070
231,348,155
260,049,107
220,526,829
1,767,630
1,583,997
-
-
67,727,048
84,648,311
59,031,280
76,326,069
10,008,749,639
9,118,992,729
9,544,988,765
8,807,835,693
Provision for employee benefits
73,498,206
75,820,214
72,561,667
72,841,567
Other liabilities
46,545,318
21,055,951
37,214,016
11,832,197
Trade accounts payable
Third parties
Related parties
19
Total trade accounts payable
Advance received
from related parties
19
Other current liabilities
VAT payable
Others
Total Current Liabilities
Non-Current Liabilities
Total Non-Current Liabilities
120,043,524
96,876,165
109,775,683
84,673,764
10,128,793,163
9,215,868,894
9,654,764,448
8,892,509,457
Authorised share capital
2,400,000,000
2,400,000,000
2,400,000,000
2,400,000,000
Issued and paid-up share capital
2,400,000,000
2,400,000,000
2,400,000,000
2,400,000,000
3,290,152,068
3,290,152,068
3,290,152,068
3,290,152,068
240,000,000
240,000,000
240,000,000
240,000,000
2,909,000,754
3,392,534,794
2,909,000,754
3,392,534,794
8,839,152,822
9,322,686,862
8,839,152,822
9,322,686,862
18,967,945,985
18,538,555,756
18,493,917,270
18,215,196,319
Total Liabilities
Shareholders’ Equity
Share capital
13
Premium on share capital
Retained earnings
Appropriated
Legal reserve
Unappropriated
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
14
53
Annual Report
2005
Statements of Income
For the years ended 31 December 2005 and 2004
Consolidated
Notes
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
Revenues
Sales
Service income
Other income
50,418,090,404
44,670,377,289
48,393,171,448
43,489,576,219
1,502,667,620
1,281,571,989
1,435,256,833
1,241,036,731
373,892,595
305,672,278
379,965,982
322,799,668
-
-
247,248,656
236,644,134
52,294,650,619
46,257,621,556
50,455,642,919
45,290,056,752
47,396,030,935
41,857,458,134
45,777,646,116
40,923,127,490
3,280,038,512
2,808,628,198
3,173,464,769
2,873,945,591
Share of net profit of investments
- equity method
8
Total revenues
Expenses
Cost of sales
15
Directors’ remuneration
6,200,000
5,280,000
6,200,000
5,280,000
50,682,269,447
44,671,366,332
48,957,310,885
43,802,353,081
1,612,381,172
1,586,255,224
1,498,332,034
1,487,703,671
(2,661,570)
-
-
-
Income tax
(473,253,642)
(479,398,022)
(361,866,074)
(380,846,469)
1,136,465,960
1,106,857,202
1,136,465,960
1,106,857,202
4.74
4.61
4.74
4.61
Total expenses
Profit before interest expense
and income tax
Interest expense
Basic earnings per share
16
54
Annual Report
2005
Statements of Changes in Shareholders' Equity
Consolidated
Issued
and paid-up
Premium on
Retained
share capital
share capital
earnings
Total
Baht
Baht
Baht
Baht
2,400,000,000
3,290,152,068
3,632,534,794
9,322,686,862
-
-
1,136,465,960
1,136,465,960
-
-
(1,620,000,000)
(1,620,000,000)
2,400,000,000
3,290,152,068
3,149,000,754
8,839,152,822
2,400,000,000
3,290,152,068
3,065,677,592
8,755,829,660
-
-
1,106,857,202
1,106,857,202
Notes
2005
Opening balance
Dividends
17
Closing balance
2004
Opening balance
Dividends
17
Closing balance
-
-
(540,000,000)
(540,000,000)
2,400,000,000
3,290,152,068
3,632,534,794
9,322,686,862
Company
Issued
and paid-up
Premium on
Retained
share capital
share capital
earnings
Total
Baht
Baht
Baht
Baht
2,400,000,000
3,290,152,068
3,632,534,794
9,322,686,862
2005
Opening balance
Dividends
-
-
1,136,465,960
1,136,465,960
-
-
(1,620,000,000)
(1,620,000,000)
2,400,000,000
3,290,152,068
3,149,000,754
8,839,152,822
2,400,000,000
3,290,152,068
3,065,677,592
8,755,829,660
-
-
1,106,857,202
1,106,857,202
-
-
(540,000,000)
(540,000,000)
2,400,000,000
3,290,152,068
3,632,534,794
9,322,686,862
17
Closing balance
2004
Opening balance
Dividends
17
Closing balance
55
Annual Report
2005
Statements of Cash Flows
Consolidated
Notes
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
Cash flows from operating activities
Net profit
1,136,465,960
1,106,857,202
1,136,465,960
1,106,857,202
9, 11, 12
642,511,503
576,562,926
592,263,323
547,151,578
9
(2,000,000)
650,000
(2,000,000)
650,000
(898,734)
(3,028,510)
(178,156)
(2,946,270)
8
-
-
(247,248,656)
(236,644,134)
6
(60,019,439)
43,519,005
(63,226,512)
43,686,523
7,367,861
20,179,505
7,621,865
17,494,766
Others
9,990,442
3,198,547
5,577,766
2,168,332
(128,101,314)
(22,780,901)
(446,432)
(18,982,881)
Adjustments for:
Depreciation and amortisation
Allowance (reverse) for
loss on disposal of
obsolete plant and equipment
Gain on disposal of property, plant
and equipment
Share of net profit of investments
- equity method
Allowance (reverse) for obsolete
and shrinkage inventories
Changes in operating assets and liabilities
Trade accounts receivable
Advance payment to related parties
(467,460)
110,709
(1,015,812)
424,256
Inventories
(85,168,684)
(610,640,998)
63,223,144
(598,539,312)
Purchase discount receivable
(34,424,256)
(62,558,872)
(25,320,282)
(57,478,178)
(69,010,488)
(383,131,537)
(66,968,015)
(381,887,298)
Trade accounts payable - third parties
864,089,361
1,650,225,991
762,474,035
1,632,778,291
(6,533,944)
27,758,893
13,247,259
27,758,893
6,218,292
435,265
5,299,177
261,151
Non-trade accounts payable
(42,582,926)
(58,506,261)
(46,249,874)
(54,962,349)
Current tax liabilities
(29,820,712)
49,287,080
(34,351,871)
44,735,623
49,233,915
53,883,994
39,522,278
52,699,953
183,633
(29,082,180)
-
(30,125,958)
(16,921,263)
(4,691,049)
(17,294,789)
(6,007,288)
Trade accounts payable - related parties
Advance received from related parties
Accrued expenses
VAT payable
Other current liabilities
Provision for employee benefit
Net cash receipts from operating activities
(9,689,869)
(13,760,285)
(7,901,765)
(9,464,555)
2,230,421,878
2,344,488,524
2,113,492,643
2,079,628,345
56
Annual Report
2005
Statements of Cash Flows (Continued)
Consolidated
Notes
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
Cash flows from investing activities
Net (purchase) disposals
of current investment
50,559,962
(275,418,882)
(196,922,838)
-
(234,764,379)
(619,482,050)
(1,119,187,465)
(549,694,919)
(1,093,460,316)
(17,210,542)
(6,239,351)
(14,476,677)
(6,235,982)
10,331,272
8,506,554
8,682,786
8,424,311
8
-
-
40,000,000
40,000,000
19
-
-
98,500,000
(102,500,000)
Purchase of investment in a subsidiary
4
(275,418,882)
8
Purchase of property, plant and equipment
Purchase of other intangible assets•
Disposals of property, plant and equipment
Dividends received from a related party
50,559,962
-
Net repayments short-term loan
made to a related party
Net repayments long-term loan
from a related party
19
-
-
-
290,000,000
23,503,202
79,166
29,169,739
7,021,240
(1,075,199,838)
(1,066,281,134)
(898,002,332)
(806,190,785)
53,514,433
-
-
-
(1,620,000,000)
(540,000,000)
(1,620,000,000)
(540,000,000)
(1,566,485,567)
(540,000,000)
(1,620,000,000)
(540,000,000)
(411,263,527)
738,207,390
(404,509,689)
733,437,560
Cash and cash equivalents, opening balance
4,449,897,259
3,711,689,869
4,290,356,698
3,556,919,138
Cash and cash equivalents, closing balance
4,038,633,732
4,449,897,259
3,885,847,009
4,290,356,698
510,196,020
430,110,942
396,217,945
336,110,846
2,801,735
-
-
-
108,328,645
95,952,524
93,049,708
78,542,851
Net deposits received
Net cash payments for investing activities
Cash flows from financing activities
Short-term loans from financial institutions
Dividends paid
17
Net cash payments for financing activities
Net increase (decrease) in cash and
cash equivalents
Supplementary information for cash flows
Income tax paid during the year
Interest paid during the year
Non cash transactions
Investing activities:
Purchase of property, plant and equipment
and other intangible assets unpaid
57
Annual Report
2005
Notes to the Consolidated and Company Financial Statements
1
General information
Siam Makro Public Company Limited was incorporated in Thailand on 10 May 1988, changed its status to a public company on
