Page 170 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

Central Retail’s overall performance might be affected by economic condition in Italy for example the recession
that occurred since 2007 where Italy suffered a decline in gross domestic product (GDP) and a decrease in
employment rate which negatively affected consumer confidence and household consumption despite,
a slight increase in GDP in Italy. In addition, Italy was one of country in the European Union was affected by
the COVID-19 pandemic last year. The new Italian government was appointed on 13 February 2021 and
has imposed more stringent measures to prevent the spread of COVID-19. The government also increased
high risk zone area during 15 March till 6 April 2021 that directly affected the economy in all industrial sectors.

However, the ease of strict measures by the Italian government together with the progressing vaccination plans in
the European Union (EU) countries could lead to resumption of the tourism industry, which will help alleviate the recession.
According to Thailand and Italy trade in September from International Trade Promotion, Ministry of Commerce,
stated that although Italy was first European country to face a major outbreak of COVID-19, overall Italian economic
situation is gradually recovered at this moment. The major contribution is the effective vaccination process for the people,
accounting for 80% of the total population in the country and investment grew by more than 5%, even at the
higher rate than before COVID-19 pandemic including government ’s stimulus program and an increase of export

According to report of overall Italian economy in 2021-2022 from Italian National Statistical Institute (ISTAT)
stated that Italian’s gross domestic product (GDP) in 2021 grows by 6.6% and will grow by 4.7% in 2022.
Moreover, the European Union expects that overall Italian economy will gradually recover including decline of
public debt. The economy is now expected to return to pre-crisis levels in the second quarter of 2022.

However, although the business of Central Retail in Italy continues to grow, Central Retail cannot guarantee
that it will maintain the growth at that rate, or that it will not be affected by the economic situations of Italy.
Negative developments in economic conditions of Italy, or of any region in which Central Retail is present can
lessen confidence and have a negative impact on consumer spending patterns, especially the general purchasing.
Therefore, the aforementioned trends may have a negative impact on the Central Retail’s business performance,
financial position, and business opportunities.

Since investments in overseas markets fall within the new business scope, Central retail has then carried out
investments with prudence while arranging its organizational structure to assign responsibility to a unit to closely
oversee and monitor business progress with the management team in those countries in order to develop risk
response plans and solve emerging problems in a promptly manner

(8) Financial Risk

Central Retail is exposed various financial risks arising from its normal operations. Central Retail’s financial risk
management focuses on managing capital market uncertainty and reducing negative impacts that may arise
from Central Retail’s operations, especially amid the COVID-19 outbreak situation in 2021 which affected
the performance of the Company. Central Retail emphasizes efficient financial management by prioritizing
investment projects and controlling costs appropriately to reduce impacts on profitability and maintain
both short-term and long-term financial liquidity. The cash flow from operating and financing activities serves as
a source of capital for Central Retail’s operations. Central Retail mainly uses such capital as working capital for
product purchases and capital expenditures. In this regard, Central Retail regularly conducts a capital adequacy
assessment by considering the operating cash flow and market conditions. In case of insufficient of operating
cash flow, Central Retail may seek out loans or increase capital of the Company as well set up guidelines
and expense control’s measures, review investment and sales plans in accordance with demand and changing
market situations in order to maintain profitability and the Company’s financial liquidity both short term and long term.

170 Annual Report 2021 (Form 56-1 One-Report)