NTERIM F/S AND CONSOLIDATED F/S OF Q3/1998
06 พฤศจิกายน 2541
(c) Inventories
Inventories are stated at the lower of cost or net realisable value. Cost is determined on
the latest purchase price which is approximate to cost determined on a first-in first-out
basis. Net realisable value is the price at which inventories can be sold in the normal
course of business after allowing for the costs of realisation. Provision is made where
necessary for obsolete, slow-moving and shrinkage inventories.
(d) Foreign currencies
Trading transactions denominated in foreign currencies are translated into Thai Baht at
the exchange rates ruling when the transactions are entered into. Monetary assets and
liabilities denominated in foreign currencies are translated into Thai Baht at the exchange
rates ruling at the balance sheet date and the forward contracted rate. Exchange gains
or losses arising from the application of forward contracted rate are deferred and
amortised by the straight-line method over the period of forward contracted rate
agreements. Exchange gains or losses arising from the application of exchange rates at
the balance sheet date are included in the statement of income.
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Siam Makro Public Company Limited Page 9
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
(e) Investment
Investment in companies in which Siam Makro Public Company Limited holds more
than 20% of the share capital and over which the company exercises significant
influence, are accounted for under the equity method. The investment is initially
recorded at cost. The carrying amount of the investment is increased or decreased to
recognise the company's share of the profits or losses of the investee after the date of
acquisition and to take account of any dividends received.
(f) Deferred development rights
Deferred development rights represent certain costs of development that the subsidiary
companies acquired from Siam Makro Public Company Limited. These costs are
capitalised and are being amortised over 5 years from the date of acquisition by the
subsidiary companies.
(g) Provision for retirement benefits
Provision for retirement benefits is made for employees whose length of service exceeds
3 years and is normally payable on termination of service. The calculation is based on
the latest basic salary multiplied by the years of each employee's service, as set out in
the company's retirement benefits plan.
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Siam Makro Public Company Limited Page 10
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
Short-term investments
3. Short-term investments comprise fixed deposits and bill of exchange bearing interest at
rates between 5.50% - 15.00% per annum.
Accounts receivable
4. As at September 30, 1998 the outstanding accounts receivable balances aged longer
than 3 months are as follows : -
The company only The consolidation
(Baht'000) (Baht'000)
Accounts receivable aged longer than 3 months - 124
Related parties transactions
5. A portion of the company's transactions have been made with subsidiaries, associated
and affiliated companies. A summary of significant transactions is set out below :
The company only .
1998 1997 .
Third Period of Third Period of
quarter nine months quarter nine months
(Million Baht) (Million Baht) (Million Baht) (Million Baht)
Transactions during the period :
With subsidiary companies
Revenues :
- Sales of inventory 0.2 0.2 - 241.6
- Disposal of fixed assets - 0.6 - 294.8
- Disposal of deferred
development rights - - - 55.7
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Siam Makro Public Company Limited Page 11
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
The company only
1998 1997
Third Period of Third Period of
quarter nine months quarter nine months
(Million Baht) (Million Baht) (Million Baht) (Million Baht)
- Interest income 22.9 78.4 24.0 66.4
- Rental income 19.8 55.9 18.1 43.4
- Management fee 0.5 1.4 0.5 1.4
Transactions during the period :
With subsidiary companies
Expenses :
- Land rental 65.4 196.2 60.9 176.7
- Royalty fee 3.1 9.0 3.1 9.0
- Purchase of office supplies 0.3 0.6 - -
- Purchase of fixed assets - 0.1 - -
- Sales discounts - - 10.6 10.6
- Motor vehicle expenses 1.3 1.3 - -
With an associated company
Interest income - - 0.9 2.4
With an affiliated company
Royalty fee 26.9 82.9 34.2 97.0
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Siam Makro Public Company Limited Page 12
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
The consolidation
1998 1997
Third Period of Third Period of
quarter nine months quarter nine months
(Million Baht) (Million Baht) (Million Baht) (Million Baht)
With an associated company
Interest income - - 0.9 2.4
With an affiliated company
Royalty fee 28.8 88.7 35.9 101.1
The transactions in respect of sales of inventory, disposal of fixed assets and deferred
development rights to subsidiary companies, Makro Auto Care Company Limited and
Makro Office Centre Company Limited, resulted from a business reorganisation in the first
quarter of 1997. The selling prices of the above transactions represent net book value, as
specified in the agreements between the company and the subsidiary companies.
The rental charges in respect of land and building as specified in the agreements between the
company and subsidiary companies are based on the costs of land and fixed assets plus the
related expenses.
General services provided by the company are charged at cost to a subsidiary company on
the basis of an agreed annual fee.
The company has entered into the agreements with an oversea affiliated company and a
subsidiary company to use their trade marks. The royalty fee for the use of the trade marks
represents a percentage of the company's net sales.