11 February 1994 and was subsequently listed on the Stock Exchange of Thailand on 11 August 1994.
The Company's principal business is the operation of Cash and Carry Trade Centres throughout Thailand, under the name
"Makro", selling food and non-food products to registered members, predominantly small and medium size businesses, retailers,
caterers, professional and service sectors and institutions.
The Company has three subsidiaries - Makro Office Centre Company Limited, Siam Food Services Limited and Makro Properties
Limited which operate businesses as follows: Makro Office Centre Company Limited is a specialised retailing operation, a
category killer supplying office supplies, office automation products and office services such as copying and printing, on a self
service, mail order and delivery basis, Siam Food Services Limited is a importing and trading frozen foods company and providing
services such as freight, delivery, rental and storage and Makro Properties Limited is a land investment company, purchasing the
land on which some Trade Centres are located on a lease basis.
The registered office of the Company is located at 3498 2nd Floor, Lard Prao Road, Klongchan, Bangkapi, Bangkok 10240.
The consolidated and Company financial statements have been approved for issue by the board of directors on 22 February 2006.
2
Accounting policies
The principal accounting policies adopted in the preparation of these consolidated and Company financial statements, which have
been applied consistently, are set out below.
2.1 Basis of preparation
The consolidated and Company financial statements have been prepared in accordance with Thai generally accepted
accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Account
Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission.
As a result of the Federation of Accounting Profession (FAP) approval of three new accounting standards on 12 May 2005,
the Company has adopted TAS 52, 'Events After Balance Sheet Date', TAS 53, 'Provisions, Contingent Liabilities, and
Contingent Assets' and TAS 54, 'Discontinuing Operations' for the year ended 31 December 2005. The adoption of the three
new standards did not have an impact on the financial statements presented.
The accounting principles applied may differ from generally accepted accounting principles adopted in other countries and
jurisdictions. The accompanying consolidated and Company financial statements are therefore not intended to present the
financial position and results of operations and cash flows in accordance with jurisdictions other than Thailand.
Consequently, these financial statements are prepared based on the assumption that the users of the financial statements
have an understanding of Thai generally accepted accounting principles and practices.
58
Annual Report
2005
2
Accounting policies (Cont'd)
2.1 Basis of preparation (Cont'd)
The consolidated and Company financial statements have been prepared under the historical cost convention.
An English version of the consolidated and Company financial statements have been prepared from the statutory financial
statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two
languages, the Thai language statutory financial statements shall prevail.
The preparation of financial statements in conformity with Thai generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reported periods. Although these estimates are based on management's best knowledge of current events and
actions, actual results may differ from those estimates.
Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.
2.2 Investment in subsidiaries
Investment in subsidiaries are those entities in which the Group has an interest of more than one half of the voting rights or
otherwise has power to exercise control over the operations. Subsidiaries are consolidated from the date on which control is
transferred to the Group and are no longer consolidated from the date that control ceases. All intercompany transactions and
balances between group companies are eliminated. Where necessary, accounting policies for subsidiaries have been
changed to ensure consistency with the policies adopted by the Group.
Investment in subsidiaries in the Company financial statements are presented by the equity method of accounting.
2.3 Foreign currency transactions
Foreign currency transactions in the Group are accounted for at the exchange rates prevailing at the date of the transactions.
The outstanding monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling
at the balance sheet date. Gains and losses resulting from the settlement of such transactions and from the translation of
monetary, assets and liabilities denominated in foreign currencies are recognised in the statements of income. Such
balances including balances hedged by forward foreign exchange contracts are translated at year-end exchange rates.
2.4 Financial instruments
Financial instruments carried on the balance sheet include cash and cash equivalents, current investments, trade receivables
and payables, amounts due from/to related parties, and loans to related parties. The particular recognition methods adopted
are disclosed in the individual policy statements associated with each item.
59
Annual Report
2005
2
2.4 Financial instruments (Cont'd)
Foreign currency forward contracts establish the exchange rate at which the Group will pay foreign currency amounts on a
predetermined future date.
Where the Group enters into significant forward contracts, the foreign currency amount
receivable under these contracts are translated at the year end exchange rate. Unrealised gains or losses that result from
the translation are recognised in the income statement. Any premium or discount equal to the difference between the spot
exchange rate and the forward rate arising at the inception of the contract is amortised over the life of the contract.
2.5 Cash and cash equivalents
Cash and cash equivalents are carried on the balance sheet at cost. Cash and cash equivalents comprise cash in hand,
deposits with banks and other short-term highly liquid investments with a maturity of three months or less when purchased.
2.6 Trade accounts receivable
Trade accounts receivable are carried at original invoice amount less allowance for doubtful receivables based on a review of
all outstanding amounts at the year end. The amount of the allowance is the difference between the carrying amount of the
receivable and the amount expected to be collectible. Bad debts are written-off during the year in which they are incurred.
2.7 Inventories
Inventories are stated at the lower of cost or net realisable value. Cost is determined by the latest purchase price which
approximates to cost determined by the first-in first-out basis. The cost of purchase comprises both the purchase price and
costs directly attributable to the acquisition of the inventory, such as import duties and transportation charges, less all
attributable discounts, allowances or rebates. Net realisable value is the estimate of the selling price in the ordinary course
of business, less the costs of completion and selling expenses. Allowance is made, where necessary, for obsolete, slowmoving and shrinkage inventories.
