Payment of service fee to related company
To The President, The Stock Exchange of Thailand Subject Payment of service fee to related company
Central Pattana Public Company Limited would like to announce that the board of director's meeting No.1/2006 held on February 23, 2006 passed the resolution to renew the management service agreement with Harng Central Department Store Ltd., who has provided management and advisory services relating to the set up and implementation of the company's policies and management practice as well as related recommendation. The term of new agreement is 2 years. The details of transaction and the conditions are as follows:
1. The date on which the transaction take place : January 1, 2006
2. The parties involved Service receiver: Central Pattana Public Co., Ltd. "CPN" Service provider: Harng Central Department Store Ltd. "HCDS" Relationship with the company : The majority shareholders of both CPN and HCDS are members of Chirathivat family, (persons and juristic persons) who hold totaling 61.70% in CPN and 100% in HCDS respectively.
3. The general characteristics of the transaction : Payment of management service fee calculates from 0.8% of the Company's consolidated revenues include revenue from properties, which are managed by the Company. The minimum fee is not less than 3,622,500 baht/month and maximum fee is not more than 5,433,750 baht/month such minimum and maximum fee will increase 5% every year.
The minimum and maximum service fee for last year were as follow,
Year 2005
Minimum fee was 3,450,000 baht/month.
Maximum fee was 5,175,000 baht/month.
4. The total value of the consideration : Maximum value is 65,205,000 baht in 2006 and 68,465,250 baht in 2007. The total consideration for these 2 years is 133,670,250 baht or 1.22% of book value of net tangible assets per reviewed financial statements as of September 30, 2005.
5. The basis used to determine the value of consideration : Based on appropriate allocation basis of actual expenses of the service provider to all the group companies.
6. The details of the connected persons and the nature and extent of the interest of the connected person in the transaction :
Names Position % shares held Position %shares held
in CPN in CPN in HCDS in HCDS
1.Mr. Vanchai Chairman 2.94 Chairman 0.25
Chirathivat
2.Mr.Kobchai Director, 3.70 - 4.35
Chirathivat CEO
3.Mr.Sudhitham Director, 5.66 Director 3.83
Chirathivat Executive Director
4.Mr.Prin Director, 2.86 Director 1.24
Chirathivat Executive Director
5.Mr. Suthichai Director, 0.86 Director 6.87
Chirathivat Executive Director
6.Mr.Suthikiati Director, - Director 6.86
Chirathivat Executive Director
7.Mr.Suthichart Director, - Director 3.83
Chirathivat Executive Director
8.Mr. Sudhisak Director, 0.43 Director 2.33
Chirathivat Executive Director
9.Mr. Sudthidej Executive 1.48 - 2.68
Chirathivat Vice President
10.Mr.Sudhipak Senior 0.67 - 2.10
Chirathivat Vice President
11.Ms.Wallaya Senior 0.004 - 1.40
Chirathivat Vice President
12.Chirathivat Shareholders 43.10 Director / 64.26
Family Shareholders
(persons and
juristic persons)
Total 61.70 100.00
In approval process, the directors who are the related person in both parties did not vote.
7. Non-related directors and the Audit Committee are of an opinion that the service fee to HCDS is fair and reasonable, therefore the board approve the service fee transaction with HCDS.
Please be informed accordingly.
Yours Faithfully,
(Mr.Naris Cheyklin)
Secretary to the Board of Director
