Approval of Connected Transactions

Translation December 13, 2005 Subject : To inform the Board of Directors' resolutions No. 6/2005 To : Director and President The Stock Exchange of Thailand The Board of Directors' Meeting of Siam Makro Public Company Limited No. 6/2005 held on December 13, 2005 has adopted the following resolutions: - 1. The increased expenses from the connected transactions for the year 2005 be ratified. The Company had been approved to enter into the connected transactions for the year 2005 pursuant to the resolutions adopted by the Board of Directors' Meeting No.6/2004 held on 15 December 2004. However, thereafter, there have been additional connected transactions, and some of the approved connected transactions have caused more expenses. Details are as follows: 1.1) Trademark License Agreement pursuant to the following details: 1.1.1) Date of transaction : 1 January 2005 Term of agreement : 1/1/2005-31/12/2005 Licensor : Orkam Asia Trademark AG (OAT) Licensee : Siam Makro Plc. (SML) Makro Office Centre (MOC) 1.1.2) Type of transaction : SML and MOC are granted to use trademarks and service marks. 1.1.3) 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. 1.1.4) Nature and scope of interest : OAT is a company of SHV group, a of connected persons major shareholder of SML holding directly and indirectly SML shares over 10%. 1.1.5) 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. 1.1.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Directors being connected Fernandes persons not attending the (2) Mr. Ruurd Jacobus Faber meeting nor having the right to vote Approval expenses (including tax) : Baht 135,229,000 Actual expenses paid in 2005 : Baht 147,000,000 (including tax) Increased expenses : Baht 11,771,000 As at 30 September 2005, the net tangible assets according to the Company's consolidated financial statement is Baht 9,484 Million. Consequently, the size of above transaction is over 0.03% equivalent to Baht 2.85 Million but less than 3% equivalent to Baht 285 Million.The value of transaction is not required the shareholders' meeting approval. 2. The following connected transactions for the year 2006 be approved. 2.1) Software License Agreement pursuant to the following details: 2.1.1) Date of transaction : 1 January 2006 Term of agreement : 1 year, to be renewed on yearly basis Licensor : Orkam Asia Management AG (OAM) Licensee : Siam Makro Plc. (SML) 2.1.2) Type of transaction : SML is granted the right to use software license namely "MBS2000". 2.1.3) 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. 2.1.4) Nature and scope of interest : OAM is a company of SHV group, a of connected persons major shareholder of SML holding directly and indirectly SML shares over 10%. 2.1.5) 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. 2.1.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Directors being connected Fernandes persons not attending the (2) Mr. Ruurd Jacobus Faber meeting nor having the right to vote Estimated expenses for the year : Baht 3,800,000 2006 (including tax) As at 30 September 2005, the net tangible assets according to the Company's consolidated financial statement is Baht 9,484 Million. Consequently, the size of above transaction is over 0.03% equivalent to Baht 2.85 Million but less than 3% equivalent to Baht 285 Million.The value of transaction is not required the shareholders' meeting approval. 2.2) Trademark License Agreement pursuant to the following details: 2.2.1) Date of transaction : 1 January 2006 Term of agreement : 1/1/2006-31/12/2006 Licensor : Orkam Asia Trademark AG (OAT) Licensee : Siam Makro Plc. (SML) Makro Office Centre (MOC) 2.2.2) Type of transaction : SML and MOC are granted to use trademarks and service marks. 2.2.3) 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. 2.2.4) Nature and scope of interest : OAT is a company of SHV group, a of connected persons major shareholder of SML holding directly and indirectly SML shares over 10%. 2.2.5) 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. 2.2.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Directors being connected Fernandes persons not attending the (2) Mr. Ruurd Jacobus Faber meeting nor having the right to vote Estimated expenses for the year : Baht 147,000,000 2006 (including tax) As at 30 September 2005, the net tangible assets according to the Company's consolidated financial statement is Baht 9,484 Million. Consequently, the size of above transaction is over 0.03% equivalent to Baht 2.85 Million but less than 3% equivalent to Baht 285 Million. The value of transaction is not required the shareholders' meeting approval. 2.3) Own Brand Service Fee pursuant to the following details: 2.3.1) Date of transaction : 1 January 2006 Term of agreement : 1 year. Service Provider : Makro Asia Management Ltd. (MAM) Service Receiver : Siam Makro Plc. (SML) 2.3.2) 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. 