2.8 Investments
The Group classifies its investments in debt securities as held-to-maturity securities. Those investments with fixed maturity
that the management has the intent and ability to hold to maturity are included in current assets when the maturity date is
less than 12 months from balance sheet date and included in non-current assets when the maturity date is longer than 12
months.
Investments in debt securities which are classified as held-to-maturity securities are carried at amortised cost.
60
Annual Report
2005
2
2.8 Investments (Cont'd)
A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying
value of the investment is higher than its recoverable amount, the impairment loss is charged to the income statement.
On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged to the
income statement.
2.9 Property, plant and equipment
All property, plant and equipment is initially recorded at cost, and is stated at cost less accumulated depreciation.
Depreciation is calculated on the straight-line method to write-off the cost of each asset to their residual values over their
estimated useful lives which range from 5 - 20 years. Land is not depreciated as it is considered to have an indefinite life.
Leasehold rights are amortised by the straight-line method over the period of agreements, which range from 3 - 30 years.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its
recoverable amount.
Estimated recoverable amount is the higher of the anticipated discounted cash flows from the
continuing use of the asset and the amount obtainable from the sale of the asset less any costs of disposal.
Gains and losses on disposals of property, plant and equipment are determined by reference to their carrying amount and
are included in operating profit.
Expenditure on additions, renewals and betterment, which result in a substantial increase in the current replacement value of
an asset is capitalised. Repair and maintenance costs are recognised as an expense when incurred.
2.10 Land held for sale or future development
Land held for sale or future development is recorded at cost less allowance for impairment of assets.
2.11 Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company's share of the net assets of
the acquired subsidiary undertaking at the date of acquisition. Goodwill on acquisition of subsidiary is reported in the
consolidated balance sheet as an intangible asset. Goodwill is amortised using the straight-line method over its estimated
useful life but not over 20 years.
61
Annual Report
2005
2
2.12 Leases - where a Group company is the lessee
Leases not transferring a significant portion of the risks and rewards of ownership to the lessee are classified as operating
leases.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the
statement of income on a straight-line basis over the period of the lease.
When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor
by way of penalty is recognised as an expense in the period in which termination takes place.
2.13 Other intangible assets
Other intangible assets represent proprietary software for internal use. The cost includes cost of software development and
software license fee. Other intangible assets are amortised using the straight-line method over their estimated useful lives,
which range from 3-5 years.
2.14 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the
obligation can be made.
2.15 Employee benefits
i) Pension fund benefit
The Group operates a pension scheme for employees who joined the Company before the 1st of January 2003 and
choose to retain the benefits of the original scheme. Employees, upon resignation or retirement from the Company after
having completed 3 years of service, shall be entitled to receive cash payment equivalent to their prevailing salary
multiplied by the number of years of service, but not exceeding the equivalent of 10 months of final salary.
ii) Severance benefit
Under Labor Laws applicable in Thailand and Group's employment policy, all employees completing 120 days of service
are entitled to severance pay on termination or retrenchment without cause or upon retirement age of 60. The severance
pay will be at the rate according to number of years of service as stipulated in the Labor Law which is currently at a
maximum rate of 300 days of ending salary.
62
Annual Report
2005
2
2.15 Employee benefits (Cont'd)
Provision for employee benefits (Cont'd)
iii) Additional benefit related to provident fund
The Group operates an employee benefit scheme under which employees who are members of the Group's provident
fund, being a defined contribution plan, for at least 9 years are entitled to receive additional contribution from the Group
on their resignation or retirement from employment with the Group. Employees, who are member of the provident fund for
at least 9 years, shall be entitled to receive an additional 50% of the contributions made by the Group on their behalf.
The Group recognises its liabilities in respect of these three defined benefit plans at the present value of the defined
benefit obligations at the balance sheet date adjusted for actuarial gains/losses. These defined benefit obligations are
calculated by independent actuaries using the projected unit credit method. The present value of the defined benefit
obligations are determined by the estimated future cash outflows using interest rates of government bonds which have
terms to maturity approximating the terms of the related liability.
Actuarial gains and losses arising from experience adjustments (the effects of differences between the previous actuarial
assumptions and what has actually occurred), changes in actuarial assumptions and amendments to employee benefits
plans are charged or credited to income over the average remaining service lives of the related employees.
Provident fund
The Group operates a provident fund, being a defined contribution plan, the assets for which are held in a separate trust
fund. The provident fund is funded by payments from employees and by the Group. The Group's contributions to the
provident fund are charged to the income statements in the years to which they relate.
2.16 Revenue recognition
Sales are recognised on the delivery of products and customer acceptance, net of discounts. For consolidated financial
statements, intra-group sales are eliminated.
Sales of services are recongised in the accounting period in which the services are rendered.
2.17 Segment reporting
The segmental reporting has been prepared based on the Company's method of internal reporting, which desegregates its
business by service or product.
63
Annual Report
2005
2
2.18 Earnings per share
Basic consolidated earnings per share and Company earnings per share are calculated by dividing the consolidated net
earnings attributable to shareholders by the weighted average number of ordinary shares in issue during the year.
2.19 Dividends
Dividends are payable when declared by the board of directors and approved by the shareholders.
2.20 Income taxes
The Group calculates income taxes according to the Revenue Code and records them on accrual basis. The Group does not
recognise income taxes payable or receivable in future periods in respect of temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements.
64
Annual Report
2005
3
Cash and cash equivalents
Consolidated
Cash in hand
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
465,887,332
433,946,381
456,309,923
432,194,381
Deposits held with banks
1,438,149,281
366,284,316
1,294,939,967
335,412,478
Bills of Exchange
1,055,133,085
3,484,666,562
1,055,133,085
3,357,749,839
Promissory Notes
100,000,000
165,000,000
100,000,000
165,000,000
Treasury bills
979,464,034
-
979,464,034
-
4,038,633,732
4,449,897,259
3,885,847,009
4,290,356,698
The weighted average effective interest rates of deposits held with bank was 0.34% - 3.75% per annum (2004 : 0.62% - 1.35%
per annum).
Investments in debt securities represent bills of exchange, promissory notes and treasury bills having weighted average
effective interest rates of 1.25% - 3.95% per annum (2004 : 0.70% - 1.925% per annum), having a maturity of three months or
less when purchased.
During the year, interest income includes interest income from investments in debt securities as follows:
Consolidated
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
Investments in debt securities
Interest income
62.6
65
33.4
61.8
Annual Report
2005
31.9
4
Current investments
Consolidated
Opening net book value
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
49,440,038
100,000,000
49,440,038
100,000,000
Additions
324,858,920
49,440,038
324,858,920
49,440,038
Disposals
(49,440,038)
(100,000,000)
(49,440,038)
(100,000,000)
Closing net book value
324,858,920
49,440,038
324,858,920
49,440,038
As at 31 December 2005, current investments represent investment in bill of exchange and promissory notes bearing interest
rates at 3.60% - 3.75% per annum (2004 : 1.925% per annum).
