CPN ANNUAL REPORT 2011 THE GREAT JOURNEY Central Pattana Public Company Limited Location: 30th – 33rd Floor, The Offices at CentralWorld, 999/9 Rama I Road, Patumwan Sub-District, Patumwan District, Bangkok 10330, Thailand Telephone: + 66 (0) 2667 5555 Facsimile: + 66 (0) 2264 5593 Corporate Website: www.cpn.co.th Registration No: 0107537002443 Year of Establishment: 1980 Business Overview: Develop and invest in retail property for rent comprising large-scale shopping complexes and other related supportive businesses. In addition, the Company invests in retail property fund and acts as a property manager of the fund. Security Information: Common shares of Central Pattana Plc. were listed and traded on the Stock Exchange of Thailand in 1995 under the abbreviated security name of “CPN”. Registered Capital: Baht 2,178,816,000 Issued and Paid-up Capital: Baht 2,178,816,000 comprising ordinary shares of 2,178,816,000 shares Par value of Baht 1 per share Contacts: Corporate Secretary Telephone: + 66 (0) 2667 5555 Ext.1665 Facsimile: + 66 (0) 2264 5593 Email : [email protected] Investor Relations Telephone: + 66 (0) 2667 5555 Ext.1614 or 1669 Facsimile: + 66 (0) 2264 5593 Email : [email protected] CONTENTS 1418 22 24 25 26 Consolidated Message Report Report of Report of Report of Operational & from the Board of the Audit the Nomination & the Risk the Corporate Financial Highlights of Directors Committee Remuneration Management Governance Committee Committee Committee 5362 66 68 70 71 Operational Future Projects Vision & Missions Business Corporate Nature Performance Strategy Values of Business of Assets under CPN’s Management 102114 116 120 122 132 Sustainability Risk Factors Capital Structure Organization Management Nomination Management Chart Structure of Directors and Management 238248 251 252 255 256 Management General Information List of Committee Existing Reference Firms Information Biography of Business held in Subsidiaries Projects managed for Investors by the Company by CPN 10% Upward 2830 34 36 40 45 Board of Directors Awards 2011 Year In Brief Economic and 2011 Financial CPN Today and Management of Great Pride Retail Industry Performance Team in 2011 Overview in 2011 Review 76 77 79 92 96 100 Group Structure Revenue Structure Corporate Organization Human Capital Human Capital of the Company of the Company Governance Development Management Development and its Subsidiaries and its Subsidiaries 135 138 149 150 151 237 Remuneration Connected Responsibilty Audit Report of Financial Auditor’s Fee of the Directors Transactions of the Board Certifi ed Public Statements and Management of Directors to Accountant Financial Statements A Great Journey Makes A Great Destination To us, our “To be the most admired and dynamic regional retail property developer with world-class rewarding experience” journey is underway. A new journey to a sustainable destination in which every move is made with confi dence. Most Admired Dynamic Regional World-Class To be the most Retail Developer Retail Developer Retail Developer Rewarding admired and dynamic Of All Stakeholders Experience regional retail property developer with world-class rewarding experience GOOD COMPANION, GREAT JOURNEY Let’s Make A Happy & Memorable Journey Together There’s no better recipe for a memorable, fruitful trip than a fi ne traveling companion—one that stands behind you, shares your fond moments, and visualizes your goals. Most Admired Retail Developer Of All Stakeholders With a fresh perspective on a whole new world, we relentlessly strive for breakthroughs in impressive experiences to pass on to customers. Here lies our source of never-ending inspiration. FINDING A GREAT INSPIRATION That Always Gives You A Pleasant Surprise Dynamic Retail Developer Taking stock of our series of successes to date, we’ve strategized our next move and are poised to hit our stride in becoming the regional leader—a mission well within sight. GETTING READY FOR THE NEXT MOVE And Make Sure You’ll Successfully Reach Your Destination Regional Retail Developer ENJOYING WORLD-CLASS EXPERIENCE That Always Brings a WOW Experience to Your Extraordinary Life With every rewarding experience comes an impressive moment, particularly when such an experience is painstakingly brought to you through world-class quality and standards—all designed for your memorable moments of success. World-Class Rewarding Experience 014| 015 CPN ANNUAL REPORT 2011 CONSOLIDATED OPERATIONAL AND FINANCIAL HIGHLIGHTS Over three decades of experience and CPN will be as committed as ever to running appreciation of retail property development its business with virtue and corporate represent our key ingredients of success. Our governance, and continuing its business exceptional performance and enhancing development to achieve the “To be the businesses, spanning strategic trade locations most admired and dynamic regional retail in Thailand, refl ect not only our professional property developer with world-class expertise, but also a prudent fi nancial policy. rewarding experience” vision. 