ONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER 3/2000

02 พฤศจิกายน 2543
Net decrease in cash and cash equivalents (257,945) (490,823) (301,738) (513,539) Cash and cash equivalents, beginning balance 3,994,405 3,624,026 3,886,733 3,508,055 Cash and cash equivalents, ending balance 3,736,460 3,133,203 3,584,995 2,994,516 Cash and cash equivalents: Cash on hand and at banks 1,855,031 2,500,203 1,783,566 2,394,516 Short-term investments 1,881,429 633,000 1,801,429 600,000 3,736,460 3,133,203 3,584,995 2,994,516 Supplementary information for cash flows: Interest paid - 5,309 - 5,307 Income tax paid 482,774 238,630 406,213 197,389 The notes to the interim consolidated and company financial statements on pages 10 to 18 are an integral part of these interim financial statements. Siam Makro Public Company Limited Notes to the Interim Consolidated and Company Financial Statements (Unaudited) For the nine-month period ended 30 September 2000 and 1999 1 Accounting Policies The interim consolidated and company financial statements are prepared in accordance with the accounting principles generally accepted in Thailand as required by Thai Accounting Standard No. 41 "Interim Financial Reporting". In addition, the primary financial statements (i.e. balance sheets, statements of income, changes in shareholders' equity, retained earnings and cash flows) are presented in the full format as prescribed by the Ministerial Regulation No. 7 (B.E. 2539) in accordance with the Securities and Exchange Commission's and the Stock Exchange of Thailand's requirements. The accounting policies used in the preparation of the interim financial statements are consistent with those used in the annual financial statements for the year ended 31 December 1999. The Group has implemented the following new Thai Accounting Standards, effective 1 January 2000, in these interim financial statements: TAS 41 - Interim Financial Reporting TAS 44 - Consolidated Financial Statements and Accounting for Investment in Subsidiaries TAS 45 - Accounting for Investment in Associates TAS 47 - Related Party Disclosures The comparative figures, where appropriate, have been adjusted or extended to take into account the requirements of those newly effective standards. In addition, in the third quarter ended 30 September 1999, the Group has changed its accounting policy in respect of capitalisation of certain intangible assets including Deferred development rights and Pre-operating and start-up expenses. The Group has accounted for this change retrospectively by adjustment to the opening balance of retained earnings as at 1 January 1999. The effects of the change are presented in Note 10. Costs that incur unevenly during the financial year are recognised as expense or deferred in the interim report only if it would be also appropriate to recognise or defer such costs at the end of the financial year. Income tax expense is recognised based on the best estimate for the year. These interim financial statements should be read in conjunction with the 1999 annual financial statements. 2 Segment Information Financial information by business segments For the three-month period ended 30 September 2000 Wholesale Land and Retail Service Rental Business Business Business Elimination Total Million Million Million Million Million Baht Baht Baht Baht Baht Sales and services income 9,346 292 65 (66) 9,637 Operating profit 278 2 51 - 331 Income tax (95) Net profit 236 2 Segment Information (Continued) For the three-month period ended 30 September 1999 Wholesale Land and Retail Service Rental Business Business Business Elimination Total Million Million Million Million Million Baht Baht Baht Baht Baht Sales and services income 8,925 273 65 (65) 9,198 Operating profit 164 2 51 - 217 Income tax (71) Net profit 146 For the nine-month period ended 30 September 2000 Wholesale Land and Retail Service Rental Business Business Business Elimination Total Million Million Million Million Million Baht Baht Baht Baht Baht Sales and services income 26,771 858 196 (198) 27,627 Operating profit 852 7 153 - 1,012 Income tax (299) Net profit 713 For the nine-month period ended 30 September 1999 Wholesale Land and Retail Service Rental Business Business Business Elimination Total Million Million Million Million Million Baht Baht Baht Baht Baht Sales and services income 24,380 771 196 (198) 25,149 Operating profit 557 (4) (13) - 540 Income tax (220) Net profit 320 The Company and its subsidiaries operate 3 major businesses as follows : - Cash and carry wholesale business of merchandise and retail business of office supplies. - Automotive service centers and gas stations. - Land investment and property leasing to affiliated companies. 