Download - ROBINS : Annual Report 2007

Department StorePublic Company Limited

ANNUALREPORT 2007

Robinson Department StorePublic Company Limited and its Subsidiaries

CONTENTS

Message to Shareholders

Financial Highlights

Operating Results in 2007

Market and Retail Business Overview in 200707History and Major Developments

Structure of the Company and its subsidiaries

Nature of Business

Risk Factors

Shareholders and Dividend Policy

Management

Good Corporate Governance and Corporate Social Responsibility

Report of the Audit Committee

Statement of Directors Responsibility

Management Discussion and Analysis

Annual Financial Statement

Inter-Company Transactions

General Information

2

4

6

7

9

12

16

23

27

29

52

59

61

62

65

130

136

2

Message to Shareholders

This year marked the 28th year that Robinson Department Store has opened its door to customers. At present, there are 21 branches covering high potential areas throughout the country. The Company has always been striving to provide fashion products that are of great variety, while continually keeping pace with fashion trends. In addition, products which are available only at Robinson have also been developed and provided at reasonable prices along with excellent service to ensure continued customer satisfaction.

2007 was again a year of great pride with the opening of our 21st branch in Phuket. Complete with modern design, the new Jungceylon branch which opened in September has successfully gained positive responses from customers. In addition, the Company also expanded and renovated the Chiang Mai branch to become a flagship store, strengthening its position as a leading department store and fashion centre in the region.

The overview of economic situation in 2007 was rather stagnant. Consumption of the private sector grew at a slow pace due to a decrease in consumers spending. However, there was heavier competition in the department store business especially in Bangkok area. With clear strategic planning and efficient operation, the Company experienced an ongoing growth with a sales increase of 4.4% in 2007. With successful revenues growth, efficient expenses management both in terms of human resources distribution and sales promotion along with ongoing energy-saving measures, the Company was able to achieve net profit of Baht 864 million, or 20% higher than profit from ordinary operation last year.

Regarding good corporate governance, the Companyûs board of directors has exerted great efforts to continuously upgrade the standard of corporate governance with a firm belief that it will result in the Companyûs sustainable growth. In the year 2007, the Company set a goal to upgrade the corporate governance to accepted standard. As a result, the policy of corporate governance was improved. Business ethics was also set up for participation of the Companyûs directors, management, and staff. In addition, the Company's board of directors was restructured to comply with the principles of good governance.

In the year 2008, the Company aims to introduce new experiences to customers both in terms of product and service to serve each customer individual needs. The Company has a strong belief that sales growth, effective expenses control coupled with investment discipline will lead to added value for shareholders. It also recognizes the importance of stakeholders in compliance with the Companyûs good corporate governance policy.

Apart from business planning, Robinson believes that sustainable growth must be accompanied by Corporate Social Responsibility. Realizing the importance of this matter, the Company has set a clear target and plan to create cooperation from every party including Robinson, its staff and customers for sustainable responsibility to society. This also includes the provision of educational opportunity to less fortunate children in order to develop their knowledge and upgrade their education to accepted standards.

Finally, the Companyûs board of directors would like to express their sincere thanks to shareholders, customers, and business partners who have played a supporting role in the Companyûs continuous growth, along with all staff members for their dedication and tireless efforts to every task. We strongly hope for their success and bright future together with Robinson in the coming years.

(Mr. Sudhisak Chirathivat)


3


Board of Directors

Mr. Sudhisak ChirathivatChairman of Board of Director(Authorized Director)

Mr. Sudhitham ChirathivatVice Chairman(Authorized Director)

Mr. Prin ChirathivatDirector(Authorized Director)

Mr. Tos ChirathivatDirector(Authorized Director)

Mr. Preecha EkkunagulDirector/ President(Authorized Director)

Mr. Pandit MongkolkulDirector(Authorized Director)

Mr. Piya NguiakaramahawongseDirector(Authorized Director)

Mr. Somchai ApiwattanapornDirector/ Independent Director/Chairman of Audit committee

Mr. Vithaya ChavananandDirector/ Independent Director/Audit committee

Mr. Phibul PhatharodomDirector/ Independent Director/Audit committee

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

24

5

8

91037 6

1

4



Remark: For the year ended 2006, the company and its subsidiaries recorded a gain from reversal of impairment loss on land and leasehold rightsamounted of Baht 2,170 million and allowance for obsolete and slow-moving stock of Baht 227 million

Revenue Breakdown

Reversal ofimpaiment loss on assets

Other income

Rental and service income

Sales

20040

3,000

6,000

9,000

12,000

15,000(Million Baht)

9,941

2005

10,955

2006

14,200

2007

12,602

Sales Growth

20040

3,000

6,000

9,000

12,000

15,000(Million Baht)

13.8%

2005

11.1%

2006

10.1%

2007

4.4%

Gross Profit vs. Net Profit

Net Profit

Extraoridinary Item

Gross Profit

(Million Baht)

0

500

1,000

1,500

2,000

2,500

3,000

2004 2005 2006 2007

Men's Wear 27%

Ladies's Wear17%

Children's Wear11%

Cosmetic & Accessories30%

Home Gift and Toys15%

Debt to Equity

Debt

Equity

(Million Baht)

20040

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005 2006 2007

1.96x

4,873

2,482

1.42x

3,569

2,506

0.67x

3,465

5,169

0.59x

5,693

3,337

Sales Mix by Category

5

Revenue from salesTotal revenueCost of salesSelling and administrative expensesNet profit (loss)

2007 20052006*

(Unit : Million Baht)

Consolidated

11,28512,6028,6852,821864

10,81214,2008,3822,9042,662

9,81710,9557,6422,353927

Cash and cash equivalentsCurrent assetsTotal assetsCurrent liabilitiesTotal liabilitiesIssued and paid-up share capitalRetained earnings (deficit)Minority interestTotal shareholder's equity

1,5712,8149,0303,2623,3373,9431,419155

5,693

9972,1388,6353,3803,465

11,107992140

5,169

1,0301,9056,0742,7633,569

11,107(1,618)

1382,506

Profit and Loss Statement

(time)(days)(days)(days)

(%)(%)(%)(%)

(time)(Baht)(Baht)

*Remark: For the year ended 2006, the company and its sunsidiaries recorded a gain from reversal of impairment loss on land and leaseholdrights amounted of Baht 2,170 million and allowance for obsolete and slow-moving stock of Baht 227 million

Balance Sheet

Liquidity RatioAverage Collection PeriodAverage Selling PeriodAverage Payment PeriodGross Profit MarginNet Profit Margin Return on EquityReturn on AssetsDedt to Equity Ratio Book Value Per ShareBasic Earning Per Share

0.8611.4727.21

100.1723.047.66

15.929.790.595.130.78

0.639.13

26.9490.0222.4724.6269.3636.190.674.652.40

0.697.78

25.7581.1222.169.45

37.1813.811.422.260.83

Key Financial Ratios



2007 20052006*

(Unit : Million Baht)

Consolidated

2007 20052006*

Consolidated

6


With a goal to become the most preferred department store with branches covering high potential areas throughout the country, the Company operates retail business which provides modern products and services in response to the lifestyles and demands of each customer. Under the concept of çRobinson...Your Life Revitalizer,é the Company aims to expand its branches throughout the country. There are currently 21 branches, comprising 10 branches in Bangkok and its suburbs and 11 provincial branches. Opened in September 2007, Jungceylon branch, the 21st branch, is the second branch in Phuket located at Jungceylon Shopping Mall, Patong beach, Phuket Province.

Regarding competitive strategy, the Company places emphasis on providing fashion products that are of great variety and fashionable, while continuously creating unique merchandise assortment and been available only at Robinson. The company also stresses the provision of excellent service to make customer impression including fashion consult, information on product uses as a value-added service for easy decision making. Regarding marketing, the Company organizes main sales promotional programs in the form of event marketing or themed promotions quarterly in order to create a shopping atmosphere according to the seasons and festivals. The Company also aims to increase loyalty towards Robinson with emphasis on member customers and habitual customers, while implementing a pricing strategy at appropriate period. In the past year, the Company placed emphasis on Localized Marketing promotion especially in regional branches with positive responses from customers. This helped promote the Companyûs image as a leading department store.

In 2007, the Company invested in complete store major renovations including Chiang Mai branch, in the previous year the store was renovated in some part of store area

including expanding its space to the fifth floor. In 2007, the store was fully renovated to provide a great atmosphere for customer to shop in and become flagship store in the North.

Phuket branch was under refurbishment to enhance its interior and exterior store atmosphere with emphasis on its modern image and conglomerate with the new store, Jungceylon.

Udonthani branch was renovated in particular floor, however, it is planned to be fully renovated in 2008 and developed to become flagship store in the North-East.

In addition, the Company invested in minor renovation in Ratchadapisek branch, Hadyai Branch, and Ubon Ratchathani Brach to improve interior decoration, sales area in particular department and also service area such as Beauty Room, Fitting Room, Relax Conner and etc.

Regarding operation results according to the consolidated financial statements for the year 2007, the Company and its subsidiaries generated total revenue of Baht 12,602 million comprising revenue from sales of goods at 89.55%, rental and service income at 5.40%, and 5.05% of other income. The Company recorded a net profit of Baht 864 million, or Baht 0.78 per share. As of 31 December 2007, total assets of the Company amounted to Baht 9,030 million, total liabilities were Baht 3,337 million, and shareholderûs equity was Baht 5,693 million.

Operating Results 2007

7


Market and Retail Business Overview in 2007

Competitors

1. Operators of department stores include chain department stores and local department stores. The main chain

department store are Central Group and The Mall Group with a combined number of 23 branches consisting of 19

branches in Bangkok and 4 Branches in upcontry including Chiang Mai, Had Yai, Nakorn Ratchasima, and Phuket.

2. Other retail business operators include discounted stores/super centres, and various types of shopping mall

such as Central World, Esplanade, King Power, Platinum Mall, and Union Mall.

Retail Business Overview

In 2007, the Thai economy grew at a slow pace with a decrease in economic growth from 5.1% in 2006 to

4.8% in 2007 due primarily to a slowdown in spending and investment from the public sector. Domestic consumption

had continually decreased from 3.2% in 2006 to 1.4%.

For overall retail business sector, the growth rate has declined from 3.9% in 2006 to 3.2% in 2007 due to a

decrease in consumers' confidence in the economy. Therefore, they were more careful with spending. However

consumers' confidence improved in the second half of the year, as the political atmosphere became clearer. Modern

trade business experienced a continual growth especially specialty stores, convenience stores, and discount

stores/super centers with the opening of a lot of new branches, despite the fact that the retail business law has not

been completed yet. In 2007, the modern trade business saw a growth of 11%

Overall department store business during the past year recorded a decrease of growth from previous year.

Although in Bangkok area, the growth rate had declined from previous year, competition remained intense. Operators

have organized various sales promotion activities to stimulate consumer spending such as the introduction of a joint

promotion program with credit card to increase spending. In addition, as customer spending has slowed down due to

the fact that they tend to buy only the necessaries, various sale events were organized to stimulate customer

spending, while increasing their frequency of shopping. Meanwhile, sales in the upcountry increased. There was not

much competition among department stores in provincial areas due to the fact that there are not many operators of

department stores in each province and their locations and customer target groups are different. In 2007, there was

only one new branch opening which was Robinson Ocean Jungceylon located on Patong beach, Phuketûs main

tourist attraction.

8


Market and Retail Business Overview in 2007

Regarding competition among other forms of retail business which is considered the Companyûs indirect

competitors, discount stores/super centers tended to develop its store areas to become a shopping mall, while

placing more emphasis on promoting their fashion clothing. However, the pricing strategy has still been used due to

the fact that their product ranges were food and daily use items which do not rely much on brand names and

product differentiation. Meanwhile, small-sized shopping malls in the form of lifestyle center or neighborhood mall saw

a high growth rate. They put emphasis more on food and entertainment than general products with specific group of

targeted customers

Although income per family tended to be higher than inflation, consumption in 2007 grew at a low pace due to

a concern over economic and political uncertainty which has prompted consumers to be more careful with spending.

Regarding overall consumer behavior, consumers became more reasonable when selecting products. They tended to

carefully compare quality, prices, and images of products before making a decision to buy. In addition, particular

attention was paid on their good health. Therefore, demands for health and beauty products increased. Moreover,

consumers tended to respond to changes in fashion rapidly. They also had more lifestyle choices due to easy access

to various forms of media whose ways of presenting vary greatly. Therefore, consumer demand focused on products

that were up-to-date, varied, worthwhile, fashionable, and modern. Apart from presenting products, excellent service is

also an important thing that operators of department stores must emphasize as well. The tendency to buy products

by credit card or personal loan has continuously increased.

9


History and Major Developments

1979

1992

1995

1996

1997

1998

2000

2001

2002

2003

Robinson Department Store opened its first branch at Victory Monument.

Robinson became the first department store company listed on The Stock Exchange of Thailand on 3

January 1992.

The Central Retail Corporation group joined Robinson as a major shareholder and was jointly established

CR Thailand Co., Ltd. in order to develop provincial department stores under the çRobinsoné brand. Later,

the Company proceeded to open new stores up to 20 branches.

Robinson integrated its supermarket business with Central Group and formed a joint venture with Royal

Ahold Co., Ltd., a Netherlands based supermarket operator. The resulting company, CRC Ahold Co., Ltd.,

began operating supermarkets under the çTOPS SUPERMARKETé brand. In December 1996 and May 1998,

the Company sold its shares to Royal Ahold Co., Ltd.

The Company was approved for the asset transfer transaction to Power Buy Co., Ltd. and CRC Sport

Co., Ltd. respectively. Also, the Company granted right to those companies to utilize space in each

branch in order to operate electrical appliance stores and sport accessories stores. The Company

received income from those companies as income sharing on percentage of sales or fixed charge per

square meter. In April 1998, the Company purchased 40% shareholdings in both companies.

The Company announced a debt moratorium as a result of the sharp depreciation of the Baht following

the sudden flotation of the currency on 2 July 1997

On 2 May 2000, the Central Bankruptcy Court ordered rehabilitation of the Company as well as appointed

Robinson Planner Co., Ltd. as a Planner and as a Plan Administrator on 20 December 2000. The Company

also decided to close its Don Muang branch due to unacceptable of return on investment.

The Company closed its Victory Monument branch since lease agreement had terminated as well as

this branch attributed an unacceptable of return on investment. This left the Company with a total of

18 branches. Of these 9 branches were in Bangkok and 9 in provincial locations. The Company also

issued Notes to the unsecured financial creditors with a total value of Baht 4,766.7 million for principal

and interest.

The Company successfully implemented major steps set forth in its Rehabilitation Plan i.e. increasing

its capital from Baht 1,480.8 million to Baht 14,808.8 million, proceeding the debt-to-equity conversion,

proceeding a 25% capital reduction capital, and forgiveness of remaining debt. This achievement prompted

the Stock Exchange of Thailand to consider approving resumption of trade in the Companyûs ordinary

shares in Commerce sector, effective 26 November 2002.

In March, the Company waived the right to purchase new issuance shares from capital increase of CRC

Sports Co., Ltd. at its proportion. As a result, the Companyûs shareholding in CRC Sports was reduced

to 29.19%. In May, the Company re-launched its campaign to promote a new image using the concept

of çRobinson...Your Life Vitalizeré. In December, the Company gained Court approval for an amendment

of its Rehabilitation Plan to facilitate the repurchase of Notes under the VDRP.

10


History and Major Developments

In January, Robinson SPV Co., Ltd. (SPV) signed a loan agreement with two financial institutions to

secure funding for repurchase of Notes under the VDRP. The long-term loan was for up to Baht 2,700

million. At year-end 2004, the Company repurchased 15,899,277 units of Notes under the VDPR program,

equal to 77.04% of total outstanding Notes. In addition, on 22 March, the Creditorsû Meeting ordered by

the Court, passed a resolution to elect three new directors representing unsecured financial creditors

to replace resigning directors. On 8 December 2004, the Company acquired the remaining balance of

shares from its local partner in CR Ratchaburi (Thailand) Co., Ltd. thereby increasing its shareholding

from 49.99% to 99.99%. The acquisition stemmed from the need to improve management flexibility.

The Company continued to run its çRobinson...Your Life Revitalizeré campaign in its retail businesses

with the aim of generating continuous sales growth. The Company also launched one new branch, at

Rattanathibet, while continuously renovating and modernizing its existing stores across the country to

create a more colourful and lively ambiance. In addition, product selections with variety of assortment

were readjusted to tie in with Robinsonûs target customer groups and reflect its new image. On 19

December 2005, the Company has proceeded the early redemption on remaining notes which resulted

in the completion of the Companyûs rehabilitation plan.

The Bankruptcy Court considered the petition and ordered the termination of the Companyûs rehabilitation

plan. On April 2006, the Annual Ordinary General Meeting of shareholder was firstly held after the

Company resumed the ordinary business operation. The Meeting unanimously approved the appointment

10 directors as the Companyûs Board of Directors, comprising of 3 independent directors. In November,

the new branch Robinson Ayudhaya was official opened as the 20th branch of Robinson, the investment

cost was approximately Baht 347 million.

The Company made the first dividend payment after the order the termination of rehabilitation plan from

The Bankruptcy Court, at the rate of Baht 0.32 per share. Pursuant to the resolution of the Extraordinary

Shareholdersû Meeting1/2007 which held on June 19, 2007 that the Company decreased its capital

through reducing par value from Baht 10 to Baht 3.55, an share premium and partial of retained earnings

were transferred to set aside share discount according to the Federation of Accounting Professions

(FAP) Announcement. On September 13, 2007, Department of Business Development of Ministry of

Commerce completed amended the Company registered capital and Memorandum of Association.

In September, the new branch Robinson Jungceylon was opened as the 21st branch of Robinson,

the investment cost was approximately Baht 132 million.

2004

2005

2006

2007

11


History and Major DevelopmentsMajor changes and development of the company in the year 20071 January

12 April

25 May

19 June

31 August

13 September

27 September

19 December

The Company changed its accounting policy for its investments in subsidiary companies and associate companies in its financial statements from the equity method to the cost method in compliance with the announcement of the Federation of Accounting Professions 26/2006.Some areas in Bangkae branch damaged due to the fire incident at Future Park Bangkae Shopping Center. However, damages to the building and property owned by the Company were compensated and covered by the insurance policy. The Bangkae branch was temporarily closed for the safety of customers as well as damages assessment procedure. In August, the Company opened the areas which did not damage. Damaged areas are currently under renovation. Loss of revenue from sales at Bangkae branch did not cause any important effect to the Company's net sales.The Company paid dividend for the year 2006 operation results to general shareholders at Baht 0.32 per share with a total of Baht 355.41 million.The Company's Extraordinary Meeting of Shareholder No. 1/2007 approved the decrease of paid-up capital by reducing the par value from Baht 10 to Baht 3.55. Share premium and retained earnings which have not been allocated was transferred to eliminate the share discount.The Company opened some areas of Phuket Jungceylon branch. Official opening was held on 3 November. This is considered the Company's 21st branch and the second branch in Phuket under the management of CR Phuket (Thailand) Co., Ltd. (a subsidiary company with 50% of its shares held by CR (Thailand) Co., Ltd.) with investment budget at Baht 132 million and a leasing period of 25 years.The Department of Business Development, Ministry of Commerce completed the registration of the decrease of paid-up capital and the amendment of the Memorandum of Association according to the resolution of the Extraordinary Meeting of Shareholder No. 1/2007. The par value of the Company decreased from Baht 10.00 to Baht 3.55, while the registered capital and the paid-up capital of the Company decreased from Baht 11,106,611,330 to Baht 3,942,847,022.15.The Company ceased operation of Sapanmai Sappasinka Co., Ltd. (a subsidiary company which the Company holds 74.50% of paid up share capital) and D C R Co., Ltd. (an associated company which the Company holds 20.86% of paid up share capital) because there had been no business operations for more than 5 years in such companies. Sapanmai Sappasinka Co., Ltd. is currently in the liquidation process, while D C R Co., Ltd. has already refunded to the Company with the amount of Baht 80,718,748.79 on September 27, 2007.The Company signed a leasing agreement and service contract with Tanathip Shopping Center Co., Ltd. in order to open its 22nd branch and the 2nd branch in Ubon Ratchathani with a leasing period of 22 years and investment budget of Baht 390 million.

12

Robinson Department Store Pcl.

Robinson Anusawaree Co., Ltd. Kruerkaew Co., Ltd. RST Sky Bridge Co., Ltd.

Siam Ritz Plaza Co., Ltd.

Power Buy Co., Ltd.

CRC Sport Co., Ltd.Kruerpetch Co., Ltd.

RD Pattana Co., Ltd.

R-Trading (L) BHD

Robinson RatchadaCo., Ltd.

Siam Retail DevelopmentCo., Ltd.

Robinson SukhumvitCo., Ltd.

CR (Thailand) Co., Ltd.

CR Chiang Mai(Thailand) Co., Ltd.

CR Rajchaburi(Thailand) Co., Ltd.

CR Chantaburi(Thailand) Co., Ltd.

CR Phuket(Thailand) Co., Ltd.

CR Nakorn Sri Thammarat(Thailand) Co., Ltd.

CR Udornthani(Thailand) Co., Ltd.

CR Had Yai(Thailand) Co., Ltd.

CR Ubon Ratchathani(Thailand) Co., Ltd.

Robinson S.P.V.Co., Ltd.

Robinson Nakarin Co., Ltd.

Sapanmai Sappasinka Co., Ltd.

99.99%

99.99%

40.00%

29.19%

99.99%

99.99%

99.99%

89.99%50.00%49.99%

76.00%

76.00%

64.99%

49.99%

49.99%

74.99%

99.92%

99.98%

33.33%

24.00%

24.00%

99.91%

74.50%

99.86%

99.80%




Robinson Department Store Pcl.


CR Ratchaburi (Thailand) Co., Ltd.

CR Chiang Mai (Thailand) Co., Ltd.

CR Hadyai (Thailand) Co., Ltd.

CR Udonthani (Thailand) Co., Ltd.

CR Ubon Ratchathani (Thailand) Co., Ltd.

CR Chantaburi (Thailand) Co., Ltd.

CR Nakorn Sri Thammarat (Thailand)

Co., Ltd.

CR Phuket (Thailand) Co., Ltd.

Robinson Anusawaree Co., Ltd.

Sapanmai Sappasinka Co., Ltd.


Robinson Sukhumvit Co., Ltd.

Robinson Ratchada Co., Ltd.

Kruerkaew Co., Ltd.

Kruerpetch Co., Ltd.

R-Trading (L) BHD 50,000

Robinson S.P.V. Co., Ltd.

Power Buy Co., Ltd.

CRC Sport Co., Ltd.

Siam Retail Development Co., Ltd.

Square Ritz Plaza Co., Ltd.


R.S.T. Sky bridge Co., Ltd.

Name Paid-up Capital (Bath) Nature of Business

3,942,847,022

501,000,000

102,500,000

220,000,000

202,000,000

225,000,000

71,000,000

130,000,000

280,000,000

177,000,000

8,000,000

20,000,000

105,000,000

100,000,000

75,000,000

40,000,000

11,250,000

50,000

1,000,000

560,000,000

370,000,000

500,000,000

125,000,000

3,000,000

46,995,000

Retail, including department stores in Bangkok

and upcountry areas, under "Robinson" brand.

