BIGC: Annual Report 2004

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Annual Report 2004

Transcript of BIGC: Annual Report 2004

  • ANNUAL2 0 0 4

    Big C Supercenter Public Company Limited

    () 2547

    A Central Casino Partnership

    REPORT

  • 17

    More than 17 million bahtBig C Foundation has been supporting the educationof Thai children for brighter future

    2,000

    More than 2,000 million bahtBig C and our customers have been helping local developmentby paying local tax

    Working For Dreams, Smiles and the Happiness of Thai Society

    1,700

    More than 1,700 million bahtBig C has been distributing income to our local staffs

  • Contents

    Message from Chairman of the Board 2Honorary Chairman and Board of Directors 3Audit Committee and Audit Committee Report 4Board of Directors Report 8Executive Officers 9Education and Working Experience of Directors and Executive Officers 10General Information 17Shareholders and Subsidiaries 25Business in Big C 29Significant Change and Future Trends 35Big Cs Branches and Head-to-Head Competitors 37Risk Factor 39Summary of Financial Data 43Analysis of Financial Position and Operating Result 47Management 53Related Company Transactions 75Financial Statements 118

    2 3 4 8 9 10 16 24 28 34 36 38 42 46 52 74 84

  • 2 2 5 4 7 ()

    Message from Chairman of the Board

    2547 () 4

    3

    42,341 2546 47,440 2547 13.3 1,602

    2548 4 44

    2546 3 4 3 1,500

    ( )

    2004 marked a major milestone for Big C Supercenter PLCin successfully implementing its business strategies. This significantsuccess was indicated by being a leading supercenter in Thailandthat reflects the new-style of retailing concept and was also provenby the opening of 4 more branches throughout the Kingdom toensure more accessibility to its customers.

    Despite several difficulties weathered byThailand including unrest in the south, SARS andbird flu epidemics, high oil prices and the year-endtsunami disaster, Big C reported unexpected, solidoperating performance boosted by high customerconfidence and trust.

    In addition to its highest efficiencies inbusiness management, Big C enjoyed theaccomplishment of increased sales capacity and

    efficient control of operating costs with significant decline inexpenses as targeted. The operating outcome of 2004 was highlysuccessful. Revenues grew by 13.3% from 42.341 billion Baht in2003 to 47.440 billion Baht in 2004 with 1.602 billion Baht netearnings.

    The 2005 business plan is focused on opening new branchoutlets to ensure nationwide coverage to fulfill customer demand.Big C will open 4 new branches in high potential areas in 2005,increasing its extensive retailing network to 44 branch offices by theend of the year.

    Throughout its many years of operation, Big C has beencommitted to social contributions in accordance with the Staytogether with the Community concept. As a retailing operator,Big C has given an ongoing return to the communities in which ithas operated by being a good taxpayer. Last year, the Big CFoundation, which was established to help support youthdevelopment in education, handed over 3 Big C learning buildings toneedy schools in rural areas. This year, the company will continuethis commitment, which has been implemented for 3 consecutiveyears, by delivering 4 new buildings and 1,500 scholarships.

    On behalf of the Board of Directors of Big C, I sincerelyextend my deep appreciation to the shareholders and customerswho have provided excellent support to the company. My personalthanks also go to all the management and staff for their exemplaryendeavors, which have prompted our company to make steadysteps forward and maximize benefits to all parties and Thaisociety as a whole.

    (Mr. Suthichart Chirathivat)Chairman of the Board

  • 3A N N U A L R E P O R T 2 0 0 4BIG C SUPERCENTER PUBLIC COMPANY LIMITED

    Honorary Chairman and Board of Directors

    Mr. Vanchai ChirathivatHonorary Chairman

    Mr. Suthichart ChirathivatChairman of the Board

    Mr. Andre Claude Luc MercierDirector

    Mr. Viet Hung DoDirector

    ,

    Mr. Yves Bernard Braibant

    Director, Chief Executive Officer &President

    -

    Mr. John Sian Zu-LinDirector

    Mr. Tos ChirathivatDirector

    Mr. Pierre Bruno Charles BouchutDirector

    -

    Mr. Jean-Michel BARGEDirector

    Mr. Jacques Dominique EhrmannDirector

    ,

    Mr. Nontaphon NimsomboonIndependent Director, Chairman of the

    Audit Committee

    Mr. Chirstophe GuillonDirector

    ,General Winai Phattiyakul

    Independent Director, Member ofAudit Committee

    . ,Dr. Rongphol CharoenphandhuIndependent Director, Member of

    Audit Committee

    3

    A N N U A L R E P O R T 2 0 0 4BIG C SUPERCENTER PUBLIC COMPANY LIMITED

  • 4 2 5 4 7 ()

    Audit Committee and Audit Committee Report

    Mr. Nontaphon NimsomboonCommittee Chairman

    Gen. Winai PhatthiyakulCommittee Member

    .