5
Consolidated
Gross trade accounts receivable
Less allowance for doubtful accounts
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
186,774,576
58,673,262
30,781,001
30,334,569
(5,942,892)
(2,230,216)
-
-
180,831,684
56,443,046
30,781,001
30,334,569
As at 31 December 2005, outstanding accounts receivable balance aged longer than 91 days comprise Baht 7,345,913
(2004 : Baht 2,287,569) in the consolidated financial statements and there are no outstanding accounts receivable balance
aged longer than 91 days in the Company financial statements in 2005 and 2004.
6
Inventories, net
Consolidated
Finished goods
Goods-in-transit
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
4,095,233,190
4,025,715,164
3,823,255,360
3,868,470,801
34,171,811
18,521,153
513,450
18,521,153
4,129,405,001
4,044,236,317
3,823,768,810
3,886,991,954
(81,273,307)
(141,292,746)
(73,056,689)
(136,283,201)
4,048,131,694
3,902,943,571
3,750,712,121
3,750,708,753
Less allowance for obsolete
and shrinkage inventories
Inventories, net
66
Annual Report
2005
7
On 29 December 2004, the shareholders at the Extraordinary Meeting passed a resolution to approve the purchase of 100% of the
ordinary shares in Siam Food Services Limited from Diethelm Trading Company Limited for a total value of Baht 230 million. The Company
entered into a Share Purchase Agreement on 30 December 2004 to purchase the shares and assume control of Siam Food Services
Limited on 1 January 2005. Under the terms of the share purchase agreement, the Company paid Baht 210 million as a refundable deposit
to the seller on 30 December 2004. The refundable deposit is presented in other current assets in the Balance Sheet as at 31 December 2004.
8
Investments - equity method
Consolidated
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
-
-
2,276,923,852
2,080,279,718
Acquisition of a subsidiary
-
-
234,764,379
-
Share of net profit of subsidiaries
-
-
247,248,656
236,644,134
Dividend received
-
-
(40,000,000)
(40,000,000)
-
-
2,718,936,887
2,276,923,852
Company
31 December 2005
Accumulated
Paid up
Subsidiaries
Business
Relationship
%
share of profit
Capital Ownership
Cost in subsidiaries
Baht’000
Makro Properties
Land investment &
Being shareholder and
700,000
Limited
property leasing
under the same management
Makro Office
Retail business of
Being shareholder
Centre Company
office supplies, office
and management
Limited
equipment, office
participation
Interest Baht’000
Equity Dividend
Baht’000
Baht’000 Baht’000
99.99
710,641
1,505,834
2,216,475
-
200,000
99.99
200,000
50,255
250,255
40,000
10,000
99.99
234,764
17,443
252,207
-
1,145,405
1,573,532
2,718,937
40,000
furniture and business
service center
Siam Food
Importing and
Being shareholder
Services Limited
trading frozen foods,
and management
provide services such
participation
as freight, delivery,
rental and storage
67
Annual Report
2005
8
Investments - equity method (Cont'd)
Company
31 December 2004
Accumulated
Paid up
Subsidiaries
Business
Relationship
%
share of profit
Capital Ownership
Cost in subsidiaries
Baht’000
Makro Properties
Land investment &
Being shareholder and
Limited
property leasing
under the same management
700,000
Makro Office
Retail business of
Being shareholder
Centre Company
office supplies, office
and management
Limited
equipment, office
participation
200,000
Interest Baht’000
Equity Dividend
Baht’000
Baht’000 Baht’000
99.99
710,641
1,313,358
2,023,999
-
99.99
200,000
52,925
252,925
40,000
910,641
1,366,283
2,276,924
40,000
furniture and business
service center
On 29 December 2004, the shareholders at the Extraordinary Meeting passed a resolution to approve the purchase of 100% of
the ordinary shares in Siam Food Services Limited from Diethelm Trading Company Limited which the Company entered into a
Share Purchase Agreement on 30 December 2004 to purchase the shares and assume control of Siam Food Services Limited on
1 January 2005. The total value included the related purchasing expenses is more than net book values which is equivalent fair
values at the date of acquisition as follows:
Thousand Baht
Cash and cash equivalent
15,526
Current assets
223,010
Non current assets
14,398
Current liabilities
(213,821)
Non current liabilities
(1,272)
Fair value of net assets
37,841
Total purchase consideration
234,764
Goodwill
196,923
Total purchase consideration net cash
219,238
68
Annual Report
2005
9
Property, plant and equipment, net
Consolidated
Land &
Equipment &
Construction
buildings
vehicle
in progress
Total
Baht
Baht
Baht
Baht
9,665,362,524
4,907,747,498
37,708,439
14,610,818,461
(1,869,783,861)
(3,692,708,646)
-
(5,562,492,507)
At 31 December 2004
Cost
Less accumulated depreciation
allowance for the disposal of
Net book value
-
(2,000,000)
-
(2,000,000)
7,795,578,663
1,213,038,852
37,708,439
9,046,325,954
7,795,578,663
1,213,038,852
37,708,439
9,046,325,954
97,394,897
514,977,007
19,653,528
632,025,432
(217,425)
(5,093,363)
(4,121,750)
(9,432,538)
For the year ended 31 December 2005
Additions (Transfers)
Disposals
Reverse allowance for the disposal
of obsolete plant and equipment
-
2,000,000
-
2,000,000
Depreciation charge
(268,271,774)
(358,077,805)
-
(626,349,579)
7,624,484,361
1,366,844,691
53,240,217
9,044,569,269
9,786,454,297
5,377,605,484
53,240,217
15,217,299,998
(2,161,969,936)
(4,010,760,793)
-
(6,172,730,729)
7,624,484,361
1,366,844,691
53,240,217
9,044,569,269
At 31 December 2005
Cost
Net book value
69
Annual Report
2005
9
Property, plant and equipment, net (Cont'd)
Company
Land &
Equipment &
Construction
buildings
vehicle
in progress
Total
Baht
Baht
Baht
Baht
6,727,991,035
4,678,658,538
37,667,129
11,444,316,702
(1,821,903,098)
(3,514,594,056)
-
(5,336,497,154)
At 31 December 2004
Cost
allowance for the disposal of
Net book value
-
(2,000,000)
-
(2,000,000)
4,906,087,937
1,162,064,482
37,667,129
6,105,819,548
4,906,087,937
1,162,064,482
37,667,129
6,105,819,548
81,925,617
466,120,363
16,155,796
564,201,776
(217,425)
(4,165,455)
(4,121,750)
(8,504,630)
Additions (Transfers)
Disposals
Reverse allowance for the disposal
of obsolete plant and equipment
Depreciation charge
-
2,000,000
-
2,000,000
(252,111,149)
(335,502,062)
-
(587,613,211)
4,735,684,980
1,290,517,328
49,701,175
6,075,903,483
6,809,620,776
5,086,533,643
49,701,175
11,945,855,594
(2,073,935,796)
(3,796,016,315)
-
(5,869,952,111)
4,735,684,980
1,290,517,328
49,701,175
6,075,903,483
At 31 December 2005
Cost
Net book value
10 Land held for sale or future development, net
Land held for sale or future development, net represents land amounting to Baht 143,663,688 net of the impairment provision as follows:
Consolidated
Land held for sale or future development
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
308,572,549
308,572,549
-
-
(164,908,861)
(164,908,861)
-
-
143,663,688
143,663,688
-
-
Less allowance for impairment
relating to property
Land held for sale
or future development, net
70
Annual Report
2005
11 Goodwill, net
Consolidated
Baht
As at 31 December 2004
Cost
-
Less accumulated amortisation
-
Net book value
-
Transactions during the year ended 31 December 2005
-
Increase from acquisition of a subsidiary, net
196,922,838
Amortisation
(9,846,142)
187,076,696
Cost
196,922,838
(9,846,142)
Net book value
187,076,696
12 Other intangible assets, net
Computer Software
Consolidated
Company
Baht
Baht
Cost
22,657,627
14,048,526
(14,772,110)
(8,373,709)
7,885,517
5,674,817
Net book value
Transactions during the year ended 31 December 2005
7,885,517
5,674,817
17,328,508
14,476,677
(285,227)
-
Amortisation
(6,315,782)
(4,650,112)
18,613,016
15,501,382
39,986,135
28,525,203
(21,373,119)
(13,023,821)
18,613,016
15,501,382
- cost
- accumulated amortisation
Additions
Cost
Net book value
71
Annual Report
2005
13 Share capital and premium on share capital
As at 31 December 2005 and 2004, the total authorised number of ordinary shares is 240,000,000 shares with a par value of Baht
10 per share. All issued shares are fully paid-up.