Bangkok branches include: Silom,

Ratchadaphisek, Sukhumvit, Bangrak, Bangkae,

Srinakarin, Fashion Island, Rangsit, Ladya,

Rattanathibet Sriracha and Ayutthaya

Holding company to jointly invest in department

store business under the "Robinson" brand in

eight provinces

Operating a department store in Ratchaburi

Operating a department store in Chiang Mai

Operating a department store in Hadyai

Operating a department store in Udonthani

Operating a department store in Ubon Rachathani

Operating a department store in Chantaburi

Operating a department store in Nakorn Sri

Thammarat

Operating a department store in Phuket

Dormant company

Dormant company

Dormant company

Offer space rental within store

Offer space rental within store

Offer warehouse space for rent

Invest in businesses

Invest in businesses

Repurchase Notes under VDRP

Operate specialty stores: Electrical Appliances

Operate specialty stores: Sports Accessories

Owner and management of Fashion Island

shopping complex (Ramindra)

Land development

Build and manage the sky train connection to

department store

13

The Company and its subsidaries



14

Type of

Income/Company

2007 2006 2005% of

Shareholding MillionBath % Million

Bath % MillionBath %

Net sales

-Robinson Department Store Pcl.

-Subsidiaries

CR Ratchaburi

CR Chiang Mai

CR Hadyai

CR Udonthani

CR Ubon Ratchathani

CR Chantaburi

CR Nakorn Sri Thammarat

CR Phuket

Total net sales

Rental and service Income

Share of profits from investments

accounted for using the equity method

Other income

Total income

99.99

89.99

76.00

76.00

74.99

64.99

49.99

49.99

6,845

4,439

11,285

681

133

503

12,602

6,731

4,080

10,811

702

133

2,554

14,200

6,150

3,667

9,817

672

101

365

10,995

54.32

35.23

89.55

5.40

1.05

3.99

100.00

47.40

28.47

75.87

4.95

0.93

17.98

100.00

56.14

33.47

89.61

6.13

0.93

3.33

100.00

Income Structure



15

Categories of ProductsIncome (%)

2007

SOFTLINE

HARDLINE

OTHERS

85.54

14.10

0.36

85.31

14.24

0.45

85.21

14.27

0.52

2006 2005

Business GoalAs a leading retail operator, we strive to be the most preferred department store with widest market coverage in Thailand,

offering merchandises to best fit our customer lifestyle with innovative store formatand services

Income Structure from Sales



16


Nature of Business

Product lines

Current products can be divided into 2 main categories as follows:

1. Soft Line products reflecting modern preferences and fashion trends, with the main categories as follows:

Menûs Fashion and Ladiesû Fashion

Cosmetics and Accessories

Leather Products

Children Products

This line emphasizes brand names, modernity, quality, variety, and fashion. The nature of product has rapid change.

Customersû purchase decisions depend on current trends.

2. Hard line product can be divided into the following categories:

Home and Kitchenware

Automobiles accessories and equipments

Toy and Gifts

This product line emphasizes quality, functionality, feature, variety, and modernity. Customersû purchase decisions

depend on product features, functions and prices.

Product Group Brand

Kitchenware and bedroom items

Fashion and ladiesû wear

Ladiesû shoes and bags

Menûs wear

Childrenûs products

R*Home, Home Genius, Cuizimate

FOF, Ohayo, Chee, Vivienne, Tasha, Taj,

FOF Accessories, Pacific Union, Pacific Life

FOF

Pacific Union, Snap, True Blue, Otoko,

Beyond Basic

Teeny Tiny, Pumpkin Pie, Beyond Basic

Fashion and ladiesû wear Allure, Centro Moda, I.E., Ying & Yang,

Goelia, Ermis, Voir Shoez, Perllini

17


Nature of Business

To provide the above products, not only the leading brands which preferred by the customer but the Company

has also developed its own product design, which is different from general products available on the market. The

Company has selected new products with interesting feature and designs in order to increase product

variety and differentiate itself from its competitors. These products are available only at Robinson

(ONLY @ ROBINSON) and can be divided into categories as follows:

Private Label Products:

These comprise products whose brands are developed by the Company itself. The Company considers and

selects only the products demanded by customers and provides them at reasonable price with emphasis on good

quality and modern style. Available throughout 21 stores, the products can be divided into the following categories:

Exclusive Brand Products:

These comprise products which are produced domestically as well as imported international brands which

are exclusively available at Robinson. This is part of the Companyûs differentiation strategy. The products are then

positioned in stores where customer demand for such products and purchasing power is most conducive. This

type of products includes:

Product Group Brand

18


Nature of Business

One-Price Products ùJust Buyû

A variety of products which are sold at Baht 35 and Baht 52 consisting of products for teenagers and young

professionals. Consumer products such as accessories, cosmetics, stationary, gifts, and home products are also included.

Procurement of products and services

The Companyûs procurement of products is conducted from the centre. The merchandising line at head office

is responsible for controlling in purchase, price negotiation, payment conditions and inventory management in each

store to be at a level as set by the Company. A computerized system has been utilized to control and follow up the

sales and inventory for accurate and efficient management. Of supply chain management, the Company collaborated

with Supply Chain Management Department of Central Retail Corporation Co.,Ltd has developed supply chain system

to be more efficient and put efforts to persuade our suppliers to join in our supply chain system since our system

shall reduce suppliersû overhead cost and be more response relevant to customer needs.

The Company has purchased products from over 2,000 suppliers both domestically and internationally.

Domestic purchases emphasized modern, brand named products that comply with trendy, are of high quality, are

worthwhile, different, and varied in terms of variety and assortment subject to the need of our targeted customers.

In terms of international purchases, the Company itself contacted international suppliers by sending its staff to

survey products and negotiate directly with international manufacturers and suppliers. However, the Company does

not enter into exclusive purchase agreements with specific suppliers. Imported products are mainly from Singapore,

China, Korea, Hong Kong, India, and Japan. The main purpose of international purchases is to offer different, modern,

new and prominent products in the categories of clothing, accessories, childrenûs products, toys, and kitchenware.

Concerning payment conditions, the Company has employed 2 systems, namely a consignment basis of

approximately 75% of sales and credit base of 25%.

19


Nature of Business

Competitive Strategy

Product

ùModern products and differentiationû

The Company places emphasis on providing modern products that are of great variety, fine quality, are

fashionable, modern and comply with the lifestyles and personalities of customers and are at a price level that is

appropriate for its consumer group. The Company also emphasizes the provision of excellent service and information

on product uses to customers as a value added service for easy decision making.

During the past year, the Company has provided fashion products including Menûs Wear, Ladiesû Wear, home

furnishing items and home-use appliances with emphasis on differentiation of products. The Company has presented

new brands in Menûs Wear and Ladiesû Wear product group such as Pacific Union and Pacific Life Accessories

such as Allure Jewelry and Allure Accessories, Home-use appliances such as Cuizimate (kitchenware), Ella

(Towel), high quality plastic ware from Japan and carpet from India.

Furthermore, the Company stresses the importance of an effective product management policy with the use

of information technology systems. Attention has also been paid to ensure that there is a sufficient and complete

product supply at all branches in order to meet customer demand. The Company also selects products that are

different and outstanding, while continually offering new products such as exclusive collections, to customers in

accordance with seasons and the various festivals that occur throughout the year. And each year, the Company also

provides products in accordance with current market trends.

Service

ùProviding excellent services and adding value to customers with special and beneficial servicesû

The Company stresses the provision of excellent service to customers making them impression and added

value with privilege services, enable customers to make purchase decisions more easily. Services on offer include:

- Product suggestion and fashion consult as well as information on product uses to create customer confidence

in buying products.

- Special services/activities that offer useful knowledge on product uses to customers in the form of activities

which creates enjoyment in shopping, for example, ùBra measurementû which provides a measurement service

and recommendations on how to choose bra, provision of information in cosmetics, spa products and other

services.

- Establish hospitality with customers by giving them a smile and a warm welcome in order to creating a lasting

impression and encourage repeated buying behavior in the future.

- Random quality of service by Mystery Shopper to assure that sales persons truly service our customers with

Robinsonûs service standard.Furthermore, the Company also places emphasis on its perfect facilities including clean restrooms, fitting rooms,

resting area, relax room, parking areas only for our value member, and connecting walkways to BTS stations.

20


Nature of Business

Regarding other services, the Company selects leased shops which can satisfy the needs of selected

customer groups and align with trends, including shops that provide various products, restaurants, and beauty salons

so that each branch will serve as a one-stop shopping place.

Marketing

ùEmphasize on the modernity and creation of çjust righté marketing activities to become the most preferred

department storeû

The Company places emphasis on creating the Robinson brand strength through the use of various clear,

advertisements and public relations media on a regular basis, so that customers will remember and be loyal to the

Robinson brand. Mass media communication can be conducted by advertising in the newspaper or radio. Specific

communication through leaflets and handbills has also been done. Creation of product differentiation has been

communicated through billboards and leading magazines. Famous people with a personality that reminds people of

Robinson have been used to serve as Robinson brand endorsers to and encourage people to think of Robinson.

The Company organizes key promotional programs in the form of event marketing or themed promotions

quarterly in order to create a shopping atmosphere according to the seasons and festivals. The Company also

implements a pricing strategy at regular intervals by organizing memorable and attractive sales promotion programs

such as the Surprise Sales, First Come First Serve, Lod-Talai Stock, Hot Sales as well as sales promotion activities at

specific departments of each branch. In addition, the Company also focused on modern advertisement and

communication to impress the customers for each season and festival such as Valentineûs Hug Bear, Bra Advisor,

The New Shopping Paradise and Always Loving You Dad

In 2007, the Company kept emphasizing on localized marketing continued from last year and employed the

past successful sales promotion to become key promotional programs of the store in this year such as Women's

Paradise to response to the needs of customers in the area, especially in large provinces in order to stress its

leading position and create opportunities for participating in various activities with customers. Despite of increasing in

sales from this strategy, it also fostered the corporate image and created good relationships with the consumers in

that area. With well-organized customer base, the Company focused on the high spending customer such as modern

ladies group which have prominent lifestyle and also strive to connect with member customers.

21


Nature of Business

Regarding the customer relations management, the Company, in cooperation with Central Retail Group,

launched The 1 Card which accumulates points when goods are bought and can be redeemed for discounts or gifts.

The objective is to launch this card and to expand the member customer group which will result in the development

of the marketing strategy from the habitual customer database. The card was officially launched in June 2006. In

addition, the Company also cooperated with General Card Services Co., Ltd. to launch the Robinson Visa Card

under the concept: Adding more-than-expected happiness with people of the new generation as the target group

in order to expand its customer base. The card will provide discounts when shopping at Robinson, reward

redemption from accumulated points, special privileges for less installment payments and longer installment terms or

buy first pay later and special discounts during birth months. The card can be divided into 2 levels including the

classic card for those with more than Baht 15,000 of income and gold card for those with more than Baht 20,000 of

income and a supplementary card for those over 18 years of age. The card was officially launched in February 2006.

Store and Location

ùModernized store format, attractive ambience and extensive network of stores throughout nationwideû

The Company recognizes the importance of its locations, which allow great convenience for its target

customer group. In addition, branch expansion in Bangkok and the suburbs as well as large provinces has also been

emphasized in order to provide more convenience to targeted customers. The Company has currently a total of 21

branches both in Bangkok and provincial areas. Furthermore, the Company also renovated and expanded space of

Chiang Mai store to be the most modern and biggest department store in the North and to be a second Flagship

Store of the Company. The Company targets Chiang Mai branch to become a central of fashion and shopping center

in the North area of Thailand. In term of new store opening, Jungceylon branch, Tambol Patong, has been opened to

serve tourist customer both foreign and Thai and also customers in surrounding area.

Regarding its interior and exterior design, the Company stresses modernity, convenience, and brightness, while

creating a new shopping ambience for customersû pleasurable experience. Shop decoration and product layout has

been arranged in a consistent manner, allowing for customer convenience and easy access to products. Mannequins

are also used to show fashion attire and to stimulate customer's awareness of ever-changing fashion trends.

22


Nature of Business

Customer Relationship Management

The Companyûs main target groups include modern families and young professionals between the ages of

25-45 who have modern lifestyles and love to spend on popular fashion products at reasonable prices. Customers

who fall into groups such as teenagers, students, and young professionals are those who demand inexpensive products

with fashion.

The branches that are located in tourist areas or areas with overseas residents in close proximity include

Ratchadapisek, Silom, Sukhumvit, Bangrak, Phuket, Chiang Mai, Had Yai and Sriracha. The Company launched the

Tourist Card and VAT refund activities to allow convenience for overseas customers. In addition, special discounts and

sales promotion activities have been organized especially for tourists.

The Company provides special services for loyal customers', who are members of The 1 Card and Robinson

Visa Card including special privileges such as discounts, points accumulation when buying products and rewards

redemption, and also Lifestyle monthly magazine delivered to members. Through this magazine, members are able to

obtain news and information on sales promotion activities, new products, and special activities. At present, the

Company has more than 782,000 members of The 1 Card, 98% of which have continuously visited the department

store. There are currently 60,000 members of the Robinson Visa Card.

23

Risk associated with the competitive environment of the retail business

In 2007, Thailand's economy was continuously affected by negative factors from the year 2006 especially

the political conflict which has created an adverse effect on the confidence of consumers, business operators as

well as investors. Besides this, the domestic consumption has slowed down due to the fact that consumers are

more careful about spending. As the Retail Business Act has not been finalized yet, the retail business operators

especially the modern trade group has accelerated its branch expansion before the (draft) Act is enforced.

Therefore, the competition in the retail business was more violent. As for the department store business, there

was also heavier competition, especially in the Central Bangkok area where selling areas considerably increased

during the past year. Most department store operators employed various marketing strategies such as the

introduction of marketing activities, sales promotions, and discounts in order to stimulate spending by high end

consumers and to compete for more customers in the middle group which is the Company's main targeted

customer group.

The Company created its competitive capability with emphasis on the creation of product and service

difference by providing interesting products, increasing new product brands in the general category and

the differentiated category which was invented and developed by the Company. The Company has continually kept

pace with fashion trends in order to promptly provide products which were in market demand and consistent

with the lifestyles of our targeted customer. In addition, The Company has adapted more effective sales promotion

strategy by increasing marketing activities in branches that are located in the suburbs and provincial areas for

localized marketing promotions. This not only helped increase sales but also create a good corporate image,

while increasing loyalty towards Robinson.

Risk associated with the adjustment of related laws

The City Plan law has produced direct effects on the development of large-sized commercial complex

buildings which also included the construction and expansion of certain segments of some retail businesses such

as large scale retail stores which provide various consumer products. This law has been used by the government as

a means to monitor branch expansion of modern retail stores, as the process of the Retail Business Act enforcement

has not been completed yet. Although the City Plan law has no direct effect on the expansion of department stores,

this law has created an indirect effect on their expansion, as it is more difficult to develop new shopping complexes

and the expansion of retail areas has since slowed down. The shopping complex is a major location for department

store expansion, as it is a commercial point which provides a variety of products and services.


Risk Factors

Regarding the (draft) Retail Business Act, its objective is to directly supervise and monitor retail business.

The Act has been continually drafted and improved to include content regarding criteria, methods, and conditions

for operating particular segments of retail business and the permission of branch expansion. The (draft) Act has

been created with the intention of creating balance between large scale retail businesses (which provides basic

consumer necessaries and use pricing strategies) and community retail businesses (grocery). Regarding this matter,

the Company finds that the department store is a retail business which emphasizes fashion products, product

variety, brand name products which are different from consumer products sold in small retail stores. It also provides

other related one-stop services. It is a retail business with particular features that are different from community retail

businesses (grocery). Therefore, the Company's operation, management, and plans for expansion are not opposed

to the idea and intentions of this (draft) Act. It is unlikely that the Company will be directly affected by the (draft)

Act. In addition, in the primary consideration process of the (draft) Act, the department store business has not been

included in the category whose branch expansion needs to be monitored. The Company is confident that if the Act

is enforced, there will be no obstacle for permission of branch expansion.

The announcement of unfair trade practices in commercial business has the objective of setting definitions

and qualifications for trade operators who have power over markets, so that trade and business can be conducted

independently and fairly. This also allows operators to know which action and qualification may be considered false

according to the Trade Competition Act B.E. 2542. However, the Company has always set policies that adhere to

and follow the Act regarding fair trade practices in business operation. Throughout the years, the Company has

developed a good relationship with its business partners. Both assistance and cooperation have been provided for a

long time. Therefore, the announcement of a trade competition committee has had no effect towards the Company.

Risk associated with the dependency of purchasing from suppliers

The Company diversified its purchases from more than 2,000 suppliers in order to increase variety and the

differentiation of products in compliance with the Company's strategy, which also includes reducing dependency on

large purchases from a single, specific supplier. However, the Company still has products that accounted for a total

of 14.01% of sales in 2007, which were obtained from a single supplier whose productsand brand name is very

popular among customers. The Company also acts as a major partner in distributing products for such suppliers in

both Bangkok and provincial. Moreover, there has also been cooperation on the organization of marketing and

promotional activities on a regular basis, as well as product management and supply chain management in order to

provide sufficient products and decrease the exceeding amounts of product.

24


Risk Factors

Risk associated with the obsolete products

The Company operates the department store business with emphasis on continually providing fashionable

products as well as modern products. When consumers' trend has changed, the Company's products have become

obsolete and cannot be sold. However, the Company has employed efficient supply chain management system,

while conducting ongoing stock monitoring for up-to-date inventory management. In addition, the Company has set

an accounting policy that included provision for impairment of inventories in the credit stock category which accounted

for 25% of product costs. Moreover, most of the Company's products or approximately 75% of product costs were

in the consignment category which contains no stock, allowing for high flexibility in inventory management. Therefore,

risk associated with the obsolete products has created no effect on the Company's operation.

Risk associated with the dependency of leasehold

The Company owns land and buildings for 2 of its branches and owns rental contracts, sublease contracts,

and leasehold rights on land and buildings from existing owners for the remaining 19 of its department store branches.

The lease contract is a result of the necessity to select high potential areas for operating department store business.

Such land and/or buildings are not normally sold by their owners. They are instead leased out. In some cases, the

cost for acquiring the rights to land and buildings are costly and not worth the investment, especially when compared

to leasing. At present, the remaining term of such lease contracts is between 4 to 25 years. Moreover, certain parts

of the contract already set conditions for contract renewal. Since both parties involved were complying with these

existing contracts, the Company accordingly expects the successful renewal of such contracts in the future.

Regarding risk associated with damages to buildings and property which causes disruption to the department

store operation including fire, natural disasters, and terrorist acts, the Company undertook insurance for damage of

assets owned by the Company and property under the Company's supervision as well as insurance policy which

covered losses to the third party. In addition, insurance for losses of income caused by business interruption was

undertaken in case of temporary operation disruption of any of Robinson's branches. In the case when the Company

owned rental contract on buildings and depended on the management of its existing owner, the risk resulted from

damage and losses of shopping complex buildings and other facilities due to lack of appropriate maintenance may

occur. However, the Company has cooperated and followed up the building maintenance service provided by the

management of the shopping complex on a regular basis to ensure that the shopping complex buildings were safe

and suitable for the Company's business operation.

25


Risk Factors

Financial risk

Liquidity

As of 31 December 2007, the Company and its subsidiaries have current assets of Baht 2,814 million and

current liabilities of Baht 3,262 million, representing a ratio of 0.86 times. The Company's current liabilities are mostly

trade accounts payable and more than 75% of the trade accounts payable are those with the condition that payment

will be made only when products are sold. The inventories as they appear in the balance sheets are products with

actual buying conditions, which is a general feature of the retail business in the category of department store. The

average selling period is shorter than the average payment period. Therefore, the fact that the amount of current

liabilities is higher than the amount of current assets has not created any effect on the Company's normal liquidity.

Interest rates and foreign exchange rates

As of 31 December 2007, The Company has no outstanding borrowings, as long-term loan has been paid

off. The Company still has short-term credit facilities with interest rate referring to the interest rate of the financial

market at time of withdrawal. As the amount of borrowings is not high (less than 1% of the Company's total liabilities),

The Company expects that a change in such interest rates will not adversely affect business.

Regarding the risk from foreign exchange rates caused by imported merchandise as a normal business

transaction, The Company currently has a small credit line of letter of credit facility, compared to total amount of

sales. Besides this, The Company also has a policy of making a contract to minimize the risk from unpredictable

foreign exchange rates in advance and in the event of money market fluctuation.

26


Risk Factors

27

Company's Securities

On 31 December 2007, the Company had a registered capital of Baht 3,942,847,022.15 with 1,110,661,133 paid-up

capital shares, par value Baht 3.55 each.

Shareholders

Top 10 shareholder list as of 28 December 2007

The Company's ultimate shareholder is Central Retail Group (Chirathivat Family), which comprises of Central Retail

Corporation Co., Ltd. and C.R.G Service Co., Ltd. They jointly hold the company's shares in aggregate of 53.83% of total

outstanding shares.

Central Retail Corporation Ltd.

C.R.G. Service Co., Ltd.

GOLDMAN SACHS & CO

CREDIT SUISSE SINGAPORE TRUST ACCOUNT CLIENTS

J.P.MORGAN IRELAND (NOMINEES) LIMITED 565

HSBC (SINGAPORE) NOMINEES PTE LTD

THE BANK OF NEW YORK (NOMINEES) LIMITED

STATE STREET BANK AND TRUST COMPANY

STATE STREET BANK AND TRUST COMPANY FOR AUSTRALIA

STATE STREET BANK AND TRUST COMPANY FOR SWITZERLAND

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

308,162,660

289,645,488

126,860,850

51,992,765

50,000,000

43,343,790

36,842,796

26,483,821

17,343,879

16,048,594

27.75

26.08

11.42

4.68

4.50

3.90

3.32

2.38

1.56

1.44

No. Shareholder's Name No. of Shares %



28

Dividend Policy

On 26 April 2006, a Shareholder's Meeting approved the Company's dividend payout policy is at the rate of

approximately 40% of profit arising from ordinary business (after corporate income tax).

The Company's dividend payment in the past;

*As a result of good operating business performance together with sufficient cashflow to operating the business as

annual business plan, the board of directors considered appropriate for proposing the Meeting to approve the payment of

dividend for the year 2007 to the holders of ordinary shares at the rate of Baht 0.40 per share. The dividend payment

shall be made on May 23, 2008. The share register book for the right to receive the dividend will be closed on May 8,

2008.

Year

2006

2007*

719

864

0.32

0.40

49.4%

51.4%

Net Profit from ordinary operations(Consolidated)(Million Baht)

Dividend pershare(Baht)

Dividend payout ratioshare(%)




Management

29

Organization Chart

Board of Directors

Audit CommiteeNomination &

Remuneration Committee Board of ExecutiveDirectors

President & CEO

Risk ManagementWorking Team

Corporate GovernanceWorking Team

Internal Audit team

Merchandising Operation Marketing Finance andAdmisnistration

System andBusiness Development

SVP SVP

VP VP VP VP VP VP VP

30

Structure of the Board

The organization structure of Robinson Department Store Public Company Limited consists of the board

of directors which responsible for supervision of the Company's governance, and 5 specific committee which

includes audit committee, board of executive committee, nomination and remuneration committee, risk

management working team and good corporate governance working team with details as follows:

Board of Directors The board of directors carries out the Company's activities in accordance with governing laws, the

Company's objectives and Article of Association, as well as the resolutions of shareholder meetings, the

rules and regulations of the Stock Exchange of Thailand and the Securities Exchange Commission. Directors

shall perform their duties in good faith with due diligence and care in the best interests of shareholders.

They shall also commit themselves to continuing good business ethics and take into account the benefits of

all stakeholders. They shall provide reliable systems for accounting, financial reporting, and account auditing.

To perform their duties, the board of directors may assign directors or other persons to carry out any tasks

under the supervision of the board of directors. Alternatively, the board of directors may assign a power of

attorney to delegate specific tasks to other persons, as agreed by the board within the timeframe specified

by the board.

Scope of Duties and Responsibility of the Board of Directors

1. To consider and approve policies, business plan, and the Company's annual budget.

2. To consider and approve any transactions made by the Company and its subsidiaries which may result

in changes to the Company's financial status, liabilities, and capital structure.

