BIGC: Annual Report 2006

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Annual Report 2006

Transcript of BIGC: Annual Report 2006

  • ------------------------------------------- 2Welcome to Big C 2549 ---------------------------------------------- 3Key Indicators for 2006 Performance ------------------------------ 4Message from the Chairman 2549 ------------------- 62006 Business Highlights --------------------------------------------------- 8Management ------ 29Honorary Chairman and Board ofDirectors ----------------------------------------- 30Executive Officers ----------------- 32Education and Working Experience ofDirectors and Executive Officers ------------------------------ 40Organization Structure -------------------------------------------- 41The Business of Big C/ -------------------------------- 48Big C Store Information

    ----------------------------------- 60Big C in the Community

    ontents

    2549

    Annual Report 2006

    ------------------ 66Summary Financial Data

    -------------- 72Managements Discussion and Analysis

    ------------------ 82Board of Directors Report

    2549 -------------------------------------------- 83The Audit Committees Report for 2006

    ---------------------------- 87Financial Statements

    ----------------- 101Notes to Consolidated Financial Statements

    ------------------------------------ 139Related Company Transactions

    --------------------------------------- 152Major Shareholders

    ----------------------------------------------- 154Subsidiaries

  • 2 ()( : BIGC) 2536

    14,000 49 25 24

    Founded in 1993, Big C Supercenter PLC (BIGC)is one of Thailands leading consumer retail operators.Under the name of Big C Supercenter, the companyoffers a wide variety of goods in modern retail outletsat very competitive prices. Operating under the conceptof More Than Just Low Prices, Big C is committedto delivering maximum value to our customers througha combination of low prices, wide selection, clean andefficient shopping environments and outstanding service.

    Big C employs over 14,000 staff from all regionsof the country. We operate 49 Supercenters nationwide,with 25 located in the greater Bangkok Metropolitanarea and 24 in provinces across Thailand. One ofthe companys central tenets is to be a good corporatecitizen that contributes to society while we benefit ourcustomers, employees and shareholders. To meet thisgoal, Big C supports a range of community and charitableactivities in the areas where we operate as well asthrough the Big C Foundation.

    Welcome to Big C

  • 3( : ) 2549 2548 29,956,178 28,896,719 15,453,472 15,168,571 14,502,706 13,728,148 65,700,136 59,578,094 2,123,624 1,882,774

    2549 2548 32 33 70 72 3.2 3.2 15 14.2 7.2 6.7 2.7 2.3 18.1 17.1

    (unit:Thousand Baht)2006 2005

    Total Assets 29,956,178 28,896,719Total Liabilities 15,453,472 15,168,571Total Equity 14,502,706 13,728,148Total Revenues 65,700,136 59,578,094Net income 2,123,624 1,882,774

    Financial Ratio 2006 2005Average inventory days 32 33Average account payable days 70 72Net profit margin 3.2 3.2Return on equity 15 14.2Return on asset 7.2 6.7Earning per share 2.7 2.3Net book value per share 18.1 17.1

    2549Key Indicators for 2006 Performance

  • 4Message from the Chairman

    2549 ()

    58,032.8 9.1% 53,194.5 2548 2,123.6 12.8 % 1,882.8 2548

    49 25 24 2550 4 6

    2006 was a challenging year for Big CSupercenter PLC, given the increasingly intensecompetitive environment, economic slowdown andpolitical uncertainty that reduced both consumerconfidence and spending. In spite of these adversefactors, Big C still managed to achieve solid financialgrowth and operational expansion. The Companycontinued to practice good corporate citizenship byway of social contributions, maintaining high-qualitystores and products and low-price leadership.

    In spite of the challenges outlined above,Big C successfully achieved its 2006 performancetargets. Sales were 58.03 billion baht, 9.1% up from53.19 billion baht in 2005. Net earnings grew 12.8%to 2.12 billion baht from 1.88 billion baht in 2005.This performance is attributable to effectiveimplementation of our marketing strategy thatresponded to consumer expectations, especiall yourvalue-based pricing strategy that suited the economicconditions. Our strong performance was also due tothe professionalism of our management team, efficientcost control, logistics development and IT & databaseupgrades.