Number of shares
At 31 December 2003
Ordinary Shares
Share Premium
Total
Baht
Baht
Baht
240,000,000
2,400,000,000
3,290,152,068
5,690,152,068
-
-
-
-
240,000,000
2,400,000,000
3,290,152,068
5,690,152,068
-
-
-
-
240,000,000
2,400,000,000
3,290,152,068
5,690,152,068
Issue of shares
At 31 December 2004
Issue of shares
At 31 December 2005
14 Legal reserve
Consolidated
Opening balance
2005
2004
2005
2004
Baht
Baht
Baht
Baht
240,000,000
240,000,000
240,000,000
240,000,000
-
-
-
-
240,000,000
240,000,000
240,000,000
240,000,000
Appropriation during the year
Closing balance
Company
Under the Public Companies Act, the Company is required to set aside as a statutory reserve at least 5% of its net profit after
accumulated deficit brought forward (if any) until the reserve is not less than 10% of the registered capital. The reserve is nondistributable.
72
Annual Report
2005
15 Selling and administrative expenses
The following expenditure items, classified by nature, have been included in selling and administrative expenses.
Consolidated
Company
Notes
2005
2004
2005
2004
9
626,349
570,853
587,613
543,390
12
6,315
5,709
4,650
3,761
11
9,846
-
-
-
43,081
37,793
335,611
329,549
808,555
665,326
719,157
621,912
3,173
2,911
2,836
2,718
Depreciation on property, plant
and equipment (Baht'000)
Amortisation of other
intangible assets (Baht'000)
Amortisation of
good will (Baht'000)
Land rental (Baht'000)
Employee costs (Baht'000)
Number of employees at the end of the year
16 Basic earnings per share
Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of
ordinary shares in issue during the year, that is 240,000,000 shares in the year 2005. (2004 : 240,000,000 shares). There are no
dilutive instruments in issue.
Consolidated and Company
Net Profit (Baht)
2005
2004
1,136,465,960
1,106,857,202
240,000,000
240,000,000
4.74
4.61
Weighted average number of ordinary shares (shares)
Basic earnings per share (Baht)
17 Dividend
A 2005 interim dividend of Baht 5.00 per share amounting to a total of Baht 1,200 million was approved at the Extraordinary
shareholders' meeting on 26 October 2005 and fully paid in the fourth quarter of 2005.
A dividend in respect of 2004 of Baht 1.75 per share amounting to a total of Baht 420 million was approved at the annual
shareholders' meeting on 25 April 2005 and fully paid in the second quarter of 2005.
A 2004 interim dividend of Baht 1.00 per share amounting to a total of Baht 240 million was approved at the Board of Directors'
meeting on 11 August 2004 and fully paid in the third quarter of 2004.
73
Annual Report
2005
17 Dividend (Cont'd)
A dividend in respect of 2003 of Baht 1.25 per share amounting to a total of Baht 300 million was approved at the annual
shareholders' meeting on 27 April 2004 and fully paid in the second quarter of 2004.
18 Contingencies and commitments
As at 31 December 2005 and 2004 the Company and its subsidiaries have contingent liabilities in respect of bank and other
guarantees and other matters arising in the ordinary course of business from which it is anticipated that no material liabilities will
arise. In the ordinary course of business, the Company and its subsidiaries have provided guarantees to third parties as follows:
Bank guarantees
As at 31 December 2005 and 2004, banks have provided guarantees on behalf of the Company and its subsidiaries, primarily in
respect of electricity as follows:
Consolidated
Bank guarantees
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
52,071,800
50,447,700
50,619,800
49,698,800
Operating lease agreements
The future minimum payments under operating lease agreements as at 31 December are as follows:
Consolidated
Not later than 1 year
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
158,425,103
129,792,051
354,593,402
184,921,059
396,189,339
370,172,773
653,324,809
203,757,064
1,411,306,676
1,428,685,867
1,319,264,579
1,372,825,398
1,965,921,118
1,928,650,691
2,327,182,790
1,761,503,521
Later than 1 year
and not later than 5 year's
Later than 5 years
74
Annual Report
2005
18 Contingencies and commitments (Cont'd)
Capital commitments
Capital expenditure contracted for at the balance sheet date but not recognised in the financial statements is as follows:
Consolidated
Property, plant and equipment
Company
2005
2004
2005
2004
Baht
Baht
Baht
Baht
60,873,023
35,285,517
59,983,015
29,839,198
Contingencies
In the year 2002, the Company sold all investments in a subsidiary, Makro Auto Care Company Limited. Under the sales
agreement in respect of the sale of the subsidiary, the Company has made certain representations and warranties for a certain
period in respect of the completeness and accuracy of the subsidiary's accounts and records, and its compliance with various
laws and regulations, such warranties being those ordinarily found on the sale of a business. In the event of a breach of those
representations and warranties, the Purchaser may be entitled to claim damages from the Company. The maximum amount that
the Purchaser could seek to claim under the agreement is Baht 890 million during the period of 5 years for certain warranty from
31 May 2002. The Company does not anticipate receiving any substantial claim under these warranties and as at the date of
these financial statements the Company has not received any notice and is not aware of any incident indicating that the
Purchaser would exercise the above right under the Agreement.
19 Related party transactions
Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are
under common control with, the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of
the Company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives
them significant influence over the enterprise, key management personnel, including directors and officers of the Company and
close members of the family of these individuals and companies associated with these individuals also constitute related parties.
In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely
the legal form.
SHV Group has control over the plan and the policies of the Company and its subsidiaries through the appointment of directors
and senior executive management. Therefore, members of the SHV Group are considered to be related parties.