3. To consider and approve an investment of assets with the amount above Baht 200 million per investment.

4. To consider and approve significant engagement in rental or service related to the real estate properties

of the Company and its subsidiaries.

5. To consider and approve the significant activities which includes selling, transferring, and getting rid of

the Company and its subsidiaries' fixed assets

6. To consider, approve or give their consent on connected transactions and transactions which may cause

a conflict of interests between the Company or its subsidiaries and the concerned persons. The board

should monitor compliance with the regulations of the Securities Exchange Commission and the Stock

Exchange of Thailand.

7. To consider, approve, or give their consent on transactions concerning important issues, the acquisition

and trading of assets, all the while ensuring compliance to theregulations of the Securities Exchange

Commission and the Stock Exchange of Thailand.

8. To appoint and set duties and responsibilities of the committees.

9. To nominate directors and to consider and approve the appointment of a President.


Management

31

Qualifications of independent directors The Company independent director shall be independence and qualified pursuant to requirement of the

Company which is stricter than the minimum requirement of SET and SEC

1. Holding shares not more than 1 percent of paid-up capital of the company, affiliated company, and associated

company or related company, which shall be inclusive of the shares held by related persons;

2. Being a director who does not take part in the management of the company, affiliated company, associated

company, related company or majority shareholder of the company, and is not an employee, staff member or

advisor who receives a regular salary from the company, affiliated company, associated company, related company

or majority shareholder of the company;

3. Being a director who has no direct or indirect benefit or interest in finance and management of the company,

affiliated company, associated company or majority shareholder of the company, including the benefit or interest

of the said nature during the period of 1 year before his appointment as a member of the audit committee except

where the board of directors has carefully considered that such previous benefit or interest does not affect the

performance of duties and the giving of independent opinions;

4. Being a director who is not a related person or close relative of any management member or majority

shareholder of the company;

5. Being a director whom is not appointed as a representative to safeguard interests of the company's

directors, majority shareholders or shareholders who are related to the company's majority shareholders;

6. Being capable of performing duties, giving opinions or reporting the results of performance of work according

to the duties delegated by the board of directors free and clear of the control of the management or the majority

shareholders of the company including related persons or close relatives of the said persons.

As of December 31, 2007, member of the Company's Board of Directors comprises of;


Management

The Company's corporate secretary is Mr. Parivat Sopasit, Vice President-Finance and Administration.

Authorized directors for the Company signage are Mr. Sudhisak Chirathivat, or Mr. Sudhitham Chirathivat, or

Mr. Prin Chirathivat, or Mr. Tos Chirathivat, or Mr. Preecha Ekkunagul, or Mr. Piya Nguiakaramahawongse, or Mr. Pandit

Mongkolkul. Any two of these seven directors are authorized to jointly sign on behalf of the Company with the Company

seal affix.

1. Mr. Sudhisak Chirathivat

2. Mr. Sudhitham Chirathivat

3. Mr. Somchai Apiwattanaporn

4. Mr. Phibul Phatharodom

5. Mr. Vithaya Chavananand

6. Mr. Prin Chirathivat

7. Mr. Tos Chirathivat

8. Mr. Preecha Ekkunagul

9. Mr. Piya Nguiakaramahawongse

10. Mr. Pandit Mongkolkul

Chairman

Vice Chairman

Director and Independent Director



Director

Director

Director and President

Director

Director

32

Audit Committee

As of December 31, 2007, the audit committee comprises of various expertise which is independent director and

their qualification comply with the requirement of SET and SEC. Those 3 directors are;

1. Mr. Somchai Apiiwattanaporn Chairman of the Audit Committee

2. Mr. Phibul Phatharodom Audit Committee

3. Mr. Vithaya Chavananand Audit Committee

The secretary of audit committee is Ms. Jantana Sriviriyalertkul, Head of internal audit team.

Scope of Duties and Responsibilities of the Audit Committee

1. Review the Company's financial reporting process to ensure accuracy and adequacy.

2. Ensure that the Company has an appropriate and effective internal control system and internal audit system.

3. Ensure compliance with securities and exchange laws and SET regulations, or laws concerning the Company's

business.

4. Consider, select, nominate, and determine annual remuneration for the Company's auditor.

5. Consider the disclosure of company information in case of connected transactions or transactions which may

cause a conflict of interests to ensure accuracy and completely.

6. Prepare a report on the audit committee's supervision of business, to be disclosed in the Company's annual

report and signed by the chairman of the audit committee.

7. Perform other tasks assigned by the Company's board with the approval of the audit committee.

Tenure of Audit Committee

1. Chairman of the Audit Committee 3 years

2. Audit Committee 3 years

Board of Executive Directors

As of December 31, 2007 the Company's board of executive directors which appointed by board of directors

comprises of;

1. Mr. Sudhisak Chirathivat Chairman

2. Mr. Sudhitham Chirathivat Executive Director

3. Mr. Prin Chirathivat Executive Director

4. Mr. Tos Chirathivat Executive Director

5. Mr. Preecha Ekkunagul Executive Director and President

The secretary of board of executive directors is Mr. Parivat Sopasit, Vice President-Finance and Administration.


Management

33

Scope of Duties and Responsibilities of the Board of Executive Directors

1. Assign power of attorney to the president to act on behalf of the Company and set the scope of responsibilities

for the president to operate day-to-day business.

2. Consider and submit relevant policies, business plan, and annual budget as proposed by the management before

submission to the Company's board of directors for approval.

3. Approve an investment of assets at a credit limit up to Baht 200 million per investment. The board of executive

directors should prepare a quarterly report on details of investments for the Company's board of directors.

4. Trade and transfer the Company's fixed assets with the amount up to Baht 100 million per item.

5. Consider and approve transactions related to banks and financial institutions. This is regarded as an ordinary

trading business operation of the Company.

Nomination and Remuneration Committee

As of December 31, 2007 the Company's Nomination and Remuneration Committee which appointed by board

of directors comprises of;

1. Mr. Somchai Apiiwattanaporn Chairman

2. Mr. Vithaya Chavananand Committee

3. Mr. Sudhitham Chirathivat Committee

4. Mr. Tos Chirathivat Consultant

Scope of Duties and Responsibilities of the Nomination and Remuneration Committee

Nomination

1. Define the scope of work and policy on the selection and recruitment of directors and sub-committee based

on the size, structure, and composition of the Board of Directors, including determination of the qualification of

the candidate for submission for the Board's consideration and/or further to shareholders' meetings for approval.

2. Propose a qualified candidate on the selection and recruitment of the director whose tenure have ended or

unoccupied position for submission for the Board's approval, including for new President who shall be appointed.


Management

34

Compensation

1. Define a form of compensation for directors and sub-committee for submission to the Board and further to

shareholders' meetings for approval.

2. Define the method and practice of appropriate compensation both monetary and non-monetary compensation

for submission to the Board and further to shareholders' meetings for approval.

Risk Management Working Team

As of December 31, 2007 the Company's Risk Management Working Team which appointed by board of directors

comprises of;

The consultant of the Risk Management Working Team is Ms. Jantana Sriviriyalertkul, the secretary of Audit Committee

and head of internal audit team.

The secretary of the Risk Management Working Team is Ms. Vasana Samngamnoi.

Scope of Duties and Responsibilities of the Risk Management Workingteam

1. Make suggestions and give support to the Board in formulating the risk management policy and defining

acceptable risk levels.

2. Define the framework of the Company's risk management in line with the risk management policy, and follow

up on its implementation as well as reviewing the effectiveness of the framework.

3. Table a broad view for the Board's consideration of business risks and its management method, and follow up

on results.

4. Review risk management reports, ensure adequate and suitable risk management to acceptable levels, and

ensure continued implementation of risk management.

5. Regularly coordinate with the Audit Committee by sharing information about risks and internal control

potentially affecting the Company's business.

6. Decide and provide recommendations on critical issues which learn from the risk management process.

7. Support a Company culture for adequate risk management and internal control.


Management

1. Mr. Vithaya Chavananand Chairman

2. Mr. Preecha Ekkunagul Working Team

3. Mr. Parivat Sopasit Working Team

4. Mrs. Rattana Anoontakaroon Working Team

5. Mr. Anan Tantipanyakun Working Team

35

Good Corporate Governance Working Team

As of December 31, 2007 the Company's Good Corporate Governance Working Team which appointed by board

of directors comprises of;

Scope of Duties and Responsibilities of the Good Corporate Governance Working Team

1. Define the policy and review an adequacy and appropriation of the Company Good Corporate Governance

Policy, including practices of good corporate governance, code of conduct and Corporate Social Responsibility.

2. Quarterly meet up to follow up ongoing the Company's good corporate governance plan as well as the practicing

of the good corporate governance policy of directors, management and employees, to assure that the Company

full comply with the principle of the good corporate governance and operate its business with efficiency,

transparency and be able to examine.

3. Conduct self-assessment pertaining to the principle of the good corporate governance and submit the findings

to the Board for consideration, approval, or comments.


Management

1. Mr. Phibul Phatharodom Chairman

2. Mr. Piya Nguiakaramahawongse Working Team

3. Mr. Parivat Sopasit Working Team

1. Mr. Preecha Ekkunagul President

2. Ms. Narttaya Chirathivat Senior Vice President-Merchandising

3. Mr. Gerard McGurk Senior Vice President-Operations

4. Ms. Sirinij Chokchairittikul Vice President-Merchandising

5. Ms. Rattana Anoontakaroon Vice President-Merchandising

6. Mr. Sukitti Kittipassorn Vice President-Business Analysis and Development

7. Mr. Anan Tantipanyakun Vice President-Operation System and Support

8. Ms. Apinun Chatrapongporn Vice President-Commercial Operations

9. Ms. Usara Yongpiyakul Vice President-Marketing

10. Mr. Parivat Sopasit Vice President-Finance and Administration

Executive Officers

36

Scope of Duties and Responsibilities of the President

1. Prepare policies, business plan, and annual budget, to be submitted to the board of executive directors for

consideration and then to the board of directors for approval.

2. Manage the business according to the Company's policies and business plan as assigned by the Company's

board of directors.

3. Approve disbursement of expenses as specified in the budget, and consider and approve investment of assets

at a credit limit with the amount up to Baht 5 million per transaction.

4. To consider and approve the Company's engagement in rental or service of any movable properties which are

considered as normal business operations.

5. To consider and approve the Company's engagement in rental or service of the real estate properties which

are considered as normal business operations. The contract value shall not exceed Baht 50 million and/or three

years of tenure.

6. Consider and approve policy of merchandising, trading policy, marketing, sales, and general asset administration.

Nomination of Directors and ExecutivesNomination Procedure

The Company's Board of Directors has appointed Nomination and Remuneration Committee to have duties and

responsibilities to propose the qualified candidate for the Board's consideration and/or further to shareholders'

meetings for approval.

Appointment of the Company's directors shall be conducted according to the Article of Association as follows:

- The Company's directors need not to be the Company's shareholders. The third person who agrees to be

the Company's director and is appointed by the general shareholders meeting can be the Company's directors.

- The Company's board of directors shall consist of not less than five directors and not less than half of those

shall reside within the Kingdom.

In addition, the Company has adopted the best practices of good corporate governance in regard to the board

structure, where the Company's board of directors shall compose of independent directors at least one third of the

board size.


Management

37


Management

Criteria and procedure for electing directors at the shareholders meeting are as follows:

In vote for election of directors, majority vote shall be regarded and each shareholder shall have one vote per one

share held by such shareholder.

- Each shareholder may exercise all the votes he/she has to electing each candidate nominated as a director.

- The candidates ranked in order descending from the highest number of votes received to the lowest

shall be appointed as directors until the number of directors to be comprised or elected in such meeting

is filled. In case the votes cast for candidates in descending order are tied, which would otherwise cause

the number of directors to be exceeded, the chairman of the meeting shall have casting vote.

- Regarding the right of minor shareholders to appoint a director, the Company's regulations specify that

each shareholder has one vote for one share. The cumulative voting is not applicable.

The Company's shareholders were invited via SET online system to have a right to propose the person(s) whose

qualification comply with the Article of Association, the Public Company Limited B.E. 2535 Act, and the notice of the

Securities Exchange Commission to the Company's corporate secretary for consideration as the candidate to serve

as the Company director(s) in advance for 2 months before propose to the Nomination and Remuneration Committee's

meeting and the Board's meeting. The shareholder who wish to submit the proposal must have the following qualifications:

1. being the shareholder of the company which can be either one shareholder or combined shareholders.

2. holding minimum shares of not less than 100,000 shares.

3. having continuously held those shares in Clause 2 for at least one (1) year until the date of which the

shareholder proposes the agenda or proposes the person(s).

The Company Secretary shall review the documents initially prior to proposing to the Nomination and

Remuneration Committee for their consideration and opinion to the Board of Directors to consider the appropriation

of further submission to shareholders for the approval. However, the resolution of the Board of Director shall be

deemed the final decision. The name of the nominated person approved by the Board of Director of the Company

shall be included in the agenda regarding the election of the Company's directors, accompanied with the opinion of

the Board of Director and propose to the shareholder meeting for the approval.

The shareholder possessing the qualification in accordance with Clause 1 must submit the "Shareholders

Meeting Agenda Proposal Form" together with complete and accurate supporting documents to the Company

Secretary within January 31, 2008. The Shareholder shall clarify the objective of the proposal, whether for

acknowledgment, consideration or approval.

38

Remuneration of Directors and the Management

Monetary Remuneration

Board of Directors

According to the resolution of the annual general shareholder meeting for year 2007 approved the remuneration

for the members of the entire board not exceeding Baht 4,000,000 (four million baht net), excluding remuneration for

Mr. Preecha Ekkunagul who held another position as the Company's president, in which equivalent to the remuneration

which was approved in 2006. The Nomination and Remuneration Committee and Board of Directors determine the

remuneration of each director as deemed appropriate as follows;

Monetary remuneration of the Board in the year 2007 comprising of meeting fee and quarterly fee for the

Company's directors, Executive Directors, and Audit Committees totaling 10 directors was paid at a total amount of

Baht 1,865,000. Details has shown below;


Management

20,000

40,000

30,000

10,000

-

-

-

15,000

15,000

Chairman of the Board of Directors/

Directors/ Independent Directors

Chairman of the Audit Committee

Audit Committee

Type of Director

Meeting Fee (Baht)Quarterly Fee

(Baht)Board of Directors/Board of Executive

DirectorsAudit Committee

180,000.00

180,000.00

180,000.00

140,000.00

160,000.00

130,000.00

130,000.00

275,000.00

245,000.00

245,000.00

1,865,000.00

63,333.33

53,333.33

63,333.33

63,333.33

63,333.33

53,333.33

63,333.33

131,666.67

125,000.00

125,000.00

804,999.98

2007 2006

39

Management

The management consists of 10 executive officers taking the positions of president, senior vice president, and

vice president, as well as management who are also regarded as board members. Remuneration for executives

comprise of monthly salary, bonus, provident fund, and other remuneration (car allowance)


Management

47,048,771

None

37,972,486

None

2007 2006











Chairman

Vice Chairman

Director

Director

Director

Director

Director

Chairman of Audit Committee/

Independent Director

Audit Committee/


Audit Committee/


Grand Total

Directors' Name PositionRemuneration (Baht/year)

Type of RemunerationRemuneration (Baht/year)

Monetary Remuneration

Non-Monetary Remuneration

40


Management

Supervision on Inside InformationThe company has clearly established its scope of duty and responsibility of all employees in the form of Job

Description and has trained them to accurately understand their duties and the company's regulations. However,

some duties may occasionally cause inside information to be revealed to employees and perhaps to the public without

permission. Therefore, the company specifically details that only concerned employees can be informed of such important

inside information especially in the case of financial information, by utilizing a computerized system to limit access of

information by any particular level of authority. The company will disclose information to those concerned during the

appropriate time and only without contravention to the related regulations of the SET and other applicable laws. In

addition, the employee shall certify to the Company related to their use of inside information. The company also has

regulations in connection with the disclosure of confidential information. If an investigation finds that an employee has

disclosed confidential information or financial information without permission, said employee shall be subject to strict

punishment by the investigative committee in accordance with the company's regulations.

In the case where the company hires outside contractors to perform particular tasks the company requests that

a contract should be made in terms of protection of confidential information which may be disclosed due to the nature

of the task performed. The hired party must ensure that its staff is under obligation to protect clients' confidentiality.

The staff and executives of the hired party are prohibited from using such disclosed inside information to buy or sell

shares issued by the company either for their own benefit or that of others.

Internal ControlThe Company has an internal control system which is sufficient, appropriate, and effective. With a clear organization

structure, the Company sets a written scope of authority in various operations, authorization limit, operation processes

and responsibility of each party including the board of directors, president, management, and staff. This will allow the

Company to operate its business with accuracy, transparency, verifiability, and to prevent any damages which may

occur. The Internal Control System has been improved for ongoing effectiveness and efficiency. The Internal Audit

section, which is independent from the management reviews operations and the information technology system of all

departments to ensure that all staff in the organization comply with the Internal Control System as set by the Company,

while reporting their performance directly to the Audit Committee on a regular basis. Communication and cooperation

with management regarding audit results, observations, and suggestions was also conducted. In addition, guidelines

to resolve issues appropriately were also set up. Chairman of the Audit Committee reported all audit results to the

Board on regular basis.

Regarding auditor's opinions in the Audit Report of Certified Public Accountant for the year 2007, there were no

material respects that can be considered significant in the Internal Control System of the Compan's accounting and

information technology system.

41


Management

In terms of risk management, the Company realizes and stresses the importance of risk management. Therefore,

the Company's board appointed the risk management working team to serve as an important instrument or mechanism

to ensure the Company's effective operation of risk management with an internal control system that sufficiently covers

all risks. In 2007, the working team established the Company's written risk management policy. The working team

comprising management from various operations was also set up to consider risk factors which the Company is facing

and those which may occur in the future. The Training & Workshop for executives was also created. The Company is

currently setting up guidelines that indicate the organizationßs risks and producing risk management handbook.


Information of Board of Directors

42

Mr. SudhisakChirathivatAge: 62

Position:ë Chairman of Board of Director/Executive (Authorized Director)Relationship among managementë Brother of Mr. Sudhitham and Mrs. Narttaya ë Uncle of Mr. Prin and Mr. Tos Education:ë Bachelor Degree in Mathematics, St. Fisher College, U.S.A. ë Director Certification Program (DCP) 2007 ë Director Accreditation Program (DAP) 2007, Thai Institute of Directors Association No. of share holding (shares): NoneExperiences:ë 1994 President of Industry and Retail Business, Companies in Central Group ë 2000 Chairman of the Executive Board, Central Marketing Group Co., Ltd. ë 2001-Present Executive Board, Central Group of Companies ë 2003-Present Director/Executive Board, Central Pattana Pcl. ë 2003-Present Director/Executive Board, Central Plaza Hotel Pcl.ë 2006-Present Chairman and Chairman of the Executive Board, Robinson Department Store Pcl.

Mr. SomchaiApiwattanapornAge: 57

Position:ë Director/Independent Director/Chairman of the Audit CommitteeEducation:ë Bachelor Degree in Accounting, RamKhamhaeng University ë Master of Art (Public Management), RamKhamhaeng University ë Defense College Graduated (Wor Por Ror Or -2546) ë Certified Public Accountant ë Director Certification Program (DCP) 2006, Director Accreditation Program (DAP) 2004, Thai Institute of Directors Association ë Capital Market Academy Leader ProgramNo. of share holding (shares): NoneExperiences:ë 2003-2004 Chairman of Asset Management Committee, Director, TMB Bank Pcl. ë 2003-Present Deputy Director, Excise Department ë 2003-Present Vice Chairman of Committee, Playing Card Factory Committee, Excise Department, Ministry of Financeë 2005-Present Member of Federation of Accounting Professions Tax Accounting Committeeë 2005-Present Director, Liquor Distillery Organization, Excise Department, Ministry of Finance ë 2006-Present Chairman of Audit Committee and Independent Director, Robinson Department Store Pcl.



43

Position:ë Director/Executive Director (Authorized Director)r)Relationship among managementë Nephew of Mr. Sudhisak, Mr. Sudhitham, and Mrs. Narttaya ë Brother of Mr. Prin Education:ë BA Wesleyan University, CT, USA ë MBA (Finance) Columbia University, NY, U.S.A.No. of share holding (shares): NoneExperiences:ë 1996-2001 Chief Operational Officer, Central Retail Corporation Co., Ltd. ë 2002-Present Chief Executive Officer Central, Retail Corporation Co., Ltd. ë 2006-Present Director/ Executive Board, Robinson Department Store Pcl.

Position:ë Vice Chairman of Board of Director/Executive Director (Authorized Director)Relationship among managementë Brother of Mr. Sudhisak and Mrs. Narttaya ë Uncle of Mr. Prin and Mr. TosEducation:ë Bachelor Degree in Electrical Engineering University of Maryland (College Park), U.S.A.ë MBA (Operations Research) Iona University, New York, U.S.A. ë Director Certification Program (DCP) 2003, Thai Institute of Directors Association ë Defense College Graduated - 4313 (Wor Por Ror Or - 4313)No. of share holding (shares): NoneExperiences:ë 2002-Present Executive Committee Retail and Real Estate, Central Group of Companies, Chairman, Earth Care Co., Ltd., Executive Director, The Vintage Club Co., Ltd., Director, Central Holding Co,. Ltd., Executive Director, Central Plaza Hotel Pcl., Director, Central Pattana Pcl., Director, TT&T Pcl. ë 2006-Present Member of the National Legislative Assembly ë 2006-Present Director/Executive Board, Robinson Department Store Pcl.

Mr. SudhithamChirathivatAge: 60

Mr. TosChirathivatAge: 43



44

Position:ë Director/Executive Director (Authorized Director)Relationship among managementë Nephew of Mr. Sudhitham, Mr. Sudhisak, and Mrs. Narttaya ë Brother of Mr.TosEducation:ë Bachelor Degree, Skidmore College, U.S.A. ë MBA Sasin Graduate Institute of Business Administration, Chulalongkorn University ë Director Certification Program (DCP) 2000, Director Accreditation Program (DAP) 2005, Audit Committee Program (ACP) 2005, The Role of Chairman (RCM) 2005, Thai Institute of Directors Association ë Capital Market Academy Leader ProgramNo. of share holding (shares): NoneExperiences:ë 1999-2006 Director, Indhra Insurance Pcl. ë 2002-2006 Director, Dhanamitr Factoring Pcl.ë 1995-Present Director, General Card Services Ltd. ë 1996-Present Director/Executive Board, Central Retail Corporation Co., Ltd. ë 2002-Present Executive Board, Central Group of Companies ë 2004-Present Member of Board of University Affairs, Chiangrai Rajabhat University ë 2004-Present Consultant, Market for Alternative Investment (MAI) ë 1993-Present Director/Executive Board, Central Plaza Hotel Pcl. ë 1994-Present Director/Executive Board, Central Pattana Pcl. ë 1999-Present Director, Malee Sampran Pcl. ë 2003-Present Chairman of Audit Committee, Bualuang Securities Pcl. ë 2006-Present Director/Executive Board, Robinson Department Store Pcl.

Mr. PrinChirathivatAge: 45

Position:ë Director/Executive Director/President (Authorized Director)Education:ë Bachelor Degree in Chemical Engineering, Chulalongkorn University ë Master Degree (Industrial and Management), Asia Institute of Technology ë Director Certification Program (DCP) 2005 ë Director Accreditation Program (DAP) 2004, Thai Institute of Directors AssociationNo. of share holding (shares): NoneExperiences:ë 1995-2000 Managing Director, BigC Supercenter Pcl. ë 2000-2003 President, CRC Power Retail Co., Ltd., B2S Co., Ltd. ë 2003-Present President/Director/Executive Director, Robinson Department Store Pcl.