3 Significant Unusual Item Charged to Operating Profit The following unusual item has been charged to the operating profit during the interim period. Consolidated For the nine-month period ended 30 September 30 September 2000 1999 Million Baht Million Baht Impairment charge relating to property of a subsidiary - 164,909 In the second quarter of 1999, a subsidiary has recognised a provision for impairment of a property. Subsequent to the original purchase of this site, the Group has now determined that the site will not be used for the purpose for which it was originally acquired. It has therefore identified the asset as being an asset held for sale or future development and has provided for impairment to carry the site at market value in current economic conditions. The market value of this site has been assessed by an independent valuer on the basis of market prices for comparable sites in that location including other relevant factors. 4 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 period that is 240,000,000 shares (1999: 240,000,000 shares). 5 Capital Expenditure and Commitments Consolidated Company property, property, plant and plant and equipment equipment Baht'000 Baht'000 For the nine-month period ended 30 September 2000 Opening net book amount 8,979,058 5,782,222 Additions 965,988 790,207 Disposal (466) (466) Provision for fixed assets written off 9,802 9,802 Depreciation (544,907) (467,545) Closing net book amount 9,409,475 6,114,220 Capital commitments as at 30 September 2000 391,950 330,488 Capital commitments as at 31 December 1999 388,268 370,024 6 Share Capital and Premium on Share Capital For the nine-month period ended Number of Ordinary Share 30 September 2000 Shares Shares Premium Total Baht'000 Baht'000 Baht'000 Opening balance 240,000,000 2,400,000 3,290,152 5,690,152 Issue of shares - - - - Closing balance 240,000,000 2,400,000 3,290,152 5,690,152 As at 30 September 2000, the total authorised number of ordinary shares is 240,000,000 shares (31 December 1999: 240,000,000 shares) with a par value of Baht 10 per share (31 December 1999: Baht 10 per share). All issued shares are fully paid. 7 Related Party Transactions Orkam Holding Asia N.V. incorporated in the Netherlands owns 5.80% of the Company's shares. Although, the equity is less than one half of ownership, this company has significant influence over financial and operating policies. The following material transactions were carried out with related parties: i) Sales of goods and services income Consolidated Company For the three-month period ended 30 September 30 September 30 September 30 September 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Sales of goods: Makro Auto Care Company Limited - - 0.4 0.2 - - 0.4 0.2 Services income: Makro Properties Limited - - 18.2 18.8 Makro Auto Care Company Limited - - 6.9 7.2 Makro Office Centre Company Limited - - 10.2 5.5 - - 35.3 31.5 Consolidated Company For the nine-month period ended 30 September 30 September 30 September 30 September 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Sales of goods: Makro Auto Care Company Limited - - 1.0 0.7 - - 1.0 0.7 Services income: Makro Properties Limited - - 52.9 57.1 Makro Auto Care Company Limited - - 21.1 22.1 Makro Office Centre Company Limited - - 29.7 29.1 - - 103.7 108.3 Sales of goods above were carried out on commercial terms and conditions and at market prices. Services income are charged on the basis of the agreed rates. 7 Related Party Transactions (Continued) ii) Purchases of goods and service expenses Consolidated Company For the three-month period ended 30 September 30 September 30 September 30 September 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Purchases of goods: Makro Auto Care Company Limited - - 0.2 0.5 Makro Office Centre Company Limited - - 0.1 0.1 Charoen Pokphand Group 25.0 27.7 25.0 27.7 25.0 27.7 25.3 28.3 Service expenses: Makro Properties Limited - - 69.3 70.3 Makro Auto Care Company Limited - - 0.1 0.1 Makro Systems Far East Limited 32.2 32.9 29.6 30.5 32.2 32.9 99.0 100.9 Consolidated Company For the nine-month period ended 30 September 30 September 30 September 30 September 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Purchases of goods: Makro Auto Care Company Limited - - 0.6 1.1 Makro Office Centre Company Limited - - 0.4 0.4 Charoen Pokphand Group 76.8 79.6 76.8 79.6 76.8 79.6 77.8 81.1 Service expenses: Makro Properties Limited - - 207.1 209.7 Makro Auto Care Company Limited - - 0.4 0.4 Makro Systems Far East Limited 93.8 90.5 86.3 83.9 93.8 90.5 293.8 294.0 Purchases of goods above were carried out on commercial terms and conditions and at market prices. Service expenses are charged on the basis of the agreed rates. 