75
Annual Report
2005
19 Related party transactions (Cont'd)
Feature of relationships and related transactions
Transactions with subsidiaries
Trading transactions with and purchases of assets and services from subsidiaries are carried out under commercial terms and
conditions. They are treated in the same manner as unrelated parties and are presented at market price.
The rental charges in respect of land and buildings as specified in the agreement between the Company and subsidiaries are
based on the cost of the land and buildings plus related expenses which can be compared to the available market price. Cost of
the land and buildings means acquisition cost and related expenses mean other related expenses incurred in bringing them into
working condition for their intended use.
Management services provided by the Company are charged at appropriate price upon the actual service rendered to a
subsidiary on the basis of an agreed annual fee.
The Company has entered into agreements with a subsidiary to use its trademarks. The fee for the use of the trademarks
represents a percentage of net sales under the trademark used.
A subsidiary has issued promissory notes at call to the Company, with an interest rate being set with reference to the interest
rates of short-term loans provided by financial institutions.
A subsidiary has issued 7-year promissory note to the Company with a due date of 29 December 2009, based on the market
interest rate.
Transactions with other related parties
1. Service income
The Company provides rental space to another related company that is related to the Company through the same directorship
person. This related company is in the Charoen Pokphand Group, namely True Corporation Plc. The Company also provides
management consultant services in relation to logistic processes to Orkam Asia Management AG and the service is already
finished in the year 2004.
These rental transactions are as specified in agreements and made with reference to market price.
The management consultant service transaction is as specified in the agreement with a monthly charge of Baht 400,000.
2. Purchase of goods
The Company purchases goods from related companies having the same director or shareholders as follows:
a) Related companies in the Charoen Pokphand Group, being C.P. Consumer Products Co., Ltd., C.P. Interfood Co., Ltd.,
Perfect Companion Co., Ltd., C.P. Retailing and Marketing Co., Ltd., Vee Food Products Co., Ltd., etc.
76
Annual Report
2005
Transactions with other related parties (Cont'd)
2. Purchase of goods (Cont'd)
b) World Gas (Thailand) Co., Ltd. that was a member of the SHV group until November 2004. After that SHV group sold out all
investment to other company.
Goods purchased transactions are in line with normal business conditions and are treated in the same manner as other unrelated
manufacturer and/or distributors of merchandise and with reference to market prices.
3. Service expenses
The Company has been granted rights to use software and trademarks and received consultant services in relation to own
brand development, management services and technical assistance in auction purchasing and maintenance services for
application software from local and overseas affiliated companies, being members of the SHV Group, which are Orkam Asia
Management AG, Orkam Asia Trademark AG, Makro Cash & Carry Distribution (M) SDN.BHD. and Makro Asia Management
Ltd. respectively.
Software licence fees, royalty fees, consultant service fees, management fees and maintenance service fees for the use of
such trademarks and services are as specified in agreements and are on a reasonable basis for the Company and its
subsidiaries as follows.
a) Royalty fee for the use of trademarks represents a percentage of their net sales. The agreement is valid for 1 year. However,
the Company and its subsidiaries reserve the right to renew the agreement every year and have the right to use such
trademarks and service marks in business operations.
b) Software licence fee is NLG 50,000 (or EUR 22,689 in equivalent) for each Makro new store. The payment is made once a
new store is open. The agreement is valid for 1 year and is renewable annually. Regarding the benefit from this licence,
the Company will obtain specific IT software which is necessary to its business operations.
c) Consultant service fee is RM 12,320 per month. The agreement is valid for 1 year. Regarding the benefit from this service
agreement, the Company will receive consultant services in relation to own brand development.
d) Annual maintenance fee is 20% of the total user licence fee. The agreement is for unlimited period of time, unless party shall
terminate the agreement by written notice. The Company will receive maintenance services for the application software.
e) Annual fee for management services and technical assistance in auction purchasing is charged in Thai Baht equivalent to
USD 110,000 and annual membership fees in relation to cost sharing for the shared use of auction tools at a fixed portion
amounting to USD 160,000 and a variable portion amounting to USD 160,000 which will be shared between group
company under regional management depending on the volume of auctions realised. The agreement is valid for 1 year
and is renewable annually. The Company will receive management services and technical assistance regarding
auction purchasing.
77
Annual Report
2005
The following material transactions were carried out with related parties:
i) Sales of goods, service income, and interest income
Consolidated
For the years ended 31 December
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
Sales of goods
Subsidiaries
-
-
2.6
0.7
-
-
2.6
0.7
-
-
1.4
-
-
-
1.4
-
-
-
32.0
34.3
1.4
6.1
1.4
6.1
1.4
6.1
33.4
40.4
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
-
-
87.0
0.4
379.0
393.6
379.0
393.6
379.0
393.6
466.0
394.0
-
-
295.6
293.4
146.9
148.6
137.4
142.7
146.9
148.6
433.0
436.1
Annual Report
2005
Sales of plant and equipment
Subsidiary
Services income and interest income:
Subsidiaries
Other related parties
ii) Purchases of goods and service expenses
Consolidated
For the years ended 31 December
Company
Purchases of goods:
Subsidiaries
Service expenses:
Subsidiaries
78
iii) Outstanding balances arising from sales, purchases of goods and service
Consolidated
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
-
-
19.8
-
Trade accounts payable
to related parties
Subsidiary
76.8
83.3
76.8
83.3
76.8
83.3
96.6
83.3
iv) Advance payment and loans to related parties
Consolidated
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
-
-
2.0
1.4
0.5
-
0.4
-
0.5
-
2.4
1.4
-
-
123.0
221.5
-
-
123.0
221.5
0.5
-
125.4
222.9
-
-
500.0
500.0
-
-
500.0
500.0
Advance payment
Subsidiaries
Short-term loans to related parties
Subsidiaries
Total advance payment and
short-term loans to
related parties
Long-term loans to a related party
Subsidiary
Total long-term loans to a
related party
79
Annual Report
2005
iv) Advance payment and loans to related parties (Cont'd)
Consolidated
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
Opening balance
-
-
221.5
119.0
Movements of short-term loans to
subsidiaries are as follows:
Increase during the year
-
-
159.5
338.8
Decrease during the year
-
-
(258.0)
(236.3)
Closing balance
-
-
123.0
221.5
Short-term loans to subsidiaries, being in the form of promissory notes, are due at call.