Mr. PreechaEkkunagulAge: 49



45

Position:ë Director (Authorized Director)Education:ë BS (Electrical Engineering) and BS (Management), Massachusetts Institution of Technology, Cambridge, U.S.A. ë MBA and MS (Electrical Engineering), University of Southern California, Los Angeles, U.S.A. ë Director Certification Program (DCP) 2005, Thai Institute of Directors AssociationNo. of share holding (shares): NoneExperiences:ë 1997-Present Senior Vice President Finance and Account, Central Retail Corporation Co., Ltd. ë 1997-Present Director, Robinson Planner Co., Ltd. ë 2006-President Director, Robinson Department Store Pcl.

Mr. PiyaNguiakaramahawongseAge: 50

Position:ë Director (Authorized Director)Education:ë Bachelor Degree in Accounting, Chulalongkorn University ë MBA (Finance and International Business) Sasin Graduate Institute of Business Administration ë Director Certification Program (DCP) 2003, Thai Institute of Directors Association ë Capital Market Academy Leader ProgramNo. of share holding (shares): 225Experiences:ë 1992-Present Vice President, Central Department Store Co., Ltd. ë 1993-Present Director, Earth Care Co., Ltd. ë 2005-Present Director, Andaman Capital Co., Ltd. ë 2004-Present Director, CG Broker Co., Ltd. ë 2000-Present Director, Robinson Planner Co., Ltd.ë 2004-Present Chairman of the Executive Board Dhanamitr Factoring Pcl. ë 2006-Present Director, Malee Sampran Pcl. ë 1996-Present Director, Robinson Department Store Pcl. and its Subsidiaries

Mr. PanditMongkolkulAge: 45



46

Position:ë Director/Independent Director/Audit Committee Education:ë Bachelor Degree (Accounting and Law), Thammasat University ë M.S. (Accounting) University of Kansas, U.S.A. ë Director Accreditation Program (DAP), 2004, Audit Committee Program (ACP), 2005, Thai Institute of Directors Association No. of share holding (shares): NoneExperiences:ë 1999-2005 Independent Director/Audit Committee, Central Plaza Hotel Pcl. ë 1969-Present Partner/Certified Public Accountant, Phatharatham Auditing Office ë 2006-Present Independent Director/Audit Committee, Robinson Department Store Pcl.

Position:ë Director/Independent Director/Audit CommitteeEducation:ë Bachelor Degree (Political Science Finance), Chulalongkorn University ë MBA, Webster University, U.S.A. ë Director Accreditation Program (DAP) 2006, Thai Institute of Directors Association ë Director Certification Program (DCP), Thai Institute of Directors AssociationNo. of share holding (shares): NoneExperiences:ë 1986-Present Vice Chairman, Wijitpan Palm Oil Co., Ltd., Managing Director Wijitpan Suan Palm Co., Ltd., Director Wijitpan Construction Co., Ltd., Managing Director, CVN Developement Co., Ltd., Director, Chavananand Construction Co., Ltd, Director, Wijitpan Real Estate Co., Ltd., Director Wijitpan Palm Co., Ltd., ë 2006-Present Independent Director/Audit Committee, Robinson Department Store Pcl.

Mr. PhibulPhatharodomAge: 74

Mr. VithayaChavananandAge: 50



47

Position:ë Director/SVP-Merchandising (Authorized Director)Relationship among managementë Sister of Mr. Sudhisak, and Mr. Sudhitham ë Aunt of Mr. Prin and Mr. TosEducation:ë BS (Economic) University of Hartford, CT, U.S.A. ë MBA University of Hartford Paris, FranceNo. of share holding (shares): NoneExperiences:ë 1995-Present SVP-Merchandising, Robinson Department Store Pcl.

Position:ë VP-Commercial OperationsEducation:ë HND in Business Practices and Business Computer Practices, Dundee College of Commerce ë 5'0' Grade-3'H'Level, Lawside RC AcademyNo. of share holding (shares): NoneExperiences:ë 1998-2000 District Manager, Robinson Department Store Pcl. ë 2000-2002 Managing Director Planer Sports China Limited, TS Lifestyle Thailand Limited ë 2003-Present VP-Commercial Operations, Robinson Department Store Pcl.

Mrs. NarttayaChirathivatAge: 44

MR.GERARDMcGURKAge: 41



48

Position:ë VP-Business Analysis and DevelopmentEducation:ë Bachelor Degree in Pharmacology, Mahidol University ë MBA, Thammasat UniversityNo. of share holding (shares): NoneExperiences:ë 1997-2006 VP-Operation Systems and Support, Robinson Department Store Pcl.ë 2007-Present VP-Business Analysis and Development, Robinson Department Store Pcl.

Mr. SukittiKittipassornAge: 51

Position:ë Company Secretary/VP-Finance and AdministrationEducation:ë Bachelor Degree in Accounting, Chulalongkorn University No. of share holding (shares): NoneExperiences:ë 1995-2001 Accounting and System Manager, Siam Gardian Glass Co., Ltd. ë 2001-2003 Accounting Director, CRC Power Retail Co., Ltd. ë 2003-Present VP-Finance and Administration, Robinson Department Store Pcl.

Mr. ParivatSopasitAge: 49



49

Position:ë VP-MarketingEducation:ë Bachelor Degree in Marketing Management, ABAC ë MBA (Business Communication) Bentley College Boston, U.S.A. No. of share holding (shares): NoneExperiences:ë 1998-2000 Senior Marketing Manager, Krungsri-GE Bank Card, GE Capital Thailandë 2000-2003 Customer (Non-Auto) Insurance Product Leader, GE Capital Thailand ë 2004-Present VP-Marketing, Robinson Department Store Pcl.

Miss. UsaraYongpiyakulAge: 42

Position:ë VP-MerchandisingEducation:ë Bachelor Degree in Communication Arts, Bangkok University ë MA (Communication) International Program, 1st HONOR (Golden Medal), Bangkok University No. of share holding (shares): NoneExperiences:ë 1995-2002 Regional Store Manager, Mark &Spencer (United Kingdom), Marks & Spencer (Thailand), ë 2002-2005 General Manager-Merchandise Ready to wear (Credit-Differentiate), Robinson Department Store Pcl. ë 2005-Present VP-Merchandising, Robinson Department Store Pcl.Miss. Sirinij

ChokchairittikulAge: 32



50

Position:ë VP-MerchandisingEducation:ë BBA (General Management) at Sukhothaithammathirat University ë MBA at National Institution of Development Administration Bangkok, ThailandNo. of share holding (shares): NoneExperiences:ë 1997-2006 VP-General Merchandising BigC Supercenter Pcl. ë 2006-Present VP-Merchandising, Robinson Department Store Pcl.

Miss. RatanaAnoontakaroonAge: 48

Position:ë VP-Store Commercial OperationsEducation:ë Bachelor of Science Kasetsart University ë Master of Public Administration Program National Institute of Development AdministrationNo. of share holding (shares): NoneExperiences:ë 2004-2006 District Manager, Robinson Department Store Public Company Limited ë 2007-Present VP-Store Commercial Operations, Robinson Department Store Pcl.

Miss ApinunChatrapongpornAge: 44



51

Position:ë VP-Operation Systems and Support Education:ë Bachelor Degree (Auditing), 1st Honor, The University of the Thai Chamber of Commerceë Master Degree (Master of Public and Private Management) National Institute ofDevelopment AdministrationNo. of share holding (shares): NoneExperiences:ë 1995-2003 Store General Manager, Big C Supercenter Pcl. ë 2003-2007 Analysis Project and Director, Robinson Department Store Pcl. ë 2007-Present VP-Operation Systems and Support, Robinson Department Store Pcl.Mr. Anan

TantipanyakunAge: 41

52

The Company's board of directors approved a written good corporate governance policy with principles and practices that comply with Good Corporate Governance Principles of Listed Companies (2006) of the Stock Exchange of Thailand. This policy can be divided into 4 sections including section 1 The Company's board of directors, section 2 rights and equitable treatment of shareholders, and roles of stakeholders, section 3 information disclosure and transparency, and section 4 business ethics. The Company's board of directors assigned the corporate governance working team to be responsible for setting up policy and guidelines for good corporate governance and business ethics, while reviewing and modernizing such policy and guidelines to be suitable for current situation. The Company's board of directors, management, and staff are encouraged to strictly follow the policy and guidelines. The Company's board of directors has a strong belief that good corporate governance serves as an important factor to set up a power controls, checks-and-balances mechanism for a transparent and fair business operation which is open to scrutiny. This will help add value and returns to the Company's shareholders in the long run.

Summary of Good Corporate Governance Practices

Rights of Shareholders Recognizing the importance of shareholders rights, not only the basic rights but also other rights. The Company shall not do anything to infringe their rights or to deprive them of their rights. In 2007, the Company strived to enhance the efficiency of distribution of necessary news and information procedure to ensure that shareholders will receive sufficient and accurate information on the Company in a timely manner before making decisions. It also includes the right to receive stock certificates, to transfer shares, and to receive dividends. The Company supported shareholders to attend the shareholders' meeting. There is no restriction on the right to attend the meetings for shareholders who show up late. The Company facilitated shareholders to attend the meetings both in terms of venue, food and beverages preparation as well as proper time setting. Regarding meeting notices, the Company provided shareholders, in advance of meetings, with meeting notices that contain all agenda details, each with the board of directors' opinions, supporting information on agenda details, details about the credentials each shareholder needs to bring to the meeting. All supporting documents both in Thai and English versions along with the proxy forms were also posted on the Company's website at least 30 days in advance of meeting. Such documents were also sent to shareholders at least 14 days prior to the meeting. Since 2006 upon the completion of the Company's rehabilitation plan, shareholders' meetings have been held. The Company has not distributed any documents that contained additional information at the meetings. There have been neither additional meeting agendas nor changes on important information without prior notice. At the meeting, chairman of the Company's board of directors informed shareholders of their voting right and explained clearly how ballots are cast and counted. The minutes of the meeting were complete and accurately recorded along with the voting results of each agenda item, which must also be provided on the Company's website within 14 days after the meeting. The Company encouraged its board of directors especially the chairman, chairman of the sub-committee, and president to attend the shareholders' meetings with prior notices to enable all directors to allocate time for the meeting. In addition, shareholders were encouraged to submit their questions in advance of the meeting by sending letters to the Company's secretary or via e-mail: [email protected]. Shareholders were also able to address their opinions and questions related to the Company's operation at the meeting.



53

Equitable Treatment of Shareholders The Company provided the right of minority shareholders to nominate candidates for director positions, to propose any agenda items to the Company's secretary for the board of directors' consideration up to 2 months ahead of the board of directors meeting to set up agendas for the shareholders' meetings. Shareholders who cannot attend the meeting were able to vote by proxy or appoint independent directors as their proxies. This serves as an option for shareholders to appoint at least 2 independent directors who have no connection with the agenda items on the proxy forms. This has enabled shareholders to appoint their proxies to attend the shareholders' meeting. For director election, the Company specified that each director nominee is voted on individually. Shareholders are also encouraged to use the proxy forms which can decide balloting directions (Proxy Form B). In addition, the Company also provided the custodian proxy form for international shareholders in a category of institution (Proxy Form C). Regarding details of information for each agenda in the meeting's supporting documents for shareholders' consideration, the Company followed and adhered to the practical guidelines of the AGM Checklist provided by the Securities and Exchange Commission (SEC) In addition, the Company requested that new executives report the holding of securities and also the transfer of securities to the Securities and Exchange Commission (SEC) pursuant to section 59 under the Securities and Exchange Act B.E. 2535. In addition, the Company also clearly specified the duties and responsibilities of the executives and organization units by prohibiting executives or any persons who have inside information from disclosing such information to outsiders or non-engaged persons, except if the disclosure is made to the public as specified in the regulations of the Stock Exchange of Thailand. Any violation shall be subject to disciplinary action according to the company's regulations.

The Role of Stakeholders in Corporate Governance Apart from shareholders, the Company takes into account all groups of stakeholders, making sure that they are treated fairly and in accordance with their legal rights as specified in the laws that concern stakeholders and/or through mutual agreements with the Company. Written business ethics was produced to enable directors, executives, and staff to understand and recognize the ethical standard that has been employed in the Company's business operation. The Company strongly hopes that everyone in the organization will strictly comply with the guidelines of practices, while promoting conduct that expresses its responsibility towards stakeholders. The Company realizes that all stakeholders play a supportive role in the Company's long-running success with details as follows:

Employees: The Company has been striving to develop and create a good relationship between the Company and its staff by treating them according to the regulations set out under the labor and social welfare law. It strictly respects staff's individual rights, and provides proper remuneration and welfare benefits in comparison with those in the same business group. The Company set up a working unit particularly responsible for staff welfare benefits at all branches to ensure that the Company's staff as well as the sales staff employed by our business partners receives a fair treatment from the Company, while working in a proper and safe environment. Various activities have been organized for staff to promote teamwork and create pleasant atmosphere.



54

Partners and/or Creditors: The Company strictly observes and adheres to all its obligations to partners and/or creditors. It has regulations to prohibit executives or staff from performing any illegal or unethical practices against partners and/or creditors by admitting or asking for any properties or benefits. Should there be any evidenceor information of unethical practice the Company or partners and/or creditors must inform or disclose such information for joint consideration to find a solution to the problem in order to prevent any losses which may occur in the future.

Customers: The Company attempts to create customer satisfaction by providing fine quality products that meet customers' demands at reasonable price as well as excellent service. It also conducts its business rightly and equitably. The Company has a strict policy of preventing the confidential information of customers. Customers have a chance to make complaints or queries at all time.

Competitors: The Company abides by the framework, rules and ethics of fair competition, and will not destroy the reputation of its competitors through pricing strategy or any unethical strategies.

Community and Environment: The Company has a policy to continually support activities which are beneficial to the community and environment. It will not take any illegal action or support any illegal action which is harmful to the natural resources and community.

Information Disclosure and Transparency The Company stresses the importance of the disclosure of information including financial reports and business information that is accurate, complete, transparent, equitable, and on a timely basis through the communication channel of the SET and the Company's website www.robinson.co.th. For investor relations, the Company assigns the financial management and investor relations section, financial management division, along with the president and vice president of finance and administration to be responsible for duties related to investor relations in order to communicate important and beneficial information to the institutional investors, shareholders, stock analysts, press and general public. In the year 2007, investor relation activities included a non-deal road show among company's executives, international investors, and analysts, along with securities companies; domestic press meetings; investors' and analysts' company visits; and conference calls to acquire information on the Company's performance. The Company also participated in meet the investor activity in cooperation with the SET, or Thailand Focus event.

Investors can contact the Company's investor relations section at tel. 0-2248-2626 ext. 732, 733 or e-mail: [email protected]. This will serve as a communications channel between the Company, shareholders and investors. Regarding the quality of financial reports, the Company's board of directors is responsible for consolidated financial statements of the Company and its subsidiaries (approved by the Company's auditor) as well as financial information presented in the annual report. The Company's board of directors appoints the audit committee which consists of an independent committee responsible for the quality of financial reports and internal control system. For the year 2006 financial report, the board of directors had the opinion that such financial statements were prepared in accordance with Thai General Accepted Accounting Principles through the adoption of the appropriate accounting policy and consistent practice of that policy, including the disclosure of substantial information in the Notes to the financial statements of the Company and its subsidiaries.



55



Responsibilities of the Board

Board Composition In 2007, the company's board of directors appointed at the shareholders' meeting consisted of directors with various qualifications in terms of skills and experience in managing retail business and department stores, as well as expertise in particular fields such as accounting, finance, and law. The board of directors comprises ten members including: - 1 Executive Director - 6 Non- Executive Directors - 3 Independent Directors (Independent Directors are 30%)

However, there are currently 3 independent directors or 30% which may lead to unclear checks-and-balances system of the board of directors' control and management duties. Therefore, the nomination and remuneration committee nominated another independent director at the board of directors' meeting in order to submit to the shareholders' meeting at the general shareholders' meeting for the year 2008 for approval of appointment of new director. Upon approval at the shareholders' meeting, the composition of the Company's board of directors may change in compliance with the good corporate governance principles related to the board of directors' structure that comprises independent directors which must account for one-third of the board. This will lead to clarity in checks-and-balances system.

Roles and Responsibility of the BoardThe board of directors authority and responsibilities include:

- Carries out the company's activities in accordance with governing laws, the company's objectives and Article of Association, as well as the resolutions of shareholder meeting. Directors shall perform their duties in good faith, with due diligence and care for the Company's interest.

- Directors must possess honesty, faithfulness, business ethics, skills, experience and expertise that are useful to the Company and also put all efforts to the Company.

- Be consistently accountable to the shareholders and protect the benefit of each shareholder equally. The Board arrange for the disclosure of Company information to shareholders, investors, and all stakeholders. Such information must be correct, complete, standardized, transparent, and timely.

- The Board shall define the Company's vision, strategies, policy, and business directions and ensure that the business is efficiently and effectively administered by the management team under the Company's policy to add the highest value, which must be secure and sustained, to the Company and shareholders. The Board regularly monitors business performance by setting up the Board's Meeting in every quarter.

- The Board shall provide reliable systems for accounting, financial reporting, account auditing, including the efficient internal control system and internal audit, which the Board appointed the Audit Committee to be responsible for this matter.

- The Board shall provide efficient risk management and regular monitoring including good corporate governance practices. The Board set up the Risk Management Working Team and the Good Corporate Governance Working Team which appointed Independent Director as chairman of each working team. The working teams shall be conduct the Company's risk management and good corporate governance.

56

- The Board shall arrange a corporate secretary to assist the Board in its various activities and run the business in line with the related laws and regulations.

- Independent directors should exercise independent discretion in the formulation of strategies, management of work and resources, appointment of directors, and determination of business standards. They should also be ready to disagree with management team members and other directors on matters that may affect the equality of each shareholder.

- Chairman of the Board does not be the same person of the President of the Company for duties and responsibilities desperation and hold balance of operation power.

The number of board position The Company defines limit of the number of board positions that a director can hold which shall not exceed 5 positions during his/her tenure in order for director to have time to attend the meeting for following up the Company's business performance. While, the Company's president shall limit to be the president of a listed company only in order for he/she to have sufficient time to conduct the business operation.

Committee and Working Team

In 2007, the Board considered and appointed the additional Committees as appropriate. The new appointed committees are responsible for specific duties which expertise is needed to consider and review on the assigned work as its delegation. The Committees shall report their duties to the Board according to annual schedule. Details of committees have shown as the followings;

1. Audit Committee the structure of audit committee comprises of 3 independent directors and one of them must possess the knowledge of finance and/or accounting.

2. Nomination and Remuneration Committee the structure of the committee comprises of 2 independent directors as minimum, where the proportion of independent director shall not less than two-third of the committee size and being the chairman of the committee.

3. Risk Management Working Team the structure of the working team comprises of 1 independent director as minimum and also being the chairman of the working team.

4. Good Corporate Governance Working Team the structure of the working team comprises of 1 independent director as minimum and also being the chairman of the working team.

The Board MeetingsThe Company's Board of Director Meetings is held on regular basis, at least on 1 meeting in every quarter. The

Board has set its meeting schedule in advance for every quarter and sends notice of the meeting along with a meeting agenda and meeting documents of each agenda to each director in advance of the meeting date so that the directors have sufficient time for their consideration. In the event that queries are raised from director, each director has their right to examine the meeting document and other important documents and the management shall state it clearly.



Directors' Name Position

Meeting Attendance

(No. of Attendance / No. of Meeting)

Board of

DirectorsAudit Committee

Of the Board Meeting, the chairman of the Board, President, and corporate secretary set the meeting agenda and all important issues together including the Company and its subsidiaries' acquisition or disposal of assets which is significantly impact on the Company, investment project, as well as connected transactions, in such case, these issues shall be proposed to the board of executive directors and/or audit committee for their consideration and state their opinion before propose to the Board.

In the agenda that one of the director who has interest in transaction shall be in the meeting room before the Board consider and make decision on that agenda.

57



5/5

5/5

5/5

4/5

4/5

5/5

5/5

4/5

5/5

5/5

-

-

-

-

-

-

-

5/5

5/5

5/5

Details of the meeting attendance of the Board of Directors and Audit Committee in 2007











Chairman

Vice Chairman

Director

Director

Director

Director

Director

Chairman of Audit Committee/


Audit Committee/


Audit Committee/


Board Self Assessment The Company conducts self assessment for the Board of Directors and Audit Committee at least 1 time per year.

Board and Management Training The Company encourages each director including corporate secretary to attend a course from Thai Institute of Directors (IOD) and from other institutions in order to increase their caliber and deem beneficial to the Company's current corporate governance appropriately. In 2007, 90% of the directors in the Board have attained the certificate from IOD. The Company has determined president and senior vice president to establish his/her succession plan and report the progress to the Board of Executive Directors.

Social Responsibility

The Company has a policy to promote social responsibility on a regular basis, while creating awareness of theCompany's staff at all levels of each branch to enable them to recognize the importance of society and environmentthrough the Company's internal network system. In 2007, the Company focused on promoting 4 activities includingblood donation in cooperation with the Thai Red Cross, provision of assistance to the community and environmentalpreservation, provision of support in terms of education and sport, and making contribution to the Buddhism.

The Company provided cooperation to the private sector and government sector such as support to the blood donationcenter of the Thai Red Cross including support to HRH Princess Maha Chakri Sirindhorn' s mobile blood donation unitproject, promotion on blood donation, and production of souvenirs to be given to blood donors to celebrate His Majesty's80th birthday. Head office's staff and those working at the Company's branches are encouraged to donate blood annually.Support to the regional Red Cross in provinces where the Company's branches are located was also provided.

Regarding contribution to the community and environment preservation, the Company conducted activities throughvarious environment foundations such as the Environment Foundation. These included production of t-shirts for blooddonors, blanket donation for those suffering cold weather, and provision of donation boxes at all branches to collectmoney to support various projects of the Environment Foundation. In addition, support to other projects was alsoprovided including Love The King Project and holy candle production to celebrate His Majesty's 80th birthday.

Recognizing the importance of Thai children's education, the Company provided financial support for study materialsas well as renovation of school's building in rural areas. The Company also supported various sport competition activitiesto contribute to the good health of people.

Moreover, great efforts have been exerted to preserve and promote Buddhism in order to conserve traditional Thaiculture and traditions. These included support to the annual Buddhist Lent of Ubon Ratchathani province as well aspromotion of various activities related to Buddhism important occasions.

58



59



Dear Shareholders of Robinson Department Store Public Company Limited

In 2007, the Audit Committee performed their duties and responsibilities as assigned by the Companyûs board

of Directors in compliance with the regulations of the Stock Exchange of Thailand. The Committee held 5 meetings in

all that participated among management, auditors and internal auditors according to the appropriate agendas. The

Audit Committee reported, expressed their opinions, and offered suggestions as deemed necessary. Duties performed

were, in summary, as follows:

Procedures for Making Financial Reports and the Disclosure of Information

The Audit Committee reviewed quarterly and annual financial statements, cooperates with the Companyûs

Management and auditors. These were for the making of disclosure of information approval that is accurate to the

main point and to the principle of accounting with Generally Accepted Accounting Practices. They also ensured that

important information, connected transactions, and transactions which may cause conflict of interest were sufficiently

and credibly disclosed. Including, the committee considered and providing suggestions to auditing planning and

auditing result from auditors, before propose to the Companyûs board of Directors for approval.

Internal control system and internal audit

The Audit Committee supervised internal audit operations in compliance with professional standards, a

computerize system has been utilized to support internal audit operations and to enhance the efficiency of the

internal audit procedures, and had more concisely Internal control system. They also agreed annual auditing planning

and reported auditing result, together with, providing advices to office of internal control and the Companyûs

Management for improving procedures. In addition, the committee considered and supported workforce and ongoing

personnel development of internal team.