7 Related Party Transactions (Continued) iii) Outstanding balances arising from sales, purchases of goods and services Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Receivables from related parties Makro Auto Care Company Limited - - 7.2 156.1 Makro Office Centre Company Limited - - 4.3 5.1 Makro Properties Limited - - 4.2 - Makro Asia Management Limited 0.1 0.1 - - 0.1 0.1 15.7 161.2 Payables to related parties: Makro Properties Limited - - - 0.5 Makro Systems Far East Limited 41.9 75.8 38.5 70.3 Orkam Asia Management AG - 2.1 - 2.1 Total amounts due to subsidiaries and affiliated companies 41.9 77.9 38.5 72.9 Charoen Pokphand Group 16.3 16.2 16.3 16.2 58.2 94.1 54.8 89.1 iv) Loans to subsidiaries Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Short-term loans to Makro Properties Limited - - 66.5 - Makro Auto Care Company Limited - - 38.1 86.2 - - 104.6 86.2 Long-term loans to Makro Properties Limited - - 1,111.4 1,126.4 - - 1,111.4 1,126.4 - - 1,216.0 1,212.6 Short-term loans to subsidiaries, being in the form of promissory notes, are due at call. Long-term loans to a subsidiary are due for repayment as follows: Contract Date 30 September 31 December Due Date 2000 1999 Million Baht Million Baht 1 March 1993 110.5 125.5 28 February 2003 1 November 1995 720.9 720.9 31 October 2005 23 November 1995 280.0 280.0 22 November 2005 1,111.4 1,126.4 7 Related Party Transactions (Continued) v) Deposits for land lease paid to a subsidiary Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Million Baht Million Baht Million Baht Million Baht Deposits for land lease paid to Makro Properties Limited - - 261.6 261.6 - - 261.6 261.6 vi) Investments in subsidiaries Company 30 September 2000 Subsidiaries Business Relationship Paid up % Carrying Capital Ownership Value Dividend Baht'000 Interest Baht'000 Baht'000 Makro Properties Land investment & property Being shareholder and 700,000 99.99 1,298,829 - Limited leasing under the same management Makro Auto Care Automotive service centers, Being shareholder and 500,000 99.99 412,712 - Company automated car wash and gas management participation Limited stations Makro Office Retail business of office Being shareholder and 200,000 99.99 157,598 - Centre Company supplies, office equipments, management participation Limited office furniture and business service center. 1,869,139 Company 31 December 1999 Subsidiaries Business Relationship Paid up % Carrying Capital Ownership Value Dividend Baht'000 Interest Baht'000 Baht'000 Makro Properties Land investment & property Being shareholder and 700,000 99.99 1,191,240 - Limited leasing under the same management Makro Auto Care Automotive service centers, Being shareholder and 300,000 99.99 205,870 - Company automated car wash and gas management participation Limited stations Makro Office Retail business of office , Being shareholder and 200,000 99.99 145,838 - Centre Company supplies office equipments, management participation Limited office furniture and business service center. 1,542,948 As at 31 March 2000, Makro Auto Care Company Limited increased its share capital from Baht 300 million to Baht 500 million. The Company increased the investment in this subsidiary at the prior level at 99.99 percent of ownership interest. 8 Contingencies As at 30 September 2000 and 31 December 1999, 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 given guarantees to third parties as follows: Bank guarantees As at 30 September 2000 and 31 December 1999 the banks have given guarantees on behalf of the Company and its subsidiaries as follows: Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Electricity 46,139 39,335 43,443 37,322 Sales of liquor and cigarettes 2,132 2,132 2,097 2,097 Others 1,046 950 546 450 49,317 42,417 46,086 39,869 Letter of awareness and Letter of comfort As at 30 September 2000 the Company has issued letters of awareness and letters of comfort to banks for bank overdrafts and bank credit facility of subsidiaries amounting to Baht 300 million (as 31 December 1999 amounting to Baht 70 million). Operating lease commitments-where the group is the lessee The future minimum lease payments under operating lease are as follows: Consolidated Company 30 September 31 December 30 September 31 December (more)