Bangkok--Feb 21--Central Group’s Throughout 2005 following the aftermath of the devastating Tsunami in late December 2004, the Thai economy encountered a host of economic disruptions including unrest in the three southernmost provinces, the Avian influenza outbreak, rising oil price, alternating droughts and floods in many regions. However, the business restructuring implemented in 2002 in anticipation of future changes enabled Central Group to weather the economic storms in 2005. The Board of Directors chaired by Khun Vanchai Chirathivat was responsible for policy formulation while management and supervision of the Group were under the responsibility of the Executive Committee chaired by Khun Suthichai Chirathivat, with Khun Suthikiart Chirathivat as Deputy Chairman and 4 other Executive Directors, namely Khun Suthichart Chirathivat, Khun Suthisak Chirathivat, Khun Suthitham Chirathivat and Khun Prin Chirathivat. Business operation of Central Group’s 5 Core Businesses in 2005 can be summarized as follows. 1) Sales Volume. The overall growth rate of 12.4 percent resulted in total sales volume of 87,000 million baht. 1. Retail Business (CRC) had a growth rate of 12.6 percent. 2. Real Estate (CPN) had a growth rate of 14.2 percent. 3. Trading and Marketing (CMG) had a growth rate of 5.3 percent. 4. Hotels (CHR) had a growth rate of 2.1 percent. 5. Food (CRG) had a growth rate of 20.8 percent. 2) Investment. The Group’s total investment of 10,200 million baht comprised:- 1. Retail Business (CRC) invested 2,900 million baht (28.4 percent of total investment by the Group). 2. Real Estate (CPN) invested 5,000 million baht (49 percent of total). 3. Trading and Marketing (CMG) invested 170 million baht (1.7 percent of total). 4. Hotels (CHR) invested 1,730 million baht (17 percent of total). 5. Food (CRG) invested 400 million baht (3.9 percent of total). All Core Businesses thus had positive growth rates, thanks to the previous restructuring of the Group as well as favourable factors such as the 4.7 percent growth of GDP despite 4.5 percent inflation (as reported in Economic Outlook of the NESDB), continuous effort of the Government to stimulate consumption and investment, initiation of the 1.8 trillion baht Mega projects, a firm drive on tourism especially in the last quarter of 2005, employment creation and increased wages and salaries in both the private and public sectors leading to higher household expenditure, continued expansion of international trade and investment, reduction of diesel consumption and improvement in fuel consumption pattern that reflected better usage efficiency due to Government measures, acceleration of government budget disbursement, and the gradual raising of interest rate on long-term deposit account by major banks since the end of the second quarter. 2006 Economic Outlook The Group expects the Thai economy will grow about 5 percent in 2006, slightly more than last year, with 4 percent inflation. This is based on the continuing expansion of trade and investment both domestically and internationally, accelerated investment by the Government particularly in the Mega projects will induce private sector investment both in the city and the upcountry, high employment rate and adjusted wage and salary level to alleviate inflation will lead to higher spending by consumers and households despite the offsetting effect of rising interest rate and increased saving, acceleration of Government budget disbursement for SML funds and the provincial CEO budget to boost grass root economy in the agricultural sector. Such activities together should keep money circulating efficiently and invigorate the economy. Inflation, especially as triggered by rising oil prices, is expected to be under better control than last year. These are some of the major macroeconomic factors that the Group took into consideration in forecasting its business targets for 2006.Business Target of Central Group in 2006 Central Group forecasts that the Group’s Business will grow 11 percent with total sales volume of 96,000 million baht in 2006, and plans to invest with a total budget of 16,000 million baht from within the country in various projects of its Core Businesses as follows:- 1. Retail Business (CRC) invested 2,900 million bath (28.4 percent of total investment by the Group). 2. Real Estate (CPN) 7,750 million baht (48.5 percent). 3. Central Marketing Group (CMG) 250 million baht (1.6 percent). 4. Hotels (CHR) 2,250 million baht (14.0 percent). 5. Restaurant (CRG) 400 million baht (2.5 percent). The Group deems its investment undertaking in the previous year contributed significantly to the expansion of private sector investment and helped propel the Thai economy.Corporate Social Responsibility In addition to playing a role in creating employment and income for the economy with its nearly 20,000 trading partners and more than 60,000 employees, Central Group is well aware of its social responsibility and has set up a Corporate Image unit to handle this function specifically. In the years 2005/2006 the Group has accomplished and will continue its activities in this area as follows. 1. Corporate Image 1) Central Department Store Co., Ltd. was graciously bestowed the Royal Garuda Emblem by His Majesty the King in 20 December 2005. Installation ceremony of the Emblem will be performed in the near future. 2) CRC was awarded “The Top Retailer 2005 Gold - Thailand” and “The Best of the Best “Top Retailer”- Asia Pacific” in the 2nd Retail Asia Pacific Top 500 Award Ceremony in Beijing, jointly organized by Retailer Asia magazine, Euromonitor and KPMG 3) CPN achieved outstanding success in establishing CPN Retail Growth Fund (CPNRF). 4) CPN was 1 of the 11 listed companies in Thailand below $1 billion in annual revenue chosen by Forbes Asia, a leading business magazine of the world, to be among Asia’s Best Under a Billion. 5) For the second year running, CPN was ranked in the top quartile in the Corporate Governance Report of Thai Listed Companies 2005, organized by the Thai Institute of Directors Association (IOD). 6) For the first time, CHR was ranked in the top quartile in the Corporate Governance Report of Thai Listed Companies 2005, organized by IOD. 2. Social Contribution Central Group has many plans for social contribution in 2005/2006 including collaboration with the Fine Arts Department to restore Wat Phra Singh in Chiang Mai, donating vehicles for offsite blood collection to the Thai Red Cross Society, annual blood donation to the Red Cross (with special emphasis in 2006 to celebrate the historic occasion of His Majesty King Bhumibol’s 60-year reign), donating money to the Dabos and other Foundations, donating warm blankets to the underprivileged in Sukothai, Phrae, Nan, Lampang, Lamphun, Chiang Mai, Chiang Rai and Sakon Nakorn, donating money for education at Mae Kuang dam in Chiang Mai. Other public charity activities in cooperation with various Government agencies include providing exhibition space at shopping centers and providing training in retail business in collaboration with the Vocational Education Commission. 3. Assistance to agricultural growers Tops Supermarket with 87 branches has Contract Farming Project to provide outlet to agricultural growers (those interested should contact the Department of Cooperative Promotion). In addition, TOPS has coordinated with the Changwats and the Bank for Agriculture and Agricultural Cooperatives (BAAC) to enable growers to sell fruits of the season such as lychee, longan, sweet tamarind, etc. direct to TOPS Supermarkets. Central Group has also begun a source water protection scheme in conjunction with Suan Prakasit Project at Tambon Piang Luang, Amphoe Wiang Haeng, Chiangmai to persuade hilltribe growers near source water to stop using chemical fertilizers on vegetables and sell their produce at TOPS Supermarkets. Click for photo release at www.thaipr.net End.