    Currently, Big C operates 49stores nationwidecomprising 25 stores in Greater Bangkok area and24 in the provinces. Our 2007 business plan focuseson opening 4 new stores and renovating 6 existingstores to further enhance our nationwide network ofstores. In pursuance of its mission to stand side byside with the community, Big C remains committedto promoting and supporting the growth and prosperityof the local communities by making tax payments to

  • 5 2550 80

    13

    ( )

    all local communities in which we operate our stores,hiring local employees and supporting provincial andcommunity-based activities.

    Big C also supports social activities of theBig C Foundation, with a special emphasis on providingeducation for needy children. Activities includeconstruction of school buildings, providing scholarshipsto students and donations of encyclopedias from theThai Junior Encyclopedia Project by Royal Commandof H.M. the King to schools in the areas where Big Coperates its stores. In 2007, the Big C Foundationwill launch Thai Childrens Reading Project, aiming toencourage children to appreciate the importance ofreading, with activities to be organized during 2007to celebrate His Majestys 80th Birthday Anniversary.

    Throughout its 13 years in business, Big Chas achieved steady financial growth and continuousexpansion. We look forward to continuing this positivetrend in the years ahead for the benefit of shareholders,employees, and the community at large. On thisoccasion, I would like to sincerely thank the Board ofDirectors, the management team, all employees, andour valued customers for their strong support. As aleading modern retailer, Big C is committed to placinga premium on offering services that meet the diverseneeds of consumers while also creating benefits tothe Thai economy and society.

    Mr. Suthichart ChirathivatChairman

  • 2549

    :

    January: Big C organizes Free Trip toHong Kong Disneyland campaign to

    welcome Chinese New Year

    : ...

    February: Big C launches Free Flights forSummer Getaway campaign to help drive

    growth

    : 11

    600

    February: Big C joins with partners in 11countries to export Thai products worth

    600 million baht

    : Only @ Big C

    March: Big C launches Only @ Big Csummer collection of house brand apparel

    :

    April: Big C launches Shop and CallFree program to help customers save

    on prepaid mobile phone costs

    :

    April: Big C and Ministry of Commercelaunch Blue Flag Back to School

    program to offer extra savings onschool supplies and clothing

    : 30

    2006

    May: Big C invests 30 million baht inShop and Kick campaign to celebrate

    World Cup 2006 fever

    :

    May: Big C opens Phrae store

    :

    June: Big C opens Ratchaburi store

  • : Only @ Big C

    March: Big C launches Only @ Big Csummer collection of house brand apparel

    2006 Business Highlights

    : Only @ Big C

    September: Big C receives Tax Man ofthe Year 2006 award from the Tax

    Research Center Instituteand Tax & Business Magazine as the bestwholesale and resale operator in Thailand

    October : Big C Opensstore Lam Lukka

    :

    November: Big C launchesGet your wish at Big CPromotional campaign

    :

    December: Big C opensPrachinburi store

    October : Big C launches Only@ Big C winter collection of

    house brand apparel

    September: Big C launches Shop LaekJaek Baan campaign with the grand prize

    of a luxury house

    :

    August: Big C signs MOU with SocialSecurity Office to help lower cost of

    living for Thai workers

    : ...

    : 13 100

    June: Big C celebrates 13th anniversaryby investing 100 million baht in

    marketing activities to thank customers

    July: Ministry of Agriculture and Cooperativesgrants Big C Q-Mark certification for qualityassurance of agricultural and food products

    : Q

    : Tax Man of The Year 2006-

    Tax Research Tax & Business Magazing

    :

  • 81.

    () () 49 25 24

    8,250 8,013 10 Geant International B.V

    2.

    3 ,

    2.1

    13 1

    Management

    1. General InformationBig C Supercenter Public Company Limited operates

    in Thailand by doing business in the form of aHypermarket or Supercenter, which is a modern retailbusiness under the name of Big C Supercenter. Atpresent, Big C is managed under the roof of Big CSupercenter Public Company Limited and has a total of49 branches, divided into 25 branches in Bangkok andvicinity and 24 branches in Thailands provinces.

    The company has registered capital of 8,250 millionbaht, with paid-up shares of 8,013 million baht. Allshares are ordinary type with the par value at 10 baht.The major shareholder is Geant International B. V whichis a company in the Casino Group. The Casino Group isa well-known retailer at the international level based inFrance, and has investments in retail businesses in manycountries around the world.

    2. Management StructureThe Companys management structure is comprised

    of three management groups accompanying with theCompanys Board of Directors, the Audit Co