Compliance with regulations and related laws

The Audit Committee consistently reviewed the Companyûs compliance subjected to the Securities and Stock

Exchange Act, Regulations of the Stock Exchange of Thailand, and other related business laws.

Disclosure of information of connected transactions

The Audit Committee considered the Companyûs inter-transactions and the disclosure of information on

related transactions which may cause conflict of interest on a regular basis. Also, they provide suggestions to the

Companyûs Management to assure that it has transparency, entirety and accuracy in practice.

60


Risk management

The Audit Committee considered and gave their opinions to the report of the Companyûs risk management

and also reported the progress of the Company's risk management. The Audit Committee also exchanged the

knowledge and information related to risk and internal control, which has caused or may cause effects on the

Company with the Risk Management Committee, risk management working group and Management continuously.

Good Corporate Governance

The Audit Committee continuously fosters and follows up good Corporate Governance practices, while

providing suggestions necessary for improving such practice. Moreover, they also pushed forward the Corporate

Governance workingteam to perform and follow up the improvement more actual.

Selection and appointment of auditor

The Audit Committee estimated overall operation in 2007, the result was satisfied. They determined

remuneration for auditing fees compare with the range of work which is expanding. Then they proposed to the

Companyûs board the appointment of KPMG Phoomchai Audit Ltd. as the Companyûs Auditors for the year 2008 with

remuneration to the amount of Baht 4,339,000. Remuneration for the Auditors of subsidiaries was Baht 2,135,000. Total

remuneration for the Company and its subsidiaries was Baht 6,474,000. This will be submitted to the shareholders

meeting for their approval.

Self-assessment of the Audit Committee

Assessment of the Audit Committeeûs performance for the year 2007 was done on 28 January 2008 and

yielded satisfactory results.

The Audit Committee concluded that the Company has appropriate and reliable procedures for making

financial reports and the disclosure of information, as well as a sufficient internal control system and also has

continually improvement to support satisfactory Corporate Governance procedures.


(Mr. Somchai Apiwattanapron)Chairman of the Audit Committee

February 2008

61

The Board of Directors is responsible for financial statements of Robinson Department Store Public Company

Limited and its subsidiary. The financial statements and information set out in Annual Report have been prepared in

compliance with the generally accepted accounting principles in Thailand and other appropriate and consistent

accounting policies and with careful consideration. Thus the company has disclosed all important information in the

Notes under the Financial Statements, in a proper and highly transparent manner.

The Board of Directors provides and maintains appropriate and efficient internal control systems, ensuring that

all accounting records are accurate, complete and sufficient to protect the Company's assets.

In this regard, the Board of Directors has appointed the Audit Committee, comprising independent directors, to

review the financial reporting and internal audit procedures. The Audit Committee's Report is presented accordingly in

this Annual Report.

The Board of Directors agrees that the overall internal control systems of Robinson Department Store Public

Company Limited are satisfactory and creditable rationally for reliability on the financial statement of Robinson

Department Store Public Company Limited and its subsidiary for the year ending 31 December 2007.

Responsibility Statement from the Board of Directorson the Disclosure of the Financial Report


(Mr.Sudhisak Chirathivat)Chairman of the Board of Directors

(Mr.Preecha Ekkunagul)President

62



Revenue from Sales and Others

The Company and its subsidiaries total revenues of Baht 12,602 million were Baht 572 million an increase in

revenue from continuing operations or 4.75%. This was mainly due to an ongoing growth in sales of Baht 473 million

or 4.38% comparing to last year resulted from the successfulness in merchandising management by continuously

offering a variety of fashion goods in assortment, launching a large number of new product brands, whereby the

sales from provincial branch kept growing as a consequence of sales promotions through the year to stimulate

customer's need. In addition, there was also new stores expansion in year last year-Ayudthaya and this year-

Jungceylon which opened since September.

Rental and service incomes decreased by Baht 21 million or 2.99%, mainly due to lower rental space

comparing to last year, meanwhile a certain lessee renovated its retail space which inconvenient for customer to

shopping resulted in lower rental income to the Company.

Cost of Sales

In 2007, cost of sales of the Company and its subsidiaries was in the proportion of revenue from sales at

76.96%, a decrease from 77.53% from the previous year. Gross profit margin increased from 22.47% in 2006 to

23.04% in 2007, an increase in gross profit at the amount of Baht 170.56 million or 7.2% comparing to last year. This

was mainly due to merchandising management which emphasized the continual use of effective goods purchasing

policy and stock management policy. It also included appropriate sales promotion programs which were organized

throughout the year especially compelling marketing of differentiation product which driven higher gross margin.

Selling and Administrative Expenses

The Company and its subsidiaries selling and administrative expenses amounted to Baht 2,904 million in

2006 and Baht 2,821 million in 2007. In 2006, the Company recorded one time expenses in provision of obsolete

stock at Baht 227 million so the Company expenses from continuing operations amounted to Baht 2,677 million. On

a like-for-like basis, expenses in 2007 increased by Baht 144 million or 5.38% caused by asset depreciations and

expense from new store. However, the Company was able to efficiently control selling and administrative expenses in

existing stores particular in areas of personal expense, marketing expense and sales promotion, including ongoing

energy saving measurement.

Net Profit and Interest Expenses

In 2007, Interest expense decreased by Baht 31 million from 2006 due to the final repayment was made

since 2006, whereby, corporate income tax expense increased by Baht 16 million as a result of good performance

from operations.

63



The Company and its subsidiaries net profit amounted to Baht 846 million or an increase of Baht 145 million

or 20.20% comparing to year 2006 on a like-for-like basis. Net margin to sales increased from 6.65% to 7.66%.

These results reflected the successfulness of the Company business strategy amid fierce competition in department

store segment and economy slowdown.

.Assets

At the end of 2007, total assets of the Company and its subsidiaries were at Baht 9,030 million, an increase

of Baht 395 million from the previous year, this was mainly due to an increase in cash from sales, account receivable

from creditcard sales, and increase in investment in affiliates. Property, plant and equipment, and leasehold rights

decreased by Baht 400 million caused by asset depreciations and amortizations.

Liabilities and Shareholders Equity

At the end of 2007, total assets of the Company and its subsidiaries of Baht 3,337 million, decreased by

Baht 128 million because repayment of loan from related companies was made and in 2007 the Company has not

incurred more debt thus debt to equity ratio was at 0.59 times about the same level of last year.

In 2007, the first dividend payment was made to the shareholders with dividend payout at 49.45% of the net

profit from continuing operations, or 0.32 baht per share, amounted of Baht 355 million.

Liquidity

2550

1,312

(141)

(597)

574

2549

1,326

(590)

(770)

(34)

Cashflow from operating activities

Cashflow from investment activities

Cashflow from financing activities

Net cashflow increase(decrease)

In 2007, net cash flow increased by Baht 574 million as a result of a decrease in capital expenditure for new

store expansion, Jungceylon, since require for upfront leasehold payment was not needed same as Ayudhaya Store

which opened in the previous year. Despite of Baht 355 million cashout for dividend payment, cashflow used in

financing activities remained below last year because the Company had no obligation to pay the large amount of

debt repayment as same as 2006. Cashflow from operating activities gradually decreased due to higher corporate

income tax expense.

Refer to the change of the Companyûs accounting policy regarding investment in subsidiaries or associate

companies, to record such investment with the cost method instead of the equity method as per the Federation of

Accounting Professions announcement No.26/2549 which starting from January 1, 2007. This change in accounting

policy has effect to the Companyûs separate financial statement for the period of the year 2007, resulted in a

decrease in investments in subsidiaries and associates of Baht 1,238 million, an increase in allowance for doubtful

accounts of Baht 2,405 million, and a decrease in net profit of Baht 316 million.

However, the change in accounting policy effects only the separate financial statement. It does not have any

effect on the consolidated financial statements or business fundamentals.

Auditorûs Fee

Audit Fee

The Company and its subsidiaries paid audit fees to:

- The Companyûs auditor for the previous accounting year with a total of Baht 6,569,000.

- The audit office of the auditor, person, or business related to the auditor and the auditors office for the

previous accounting year with a total of none.

Non-Audit Fee

None

64




Annual financial statements and

Audit report of Certified Public Accountant

For the years ended 31 December 2007 and 2006

66


To the Shareholders of Robinson Department Store Public Company Limited

I have audited the accompanying consolidated and separate balance sheets as at 31 December 2007 and 2006, and

the related statements of income, changes in shareholders' equity and cash flows for the years then ended of

Robinson Department Store Public Company Limited and its subsidiaries, and of Robinson Department Store Public

Company Limited, respectively. The Company's management is responsible for the correctness and completeness of

information presented in these financial statements. My responsibility is to express an opinion on these financial

statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan

and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the accounting principles used and significant estimates made

by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a

reasonable basis for my opinion.

In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material

respects, the financial position as at 31 December 2007 and 2006, and the results of operations and cash flows for

the years then ended of Robinson Department Store Public Company Limited and its subsidiaries, and of Robinson

Department Store Public Company Limited, respectively, in accordance with generally accepted accounting principles.

As described in note 30 to the financial statements, the Company's financial statements for the year ended 31

December 2006 have been restated for the effects of the change in accounting policy for investments in subsidiaries

and associates from the equity method of accounting to the cost method, and are now termed 'separate' financial

statements.

(Wilai Buranakittisopon)

Certified Public Accountant

Registration No. 3920

KPMG Phoomchai Audit Ltd.

Bangkok

18 February 2008

Audit Report of Certified Public Accountant

67


As at 31 December 2007 and 2006

Balance sheets

Current assets

Cash and cash equivalents

Trade accounts receivable

Short-term loans and advances to

related parties

Inventories

Other current assets

Total current assets

Non-current assets

Investments in subsidiaries

and associates

Other long-term investments

Long-term loans to related parties

Property, plant and equipment

Leasehold rights

Goodwill

Other non-current assets

Total non-current assets

Total assets

(in Baht)(Restated)

2007 2006 2007 2006

Separatefinancial statements

Consolidatedfinancial statements

Assets Note

5

4, 6

4, 30

7

4, 8

9, 30

10

4

11, 16, 30

12, 30

13

14, 16

1,571,408,509

390,665,270

-

663,140,266

188,766,938

2,813,980,983

811,986,014

26,250,000

-

1,791,052,808

3,026,346,385

56,924,082

503,258,305

6,215,817,594

9,029,798,577

996,834,360

328,159,360

-

649,735,585

163,156,022

2,137,885,597

679,313,323

-

-

1,996,825,253

3,220,433,710

58,477,313

541,732,369

6,496,781,968

8,634,667,565

1,233,696,385

285,480,659

1,973,693,286

416,464,868

170,610,583

4,079,945,781

798,847,990

26,250,000

61,223,493

1,016,101,607

1,514,044,008

-

299,041,674

3,715,508,772

7,795,454,553

733,858,095

256,043,539

2,242,028,829

431,624,046

142,392,590

3,805,947,099

813,747,990

-

61,223,493

1,257,223,338

1,618,534,032

-

339,678,841

4,090,407,694

7,896,354,793

The accompanying notes are integral part of these financial statements.

68


As at 31 December 2007 and 2006

Balance sheets

Current liabilities

Trade accounts payable

Current portion of long-term loan

Short-term loans and

advances from related parties

Income tax payable

Other current liabilities

Total current liabilities

Non-current liabilities

Long-term loans from related party

Unearned lease income

Other non-current liabilities

Total non-current liabilities

Total liabilities

Shareholders' equity

Share capital

Authorised share capital

Issued and paid-up share capital

Share discount

Retained earnings

Appropriated to legal reserve

Unappropriated

Total equity attributable to

the Company's shareholders

Minority interest

Total shareholders' equity

Total liabilities and shareholder's

equity

(in Baht) (Restated)

2007 2006 2007 2006



Liabilities and shareholders' equity Note

4, 15

16

4, 16

17

4, 16

18

19

20

2,482,833,160

-

33,122,050

77,374,857

669,053,355

3,262,383,422

-

59,854,212

14,699,200

74,553,412

3,336,936,834

3,942,847,022

3,942,847,022

-

175,917,000

1,419,396,988

5,538,161,010

154,700,733

5,692,816,743

9,029,798,577

2,349,997,771

123,000,000

155,669,308

83,997,519

667,429,336

3,380,093,934

-

68,954,272

16,252,186

85,206,458

3,465,300,392

11,106,611,330

11,106,611,330

(7,217,474,659)

148,415,000

991,643,415

5,029,195,086

140,172,087

5,169,367,173

8,634,667,565

1,450,065,653

-

1,036,113,611

58,686,819

488,736,762

3,033,602,845

113,300,000

-

-

113,300,000

3,146,902,845

3,942,847,022

3,942,847,022

-

175,917,000

529,787,686

4,648,551,708

-

4,648,551,708

7,795,454,553

1,468,512,945

123,000,000

1,135,949,554

74,059,886

524,618,174

3,326,140,568

113,300,000

-

-

113,300,000

3,439,440,568

11,106,611,330

11,106,611,330

(7,217,474,659)

148,415,000

419,362,554

4,456,914,225

-

4,456,914,225

7,896,354,793


69



Statements of Income

Revenues

Revenue from sale goods


Interest income

Reversal of impairment loss

on assets

Other income

Share of profits from

investments accounted

for using the equity method

Total revenues

Expenses

Cost of sale of goods

Selling and administrative

expenses

Total expenses

Profit before interest

and income tax expenses

Interest expense

Income tax expense

Profit after tax

Net profit of minority interest

Net profit

Basic earnings per share

(in Baht)(Restated)

2007 2006 2007 2006



Note

4

4

4, 22

11, 12

4, 23

9, 11

4, 24

4, 26

27

28, 30

11,284,877,927

681,113,678

17,293,796

-

485,943,751

132,672,691

12,601,901,843

8,684,563,345

2,820,884,708

11,505,448,053

1,096,453,790

3,571,847

208,696,505

884,185,438

(19,807,951)

864,377,487

0.78

6,845,437,557

407,923,559

234,373,955

-

502,662,028

-

7,990,397,099

5,265,069,148

2,005,768,341

7,270,837,489

719,559,610

8,418,431

164,092,133

547,049,046

-

547,049,046

0.49

6,731,086,838

429,157,311

349,305,012

1,054,745,761

373,895,353

-

8,938,190,275

5,213,325,073

2,218,883,663

7,432,208,736

1,505,981,539

38,509,982

171,507,128

1,295,964,429

-

1,295,964,429

1.17

10,811,579,071

702,274,905

22,509,181

2,170,235,275

360,852,222

132,510,667

14,199,961,321

8,381,825,838

2,903,835,617

11,285,661,455

2,914,299,866

35,477,762

192,891,657

2,914,299,447

(24,080,872)

2,661,849,575

2.40





Statements of changes in shareholders' equity

(in Baht)

Balance at 1 January 2006Changes in shareholders' equity for 2006Net profitTotal recognised income and expense DividendLegal reserveBalance at 31 December 2006Changes in shareholders' equity for 2007Net profitTotal recognised income and expense Decrease in minority interest on liquidation of subsidiaryCapital decreaseDividendLegal reserveBalance at 31 December 2007

Issued andpaid-up

share capitalShare

discount, net

Appropriatedto

legal reserveUnappropriated/

(Deficit)

Total equityattributable

to the Company'sshareholder's

Minorityinterest

Totalshareholder's

equityNote

20

19, 342920

Retained earnings/ (Deficit)

11,106,611,330

-

---

11,106,611,330

- -

-(7,163,764,308)

--

3,942,847,022

(7,217,474,659)

- -

--

(7,217,474,659)

-

-

-7,217,474,659

---

96,215,000

-

--

52,200,000148,415,000

-

-

---

27,502,000175,917,000

(1,618,006,160)

2,661,849,575

2,661,849,575-

(52,200,000)991,643,415

864,377,487

864,377,487

-(53,710,351)

(355,411,563)(27,502,000)

1,419,396,988

2,367,345,511

2,661,849,575

2,661,849,575--

5,029,195,086

864,377,487

864,377,487

--

(355,411,563)-

5,538,161,010

138,227,129

24,080,872

24,080,872(22,135,914)

-140,172,087

19,807,951

19,807,951

(5,279,305)---

154,700,733

2,505,572,640

2,685,930,447

2,685,930,447(22,135,914)

-5,169,367,173

884,185,438

884,185,438

(5,279,305)-

(355,411,563)-

5,692,861,743

Consolidated financial statements

70




Statements of changes in shareholders' equity

Separate financial statements (Restated)

(in Baht)

Balance at 1 January 2006Change in accounting policy Restated balanceChanges in shareholders' equity for 2006Net profitTotal recognised income and expenseLegal reserveBalance at 31 December 2006 Balance at 1 January 2007Change in accounting policy Restated balanceChanges in shareholders' equity for 2007Net profitTotal recognised income and expenseCapital decreaseDividendLegal reserveBalance at 31 December 2007

Issued andpaid-up

share capitalShare

discount

Appropriatedto

legal reserveUnappropriated/

(Deficit)

Total equityattributable

to the Company'sshareholdersNote

30

20

30

19, 342920

Retained earnings (Deficit)

11,106,611,330-

11,106,611,330

---

11,106,611,330

11,106,611,330-

11,106,611,330

--

(7,163,764,308)--

3,942,847,022

(7,217,474,659) -

(7,217,474,659)

---

(7,217,474,659)

(7,217,474,659)-

(7,217,474,659)

--

7,217,474,659---

96,215,000-

96,215,000

--

52,200,000148,415,000

148,415,000-

148,415,000

----

27,502,000175,917,000

(1,618,006,160)793,604,285

(824,401,875)

1,295,964,4291,295,964,429

(52,200,000)419,362,554

991,643,415(572,280,861)419,362,554

547,049,046547,049,046(53,710,351)

(355,411,563)(27,502,000)529,787,686

2,367,345,511793,604,285

3,160,949,796

1,295,964,4291,295,964,429

-4.456,914,225

5,029,195,086(572,280,861)

4.456,914,225

547,049,046547,049,046

-(355,411,563)

-4,648,551,708

71

72



Statements of cash flows

Cash flows from operating activities

Net profit

Adjustments for

Depreciation and amortisation

Interest income

Interest expense

Dividend revenue

Bad debts and

doubtful debts expenses (reversal)

Allowance for obsolete and slow-moving

Loss (gain) on disposal of plant and equipment

Net profit of minority interest

Share of profits from investments

accounted for using the equity method

Earned lease income

Gain from discontinuity of subsidiary and associate

Reversal of impairment loss on assets

Write-off witholding tax

Reversal of impairment loss on investments of

subsidiary and associate

Income tax expense

Changes in operating assets and liabilities

Trade accounts receivable

Inventories

Other current assets

Other non-current assets

Trade accounts payable

Advance from related parties

Other current liabilities

Other non-current liabilities

Income taxes paid

Net cash provided by operating activities


2007 2006 2007 2006




864,377,487

691,486,271

(17,293,796)

3,571,847

(262,500)

2,952,807

1,426,452

(27,264,384)

19,807,951

(132,672,691)

(9,100,060)

(46,163,750)

-

-

(60,834,181)

208,696,505

1,498,727,958

(65,458,447)

(14,831,133)

(40,971,156)

38,659,774

132,835,389

(7,447,559)

1,556,723

(1,552,986)

(229,021,504)

1,312,497,059

2,661,849,575

581,142,896

(22,509,181)

35,477,762

-

(29,459,788)

216,948,959

2,023,772

24,080,872

(132,510,667)

(85,342,055)

-

(2,170,235,275)

1,830,653

-

192,891,657

1,276,189,180

(98,104,744)

(262,144,805)

(113,319,608)

36,628,772

507,938,732

21,577,259

90,242,809

(2,788,335)

(130,067,730)

1,326,151,530

547,049,046

438,877,625

(234,373,955)

8,418,431

(262,500)

351,449

912,002

(26,741,722)

-

-

-

(556,719)

-

-

(106,968,749)

164,092,133

790,797,041

(29,788,569)

14,247,176

(28,150,697)

33,933,723

(18,447,301)

(26,652,393)

(35,881,412)

-

(179,465,200)

520,592,368

1,295,964,429

372,905,261

(349,305,012)

38,509,982

-

2,910,810

221,257,844

(24,766)

-

-

(52,487,167)

-

(1,054,745,761)

-

-

171,507,128

646,492,748

(72,491,590)

(245,978,591)

(108,606,370)

25,968,829

396,101,064

45,502,827

79,007,715

(1,996,460)

(97,447,242)

666,552,930

73



Statements of cash flows

Cash flows from investing activities

Interest received

Dividend received

Cash of minority interest in

the liquidated subsidiary

Loan repaid by related parties

Loan to related parties

Long-term loan repaid by related parties

Purchase of property, plant and equipment

Sale of property, plant and equipment

Purchase of investment in subsidiaries

Increase in leasehold rights

Proceeds from discontinuity of

subsidiary and associate

Net cash (used in) provided by

investing activities

Cash flows from financing activities

Interest paid

Dividends paid

Proceeds from loans and advances

from related parties

Repayment of loans and advances


Repayment of loans from financial institutions

Net cash used in financing activities

Net increase(decrease) in cash

and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year


2007 2006 2007 2006




17,226,500

262,500

(5,279,305)

-

-

-

(344,409,369)

95,117,109

-

-

96,175,468

(140,907,097)

(3,894,251)

(355,411,563)

-

(114,709,999)

(123,000,000)

(597,015,813)

574,574,149

996,834,360

1,571,408,509

22,509,182

-

-

-

-

19,687,500

(434,778,354)

16,421,266

-

(213,773,227)

-

(589,933,633)

(35,174,409)

(22,135,914)

114,710,000

-

(827,000,000)

(769,600,323)

(33,382,426)

1,030,216,786

996,834,360

242,141,828

262,500

-

5,705,702,107

(5,445,201,733)

-

(150,494,502)

90,673,798

-

-

96,175,468

539,259,466

(19,547,418)

(355,411,563)

81,314,766

(143,369,329)

(123,000,000)

(560,013,544)

499,838,290

733,858,095

1,233,696,385

358,755,831

-

-

13,349,168,426

(12,294,843,609)

19,687,500

(320,041,458)

8,222,286

(271,550,000)

(213,773,227)

-

635,625,749

(35,696,106)

-

184,974,109

(4,188,144)

(827,000,000)

(681,910,141)

620,268,538

113,589,557

733,858,095

74



Notes to the Financial Statements

Note

1234567891011121314151617181920212223242526272829303132333435

Contents

General informationBasis of preparation of financial statementsSignificant accounting policiesRelated party transactions and balancesCash and cash equivalentsTrade accounts receivableInventoriesOther current assetsInvestments in subsidiaries and associatesOther long-term investmentsProperty, plant and equipmentLeasehold rightsGoodwillOther non-current assetsTrade accounts payableInterest-bearing liabilitiesOther current liabilitiesOther non-current liabilitiesShare capitalLegal reservesSegment informationInterest incomeOther incomeSelling and administrative expensesPersonnel expensesInterest expenseIncome taxEarnings per shareDividendsChange in accounting policyFinancial instrumentsCommitments with non-related partiesThai Accounting Standards (TAS) not yet adoptedOthersReclassification of accounts



75

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the directors on 18 February 2008.

1 General information

Robinson Department Store Public Company Limited, the çCompanyé is incorporated in Thailand and has its registered office at 2 Silom Road, Suriyawong, Bangrak, Bangkok, Thailand.

The Company was listed on the Stock Exchange of Thailand in January 1992.

The Company's major shareholders during the financial year were Central Retail Corporation Co., Ltd. (27.74 %shareholding) and CRG Service Co., Ltd. (26.07 % shareholding) which were incorporated in Thailand.