Consolidated
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
Movements of long-term loans to
subsidiary are as follows:
Opening balance
-
-
500.0
790.0
Decrease during the year
-
-
-
(290.0)
Closing balance
-
-
500.0
500.0
As at 31 December 2005, the outstanding balance of this promissory note was Baht 500 million with due date of 29 December
2009
v) Deposits for land lease paid to a subsidiary
Consolidated
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
-
-
145.9
145.9
-
-
145.9
145.9
Deposits for land lease paid to
Subsidiary
80
Annual Report
2005
vi) Advance received from related parties
Consolidated
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
69.0
62.8
65.1
59.8
69.0
62.8
65.1
59.8
Advance received from related parties
vii) Deposits for land lease received from a subsidiary
Consolidated
Company
2005
2004
2005
2004
Million Baht
Million Baht
Million Baht
Million Baht
Deposits for land lease received from
Subsidiary
-
-
0.6
-
-
-
0.6
-
81
Annual Report
2005
20 Financial information by business segments
Wholesale and
Land Rental
Retail Business
Business
Elimination
Total
Million Baht
Million Baht
Million Baht
Million Baht
50,508
-
(90)
50,418
Sales
Other income
- Third parties
- Related parties
1,868
8
-
1,876
33
295
(328)
-
1,901
303
(328)
1,876
Total revenues
52,294
Cost of sales
(47,396)
(3,280)
Directors' remuneration
(6)
Interest expense
(3)
Income tax
(473)
Net income
1,136
net book value as at 31 December 2005
6,255
2,790
-
Other assets
9,923
Total assets as at 31 December 2005
9,045
18,968
82
Annual Report
2005
20 Financial information by business segments (Cont'd)
Wholesale and
Land Rental
Retail Business
Business
Elimination
Total
Million Baht
Million Baht
Million Baht
Million Baht
44,671
-
(1)
44,670
Sales
Other income
- Third parties
- Related parties
1,579
8
-
1,587
74
294
(368)
-
1,653
302
(368)
1,587
Total revenues
46,257
Cost of sales
(41,857)
(2,809)
Directors' remuneration
(5)
Income tax
(479)
Net income
1,107
net book value as at 31 December 2004
6,256
2,790
-
Other assets
9,046
9,493
Total assets as at 31 December 2004
18,539
Sales to third parties and related parties are carried out at market price.
Property, plant and equipment of each business are for its own operations. Other assets comprise mainly cash and cash
equivalents, inventories, amounts due from and loans to related companies.
83
Annual Report
2005
21 Financial instruments
Interest rate risk
The Group encounters interest rate risk through its exposure to interest rate fluctuations on their cash and short-term investments
which does not significantly impact.
Foreign currency risk
The Group has limited exposure to foreign currency fluctuations on purchasing of goods and services as these purchases are not
significant in the ordinary course of business. The Group manages this risk through forward contracts. Trading for speculative
purpose is prohibited.
Credit risk
The Group has no significant concentrations of credit risk relating to its cash, current investments, trade receivables, amounts due
from related parties and loans to related parties as the Group primarily operates a cash and carry business in which most
transactions are cash sales. In addition, the Group places its cash and current investments with high quality institutions. The
Group's policies are designed to limit exposure with any one institution and to invest excess cash in low risk investment accounts.
The Group has not experienced any losses on such accounts. The subsidiaries have in place credit policies not to provide credit
for any companies considered high risk of collections.
Liquidity risk
The Group manages its liquidity risk by holding sufficient cash and short-term investments for operating expenses.
Fair value
Fair values of financial instruments approximate their carrying amounts because of the short maturities of these instruments and
there is not considered to be significant risk of changes in their future cash flows.
22 Subsequent event
At the Board of Directors' meeting of the Company on 22 February 2006, the Board of Directors unanimously resolved to propose
to the Annual General Shareholders' Meeting for approval of the Company to declare final dividend payment for the year 2005, at
the rate of Baht 4 per share. The proposed dividends must be approved by the shareholders at their meeting.
84
Annual Report
2005
MAKRO CASH & CARRY
●
Siam Makro Public Company Limited, Head Office
●
Makro Store Hat Yai Branch
3498 2nd Fl., Lardprao Rd., Klongchan, Bangkapi, Bangkok 10240
345 Moo 5, Kanjanavanit Rd., T.Kho-Hong,
Tel : 0-2375-7000, 0-2723-1000 Fax : 0-2375-2927
A.Hat Yai, Songkhla 90110
Tel : (074) 428-320-9 Fax : (074) 210-969
●
Makro Store Lardprao Branch
3498 Lardprao Rd., Klongchan, Bangkapi, Bangkok 10240
●
Tel : 0-2375-2781-9 Fax : 0-2375-9162
Makro Store Udon Thani Branch
207/3 Moo 14, T.Makkhang, A.Muang, Udon Thani 41000
Tel : (042) 322-922 Fax : (042) 322-944
●
Makro Store Chaengwattana Branch
34/54 Moo 1, Chaengwattana Rd., Klongklear,
●
Makro Store Phitsanulok Branch
Pakkred, Nonthaburi 11120
1199 Boromtrirokkanart 2 Rd., T.Naimuang,
Tel : 0-2574-0670 Fax : 0-2574-6045
A.Muang, Phitsanulok 65000
Tel : (055) 218-765 Fax : (055) 218-764
●
Makro Store Srinakarin Branch
422 Moo 5, Srinakarin Rd., Samrongnua,
●
●
●
●
●
Makro Store Khon Kaen Branch
A. Muang, Samutprakarn 10270
195 Moo 17, Mittraphap, T.Naimuang, A.Muang, Khon Kaen 40000
Tel : 0-2383-4104 Fax : 0-2383-4441
Tel : (043) 325-050 Fax : (043) 325-065
Makro Store Bangbon Branch
●
Makro Store Surat Thani Branch
40/8 Moo 10, Ekachai Ring Road-Petchkasem,
216 Moo 4, Chonkasem Rd., T.Makamtey,
Bangbon, Bangbon, Bangkok 10150
A.Muang, Surat Thani 84000
Tel : 0-2416-8080-90 Fax : 0-2416-5974
Tel : (077) 219-855 Fax : (077) 219-866