    Dr. Rongpol CharoenphandhuCommittee Member

    () () 3 1. 2. . 3.

    2547 4

    The Audit Committee of Big C SupercenterPublic Company Limited (the Company) has beenappointed by the Companys Board of Directorscomprising 3 independent non executive directors onebeing qualified in accounting and finance, one in lawand one in organizational management. The threemembers are:1. Mr. Nontaphon Nimsomboon Cmmittee Chairman2. Dr. Rongpol Charoenphandhu Committee Member3. Gen. Winai Phatthiyakul Committee Member

    During the fiscal year 2004, a total of 4 AuditCommittee meetings had been held. The meetings werealso attended by invitees including the external auditor,the internal auditor and high-level operational managersfrom the departments of finance and accounting,legal affairs and information technology to provideexplanation and appropriate additional information tothe Audit Committee as needed in making its decisions.This is to enhance the roles of the Audit Committeein discharging its duties and responsibilities. Thesubstance of matters discussed in the meetings aresummarized as follows:

  • 5A N N U A L R E P O R T 2 0 0 4BIG C SUPERCENTER PUBLIC COMPANY LIMITED

    1.

    1. Review of the interim financial statements and theexternal auditors annual report on the Companysfinancial statements

    The Audit Committee had established asguidelines for the external auditor to directly presentthe results of his review of the Companys interimfinancial statements and his report on the resultsof his examination of the Companys annualfinancial statements to the Audit Committee atits meetings. In this regard, high-level managementof the finance and accounting department wasinvited to provide answers to inquiries and relatednecessary information to ensure accuracy andconsistency of the Companys accounting andfinancial reporting process in accordance withGenerally Accepted Accounting Standards appliedin Thailand, and also to ensure adequacy ofadditional information disclosure. Coordinationhad been established between the external auditorand the Audit Committee to ensure that the auditoremphasizes on his observations and suggestionswith regard to the Companys internal controlsystem and measures as well as reviewing of relatedtransactions and transactions with possible conflictof interests. This was to ensure that transactionswere conducted at arms-length and in fullcompliance with the regulations set forth by theStock Exchange of Thailand.

    After being reviewed by the AuditCommittee, the financial statements, auditorsreport and other significant related informationwere presented to the Board of Directors either foracknowledgement, consideration or approval, asthe case may be.

  • 6 2 5 4 7 ()

    2. System of internal controls and work of theinternal auditor

    The internal auditor had been assigned bythe Audit Committee to regularly assess theadequacy and effectiveness of the Companysinternal control system applied not only toaccounting and financial work processes but alsoto the managerial side of controls. The assessmentcovered areas including, for example, theprocurement process, collection of space rental, etc.Copies of quarterly internal audit reports had beensubmitted to Audit Committee for discussion toensure efficiency and effectiveness of the Companysinternal operational controls in various areas.Close monitoring of results and potential problemsor weaknesses which may arise as well as theirprompt solutions had also been ensured in order tomaintain and enhance good corporate governanceaiming at the fair treatments and providingmaximum possible benefit of the Company as wellas of all of its stakeholders.

    2.

  • 7A N N U A L R E P O R T 2 0 0 4BIG C SUPERCENTER PUBLIC COMPANY LIMITED

    3. Selection of external auditor for 2005The Audit Committee has proposed the

    selection of Mr. Ruth Chaonakawee, or Mr. WichartLoketkrawee, or Mrs. Rattana Chala, or Mrs. SaifonIntrakaew, of Ernst & Young Office Limited as theexternal auditor of the Company for the year 2005and propose fixing professional fee at Baht2,790,000 for the audit of the Company and Baht5,940,000 for the audit of the group companiesincluding the Companys subsidiaries and affiliates.The proposal are for the consideration andagreement of the Companys Board of Directorsand then put forward further for the finalapproval of the shareholders at the generalmeeting of the Companys shareholders.

    (Mr. Nontaphon Nimsomboon)Chairman of the Audit Committee

    3. 2548

    2,790,000 5,940,000

    ( )

  • 8 2 5 4 7 ()

    Board of Directors Report

    31 2547

    ( ) ( )

    The Board of Directors is responsible for the financialstatements of the company and its subsi