37,205 43,784 50,895 53,869 64,059 07 08 09 10 11 Total Assets (Million Baht) Offi6% ce Hotel4% Retail79% Food & Beverage5% Other Incone6% Note: Excludes interest income, dividend 0.72 0.99 1.05 0.71 0.86 income, share of profi t from associate, and non-recurring income. 07 08 09 10 11 Revenue breakdown by business Adjusted Earnings per Share (Baht per share) Book Value perShare Book Value 07 08 09 10 07 08 09 10 Total Liabilities (Baht pershare) (Baht 5.98 23,565 (Million Baht) (Million 6.65 28,610 8.57 31,887 8.48 34,952 11 11 9.16 43,611 Total Shareholders’ Equity Total Shareholders’ Shopping Center 07 08 09 10 13,639 (Million Baht) (Million 07 0896% 09 10 697,038 15,173 97% 19,008 761,111 18,918 11 96% 20,448 967,430 Occupancy rate (%) Occupancy rate (sqm) leasablearea Retail 95% 964,612 11 96% 1,085,102 07 08 09 10 Total Revenues (Million Baht) (Million 8,282 9,271 11,755 11,388 11 12,766 Offi 07 0893% 09 10 ce 144,791 94% 144,280 Adjusted Net Profi Net Adjusted 86% 07 08 09 10 163,746 Baht) (Million 1,569 Occupancy rate (%) Occupancy rate Offi (sqm) ce leasablearea 81% 2,158 163,991 2,292 11 87% 1,552 11 175,831 t 1,871 016| 017 CPN ANNUAL REPORT 2011 CONSOLIDATED OPERATIONAL AND FINANCIAL HIGHLIGHTS As at 31 December 2007 2008 2009 2010 2011 Operational performance of assets under CPN’s management Leaseable Area (square metres) 848,202 911,764 1,137,549 1,134,976 1,267,306 > Retail 697,038 761,111 967,430 964,612 1,085,102 > Offi ce 144,791 144,280 163,746 163,991 175,831 > Hotel (room) - - 255 557 561 > Residential 6,373 6,373 6,373 6,373 6,373 Occupancy Rate (%) > Retail 96% 97% 96% 95% 96% > Offi ce 93% 94% 86% 81% 87% > Hotel 0% 0% 68% 50% 45% > Residential 69% 69% 67% 67% 52% Consolidated Financial Results Unit : (‘000 Baht) Total Revenues (1) 8,282,131 9,270,743 11,754,650 11,387,613 12,765,702 Revenue from Rental & Service, Food & Beverage, Hotel 7,680,984 8,598,631 10,934,257 10,529,901 11,950,730 Cost of Rental & Service, Food & Beverage, Hotel 4,473,361 4,889,596 6,696,678 6,924,476 7,783,446 Gross Profi t (2) 3,808,770 4,381,147 5,057,972 4,463,137 4,982,256 Net Profi t 1,783,406 2,185,788 4,951,623 1,124,866 2,058,123 Adjusted Net Profi t (2) 1,569,106 2,157,858 2,292,460 1,551,950 1,871,108 Note : (1) Excludes interest income, dividend income, share of profi t of associate, and non-recurring incomes. (2) Excludes non-recurring items. As at 31 December 2007 2008 2009 2010 2011 Consolidated Financial Position Unit : (‘000 Baht) Total Assets 37,204,641 43,783,780 50,895,450 53,869,402 64,059,165 Total Liabilities 23,565,347 28,610,457 31,887,348 34,951,652 43,610,988 Net Interest-Bearing Debt (3) 8,061,863 12,768,404 14,128,862 17,452,337 24,300,067 Total Shareholders’ Equity 13,639,293 15,173,322 19,008,102 18,917,749 20,448,177 Retained Earning 8,720,562 10,089,338 14,539,840 14,339,464 15,828,190 Issued and Paid-up Share Capital 2,178,816 2,178,816 2,178,816 2,178,816 2,178,816 Total Number of Shares (‘000 Shares) 2,178,816 2,178,816 2,178,816 2,178,816 2,178,816 Consolidated Financial Ratios Net Interest-Bearing Debt to Equity (3) (time) 0.59 0.84 0.74 0.92 1.19 Gross Profi t Margin (2) (%) 46.00 47.26 43.03 39.19 39.03 Net Profi t Margin (2) (%) 18.02 22.02 18.74 13.03 14.06 Return on Assets (%) 4.99 5.40 10.46 2.15 3.49 Return on Equity (4) (%) 14.24 15.89 29.85 6.06 10.71 Earnings per Share (5) (Baht) 0.82 1.00 2.27 0.52 0.94 Adjusted Earnings per Share (2) (5) (Baht) 0.72 0.99 1.05 0.71 0.86 Book Value per Share (Baht) 5.98 6.65 8.57 8.48 9.16 Dividend per Share (pay in the following year) (Baht) 0.33 0.33 0.58 0.25 0.37 (3) Net interest-bearing debt excludes loans from related parties. (4) Excludes minority interest in subsidiaries. (5) Basic earnings per share only attributable to ordinary shareholders. 018| 019 CPN ANNUAL REPORT 2011 MESSAGE FROM THE BOARD OF DIRECTORS To the Shareholders of Central Pattana three shopping complex projects in December.