2.3.3) Total Value of Service Fee : Monthly charges plus all out of pocket expenses and actual travelling expenses. 2.3.4) Nature and scope of interest : MAM is a company of SHV group, a of connected persons major shareholder of SML and in directly SML shares over 10%. 2.3.5) 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 MAM 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. 2.3.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Directors being connected Fernandes persons not attending the (2) Mr. Ruurd Jacobus Faber meeting nor having the right to vote Estimated expenses for the year : Baht 3,000,000 2006 As at 30 September 2005, the net tangible assets according to the Company's consolidated financial statement is Baht 9,484 Million. Consequently, the size of above transaction is over 0.03% equivalent to Baht 2.85 Million but less than 3% equivalent to Baht 285 Million.The value of transaction is not required the shareholders' meeting approval. 2.4) Insurance Premium on Umbrella Insurance arranged by Orkam Asia Management AG: Charging for USD 66,000 (Approximately Baht 2.7 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. Interested Directors and/or : (1) Mr. Francisco Henrique Passos Directors being connected Fernandes persons not attending the (2) Mr. Ruurd Jacobus Faber meeting nor having the right to vote Estimated expenses for the year : Baht 2,706,000 (USD 66,000 with 2006 (excluding tax) exchange rate of USD 1 = Baht 41) As at 30 September 2005, the net tangible assets according to the Company's consolidated financial statement is Baht 9,484 Million. Consequently, the size of above transaction is less than 0.03% equivalent to Baht 2.85 Million. The value of transaction is not required the shareholders' meeting approval. 2.5) Prophix (for preparing Budgets), Software License Agreement pursuant to the following details: 2.5.1) 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 (OAM) Licensee : Siam Makro Plc. (SML) 2.5.2) Type of transaction : Improvement and development of Prophix Software to be used for preparing budgets and reports. 2.5.3) 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. 2.5.4) Nature and scope of interest : OAM is a company of SHV group, a of connected persons major shareholder of SML holding directly and indirectly SML shares over 10%. 2.5.5) 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. 2.5.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Directors being connected Fernandes persons not attending the (2) Mr. Ruurd Jacobus Faber meeting nor having the right to vote Estimated expenses for the year : Baht 180,400 2006 (including tax) As at 30 September 2005, the net tangible assets according to the Company's consolidated financial statement is Baht 9,484 Million. Consequently, the size of above transaction is less than 0.03% equivalent to Baht 2.85 Million. The value of transaction is not required the shareholders' meeting approval. 2.6) Service and Technical Assistance Agreement in relation to auction through internet pursuant to the following details: 2.6.1) Date of transaction : 1 January 2006 Term of agreement : 1 year end of 31 December 2006 Service Provider : Makro Asia Management Ltd. (MAM) Service Receiver : Siam Makro Plc. (SML) 2.6.2) 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. 2.6.3) Total Value of Consideration : SML pays US$ 73,000. 2.6.4) Nature and scope of interest : MAM is a company of SHV group, a of connected persons major shareholder of SML holding directly and indirectly SML shares over 10%. 2.6.5) Company's justification : Due to the auction on the purchase of the products as well as expenses being cheaper and lower than normal process. 2.6.6) Interested Directors and/or : (1) Mr. Francisco Henrique Passos Directors being connected Fernandes persons not attending the (2) Mr. Ruurd Jacobus Faber meeting nor having the right to vote Estimated expenses for the year : Baht 3,000,000 2006 As at 30 September 2005, the net tangible assets according to the Company's consolidated financial statement is Baht 9,484 Million. Consequently, the size of above transaction is over 0.03% equivalent to Baht 2.85 Million but less than 3% equivalent to Baht 285 Million.The value of transaction is not required the shareholders' meeting approval. 2.7) Agreement to use Website and Tools for Auction pursuant to the following details: 2.7.1) Date of transaction : 1 January 2006 Term of agreement : 1 year end of 31 December 2006 Service Provider : Makro Asia Management Ltd. (MAM) Service Receiver : Siam Makro Plc. (SML) 2.7.2) 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. 2.7.3) Total Value of Consideration : SML pays proportion cost of WWRE's membership fee calculated from purchases which be made through auctions in the year 2006 by making payment on 30 June and 31 December. 2.7.4) Nature and scope of interest : MAM is a company of SHV group, a (more)