The principal activities of the Company and its subsidiaries are engaged in a chain of department stores under the brand of çRobinsoné. The Company has also jointly invested with groups of business partners (Indirect subsidiaries) outside Bangkok through a holding company, CR (Thailand) Co., Ltd.. Details of the Company's subsidiaries as at 31 December 2007 and 2006 were as follows:

Ownership interest(%)


Name of the entity

Direct subsidiariesRobinson Anusawaree Co., Ltd.Robinson Ratchada Co., Ltd.Robinson Nakarin Co., Ltd.Robinson Sukhumvit Co., Ltd.Sapanmai Department Store Co., Ltd.Kruerpetch Co., Ltd.Kruerkaew Co., Ltd.CR (Thailand) Co., Ltd.R-Trading (L) BHD. RD Pattana Co., Ltd.Robinson S.P.V. Co., Ltd.CR Rajchaburi (Thailand) Co., Ltd.Indirect subsidiariesCR Udorn Thani (Thailand) Co., Ltd.CR Phuket (Thailand) Co., Ltd.CR Nakhon Sri Thammarat (Thailand) Co., Ltd.CR Had Yai (Thailand) Co., Ltd.CR Chiang Mai (Thailand) Co., Ltd.CR Ubon Ratchathani (Thailand) Co., Ltd.CR Chantaburi (Thailand) Co., Ltd.CR Rajchaburi (Thailand) Co., Ltd.

Type of business

Dormant CompanyDormant CompanyDormant CompanyDormant CompanyDormant CompanyInvesting CompanyDormant CompanyInvesting CompanyInvesting CompanyReal EstateInvesting CompanyDepartment Store

Department Store Department Store Department Store Department Store Department Store Department Store Department Store Department Store

Country ofincorporation

ThailandThailandThailandThailandThailandThailandThailandThailandMalaysiaThailandThailandThailand

ThailandThailandThailandThailandThailandThailandThailandThailand

2007

99.9199.8099.8699.99

-99.9999.9999.9999.9299.9899.9950.00

76.0049.9949.9976.0089.9974.9964.9949.99

2006

99.9199.8099.8699.9974.5099.9999.9999.9999.9299.9899.9950.00

76.0049.9949.9976.0089.9974.9964.9949.99



76

2 Basis of preparation of financial statements

The financial statements issued for Thai reporting purposes are prepared in the Thai language. This Englishtranslation of the financial statements has been prepared for the convenience of readers not conversant withthe Thai language.

The financial statements are prepared in accordance with Thai Accounting Standards ("TAS") including relatedinterpretations and guidelines promulgated by the Federation of Accounting Professions ("FAP") and withgenerally accepted accounting principles in Thailand.

During 2007, the FAP issued the following revised TAS relevant to the Group's operations and effective for accounting periods beginning on or after 1 January 2007:

TAS 44 (revised 2007) Consolidated and Separate Financial Statements

TAS 45 (revised 2007) Investments in Associates

The adoption of these revised TAS has resulted in a change in the Company's accounting policy for interests in subsidiaries and associates in the separate financial statements of the Company. The effects of this changeare disclosed in note 30.

In addition to the above revised TAS, the FAP has issued during 2007 a number of other new and revised TAS which are only effective for financial statements beginning on or after 1 January 2008 and have not beenadopted in the preparation of these financial statements. These new and revised TAS are disclosed in note 33.

The financial statements are presented in Thai Baht, rounded in the notes to the financial statements to thenearest thousand. They are prepared on the historical cost basis except as stated in the accounting policies.

The preparation of financial statements in conformity with TAS requires management to make judgments,estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities,income and expenses. The estimates and associated assumptions are based on historical experience andvarious other factors that are believed to be reasonable under the circumstances, the results of which formthe basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparentfrom other sources. Accordingly, actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period,or in the period of the revision and future periods, if the revision affects both current and future periods.




77

3 Significant accounting policies

(a) Basis of consolidation

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the çGroupé) and the Groupûs interest in associates.

Significant intra-group transactions between the Company and its subsidiaries are eliminated on consolidation.

Subsidiaries

Subsidiaries are those companies controlled by the Company. Control exists when the Company has thepower, directly or indirectly, to govern the financial and operating policies of a company so as to obtainbenefits from its activities. The financial statements of subsidiaries are included in the consolidated financialstatements from the date that control commences until the date that control ceases.

Associates

Associates are those companies in which the Group has significant influence, but not control, over the financialand operating policies. The consolidated financial statements include the Groupûs share of the total recognised gains and losses of associates on an equity accounted basis, from the date that significant influence commencesuntil the date that significant influence ceases. When the Group's share of losses exceeds its interest in anassociate, the Group's carrying amount is reduced to nil and recognition of further losses is discontinuedexcept to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

(b) Foreign currencies

Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated toThai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translationare recognised in the statement of income.

Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht usingthe foreign exchange rates ruling at the dates of the transactions.

(c) Cash and cash equivalentsCash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid short-term investments. Bank overdrafts that are repayable on demand are a component of financing activities for the purpose of the statement of cash flows.

(d) Trade and other accounts receivable

Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts.

The allowance for doubtful accounts is assessed primarily on analysis of payment histories and futureexpectations of customer payments. Bad debts are written off when incurred.




78

(e) Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is calculated using the weighted average cost principle and comprises all costs of purchase.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated coststo complete and to make the sale.

(f) Investments

Investments in subsidiaries and associates

Investments in subsidiaries and associates in the separate financial statements of the Company are accountedfor using the cost method. This is a change of accounting policy, the effects of which are disclosed in Note 30. Investments in associates in the consolidated financial statements are accounted for using the equitymethod.

Investments in equity securities

Equity securities which are not marketable are stated at cost less impairment losses.

Disposal of investments

On disposal of an investment, the difference between net disposal proceeds and the carrying amount togetherwith the associated cumulative gain or loss that was reported in equity is recognised in the statement ofincome.

(g) Property, plant and equipment

Owned assets

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation

Depreciation is charged to the statement of income on a sum-of-the-year digits basis (except for property,plant and equipment acquired before 2001 which are depreciated on a straight-line basis) over the estimateduseful lives of each part of an item of property, plant and equipment. The estimated useful lives are asfollows:


yearsyearsyearsyearsyearsyearsyears

2020

5-205-105-10

55


79

(h) Intangible assets

Goodwill

Goodwill in a business combination represents the excess of the cost of acquisition over the fair value of theGroupûs share of the identifiable net assets acquired. Negative goodwill in a business combination representsthe excess of the fair value of the Group's share of the identifiable net assets acquired over the cost of acquisition.

Goodwill and negative goodwill are stated at cost less accumulated amortisation and impairment losses.Goodwill and negative goodwill arising on acquisition of shares in subsidiaries and associates in the Companyûsseparate financial statements are included in investments.

The gain or loss on disposal of an entity includes the net balance of goodwill relating to the entity disposed of.

Other intangible assets

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses.

Amortisation

Amortisation is charged to the statement of income on a straight-line basis from the date that intangible assets are available for use over the estimated useful lives of the assets. The estimated useful lives are as follows :

(i) Impairment

The carrying amounts of the Groupûs assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assetsû recoverable amounts are estimated.


Leasehold improvementsBuildings and constructionBuildings and construction improvementsInformation system equipmentBuilding system equipmentFurniture, fixtures and office equipmentTransportation equipment

No depreciation is provided on freehold land or assets under construction.

Leasehold rightsGoodwillSoftware licenses

Over the lease periods20 and 27 years5 and 10 years



Notes to the Financial statements

80

An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The impairment loss is recognised in the statement of income.

Calculation of recoverable amount

The recoverable amount of assets is the greater of the assets' net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. However, an impairment loss in respect of goodwill is not reversed.

An impairment loss is reversed only to the extent that the assetûs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(j) Interest-bearing liabilities

Interest-bearing liabilities are recognised initially at cost.

(k) Trade and other accounts payable

Trade and other accounts payable are stated at cost.

(l) Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

(m) Revenue

Revenue excludes value added taxes and is arrived at after deduction of trade discounts.

Sale of goods and services rendered

Revenue is recognised in the statement of income when the significant risks and rewards of ownership havebeen transferred to the buyer.†No revenue is recognised if there is continuing management involvement withthe goods or there are significant uncertainties regarding recovery of the consideration due, associated costsor the probable return of goods. Service income is recognised as services are provided.




81

Rental income

Rental income from investment property is recognised in the statement of income on a straight-line basis over the term of the lease.

Interest and dividend income

Interest income is recognised in the statement of income as it accrues. Dividend income is recognised in thestatement of income on the date the Group's rights to receive payments is established.

(n) Expenses

Operating leases

Payments made under operating leases are recognised in the statement of income on a straight line basisover the term of the lease.

Finance costs

Interest expenses and similar costs are charged to the statement of income for the period in which they areincurred.

(o) Income tax

Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payableon the taxable income for the year, using tax rates enacted at the balance sheet date and applicable to thereporting period, and any adjustment to tax payable in respect of previous years.

4 Related party transactions and balances

Related parties are those parties linked to the Group and the Company by common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market priceexists, at contractually agreed prices.

The followings are relationships with related parties that control or jointly control the Company or are beingcontrolled or jointly controlled by the Company or have transactions with the Group




82

Name of entities

Central Retail Corporation Co., Ltd.

CRG service Co., Ltd.





Sapanmai Department Store Co., Ltd.


Kruerkaew Co., Ltd.


R-Trading (L) BHD.



CR Rajchaburi (Thailand) Co., Ltd.

CR Udorn Thani (Thailand) Co., Ltd.


CR Nakhon Sri Thammarat (Thailand) Co., Ltd.

CR Had Yai (Thailand) Co., Ltd.

Country ofincorporation/ Nationality

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Nature of relationships

Major shareholders, 27.74% shareholding, some common directorsMajor shareholders, 26.07% shareholding, some common directorsSubsidiary, 99.91% shareholding, some common directorsSubsidiary, 99.80% shareholding, some common directorsSubsidiary, 99.86% shareholding, some common directorsSubsidiary, 99.99% shareholding, some common directorsSubsidiary, 74.50% shareholding, some common directorsSubsidiary, 99.99% shareholding, some common directorsSubsidiary, 99.99% shareholding, some common directorsSubsidiary, 99.99% shareholding, some common directorsSubsidiary, 99.92% shareholding, some common directorsSubsidiary, 99.98% shareholding, some common directorsSubsidiary, 99.99% shareholding, some common directorsSubsidiary, 99.99% shareholding, some common directorsSubsidiary, 76.00% shareholding, some common directorsSubsidiary, 49.99% shareholding, some common directorsSubsidiary, 49.99% shareholding, some common directorsSubsidiary, 76.00% shareholding, some common directors




83

The pricing policies for particular types of transactions are explained further below:

Transactions Pricing polices

Sale of goods Market prices should not be lower than the cost of goods.

Interest income/Interest expense Minimum loan rates or saving rates or fixed deposit rate of certain local financial institutions plus 0% to 2.5% per annum depend on financial cost of each company.

Rental and service fees Certain percentages of sales with a reference to the related market prices or fixed amount.

Management fees Certain percentages of sales or fixed amount.

Name of entities




Power Buy Co., Ltd.

CRC Sport Co., Ltd.

B2S Co., Ltd.Central Food Retail Co., Ltd.Central Department Store Co., Ltd,Central Trading Co., Ltd.Central Garment Factory Co., Ltd.Cetrac International Co., Ltd. RIS Co., Ltd.PB Logistic Co., Ltd.Central Pattana Rattanatibeth Co.,Ltd.

Country ofincorporation/ Nationality

Thailand

Thailand

Thailand

Thailand

Thailand

ThailandThailandThailandThailandThailandThailandThailandThailandThailand

Nature of relationships

Subsidiary, 89.99% shareholding, some common directorsSubsidiary, 74.99% shareholding, some common directorsSubsidiary, 64.99% shareholding, some common directorsAssociate, 40% shareholding, some common directorsAssociate, 40% shareholding, some common directorsSome common directorsSome common directorsSome common directorsSome common directorsSome common directorsSome common directorsSome common directorsSome common directorsSome common directors


84

Consolidated Separate financial statements financial statements

2007 2006 2007 2006

Transactions for the years ended 31 December 2007 and 2006 with related parties are summarisedas follows:

Major shareholdersRental and service chargesUtility incomeManagement fee expenseInterest expense

SubsidiariesRevenue from salesRental and service chargesSales of propertyManagement fee incomeInterest incomeRental and service expenseInterest expense

AssociatesRental and service chargesUtility incomeManagement fee incomeInterest expense

Other related partiesRevenue from salesRental and service chargesUtility income Sales of propertyManagement fee incomeRental and service expenseInterest expenseDirector remuneration

8,521 1,141

63,935-

-------

106,830 16,007 4,834 1,069

107

298,369 97,839 26,581 2,536

52,183 948

1,865

10,245 1,574

62,635 130

-------

99,970 15,857 4,612 1,539

- 337,690 100,276

8,269 2,546

54,757 1,365 1,205

8,521 1,141

62,519-

111,364 60

36,902 107,741 218,294 21,360 4,984

74,310 11,327 3,091 1,069

107 213,232 66,778 26,581 1,549

51,971 948

1,865

10,245 1,574

61,363-

83,635 167-

98,870 338,343 21,360 3,268

69,769 11,297 2,907 1,539

- 238,135 69,052

- 1,597

54,717 1,365 1,205


Notes to the Financial StatementsFor the years ended 31 December 2007 and 2006

(in thousand Baht)

85

Balances as at 31 December 2007 and 2006 with related parties were as follows:

(in thousand Baht)

2007 2006 2007 2006


Consolidatedfinancial statementsTrade accounts receivable from related parties

Major shareholders


Subsidiaries


CR Udorn Thani (Thailand) Co., Ltd.


CR Nakorn Sri Thammarat (Thailand) Co., Ltd.






Associates

Power Buy Co., Ltd.

CRC Sport Co., Ltd.

Other related parties

B2S Co., Ltd.

Central Food Retail Co., Ltd.

Central Department Store Co., Ltd.

Others

Less allowance for doubtful accounts

Net

3,884

-

-

-

-

-

-

-

-

-

6,229

6,685

6,359

30,008

15,520

11,137

79,822

-

79,822

712

-

-

-

-

-

-

-

-

-

10,393

7,196

7,939

36,111

9,261

11,053

82,665

-

82,665

2,244

-

3,444

6,572

4,554

4,893

5,625

1,126

2,203

2,298

4,568

4,570

4,223

26,280

15,490

5,637

93,727

-

93,727

644

267

4,198

3,512

3,818

4,644

5,418

1,251

2,678

2,416

8,089

4,885

6,147

31,292

9,254

5,850

94,363

-

94,363



86

(in thousand Baht)

2007 2006 2007 2006



Subsidiaries










Short-term loans to related parties, net

(in thousand Baht)(Restated)

(% per annum)

2007 20062007 2006 2007 2006



Interest rate (%)

Subsidiaries



RIS Co., Ltd.

Total

-

28,248

28,248

-

-

-

10,339

28,248

38,587

-

-

-

3.875

3.875

3.875

3.875

3.875

3.875

3.875

3.875

6.5

6.5

6.5

6.5

6.5

6.5

6.5

6.5

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

84,364

10,950

251,960

151,830

10,802

1,181

-

3,879,378

4,390,465

(2,416,772)

1,973,693

80,400

46,794

238,195

146,142

10,306

1,127

12,154

4,123,683

4,658,801

(2,416,772)

2,242,029

Loans to related parties

Other receivable related parties



Short-term loans

87

(in thousand Baht)(Restated)

(% per annum)

2007 20062007 2006 2007 2006



Interest rate (%)Loans to related parties

Long-term loans

Subsidiaries


Associates



Long-term loans to related parties, net

Summary of loans to related parties

Short-term loans

Long-term loans


Loans and advance to related parties, net

6.0

-

6.0

-

-

324,882

324,882

(324,882)

-

-

324,882

324,882

(324,882)

-

-

324,882

324,882

(324,882)

-

-

324,882

324,882

(324,882)

-

61,224

324,882

386,106

(324,882)

61,244

4,390,465

386,106

4,776,571

(2,741,654)

2,034,917

61,224

324,882

386,106

(324,882)

61,244

4,658,801

386,106

5,044,907

(2,741,654)

2,303,253


Notes to the Financial statementsFor the years ended 31 December 2007 and 2006

88

(in thousand Baht)

2007 2006 2007 2006


Consolidatedfinancial statementsLoans to related parties

Movements during the years ended 31 December 2007 and 2006 of loans to related parties were as follows:

Short-term loans

Subsidiaries

At 1 January

Increase

- principal

- interest

Decrease

- principal

- interest

At 31 December

Long-term loans

Subsidiaries

At 1 January

Increase

Decrease

At 31 December

Associates

At 1 January

Increase

Decrease

At 31 December

Total long-term loans to related parties

At 1 January

Increase

Decrease

At 31 December

-

-

-

-

-

-

-

-

-

-

324,882

-

-

324,882

324,882

-

-

324,882

-

-

-

-

-

-

-

-

-

-

344,569

-

(19,687)

324,882

344,569

-

(19,687)

324,882

4,658,801

5,445,202

218,294

(5,705,702)

(226,130)

4,390,465

61,224

-

-

61,224

324,882

-

-

324,882

386,106

-

-

386,106

5,722,576

12,294,844

338,343

(13,349,168)

(347,794)

4,658,801

61,224

-

-

61,224

344,569

-

(19,687)

324,882

405,793

-

(19,687)

386,106



89

(in thousand Baht)

2007 2006 2007 2006



Trade accounts payable- related parties

Associates

Power Buy Co., Ltd.

CRC Sport Co., Ltd.


Central Trading Co., Ltd.

Central Garment Factory Co., Ltd.

Cetrac International Co., Ltd.

Central Department Store Co., Ltd.

Others

Total

1,207

1,907

37,877

24,176

16,744

4,079

8,477

94,467

-

375

77,146

38,168

81

3,787

18,199

137,756

-

73

47,671

21,485

70

3,755

6,925

79,979

1,207

1,907

22,366

12,724

8,587

3,987

8,184

58,962

(in thousand Baht)

2007 2006 2007 2006



33,122

-

33,122

40,569

115,100

155,669

28,277

1,007,837

1,036,114

54,930

1,081,020

1,135,950

Short-term loans and advance from related parties

Comprising:

Other payables to related parties

Short-term loans from related parties

Total



90

(in thousand Baht)

2007 2006 2007 2006



Major shareholders


Subsidiaries


CR Nakonsrithummarat (Thailand) Co., Ltd.

Associates

Power Buy Co., Ltd.

CRC Sport Co., Ltd.


RIS Co., Ltd.

Central Pattana Rattanatibeth Co.,Ltd.

Others

Total

Other payable to related parties

16,231

-

-

-

70

9,161

6,327

1,333

33,122

19,485

-

-

878

-

16,779

-

3,427

40,569

13,928

-

397

-

-

6,636

6,327

989

28,277

16,652

19,200

397

878

-

14,474

-

3,329

54,930



91

(in thousand Baht)(% per annum)

2007 20062007 2006 2007 2006



Interest rate (%)

Subsidiaries

Kruerkaew Co., Ltd.


R -Trading (L) BHD.

CR Rajchaburi (Thailand)

Co., Ltd.

Associates

CRC Sport Co., Ltd.


PB Logistic Co., Ltd.

Short-term loans from related parties

Long-term loans

Subsidiaries


Long-term loans from related parties

Summary of loans from related parties

Short-term loans

Long-term loans

Total loans from related parties

3.0

2.0

-

3.0

-

-

2.0

3.0

2.0

-

3.0

4.0

4.0

2.0

Loans from related parties

Short-term loans

4,714

14,041

880,049

67,116

965,920

60,997

54,103

1,081,020

113,300

113,300

1,081,020

113,300

1,194,320

6,442

3,169

880,450

117,776

1,007,837

-

-

1,007,837

113,300

113,300

1,007,837

113,300

1,121,137

-

-

-

-

-

60,997

54,103

115,100

-

-

115,100

-

115,100

-

-

-

-

-

-

-

-

-

-

-

-

-



92

(in thousand Baht)

2007 2006 2007 2006



Movements during the years ended 31 December 2007 and 2006 of loans to related parties were as follows:

Subsidiaries

At 1 January

Increase

- principal

- interest

Decrease

- principal

- interest

At 31 December

Associates

At 1 January

Increase

- principal

- interest

Decrease

- principal

- interest

At 31 December


At 1 January

Increase

- principal

- interest

Decrease

- principal

- interest

At 31 December

Loans from related companies

Short-term loans

-

-

-

-

-

-

60,997

-

1,068

(60,790)

(1,275)

-

54,103

-

948

(53,920)

(1,131)

-

-

-

-

-

-

-

60,790

1,539

-

(1,332)

60,997

-

53,920

1,365

-

(1,182)

54,103

965,920

81,315

4,985

(28,659)

(15,724)

1,007,837

60,997

-

1,068

(60,790)

(1,275)

-

54,103

-

948

(53,920)

(1,131)

-

897,421

70,264

3,268

(4,188)

(845)

965,920

-

60,790

1,539

-

(1,332)

60,997

-

53,920

1,365

-

(1,182)

54,103



93

(in thousand Baht)

2007 2006 2007 2006


Consolidatedfinancial statementsLoans from related companies

Short-term loans

Total short-term loans from

related parties

At 1 January

Increase

- principal

- interest

Decrease

- principal

- interest

At 31 December

Long-term loans

Subsidiaries

At 1 January

Increase

Decrease

At 31 December

115,100

-

2,016

(114,710)

(2,406)

-

-

-

-

-

-

114,710

2,904

-

(2,514)

115,100

-

-

-

-

1,081,020

81,315

7,001

(143,369)

(18,130)

1,007,837

113,300

-

-

113,300

897,421

184,974

6,172

(4,188)

(3,359)

1,081,020

113,300

-

-

113,300



Commitments with related parties

94

(in thousand Baht)

2007 2006 2007 2006



Operating lease commitments

Within one year

After one year but

within five years

After five years

Total

91,282

198,054

526,467

815,803

107,240

241,694

574,109

923,043

57,241

105,857

261,512

424,610

73,200

135,970

288,640

497,810

(in thousand Baht)

2007 2006 2007 2006



108,961

10,959

1,250,529

200,960

1,571,409

104,291

(4,803)

889,523

7,823

996,834

67,596

6,290

958,850

200,960

1,233,696

66,496

(959)

667,166

1,155

733,858

5 Cash and cash equivalents

Cash on hand

Cash at banks - current accounts

Cash at banks - savings accounts

Highly liquid short term investment

Total

Cash and cash equivalents of the Group and the Company as at 31 December 2007 and 2006 were

denominated entirely in Thai Baht.



95

(in thousand Baht)

2007 2006 2007 2006



Note

6 Trade accounts receivable

Related parties

Other parties

Less allowance for

doubtful accounts

Net

Bad and doubtful debts

expenses (reversal)

for the year

79,822

314,024

393,846

(3,181)

390,665

2,953

4 82,665

248,370

331,035

(2,875)

328,160

(9,772)

93,727

192,396

286,123

(642)

285,481

351

94,363

161,971

256,334

(291)

256,043

1,895

(in thousand Baht)

2007 2006 2007 2006



Aging analyses for trade accounts receivable were as follows:

Related parties

Within credit terms

Overdue:

Less than 3 months

3-6 months

6-12 months

Over 12 months

Less allowance for

doubtful accounts

Net

79,706

-

105

11

-

79,822

-

79,822

82,665

-

-

-

-

82,665

-

82,665

93,653

-

49

25

-

93,727

-

93,727

94,362

-

-

1

-

94,363

-

94,363



96

(in thousand Baht)

2007 2006 2007 2006



Other parties

Within credit terms

Overdue:

Less than 3 months

3-6 months

6-12 months

Over 12 months

Less allowance for

doubtful accounts

Net

Total

308,478

1,648

776

408

2,714

314,024

(3,181)

310,843

390,665

243,476

1,570

718

89

2,517

248,370

(2,875)

245,495

328,160

191,363

-

365

404

264

192,396

(642)

191,754

285,481

161,355

-

303

74

239

161,971

(291)

161,680

256,043

The normal credit term granted by the Group ranges from 30 days to 60 days.