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Siam Makro Public Company Limited Page 13
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
The company only The consolidation
Notes 1998 1997 1998 1997
(Million Baht) (Million Baht) (Million Baht) (Million Baht)
Balance as at September
30, 1998 and 1997
Amounts due from subsidiary
companies 181.3 721.8 - -
Amount due from an associated
company 5.5 4.3 5.5 4.3
Amounts due from affiliated
companies 7.5 0.6 7.7 1.0
194.3 726.7 13.2 5.3
Short-term loans to subsidiary
companies (interest at
7% per annum) 5.1
Makro Properties Limited 167.8 312.3 - -
Makro Auto Care
Company Limited 87.5 - - -
Short-term loan to an
associated company
(interest at Minimum
Overdraft Rate)
Peoples Health Care
Company Limited 22.5 22.5 22.5 22.5
472.1 1,061.5 35.7 27.8
Less: Allowance for
doubtful account 5.2 (28.0) - (28.0) -
444.1 1,061.5 7.7 27.8
Amount due to a subsidiary
company 31.9 9.2 - -
Amounts due to affiliated
companies 26.9 40.9 28.8 42.7
58.8 50.1 28.8 42.7
Long-term loans to a subsidiary
company (interest at 6%
per annum)
Makro Properties Limited 5.3 1,178.4 1,178.4 - -
Deposits for landlease paid to
a subsidiary company 261.6 243.6 - -
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Siam Makro Public Company Limited Page 14
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
5.1 Short-term loans to subsidiary companies, being in the form of promissory notes, are
due at call.
5.2 Allowance for doubtful account is reserved for amounts due from and loan to an
associated company amounting to Baht 28 million. The company has disinvested in
this associated company on February 5, 1998 due to its continued financial losses.
5.3 Long-term loans to a subsidiary company are due for repayment as follows :
Date Amount Due date
(Million Baht)
January 1, 1993 40.5 December 31, 2002
March 1, 1993 137.0 February 28, 2003
November 1, 1995 720.9 October 31, 2005
November 23, 1995 280.0 November 22, 2005
1,178.4
Inventories, net
6. Inventories are made up as follows :
The company only The consolidation
1998 1997 1998 1997
(Baht'000) (Baht'000) (Baht'000) (Baht'000)
Finished goods 2,083,896 2,389,743 2,297,200 2,679,464
Goods in transit 3,711 - 3,711 -
2,087,607 2,389,743 2,300,911 2,679,464
Less: Provision for obsolete and
shrinkage inventories (139,195) (79,257) (162,355) (93,365)
Inventories, net 1,948,412 2,310,486 2,138,556 2,586,099
Siam Makro Public Company Limited
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
Investments in subsidiary and associated companies
7. Investments in subsidiary and associated companies are accounted for under the
equity method. Investments comprise :
Business activity
Subsidiary companies :
Makro Properties Limited - Land investment & property leasing
Makro Auto Care Company Limited - Automotive service centers, automated car wash
and gas stations.
Makro Office Centre Company Limited - Retail business of office supplies, office equipment,
office furniture and business service centre.
Associated company :
Peoples Health Care Company Limited - Retail business of health and beauty care products
Disposed on February 5, 1998 and pharmaceutical products.
The company only
1998 1997
Investment Dividend Investment Dividend
(Baht'000) (Baht'000) (Baht'000) (Baht'000)
Subsidiary companies :
Makro Properties Limited 1,182,369 - 1,056,834 -
Makro Auto Care Company Limited 230,140 - 4,445 -
Makro Office Centre Company Limited 159,841 - 1,331 -
Associated company :
Peoples Health Care Company Limited - - 2,902 -
1,572,350 - 1,065,512 -
Siam Makro Public Company Limited
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
Relationship
Subsidiary companies :
Makro Properties Limited Being shareholder and under the
same management control
Makro Auto Care Company Limited Being shareholder and
management participation
Makro Office Centre Company Limited Being shareholder and
management participation
Associated company :
Peoples Health Care Company Limited Being shareholder
Disposed on February 5, 1998
The consolidation
1998 1997
Investment Dividend Investment Dividend
(Baht'000) (Baht'000) (Baht'000) (Baht'000)
Subsidiary companies :
Makro Properties Limited - - - -
Makro Auto Care Company Limited - - - -
Makro Office Centre Company Limited - - - -
Associated company :
Peoples Health Care Company Limited - - 2,902 -
- - 2,902 -
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Siam Makro Public Company Limited Page 15
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
Issued & paid up
Share capital Holding
1998 1997 1998 1997
Subsidiary companies : (Baht'000) (Baht'000) (%) (%)
Makro Properties Limited 700,000 700,000 99.99 99.99
Makro Auto Care Company Limited 300,000 10,000 99.99 99.99
Makro Office Centre Company Limited 200,000 10,000 99.99 99.99
Associated company :
Peoples Health Care Company Limited 100,000 100,000 - 45.00
Disposed on February 5, 1998
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Siam Makro Public Company Limited Page 16
Notes to the financial statements and consolidated financial statements
- September 30, 1998 continued
Property, plant and equipment, net
8. The company only
1998 1997
(Baht'000) (Baht'000)
Property, plant and equipment, at cost
Land 782,655 784,892
Buildings 3,294,081 3,039,316
Leasehold rights and leasehold improvement 412,665 182,286
Store equipment 2,277,707 2,072,134
Office equipment and furniture and fixtures 518,643 470,526
Motor vehicles 52,997 56,377
Construction in progress 155,232 45,636
7,493,980 6,651,167
Less: Accumulated depreciation (2,138,173) (1,605,864)
Property, plant and equipment, net 5,355,807 5,045,303
The company only
1998 1997
Third Period of Third Period of
quarter nine months quarter nine months
(Baht'000) (Baht'000) (Baht'000) (Baht'000)
Depreciation and amortisation 147,007 445,023 143,079 410,977
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