Directors Resignation&Replacement and Connected Transaction

Translation December 15, 2004 Subject : To inform the Board of Directors' resolutions No. 6/2004 To : Director and President The Stock Exchange of Thailand The Board of Directors' Meeting of Siam Makro Public Company Limited No. 6/2004 held on December 15, 2004 has adopted the following resolutions:- 1. The meeting unanimously approved the resignation of Mr. Eric Felix Maria Van Peer and Mrs. Boonsin Srilertchaipanij from the position of the Company's Directors with an effective date as from 14 December 2004 and appointing Mr. David Thomas Binnion and Mrs. Saowaluck Thithapant as 2 new directors to replace the resigned directors. 2. The meeting unanimously approved the redesignation of the authorized directors as follows: "Number of directors whose signatures bind the Company are Mr. Arsa Sarasin, Mr. Prasert Jarupanich, Mrs. Suchada Ithijarukul, Mrs. Saowaluck Thithapant, Mr. Antonio Carlos Pereira Melo and Mr. Francisco Henrique Passos Fernandes, any two of these six directors may jointly sign with the Company's seal affixed." 3. The increased expenses from the connected transactions for the year 2004 be ratified. The Company had been approved to enter into the connected transactions for the year 2004 pursuant to the resolutions adopted by the Board of Directors' Meeting No.5/2003 held on 17 December 2003. However, thereafter, there have been additional connected transactions, and some of the approved connected transactions have caused more expenses. Details are as follows: Transactions Approval Actual Increase/ Expenses Expenses in (Decrease) (Baht) 2004 (Baht) (Baht) 3.1) Software License Agreement 7,021,649 7,400,000 378,351 3.2) Trademark License Agreement 135,229,000 135,229,000 - 3.3) Own Brand Service Agreement 3,400,000 2,000,000 (1,400,000) 3.4) Insurance Premium on Umbrella Insurance 2,520,000 2,631,954 111,954 3.5) Supply Chain System, Software License 5,000,000 6,500,000 1,500,000 Agreement 3.6) Prophix (for preparing Budgets), 5,000,000 2,500,000 (2,500,000) Software License Agreement 3.7) Service and Technical Assistance 5,647,000 4,454,714 (1,192,286) Agreement in relation to auction through internet 3.8) Agreement to use Website and Tools for - 6,850,000 6,850,000 Auction 3.9) Symantec Software License (Anti Virus - 730,000 730,000 Solfware) 3.10)Service Fee in relation to recruitment - 3,530,000 3,530,000 Total 163,817,649 171,825,668 8,008,019 Interested Directors and/or Directors being connected persons not attending the meeting nor having the right to vote are as follows: (1) Mr. Francisco Henrique Passos Fernandes (2) Mr. Antonio Carlos Pereira Melo (3) Mr. Eric Felix Maria Van Peer As at 30 September 2004, the net tangible assets according to the Company's consolidated financial statement is 8,986 Million Baht. Consequently, the size of above transactions are over 0.03% equivalent to 2.7 Million Baht but less than 3% equivalent to 270 Million Baht. The value of transactions are not required the shareholders' approval. 4. The following connected transactions for the year 2005 be approved. 4.1) Software License Agreement pursuant to the following details: 4.1.1) Date of transaction : 1 January 2005 Term of agreement : 1 year, to be renewed on yearly basis Licensor : Orkam Asia Management AG (Orkam Asia) Licensee : Siam Makro Plc. (SML) 4.1.2) Type of transaction : SML is granted the right to use software license namely "MBS2000". 4.1.3) Total Value of Consideration : SML pays one time License fee of NLG 50,000 (Euro 22,689) per new store opening. SML has to absorb all taxes incurred in relations to payment. 4.1.4) Nature and scope of : Orkam Asia is a company of SHV group, a interest of connected persons major shareholder of SML holding directly and indirectly SML shares over 10%. 4.1.5) Company's justification : The software is used for recording sales system, goods receiving, stock system, customer system of new stores and consolidation of information of all stores. The expenses paid for each store are cheaper than local system development. 4.1.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Fernandes Directors being connected (2) Mr. Antonio Carlos Pereira Melo persons not attending the (3) Mr. Eric Felix Maria Van Peer meeting nor having the right to vote. Estimated expenses for the year : Baht 3,800,000 2005 (including tax) (for expansion of 3 stores) 4.2) Trademark License Agreement pursuant to the following details: 4.2.1) Date of transaction : 1 January 2005 Term of agreement : 1/1/2005-31/12/2005 Licensor : Orkam Asia Trademark AG (Orkam Asia) Licensee : Siam Makro Plc. (SML) Makro Office Centre (MOC) 4.2.2) Type of transaction : SML and MOC are granted to use trademarks and service marks. 