97

(in thousand Baht)

2007 2006 2007 2006



Trade accounts receivable of the Group and the Company as at 31 December 2007 and 2006 were

denominated entirely in Thai Baht.

7 Inventories

Merchandise

Less allowance for shortage,

damage, obsolete and

slow-moving inventories

Net

904,388

(241,248)

663,140

902,571

(252,835)

649,736

647,302

(230,837)

416,465

674,421

(242,797)

431,624

(in thousand Baht)

2007 2006 2007 2006



8 Other current assets

Other receivable

Other receivable - related parties

Prepaid expenses

Advances payment

Others

Total

Note

4

99,360

28,248

47,020

8,113

6,026

188,767

105,416

-

30,791

13,970

12,979

163,156

99,360

38,587

20,467

4,419

7,778

170,611

104,973

-

17,437

9,773

10,210

142,393


98

(in thousand Baht)

2007 2006 2007 2006



9 Investments in subsidiaries and associates

At 1 January

Share of net profits of

investments - equity method

Acquisitions

Disposals

At 31 December

679,313

132,673

-

-

811,986

546,803

132,510

-

-

679,313

542,198

-

271,550

-

813,748

813,748

-

-

(14,900)

798,848

(Restated)

At the extraordinary shareholders' meetings held on 24 May 2007 and 19 June 2007 of Sapanmai Department Store Co., Ltd., a subsidiary, the shareholders passed a special resolution to liquidate the company. The company registered for liquidation with the Ministry of Commerce on 22 June 2007 and was liquidated during the year. The liquidator returned Baht 15.5 million to the Company.

DCR Co., Ltd., an associate, was liquidated during the year. The liquidator returned Baht 80.7 million to the Company. The Company's cost of investment in this associate was Baht 89.3 million, against which full allowance for impairment loss had been made. The investment was, accordingly, carried at nil value in both the 2007 and 2006 consolidated and separate financial statements. The amount returned to the Company by the liquidator has been credited to the consolidated and separate statements of income for the year ended 31 December 2007.





2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

Investments in subsidiaries and associates as at 31 December 2007 and 2006 were as follows:


Ownership interest Paid-up capital Cost method Equity method Impairment At equity - net

(%) (in thousand Baht)

Associates

Power Buy Co., Ltd.

CRC Sports, Co., Ltd.

Siam Retail

Development Co., Ltd.


D C R Co., Ltd.

Total

40.00

29.19

24.00

24.00

-

40.00

29.19

24.00

24.00

20.86

560,000

370,000

500,000

125,000

-

560,000

370,000

500,000

125,000

428,200

224,000

108,000

120,000

30,000

-

482,000

224,000

108,000

120,000

30,000

89,330

571,330

648,335

163,651

10,194

29,858

-

852,038

543,140

136,173

10,194

29,858

34,584

753,949

-

-

(10,194)

(29,858)

-

(40,052)

-

-

(10,194)

(29,858)

(34,584)

(74,636)

648,335

163,651

-

-

-

811,986

543,104

136,173

-

-

-

679,313


99



2007 2006 2007 2006 2007 2006 2007 2006 2007 2006


Ownership interest Paid-up capital Cost method Impairment Cost method-Net


99.99

50.00

99.86

99.99

99.80

99.99

-

99.99

99.91

99.98

99.99

99.92

99.99

50.00

99.86

99.99

99.80

99.99

74.50

99.99

99.91

99.98

99.99

99.92

501,000

645,600

105,000

100,000

75,000

40,000

-

11,250

8,000

3,000

1,000

50

501,000

645,600

105,000

100,000

75,000

40,000

20,000

11,250

8,000

3,000

1,000

50

501,000

322,800

104,850

100,000

74,850

39,999

-

11,249

7,993

3,000

999

50

1,166,790

501,000

322,800

104,850

100,000

74,850

39,999

14,900

11,249

7,993

3,000

999

50

1,181,690

(501,000)

-

(104,850)

-

(74,850)

-

-

(11,249)

(7,993)

-

-

-

(699,942)

(501,000)

-

(104,850)

-

(74,850)

-

-

(11,249)

(7,993)

-

-

-

(699,942)

-

322,800

-

100,000

-

39,999

-

-

-

3,000

999

50

466,848

-

322,800

-

100,000

-

39,999

14,900

-

-

3,000

999

50

481,748

Subsidiaries



Robinson Nakarin Co.,Ltd.



Kruerkaew Co., Ltd.

Sapanmai Department Store Co., Ltd.





R-Trading (L) BHD.


100



2007 2006 2007 2006 2007 2006 2007 2006 2007 2006


Ownership interest Paid-up capital Cost method Impairment Cost method-Net


40.00

29.19

24.00

24.00

-

40.00

29.19

24.00

24.00

20.86

560,000

370,000

500,000

125,000

-

560,000

370,000

500,000

125,000

428,200

224,000

108,000

120,000

30,000

-

482,000

1,648,790

224,000

108,000

120,000

30,000

89,330

571,330

1,753,020

-

-

(120,000)

(30,000)

-

(150,000)

(849,942)

-

-

(120,000)

(30,000)

(89,330)

(239,330)

(939,272)

224,000

108,000

-

-

-

332,000

798,848

224,000

108,000

-

-

-

332,000

813,748

Associates

Power Buy Co., Ltd.

CRC Sports Co., Ltd.



D C R Co., Ltd.

Total


101



2007 2006 2007 2006 2007 2006 2007 2006 2007 2006


Ownership interest Paid-up capital Investment value


19.58

6.56

4.15

0.71

19.58

6.56

4.15

2.50

600,000

400,000

170,000

2,800,000

600,000

400,000

170,000

800,000

117,500

26,250

12,713

20,000

176,463

117,500

26,250

12,713

20,000

176,463

(117,500)

-

(12,713)

(20,000)

(150,213)

(117,500)

(26,250)

(12,713)

(20,000)

(176,463)

-

26,250

-

-

26,250

-

-

-

-

-

10 Other long-term investment

Wattanawana Co., Ltd.

Rangsit Plaza Co., Ltd.

Samakeesan (Dokya) Co., Ltd.

Siam Family Mart Co., Ltd.

Total

Allowancefor impairmen

Investmentvalue - net

Other long-term investments recorded by the cost method as at 31 December 2007 and 2006 were as follows:


102



2007 2006 2007 2006 2007 2006 2007 2006 2007 2006


Ownership interest Paid-up capital Investment value


6.56

4.15

0.71

6.56

4.15

2.50

400,000

170,000

2,800,000

400,000

170,000

800,000

26,250

12,713

20,000

58,963

26,250

12,713

20,000

58,963

-

(12,713)

(20,000)

(32,713)

(26,250)

(12,713)

(20,000)

(58,963)

26,250

-

-

26,250

-

-

-

-

Rangsit Plaza Co., Ltd.

Samakeesan (Dokya) Co., Ltd.

Siam Family Mart Co., Ltd.

Total

Allowancefor impairmen

Investmentvalue - net


In 2006, Rangsit Plaza Co.,Ltd. generated profits from operations totaling Baht 1,545 million and had retained earnings as at 31 December 2006 totalling Baht 188.6 million. Thesefactors indicate that the value of this long-term investment is no longer impaired. Management has, accordingly, reversed the remaining balance of allowance for impairment invalue of this investment amounting to Baht 26.25 million in the statement of income for the year ended 31 December 2007

103

11 Property, plant and equipment




(in thousand Baht)Cost

At 1 January 2006


Additions

Transfer

Disposals

At 31 December 2006 and

1 January 2007

Additions

Transfer

Disposals

At 31 December 2007

Leaseholdimprovement

Building,constructions

andimprovementLand

Informationsystem

equipment

Buildingsystem

equipment

Furniture,fixtures

and officeequipment

Transportationequipment

Underconstruction Total

180,898

52,000

-

-

-

232,898

-

-

-

232,898

809,024

457,821

-

-

(3,458)

1,263,387

-

-

(56,294)

1,207,093

1,326,134

-

103,508

81,469

(10,473)

1,500,638

105,544

33,263

(3,481)

1,635,964

304,127

-

4,893

12

(29,403)

279,629

16,800

26,400

(32,778)

290,051

1,119,680

113,696

57,293

178,900

(11,751)

1,457,818

79,900

25,458

(1,842)

1,561,334

1,657,456

-

36,662

7,533

(138,512)

1,563,139

26,083

4,642

(96,435)

1,497,429

16,713

-

1,047

-

(3,311)

14,449

503

-

(255)

14,697

59,184

-

437,704

(474,205)

-

22,683

115,579

(89,763)

(36,898)

11,601

5,473,216

623,517

641,107

(206,291)

(196,908)

6,334,641

344,409

-

(227,983)

6,451,067


104




(in thousand Baht)Accumulated depreciation

At 1 January 2006


Depreciation charges

for the year

Disposals

At 31 December 2006

and 1 January 2007

Depreciation charges

for the year

Disposals

At 31 December 2007

Net book value

At 31 December 2006

At 31 December 2007



andimprovementLand

Informationsystem

equipment

Buildingsystem

equipment

Furniture,fixtures

and officeequipment



296

-

-

-

296

-

-

296

232,602

232,602

624,290

116,061

58,852

(1,514)

797,689

57,719

(54,885)

800,523

465,698

406,570

583,146

-

133,649

(5,279)

711,516

186,305

(1,707)

896,114

789,122

739,850

238,985

-

27,547

(30,988)

235,544

27,990

(6,939)

256,595

44,085

33,456

862,978

113,696

132,688

(6,789)

1,102,573

169,485

(1,480)

1,270,578

355,245

290,756

1,555,169

-

52,796

(130,593)

1,477,372

39,945

(94,867)

1,422,450

85,767

74,979

15,020

-

1,106

(3,300)

12,826

885

(252)

13,459

1,623

1,238

-

-

-

-

-

-

-

-

22,683

11,601

3,879,884

229,757

406,638

(178,463)

4,337,816

482,329

(160,130)

4,660,015

1,996,825

1,791,052


105



Separate financial statements

(in thousand Baht)Cost

At 1 January 2006


on assets

Additions

Transfers

Disposals

At 31 December 2006

and 1 January 2007

Additions

Transfers

Disposals

At 31 December 2007



andimprovementLand

Informationsystem

equipment

Buildingsystem

equipment

Furniture,fixtures

and officeequipment



69,538

-

-

-

-

69,538

-

-

-

69,538

750,421

444,813

-

-

(1,568)

1,193,666

-

-

(56,296)

1,137,370

507,015

-

78,918

65,470

(8,147)

643,256

35,664

12,504

(1,724)

689,700

249,780

-

11,565

397

(17,689)

244,053

3,752

26,400

(32,543)

241,662

715,631

68,189

46,412

130,166

(4,315)

956,083

23,092

18,114

(1,835)

995,454

1,137,841

-

20,487

5,335

(77,275)

1,086,388

9,734

-

(95,756)

1,000,366

10,233

-

38

-

(2,749)

7,522

-

-

-

7,522

57,324

-

368,990

(407,699)

-

18,615

78,252

(57,018)

(36,898)

2,951

3,497,783

513,002

526,410

(206,331)

(111,743)

4,219,121

150,494

-

(225,052)

4,144,563


106




(in thousand Baht)Accumulated depreciation

At 1 January 2006


on assets

Depreciation charge

for the year

Disposals

At 31 December 2006

and 1 January 2007

Depreciation charge

for the year

Disposals

At 31 December 2007

Net book value

At 31 December 2006

At 31 December 2007



andimprovementLand

Informationsystem

equipment

Buildingsystem

equipment

Furniture,fixtures

and officeequipment



-

-

-

-

-

-

-

-

69,538

69,538

602,740

112,984

54,987

(896)

769,815

53,963

(54,885)

768,893

423,851

368,477

168,964

-

84,103

(5,242)

247,825

116,693

(1,253)

363,265

395,431

326,435

199,154

-

21,045

(15,501)

204,698

21,819

(8,690)

217,827

39,355

23,835

554,261

68,189

86,060

(4,235)

704,275

106,378

(1,632)

809,021

251,808

186,433

1,067,199

-

36,267

(74,935)

1,028,531

28,428

(94,661)

962,298

57,857

38,068

8,799

-

693

(2,738)

6,754

403

-

7,157

768

365

-

-

-

-

-

-

-

-

18,615

2,951

2,601,117

181,173

283,155

(103,547)

2,961,898

327,684

(161,121)

3,128,461

1,257,223

1,016,102


107

108





(in thousand Baht)


Share of profits from investments accounted for

using the equity method

Total

2,170,235

-

2,170,235

1,054,746

1,115,489

2,170,235

The gross carrying amount of fully depreciated property, plant and equipment of the group and the Company that

was still in use as at 31 December 2007 amounted to Baht 3,087 million and Baht 2,161 million, respectively (2006: Baht

2,325 million and Baht 1,846 million, respectively).

In December 1999, the Company and its subsidiaries appraised the value of their land, leasehold rights and leasehold

improvement. The appraisals were carried out by an independent appraiser using methodologies including Sales

Comparison Approach (Market Approach), Discounted Cash Flow Analysis and Income Capitalisation Approach. The

appraisals indicated that the valuation of these assets was lower than cost by Baht 3,406.9 million, which was charged

to selling and administrative expenses in the financial statements for the year ended 31 December 1999. In March

2006, the Company and its subsidiaries reappraised the value of their land, leasehold rights and leasehold

improvement. The appraisals were carried out by an independent appraiser using the Income Capitalisation Approach.

The appraisals indicated that the valuation of these assets was higher than the net book value as at 31 March 2006

before netting off the impairment loss booked in 1999.

In 2005, the Company successfully complied with the Business Reorganisation Plan and on 6 February 2006 the

Central Bankruptcy Court issued an order to lift the Business Reorganisation requirement of the Company. Furthermore, the

Company generated profits from operations of Baht 927.2 million in 2005.

The above factors indicate that the value of these assets is no longer impaired. Management, accordingly, reversed

the remaining balance of allowance for impairment in value of the land, leasehold right and leasehold improvement as

at 31 March 2006, totaling Baht 2,170.2 million, to the statements of income for the year ended 31 December 2006 as

follows:


109





(in thousand Baht)

Cost

At 1 January 2006


Additions

Disposals

At 31 December 2006 and 1 January 2007

Additions

Disposals

At 31 December 2007

2,953,767

2,375,838

237,951

(24,178)

5,543,378

-

-

5,543,378

1,789,830

977,648

237,951

(24,178)

2,981,251

-

-

2,981,251

12 Leasehold rights

Note

11



(in thousand Baht)

Accumulated amortisation

At 1 January 2006


Amortisation charge for the year

At 31 December 2006 and 1 January 2007


At 31 December 2007

Net book value

At 31 December 2006

At 31 December 2007

1,560,829

599,363

162,752

2,322,944

194,088

2,517,032

3,220,434

3,026,346

1,021,045

254,731

86,941

1,362,717

104,490

1,467,207

1,618,534

1,514,044

Note

11


In March 2006, the management reversed the remaining balance of allowance for impairment in value of the assets as

at 31 March 2006 as disclosed in Note 11.

110



TotalNegative goodwillGoodwill(in thousand Baht)

Cost

At 1 January 2006

At 31 December 2006

At 31 December 2007

Accumulated amortization

At 1 January 2006


At 31 December 2006 and

1 January 2007


At 31 December 2007

Net book value

At 31 December 2006

At 31 December 2007

13 Goodwill


78,750

78,750

78,750

12,400

2,907

15,307

2,908

18,215

63,443

60,535

(27,082)

(27,082)

(27,082)

(20,763)

(1,354)

(22,117)

(1,354)

(23,471)

(4,965)

(3,611)

51,668

51,668

51,668

(8,363)

1,553

(6,810)

1,554

(5,256)

58,478

56,924

Restricted cash at bank

Guarantees and deposits

Receivable from the Revenue

Department

Land not used in operations

Others

Total

14 Other non-current assets

(in thousand Baht)

2007 2006 2007 2006



174,640

80,100

30,085

140,913

77,520

503,258

174,163

82,295

61,261

140,913

83,100

541,732

157,726

76,564

21

-

64,731

299,042

157,884

76,944

33,908

-

70,943

339,679


111



15 Trade accounts payable

Related parties

Other parties

Total

(in thousand Baht)

2007 2006 2007 2006



137,756

2,345,077

2,482,833

94,467

2,255,531

2,349,998

79,979

1,370,087

1,450,066

58,962

1,409,551

1,468,513

Note

4

16 Interest-bearing liabilities

Current

Current portion of long-term

loan from financial institution

- secured

Short-term loans from related

parties - unsecured

Non-current

Long-term loan from

subsidiary - unsecured

Total

(in thousand Baht)

2007 2006 2007 2006



Note

4

4

-

-

-

-

-

-

123,000

115,100

238,100

-

-

238,100

-

1,007,837

1,007,837

113,300

113,300

1,121,137

123,000

1,081,020

1,204,020

113,300

113,300

1,317,320


Trade accounts payable of the Group and the Company as at 31 December 2007 and 2006 were denominated entirely

in Thai Baht.

112



Within one year

After one year but within five years

Total

(in thousand Baht)

2007 2006 2007 2006



-

-

-

238,100

-

238,100

1,007,837

113,300

1,121,137

1,204,020

113,300

1,317,320

Land

Building

Total

(in thousand Baht)

2007 2006 2007 2006



-

-

-

-

-

-

69,538

141,763

211,301

69,538

141,763

211,301

Secured interest-bearing liabilities as at 31 December were secured on the following assets:

The period to maturity of interest-bearing liabilities as at 31 December were as follows:

On 15 December 2005, the Company entered into a loan agreement with a local financial institution totalling Baht 950

million. This loan bears interest at the minimum loan rate minus 1.5% per annum for the first year and minus 1.25%

per annum during the second to the third years. The repayment of principal will be made in 36 monthly installments

in amount specific in the agreement commencing from January 2006. The loan is collateralised by the mortgage of a

portion of the Companyûs land and structures thereon under the credit line totalling Baht 1,500 million and a negative

pledge for the Companyûs leasehold rights and structures thereon of the Company, maintaining minimum percentage

of investment by Group of related companies and certain financial ratio as specified in the agreement.

During the years 2007 and 2006, the Company made early repayment of the loans of Baht 123 million and Baht 510

million, respectively.

As at 31 December 2007 the Company had unutilised credit facilities totalling Baht 1,378.2 million (2006: Baht 3,375.4

million).

Interest-bearing liabilities of the Group and the Company as at 31 December 2007 and 2006 were denominated

entirely in Thai Baht.


113



17 Other current liabilities

Accrued expenses

Deposits and advances received

Other accounts payable

Revenue Department payable

Others

Total

(in thousand Baht)

2007 2006 2007 2006



179,575

74,492

162,169

3,894

248,923

669,053

175,876

68,281

194,384

5,799

223,089

667,429

121,496

34,324

88,453

2,404

242,060

488,737

128,296

35,292

159,579

4,244

197,207

524,618

18 Other non-current liabilities

Accrued leasehold rights

Others

Total

(in thousand Baht)

2007 2006 2007 2006



14,699

-

14,699

-

-

-

-

-

-

15,199

1,053

16,252


114



19 Share capital

20 Legal reserve

Authorised

At 1 January

- ordinary shares

Reduction in par value

- from Baht 10 to Baht 3.55

At 31 December

- ordinary shares

- ordinary shares

Issued and paid

At 1 January

- ordinary shares

Reduction in par value

- from Baht 10 to Baht 3.55

At 31 December

- ordinary shares

- ordinary shares

(thousand shares/ thousand Baht)

Number AmountNumber Amount

20062007

1,110,661

-

-

1,110,661

1,110,661

-

-

1,110,661

11,106,611

(7,163,764)

-

3,942,847

11,106,611

(7,163,764)

-

3,942,847

1,110,661

-

1,110,661

-

1,110,661

-

1,110,661

-

11,106,611

-

11,106,611

-

111,106,611

-

11,106,611

-

Par value per share(in Baht)

10

(6.45)

10

3.55

10

(6.45)

10

3.55

Section 116 of the Public Companies Act B.E. 2535 requires that a company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (çlegal reserveé), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.


Please refer to note 34 for the circumstances of the decrease in the share capital during 2007.

2007 2006 2007 2006



115



21 Segment information

22 Interest income

Interest income

Related parties

Financial institutions

Total

(in thousand Baht)

-

17,294

17,294

-

22,509

22,509

218,294

16,080

234,374

338,343

10,962

349,305

Note

4

2007 2006 2007 2006



23 Other income

Utilities income

Promotion and advertising

income

Management fee income

Reversal of impairment

loss on investments

Others

Total

(in thousand Baht)

180,411

46,031

8,139

60,834

190,529

485,944

186,135

54,516

7,411

-

112,790

360,852

115,058

46,317

107,741

106,969

126,577

502,662

116,821

60,165

103,543

-

93,366

373,895

Note

4

4

Business segments

Management considers that the Group operates in a single line of business, namely operation of department stores, and has, therefore, only one major business segment

Geographic segments

Management considers that the Group operates in a single geographic area, namely in Thailand, and has, therefore, only one major geographic segment


116



24 Selling and administrative expenses

2007 2006 2007 2006



Personnel expenses

Promotion expenses

Utilities expenses

Depreciation and amortisation

Building expenses

Allowance for obsolete and

slow-moving inventories

Others

Total

(in thousand Baht)

621,707

222,137

468,377

691,486

277,505

1,426

538,247

2,820,885

602,563

280,916

462,738

581,143

236,347

216,949

523,180

2,903,836

467,221

162,205

305,912

438,878

226,343

912

404,297

2,005,768

461,300

217,493

304,890

372,905

208,663

221,258

432,375

2,218,884

Note

4

25 Personnel expenses

2007 2006 2007 2006



Wages and salaries

Contribution to defined

contribution plans

Others

Total

(in thousand Baht)

437,242

5,649

178,816

621,707

403,928

5,056

193,579

602,563

327,849

4,870

134,502

467,221

308,254

4,420

148,626

461,300

The Group has established contributory provident funds for its employees. Membership to the funds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 3% to 5% of their basic salaries and by the Group from 3% to 5% of the employeesû basic salaries. The provident funds are registered with the Ministry of Finance as juristic entities and are managed by a licensed Fund Manager.


117



26 Interest expense

2007 2006 2007 2006



Interest income

Related parties

Financial institutions

Total

(in thousand Baht)

2,017

1,555

3,572

3,034

32,444

35,478

7,001

1,417

8,418

6,172

32,338

38,510

Note

4

27 Income tax expense

2007 2006 2007 2006



Current tax expense

Current year

Under / (over) provided in prior

years

(in thousand Baht)

208,697

-

208,697

192,892

-

192,892

164,092

-

164,092

171,507

-

171,507

The current tax expense in the consolidated and separate statements of income is less than the amount determined by applying the Thai corporation tax rate to the accounting profit for the year principally because the different treatment for accounting and taxation purposes of certain items of income and expense, in particular, reversal of impairment loss on investments, allowance for obsolete and slow-moving and losses suffered by certain subsidiaries cannot be set-off against the profits of the Company and other subsidiaries for tax purposes.


118



28 Earnings per share

Basic earnings per share

The calculation of basic earnings per share in the consolidated and separate financial statements for the year ended 31 December 2007 was based on the consolidated and separate net profit attributable to ordinary shareholders of Baht 864 million and Baht 547 million, respectively, (2006: Baht 2,662 million and Baht 1,296 million, respectively) and the number of shares outstanding during the year of 1,110,661,133 (2006: 1,110,661,133)

29 DividendsAt the annual general meeting of the shareholders of the Company held on 27 April 2007, the shareholders approved the appropriation of dividends of Baht 0.32 per share, amounting to Baht 355.4 million. The dividend was paid to shareholders during 2007. The general shareholders' meeting also approved the appropriation of Baht 52.2 million to legal reserve, which had been recorded in the financial statements for the year ended 31 December 2006.