Makro Store Chonburi Branch
●
Makro Store Ubon Ratchathani Branch
55/3 Moo 2, Sukhumvit Rd., T.Samed, A.Muang, Chonburi 20000
333 Moo 15, T.Khamyai, A.Muang, Ubon Ratchathani 34000
Tel : (038) 279-201 Fax : (038) 279-200
Tel : (045) 281-677-90 Fax : (045) 281-688
Makro Store Chiangmai Branch
●
Makro Store Rayong Branch
152 Moo 2, T.Nong-Pa-Krung, A.Muang, Chiangmai 50000
8/2 Moo 3, T.Tubma, A.Muang, Rayong 21000
Tel : (053) 261-200 Fax : (053) 261-217
Tel : (038) 875-300 Fax : (038) 875-301
Makro Store Nakorn Ratchasima Branch
●
Makro Store Nakornsawan Branch
523 Mittraphap-Nongkai Rd., T.Naimuang,
67/15 Moo 6, T.Nakornsawan East, A.Muang, Nakornsawan 60000
A.Muang, Nakorn Ratchasima 30000
Tel : (056) 325-200 Fax : (056) 325-210
Tel : (044) 230-477-90 Fax : (044) 230-471-2
●
●
Makro Store Charansanitwongse Branch
Makro Store Rangsit Branch
521, 521/27 Charansanitwongse Rd.,
189 Phaholyothin Rd., T.Prachathipat,
Bangkhunsri, Bangkoknoi, Bangkok 10700
A.Thanyaburi, Pathumthani 12130
Tel : 0-2864-5714 Fax : 0-2864-5713
Tel : 0-2992-1011-21 Fax : 0-2992-2213
85
Annual Report
2005
●
Makro Store Sathorn Branch
●
Makro Store Phuket Branch
1 Narathiwasratchanakarin Rd.,
77 Moo 5, T.Vichit, A.Muang Phuket, Phuket 83000
Thungwatdon, Sathorn, Bangkok 10120
Tel : (076) 249-791-800 Fax : (076) 249-801
Tel : 0-2676-0676 Fax : 0-2676-1676
●
●
Makro Store Roi Et Branch
Makro Store Nakhon Pathom Branch
32/1 Taewapiban Rd., T.Naimuang, A.Muang Roi Et, Roi Et 45000
86 Moo 13, T.Prongmadua, A.Muang, Nakhon Pathom 73000
Tel : (043) 525-680-90 Fax : (043) 525-692-3
Tel : (034) 200-711-27 Fax : (034) 200-728-9
●
●
Makro Store Trang Branch
Makro Store Surin Branch
89 Moo 2, T.Khok-Lo, A.Muang Trang, Trang 92000
4/3 Lukmuang Rd., T. Naimuang A.Muang, Surin 32000
Tel : (075) 228-050-60 Fax : (075) 228-061
Tel : (044) 531-759-66 Fax : (055) 531-777
●
MAKRO OFFICE CENTRES
Makro Store Samsen Branch
935/11 Samsem Rd., Thanonnakornchaisri, Dusit, Bangkok 10300
Tel : 0-2241-8400-8 Fax : 0-2241-8409
●
Makro Office Centre Co., Ltd. Head Office
1705 2nd Fl., Phaholyoyhin Rd., Ladyaw,
●
Makro Store Nakhon Si Thammarat Branch
Chatuchak, Bangkok 10900
93/7 Moo 2, Garome Rd., T. Posadet,
Tel : 02-939-5700 Fax : 02-939-5903-5
A. Muang Nakhon Si Thammarat, Nakhon Si Thammarat 84000
Tel : (075) 316-680-90 Fax : (075) 316-698
●
Makro Office Centre, Seacon Square Branch
Basement I, Seacon Square, 904 Moo 6,
●
Makro Store Chiang Rai Branch
Srinakarin Rd., Nongbon, Prawet, Bangkok 10260
12 Moo 17, T. Bandoo, A.Muang Chiang Rai, Chiang Rai 57000
Tel : 0-2721-8260-6 Fax : 0-2721-8274
Tel : (053) 703-688 Fax : (053) 703-679
●
●
Makro Office Centre, United Centre Branch
Makro Store Sakon Nakhon Branch
Basement I, United Centre Building,
459 Moo 3, Bankoksomhong Rd., T.Thatchoengchum,
323 Silom Rd., Bangrak, Bangkok 10500
A.Muang Sakon Nakhon, Sakon Nakhon 47000
Tel : 0-2267-6262 Fax : 0-2267-6258
Tel : (042) 731-078-97 Fax : (042) 731-076-7
●
●
Makro Office Centre, Sindhorn Building Branch
Makro Store Suphan Buri Branch
Tower 1, Ground Floor, Sindhorn Building,
290/2 Moo 4, T.Sanam-Chai,
130-132 Wireless Rd., Lumpini, Patumwan, Bangkok 10330
A.Muang Suphan Buri, Suphan Buri 72000
Tel : 0-2263-2277 Fax : 0-2650-9999
Tel : (035) 547-250-65 Fax : (035) 547-271
●
●
Makro Office Centre, Royal City Avenue Branch
Makro Store Chanthaburi Branch
31/1 Soi Soonvijai, Rama IX Rd., Bangkapi,
21/11 Moo 11, T.Plubpla, A.Muang Chanthaburi, Chanthaburi 22000
Huey Kwang, Bangkok 10240
Tel : (039) 355-240-54 Fax : (039) 355-257
Tel : 0-2641-5900 Fax : 0-2641-5901
86
Annual Report
2005
●
Makro Office Centre, Rama III Branch
●
Makro Office Centre, Sathorn Branch
295 Rama III Rd., Bangkorleam, Bangkorleam, Bangkok 10120
1 Narathiwasratchanakarin Rd., Thungwatdon,
Tel : 0-2689-0922-6 Fax : 0-2689-0921
Sathorn, Bangkok 10120
Tel : 0-2676-3730 Fax : 0-2676-3850
●
Makro Office Centre, Tawanna Branch
3500 Lardprao Klongchan, Bangkapi, Bangkok 10240
●
Tel : 0-2704-7411 Fax : 0-2704-7410
Makro Office Centre, Abdulrahim Place Building Branch
990 Rama 4 Rd., Silom, Bangrak, Bangkok 10500
Tel : 0-2636-3131 Fax : 0-2636-3232
●
Makro Office Centre, Phaholyothin Branch
1705 Phaholyothin, Ladyaw, Chatuchak, Bangkok 10900
●
Tel : 0-2513-0105-8 Fax : 0-2513-0109
Makro Office Centre, SSP Tower 3 Building Branch
88 Silom Rd., Suriyawong, Bangrak, Bangkok 10500
Tel : 0-2634-3550 Fax : 0-2634-3530
●
Makro Office Centre, Wong Wean Yai Branch
130-132 Somdejphachaotaksin Rd.,
●
●
Makro Office Centre, Samsen Branch
Bang Yee Rua, Thonburi, Bangkok 10600
939/12 Samsen Rd., Thanonnakornchaisri, Dusit, Bangkok 10300
Tel : 0-2890-2780-6 Fax : 0-2890-2791
Tel : 0-2636-9885 Fax : 0-2636-9886
Makro Office Centre, Sukhumvit Branch
●
Makro Office Centre, Ekkamai Branch
651 Sukhumvit Rd., Klongtannua, Wattana, Bangkok 10110
78/2 Soi Sukhumvit 63 (Ekkamai), Sukhumvit Rd.,
Tel : 0-2261-9661 Fax : 0-2261-9660
Phakanongnuea, Wattana, Bangkok 10110
Tel : 0-2714-8260 Fax : 0-2714-8261
●
Makro Office Centre, Pattaya Branch
24/79-83 Moo 9, Sukhumvit Rd., T. Nongprue,
●
●
Makro Office Centre, Phayathai Branch
A. Banglamoong, Chonburi 20260
15 Phayathai Rd., Thanonphayathai, Ratchatevee, Bangkok 10400
Tel : (038) 716-944 Fax : (038) 716-950
Tel : 0-2245-7550 Fax : 0-2245-7551
Makro Office Centre, Zeer Rangsit Branch
99 Moo 8, Phaholyothin Rd., T.Kookot,
A.Lam-Looka, Phatumthanee 12130
Tel : 0-2992-5609 Fax : 0-2992-5619
●
Makro Office Centre, Phuket Branch
76 Moo 5, T.Vichit A.Muang Phuket, Phuket 83000
Tel : (076) 249-520 Fax : (076) 249-525
●
Makro Office Centre, Chaengwattana Branch
88/8 Moo 1, Chaengwattana Rd., Toongsonghong,
Laksi, Bangkok 10210
Tel : 0-2984-3303 Fax : 0-2984-3317
87
Annual Report
2005

Contents

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