4.2.3) Total Value of Consideration : SML pays royalties of 0.5% of the total gross sales of the first 10 stores of SML and total gross sales of all stores of MOC. SML and MOC have to absorb all taxes in relations with the payment. 4.2.4) Nature and scope of interest : Orkam Asia is a company of SHV group, a of connected persons major shareholder of SML holding directly and indirectly SML shares over 10%. 4.2.5) Company's justification : The company has been using the trademark such as "Makro", "MOC", "ARO" etc. in operating the businesses. Apart from that, our store lay out, products display including the knowhow in operating "Cash and Carry business have been developed by Makro and MOC. Whenever, there are any new technique or store format in other countries, those best practice know how will be transferred to SML or MOC in improving our company performance. 4.2.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Fernandes Directors being connected (2) Mr. Antonio Carlos Pereira Melo persons not attending the (3) Mr. Eric Felix Maria Van Peer meeting nor having the right to vote Approved expenses (including tax) : Baht 135,229,000 4.3) Own Brand Service Fee pursuant to the following details: 4.3.1) Date of transaction : 1 January 2005 Term of agreement : 1 year Service Provider : Makro Cash & Carry Distribution (M) SDN.BHD. (Makro Malaysia) Service Receiver : Siam Makro Plc. (SML) 4.3.2) Type of transaction : Market Research and Analysis upon request, develop Own brand articles and recommendation on quality, develop packaging of own brand articles, check and report relative price position of own brand articles and provide all the necessary information to buyer Director and the responsible Buyers to facilitate the sales and profit target. 4.3.3) Total Value of Service Fee : Monthly charges plus all out of pocket expenses and actual travelling expenses. 4.3.4) Nature and scope of interest : Makro Malaysia is a company of SHV of connected persons group, a major shareholder of SML and in directly SML shares over 10%. 4.3.5) Company's justification : Own brands products are for our core customer group, Horeca. Own brand products' quality is as same as those of leader brands while their prices are significantly lower than those of leader brands. The percentage of Gross profit to sales of own brand is much higher than those of other products. The hire of service from Makro Malaysia is due to that company has qualified experienced staff in own brand development and the service payment paid to that company can make us to have more own brand sales. 4.3.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Fernandes Directors being connected (2) Mr. Antonio Carlos Pereira Melo persons not attending the (3) Mr. Eric Felix Maria Van Peer meeting nor having the right to vote Estimated expenses for the year : Baht 3,400,000 2005 4.4) Insurance Premium on Umbrella Insurance arranged by Orkam Asia Management AG : Charging for USD 65,000 (Approximately Baht 2.67 Million at Exchange Rate : USD 1 = Baht 41) (No withholding tax at source) Company's justification : For minimizing risks in relation to any damage to be occurred from any act of SML and MOC to the third parties. The insurance coverage is Euro 50 Million (approximately Baht 2,450 Million), the insurance premium of which is lower than that to be insured by SML. Estimated expenses for the year : Baht 2,665,000 (USD 65,000 with exchange 2005 (excluding tax) rate of USD 1 = Baht 41) 4.5) Prophix (for preparing Budgets), Software License Agreement pursuant to the following details: 4.5.1) Date of transaction : 1 December 2003 Term of agreement : No fixed period. Any party may terminate the Agreement by notifying to the other in advance of 3 months before 31 December of every year. Licensor : Orkam Asia Management AG (Orkam Asia) Licensee : Siam Makro Plc. (SML) 4.5.2) Type of transaction : Improvement and development of Prophix Software to be used for preparing budgets and reports. 4.5.3) Total Value of Consideration : SML pays annual License fee of USD 4,180 (20% of fee per user of USD 550 for 38 users). SML has to absorb all taxes incurred in relations to payment. 4.5.4) Nature and scope of interest : Orkam Asia is a company of SHV group, a of connected persons major shareholder of SML holding directly and indirectly SML shares over 10%. 4.5.5) Company's justification : The software is used for supporting the yearly budgeting, monthly forecasting and reporting process. The expenses paid for each store are cheaper than local system development. 4.5.