At the annual general meeting of the shareholders of the subsidiary held on 28 April 2006, the shareholders approved the appropriation of dividends of Baht 25.0 per share, amounting to Baht 44.25 million. The dividend was paid to shareholders during 2006.

30 Change in accounting policy

(a) Investments in subsidiary companies and associates

The following change of accounting policy by the Company has no effect on the consolidated financial statements of the Group.

Until 31 December 2006, the Company accounted for its investments in subsidiary companies, and associates in its financial statements using the equity method.

During 2007, the FAP issued the following new TAS which are effective for accounting periods beginning on or after 1 January 2007:

TAS 44 (revised 2007) Consolidated and Separate Financial Statements

TAS 45 (revised 2007) Investment in Associates

TAS 46 (revised 2007) Interest in joint Ventures

20062007

(in thousand Baht)

119



These new TAS require a parent company which has an investment in a subsidiary company, an entity under

joint control, or an associate company, which is not classified as a "held for sale" investment, to record such

investment in accordance with either the cost method or with the recognition and measurement basis for

financial instruments (when a TAS on financial instruments is issued and becomes effective), instead of the

equity method currently used.

Starting from 1 January 2007, the Company has, accordingly, changed its accounting policy for its investments

in subsidiary companies and associate companies in its financial statements from the equity method to the

cost method. The change in accounting policy has been applied retrospectively and the Company's 2006

financial statements, which are included in the Company's 2007 financial statements for comparative purposes,

have been restated accordingly. The effects of the change in accounting policy on the Company's 2007 and

2006 financial statements are as follows:

Investments in subsidiaries and associates

Balance at 1 January before change in accounting policy

(Decrease) increase in retained earnings

Decrease in provision for loss from investments

in subsidiaries accounted for using the

equity method

Decrease in provision for excess of losses from

investments in subsidiaries

Increase in allowance for doubtful accounts

Net decrease

Balance at 1 January after change in accounting policy

2,052,074

(572,281)

(3,023,713)

(47,121)

2,404,789

(1,238,326)

813,748

1,642,494

793,604

(4,184,903)

(81,588)

2,372,591

(1,100,296)

542,198


20062007

(in thousand Baht)

120



Retained earnings (deficit)

Balance at 1 January before change in accounting policy

Decrease in share of profits from investments

accounted for using the equity method, net

Decrease in provision for loss from investments

in subsidiaries accounted for using the

equity method


Decrease in provision for excess of losses from

investment in subsidiaries

Net (decrease) increase

Balance at 1 January after change in accounting policy

991,644

(1,238,326)

3,023,713

(2,404,789)

47,121

(572,281)

419,363

(1,618,006)

(1,100,296)

4,184,903

(2,372,591)

81,588

793,604

(824,402)

20062007

(in thousand Baht)

Net profit

Net profit before change in accounting policy

Decrease in share of profits from investments accounted for

using the equity method, net


Net decrease

Net profit after change in accounting policy

Decrease in earnings per share (Baht)

865,823

(315,792)

-

(315,792)

550,031

0.28

2,661,850

(1,333,687)

(32,198)

(1,365,885)

1,295,965

1.23


121



(b) Land, leasehold rights and leasehold improvement

In 2006, the Group changed its accounting policy for land, leasehold rights and leasehold improvement from revalued amount to the cost basis. The change was made because, in the opinion of the directors, the new policy, which is the benchmark treatment given in Thai Accounting Standard 32 - Property, Plant and Equipment, facilitates tracking and comparison of the primary financial information of the Group over different financial periods and is more appropriate for the Group in the current financial and economic environment.

31 Financial instruments

Financial risk management policies

The Group is exposed to normal business risks from changes in market interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties. The Group does not hold or issue derivative financial instruments for speculative or trading purposes.

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group's risk management process to ensure that an appropriate balance between risk and control is achieved.

Interest rate risk

Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group's operations and its cash flows because loan interest rates are mainly floated. The Group is primarily exposed to interest rate risk from its borrowings (Note 16).






More than5 Years

Over 1 to5 Years

1 year or toless

Total

2007

Floating Fixed

(%)(in thousand Baht)

Financial assets

Cash at financial institutions

Short term investment


As at 31 December 2007 and 2006, the Company and subsidiaries had risk from the changing value of financial instruments, from changing market interest rates as follows:

Fixed interest rate maturing in: Average interest rate

1,250,529

1,196

174,640

1,250,529

200,960

174,640

0.50-2.67

0.75-2.375

0.50-3.50

-

199,764

-

-

-

-

-

-

-

-

3.074

-

Floatinginterest rate

122





More than5 Years

Over 1 to5 Years

1 year or toless

Floatinginterest rate Total

2007

Floating Fixed


Financial assets


Short-term investment



advances to related parties


Financial liabilities

Short-term loans and advances


Long-term loan from related party


958,850

1,196

157,726

4,390,465

-

1,007,837

-

958,850

200,960

157,726

4,390,465

61,224

1,007,837

113,300

0.5-2.67

0.75-2.375

1.50-3.50

Fixed deposit+1.5

-

Savings+2.50

-

-

199,764

-

-

-

-

-

-

-

-

-

-

-

113,300

-

-

-

-

61,224

-

-

-

3.074

-

-

6.00

3.00

2.00

123





More than5 Years

Over 1 to5 Years

1 year or toless


2006

Floating Fixed


Financial assets


Short term investment




from financial institution

Short - term loans and advances



889,523

7,823

174,163

123,000

115,100

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

889,523

7,823

174,163

123,000

115,100

0.50 - 3.50

1.00 - 3.50

1.50 - 3.50

MLR - 1.25

Savings + 2.50

124





More than5 Years

Over 1 to5 Years

1 year or toless


2006

Floating Fixed


Financial assets


Short-term investment



advances to related parties




from financial institution

Short-term loans and advances


Long-term loan from related party


667,166

1,155

157,884

4,658,801

-

123,000

1,081,020

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

113,000

-

-

-

-

61,224

-

-

-

-

-

-

6.00

-

4.00

2.00

667,166

1,155

157,884

4,658,801

61,224

123,000

1,081,020

113,000

0.50 - 3.50

1.00 - 3.50

0.50 - 4.00

MLR - 0.5

-

MLR - 1.25

Savings+2.50

-

125

126




Credit risk

Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial

and contractual obligations to the Group as and when they fall due.

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit

evaluations are performed on all customers requiring credit over a certain amount. At the balance sheet date there

were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying

amount of each financial asset in the balance sheet. However, due to the large number of parties comprising the

Group's customer base, Management does not anticipate material losses from its debt collection.

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by

management to finance the Group's operations and to mitigate the effects of fluctuations in cash flows.

Fair values

The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,

willing parties in an arm's length transaction.

The fair value of trade and other short-term receivables is taken to approximate the carrying value.

The carrying amounts of short-term loans to subsidiaries approximate their fair values because they are short-term

maturity loans. The carrying amounts of long-term loans to subsidiaries approximate their fair value estimated from

the current market interest rates available for borrowings with the same maturity profile.

The carrying amounts of borrowings with variable interest rates approximate their fair values. The carrying amounts of

other accounts with fixed interest rates are immaterial.

127




Capital commitments

Contracted but not provided for

(in thousand Baht)

2007 2006 2007 2006



22,000 -23,000 -

Operating lease commitments

Within one year

After one year but

within five years

After five years

Total

(in thousand Baht)

2007 2006 2007 2006



167,871

662,525

1,555,343

2,385,739

112,492

442,703

407,840

963,035

125,766

547,499

726,598

1,399,863

107,674

479,428

483,607

1,070,709

32 Commitments with non-related parties

The group has lease agreements covering rental and service agreements with local certain companies. These

agreements are for periods until the year 2025. The annual rental and service fees are payable as follows:

32 Thai Accounting Standards (TAS) not yet adopted

128




The Group has not adopted the following TAS that have been issued as of the balance sheet date but are not yet

effective. These TAS will become effective for financial periods beginning on or after 1 January 2008.

TAS 25 (revised 2007) Cash Flows Statements

TAS 29 (revised 2007) Leases

TAS 31 (revised 2007) Inventories

TAS 33 (revised 2007) Borrowing Costs

TAS 35 (revised 2007) Presentation of Financial Statements

TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors

TAS 41 (revised 2007) Interim Financial Reporting

TAS 43 (revised 2007) Business Combinations

TAS 49 (revised 2007) Construction Contracts

TAS 51 Intangible Assets

The adoption and initial application of these TAS is not expected to have any material impact on the consolidated or

separate financial statements.

129




As at 31 December 2006, the Company's separate financial statements, before restatement (note 30), carried a

share discount and unappropriated retained earnings of approximately Baht 7,217 million and Baht 992 million,

respectively. Subsequent to the approval of the 2006 unrestated financial statements, on 26 February 2007, the

Board of Directors approved the appropriations of 2006 profits as cash dividends and legal reserve totaling

Baht 355.4 million (Baht 0.3 per share) and Baht 52.2 million, respectively. The Annual General Meeting of the

Company's shareholders held on 27 April 2007 approved the Board of Directors' proposal to distribute the

dividends, which were paid on 25 May 2007. On 27 April 2007, the Federation of Accounting Professions (FAP)

announced a guidance outlining the accounting treatment for compensation of cumulative deficit of a public

company partly requiring a public company carrying a share discount and cumulative profits to set aside the

amount of accumulated profits not less than the share discount prior to paying the dividends. As such, the

approvals of payments of dividends have not been in line with the FAP's Announcement. The Company closed

the shareholders' register for right to receive the dividends on 9 May 2007 and had proceeded with the

payments of dividends as approved by the shareholders.

During the third quarter of 2007, the shareholders resolved to decrease the registered share capital of the

Company from Baht 11,106.6 million (divided into 1,110,661,133 shares at Baht 10 par value) to Baht 3,942.8

million (divided into 1,110,661,133 shares at Baht 3.55 par value) and to transfer the premium resulting from the

decrease in share capital amounting to Baht 7,163.8 million and a portion of unappropriated retained earnings

amounting to Baht 53.7 million to set off against the total amount of share discount amounting to Baht 7,217.5

million The Company registered the decrease in the registered share capital with the Ministry of Commerce on

13 September 2007.

On 12 April 2007, a portion of the Company's property, equipment and inventories was damaged by fire.

Currently, the Company has received compensation for all losses incurred in amount of Baht 53.9 million.

Certain accounts in the 2006 financial statements have been reclassified to conform with the presentation in

the 2007 financial statements.

34 Others

34 Reclassification of accounts

(a)

(b)

130

The Company enters various transactions with its subsidiaries, joint-venture companies and other related

companies. Certain assets, liabilities, income, costs and expenses of the Company and its subsidiaries also involve

inter-company transactions. These businesses are related through sharing the same shareholders and/or directors,

as disclosed in Note 4 of the Company's financial statement. Details of major transactions during the year ended

31 December 2007 can be summarized as follows:

Details of Major Transactions



Subject Related Company Relationship with

Subs

idiarie

s

Joint-v

entu

res

Main

Shar

eholde

rs

Joint s

hare

holder

s

Joint D

irect

ors

Inter-company

Transaction

value

(Million Baht)






Robinson S.P.V Co., Ltd.













x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

391.40

553.22

Income

Interests

Rentals and

Services


Subs

idiarie

s

Joint-v

entu

res

Main

Shar

eholde

rs

Joint s

hare

holder

s

Joint D

irect

ors

Inter-company

Transaction

value

(Million Baht)

131









Power Buy Co., Ltd.

CRC Sport Co., Ltd.

B2S Co., Ltd.

CRC Power Retail Co., Ltd.

Office Club (Thailand) Co., Ltd.

Group of Central Food Retail Co., Ltd.

Central Department Co., Ltd.


CDS Restaurant Co., Ltd.

Central Pattana Group Pcl.

Textral Textile Co., Ltd.

RIS Co., Ltd.

Central Watson Co., Ltd.

Group of Central Restaurant Group Co., Ltd.

(Auntie Anne's, Pizza Hut, Mister Donut, KFC)







Power Buy Co., Ltd.

CRC Sport Co., Ltd.

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

7.39Financial Services


Subs

idiarie

s

Joint-v

entu

res

Main

Shar

eholde

rs

Joint s

hare

holder

s

Joint D

irect

ors

Inter-company

Transaction

value

(Million Baht)

132



Group of Central Food Retail Co., Ltd.

B2S Co., Ltd.

CRC Power Retail Co., Ltd.


Kruerkaew Co., Ltd.










Central Trading Co., Ltd.

Central Garment Factory Co., Ltd.

Cetrac International Ltd.

Textral Textile Co., Ltd.

Earth Care Co., Ltd.

Central Department Co., Ltd.

Central Pattana Group Pcl.

Tiang Chirathivat Co., Ltd.

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

107.74

523.11

94.65Rentals/Services

Management fees

Expenses

Merchandising

Payment


Subs

idiarie

s

Joint-v

entu

res

Main

Shar

eholde

rs

Joint s

hare

holder

s

Joint D

irect

ors

Inter-company

Transaction

value

(Million Baht)

133




Kruerkaew Co., Ltd.





Group of Central Food Retail Group Co., Ltd.

PB Logistic Co., Ltd.

CRC Sport Co., Ltd.










RIS Co., Ltd.

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

2,073.57

180.11

76.50Management fees

Interests

Financial support

via subsdiaries

134



Necessary Inter-company Transactions

Type of Transaction

Merchandise purchases


Income from financial services

Management fee income

Management fee expenses

Lending and borrowing to

and from subsidiaries

Necessary Inter-company Transactions

The Company purchases popular brand products from relevant suppliers and acts

as sole distributor of those products. The same merchandising policy is followed

with other suppliers. Prices are negotiated with a view to achieving the highest

gross profit margin. Such products must be currently available in the market and

competitive with similar products offered by other department stores.

Specialty stores are run by affiliated companies and other companies that are

expert in specialty merchandising of specific products that are popular among the

Company's target customers. Specialty stores are also specially designed in unique,

modern styles in accordance with the Company's concepts. Compensation is based

either on a percentage of sales or a fixed rate. In addition, the Company provides

space to affiliated companies to set up international money transferred counter

services.

This source of income is derived from affiliates who use the Company's secure

room to store their cash receipts during the day. The service is a general service to

be offered by other department stores in order to facilitate their tenants. The

service fee charged to those related parties are at the same rates charged to other

tenants and/or business partners

Collected from the Company's affiliates and subsidiaries for department store

management, merchandising, marketing and use of the Robinson brand. The rate is

based on a percentage of sales and/or other income, as per each joint venture

agreement.

Paid to related company for accounting and financial management services, human

resources, legal issues, and tax. The service provider is of specialized management

expertise, so as to enable the Company to efficiently and effectively minimize

related costs.

Centralization of the merchandising system involves making inter-company loans

thru the current account system. Inter-company loan costs are minimum loan rates

or saving rates or fixed deposit rate of certain local financial institutions plus 0% to

2.5% per annum depend on financial cost of each company.

135



Measures and procedures for approval of inter-company transactionsThe Company and its subsidiaries act in compliance with the Stock Exchange of Thailandís notice

regarding measures, methods and disclosure of inter-company transactions of the listed company and under

governance of the Plan Administrator.

Future policy and trends for inter-company transactionsThe Company and its subsidiaries will continue their inter-company transactions, which are a necessary

part of department store operation. Such transactions will be conducted in compliance with the Stock Exchange of

Thailand rule and regulations. The pricing policy for inter-company transactions is as follows:

Sale of goods

Interest income/Interest expense

Rental and service fees

Management fees

Market prices should not be lower than the cost of

goods.

Minimum loan rates or saving rates or fixed deposit

rate of certain local financial institutions plus 0% to

2.5% per annum depend on financial cost of each

company.

Certain percentages of sales with a reference to the

related market prices or fixed amount.

Certain percentages of sales or fixed amount.

General Information

136

Robinson Department Store Public Company Limited

Registration number 010753600412 (previous number Bor Mor Jor 115)

Operates department stores under the name "Robinson". The company currently has 21 branches around the

country, comprising 10 branches in Bangkok and 11 provincial branches.

Baht 3,942,847,022.15 (1,110,661,133 common shares)

Baht 3,942,847,022.15 (1,110,661,133 common shares)

Baht 3.55

139 Ratchadapisek Road, Dindaeng, Dindaeng, Bangkok 10400

Tel. 0-2245-4811 Fax. 0-2247-5325

Thailand Securities Depository Co., Ltd.

62 The Stock Exchange of Thailand Building, 4th & 7th Floor,

Ratchadapisek Road, Klongtoey, Klongtoey, Bangkok 10110

Tel. 0-2229-2800 Fax. 0-2359-1262-3

KPMG Phoomchai Audit Co., Ltd.

22nd Floor, Empire Tower, 195 South Sathorn Road

Yannawa, Sathorn, Bangkok 10120

Tel. 0-2677-2000 Fax. 0-2677-2222

Auditor: Mrs. Wilai Buranakittisophon - CPA no. 3920


Registered Share Capital

Paid-up Share Capital

Par Value

Central Administration Office

Share Registrar

Auditor

General Information

Store Location

137

Robinson Department Store Public Company LimitedThanon Ratchadapisek Branch(Opening Date : November 11, 1989)139 Ratchadapisek Road, Dindaeng,Dindaeng, Bangkok 10400Tel. 02-248-2626-35, 02-247-5300-9, 245-4811 Fax. 02-642-2047Mon. - Fri. : 10.00 am. - 10.00 pm.

Sat. - Sun. & Holidays : 10.00 am. - 10.00 pm.


Silom Branch (Opening Date : December 1, 1984)

2 Silom Road, Suriyawong, Bangrak, Bangkok 10500

Tel. 02-266-3340-50 Fax. 02-236-5330

Mon. - Fri. : 10.30 am. - 10.00 pm.




Sukhumvit Branch

(Opening Date : December 1, 1990)

259 Sukhumvit Road, North Klongtoey,

Wattana, Bangkok 10110

Tel. 02-651-1533-42, 02-252-5121 Fax 02-651-1560

Mon. - Fri. : 10.00 am. - 10.00 pm.



Bangrak Branch (Opening Date : November 11, 1992)

1522 Charoenkrung Road, Bangrak,

Wattana, Bangkok 10500

Tel. 02-238-0052-61, 02-267-3781-86 Fax. 02-235-2467

Mon. - Fri. : 10.30 am. - 10.00 pm.


General Information

138



Bangkae Branch (Opening Date : December 1, 1993)

110/5 Moo 9 Petchkasaem Road, Bangwa,

Phasicharoen, Bangkok 10160

Tel. 02-455-0143-45 Fax. 02-454-8350

Mon. - Fri. : 11.00 am. - 9.00 pm.



Srinakarin Branch (Opening Date : August 21, 1994)

904/1 Moo 6 Srinakarin Road, Nhong Born, Pravej,

Bangkok 10260

Tel. 02-721-8990-9 Fax. 02-721-9066

Mon. - Fri. : 10.30 am. - 9.00 pm.



Rangsit Branch (Opening Date : March 18, 1995)

161 Moo 2 Phaholyothin Road, Prachatipat,

Thanyaburi, Pathumthani 12130

Tel. 02-958-0800-39 Fax. 02-958-0899

Mon. - Fri. : 10.30 am. - 9.00 pm.



Ram Intra Branch (Opening Date : June 1, 1995)

5/7 Moo 7 Ram Intra Road, Kannayao, Bangkok 10230

Tel. 02-947-5320-62 Fax. 02-947-5400

Mon. - Fri. : 11.00 am. - 9.00 pm.


General Information

139



Lardya Branch (Opening Date : November 11, 1996)

99 Lardya Road, Somdejchaopraya, Klongsarn,

Bangkok 10600

Tel. 02-437-0104-5 Fax. 02-439-4296, 02-437-0111

Mon. - Fri. : 11.00 am. - 9.00 pm.



Rattanathibet Branch (Opening Date : June 15, 2005)

68/100 Moo 8 Rattanathibet Road, Bangkrasor,

Muang Nonthaburi, Nonthaburi 11000

Tel. 02-525-4420-29 Fax. 02-525-4466

Mon. - Fri. : 10.00 am. - 10.00 pm.


CR Udornthani (Thailand) Co., Ltd.

Udornthani Branch (Opening Date : August 30, 1995)

277/2 Prajak Road, Makkaeng, Amphoe Muang,

Udornthani 41000

Tel. 042-242-777 Fax. 042-248-780

Mon. - Fri. : 11.00 am. - 9.00 pm.



Phuket Branch (Opening Date : October 12, 1995)

36 Dilhok-U-Thit 1 Road,Taladyai, Amphoe Muang,

Phuket 83000

Tel. 076-256-500-12 Fax. 076-223-304

Mon. - Fri. : 10.30 am. - 10.00 pm.


General Information

140


CR Nakhon Si Thammarat (Thailand) Co., Ltd.

Nakhon Si Thammarat Branch (Opening Date

: October 27, 1995)

89/201 Pattanakarnkukwang Road, Klang,

Amphoe Muang, Nakhon Si Thammarat 80000

Tel. 075-318-012-20 Fax. 075-318-010

Mon. - Fri. : 10.30 am. - 9.00 pm.



Had Yai Branch (Opening Date : December 1, 1995)

9 Thammanoonvithi Road, Had Yai, Had Yai,

Songkhla 90110

Tel. 074-220-150 Fax. 074-220-157

Mon. - Fri. : 10.30 am. - 9.00 pm.



Chiang Mai Branch (Opening Date : January 26, 1996)

2 Mahidon Road, Hai ya, Amphoe Muang,

Chiang Mai 50100

Tel. 053-203-640-59 Fax. 053-283-129

Mon. - Fri. : 10.30 am. - 9.00 pm.


General Information

141



Ubon Ratchathani Branch (Opening Date

: June 1, 1996)

221 Chayangkool Road, Naimuang, Amphoe Muang,

Ubon Ratchathani 34000

Tel. 045-241-887 Fax. 045-241-268, 045-242-866

Mon. - Fri. : 10.30 am. - 9.00 pm.



Sriracha Branch (Opening Date : May 31, 1997)

90/1 Sukhumvit Road, Sriracha, Sriracha,

Chonburi 20110

Tel. 038-771-001-10 Fax. 038-770-999

Mon. - Fri. : 10.30 am. - 9.00 pm.



Ratchaburi Branch (Opening Date : November 1, 1996)

265 Srisuriyawong Road, Namuang, Amphoe Muang

Ratchaburi, Ratchaburi 70000

Tel. 032-310-831 Fax. 032-310-866

Mon. - Fri. : 11.00 am. - 9.00 pm.


General Information

142


CR Chanthaburi (Thailand) Co., Ltd.

Chanthaburi Branch (Opening Date : January 16, 1998)

22/107 Moo 7 Chantanimit, Amphoe Muang

Chanthaburi, Chanthaburi 22000

Tel. 039-340-348-57 Fax. 039-303-114

Mon. - Fri. : 11.00 am. - 9.00 pm.



Ayutthaya Branch (Opening Date : November 16, 2006)

126 Moo 3 Asia Road, Klong Suan Plu,

Phranakhonsiayutthaya, Phranakhonsiayutthaya 13000

Tel. 035-229-888, 035-229-851 Fax. 035-229-878

Mon. - Fri. : 10.00 am. - 9.00 pm.



Robinson Ocean Jungceylon Branch

(Opening Date : November 3, 2007)

177 Rat-U-Thit 200 pee Road, Patong, Katu,

Phuket 83150

Tel. 076-600-888-97 Fax. 076-600-886

Mon. - Fri. : 11.00 am. - 10.00 pm.