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Fernandes Directors being connected (2) Mr. Antonio Carlos Pereira Melo persons not attending the (3) Mr. Eric Felix Maria Van Peer meeting nor having the right to vote. Estimated expenses for the year : Baht 180,400 2005 (including tax) 4.6) Service and Technical Assistance Agreement in relation to auction through internet pursuant to the following details: 4.6.1) Date of transaction : 4 January 2005 Term of agreement : 1 year end of 31 December 2005 Licensor : Makro Asia Management (MAM) Licensee : Siam Makro Plc. (SML) 4.6.2) Type of transaction : The Licensor will provide training on the auction through internet and assistance as well as recommendation on development and selection of the products to be purchased by auction. 4.6.3) Total Value of Consideration : SML pays US$ 121,950. 4.6.4) Nature and scope of interest : MAM is a company of SHV group, a major of connected persons shareholder of SML holding directly and indirectly SML shares over 10%. 4.6.5) Company's justification : Due to the auction on the purchase of the products as well as expenses being cheaper and lower than normal process. 4.6.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Fernandes Directors being connected (2) Mr. Antonio Carlos Pereira Melo persons not attending the (3) Mr. Eric Felix Maria Van Peer meeting nor having the right to vote. Estimated expenses for the year : Baht 5,000,000 2005 4.7) Agreement to use Website and Tools for Auction pursuant to the following details: 4.7.1) Date of transaction : 2 January 2005 Term of agreement : 1 year end of 31 December 2005 Licensor : Makro Asia Management (MAM) Licensee : Siam Makro Plc. (SML) 4.7.2) Type of transaction : SML is granted the right to access to the tools made available by WWRE for the purpose of executing auctions to assist in the buying process. 4.7.3) Total Value of Consideration : SML pays proportion cost of WWRE's membership fee calculated from purchases which be made through auctions in the year 2005 by making payment on 30 June and 31 December. 4.7.4) Nature and scope of : MAM is a company of SHV group, a major interest of connected persons shareholder of SML holding directly and indirectly SML shares over 10%. 4.7.5) Company's justification : The auction will enable the Company to get lower price and expenses since there will be competition on price and service offering resulting the benefit of the Company. 4.7.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Fernandes Directors being connected (2) Mr. Antonio Carlos Pereira Melo persons not attending the (3) Mr. Eric Felix Maria Van Peer meeting nor having the right to vote. Estimated expenses for the year : Baht 7,000,000 2005 4.8) Service Fee on Training and Development of Supply Chain Distribution 4.8.1) Licensor : Makro Asia Management Ltd. (MAM) Licensee : Siam Makro Plc. (SML) Term of agreement : 1 year 4.8.2) Nature and scope of interest : MAM is a company of SHV group, a major of connected persons shareholder of SML holding directly and indirectly SML shares over 10%. 4.8.3) Company's justification : The transaction requires skill from experts outside Thailand. The service fee is cheaper than hiring employees. 4.8.4) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Fernandes Directors being connected (2) Mr. Antonio Carlos Pereira Melo persons not attending the (3) Mr. Eric Felix Maria Van Peer meeting nor having the right to vote. Estimated expenses for the year : Baht 6,000,000 (USD 146,300) 2005 4.9) Service Fee on Training and Development of Technique on Commercial and others 4.9.1) Licensor : Makro Asia Management Ltd. (MAM) Licensee : Siam Makro Plc. (SML) Term of agreement : 1 year 4.9.2) Nature and scope of interest : MAM is a company of SHV group, a major of connected persons shareholder of SML holding directly and indirectly SML shares over 10%. 4.9.3) Company's justification : To improve and develop efficiency of Purchase Division and other personal to be equal to international level. 4.9.4) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Fernandes Directors being connected (2) Mr. Antonio Carlos Pereira Melo persons not attending the (3) Mr. Eric Felix Maria Van Peer meeting nor having the right to vote. Estimated expenses for the year : Baht 4,100,000 (USD 100,000) 2005 As at 30 September 2004, the net tangible assets according to the Company's consolidated financial statement is 8,986 Million Baht. Consequently, the size of above transactions are over 0.03% equivalent to 2.7 Million Baht but less than 3% equivalent to 270 Million Baht. The value of transactions are not required the shareholders' approval. Please be informed accordingly. Yours faithfully, Siam Makro Public Company Limited Signature (Charoen Assawajarukasem) SET Coordinator Manager