Payment of service fee to related company

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Nov 08, 2007



November 7, 2007

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.5/2007 held on November 7, 2007 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, from January 1, 2008 to December 31, 2009.In approval process, the directors who are the connected persons in both parties did not in the meeting and did not vote. The details of transaction and the conditions are as follows

1. The date on which the transaction take place :
January 1, 2008

2. The parties involved :
Service receiver is Central Pattana Public Co., Ltd. "CPN"
Service provider is Harng Central Department Store Ltd. "HCDS"
Relationship : The majority shareholders of both CPN and HCDS are members of Chirathivat family, (persons and juristic persons) who hold totaling 58.07% in CPN and 100% in HCDS respectively.

3. The general characteristics of the transaction :

1) The monthly payment of management service fee calculates from 0.75% of the Company's consolidated revenues include revenue from properties, which are managed by the Company. This rate is decreased from previous agreement that CPN paid with 0.80% of the Company's consolidated revenues.

2) The minimum and maximum fee are increased from 2007 that in line with the consolidated revenues of the Company in the past 2 years and increase 5% per annum. The details are as follow,

Period
Management Service Fee (Baht /Month)
Minimum
Maximum
1 Jan 08 - 31 Dec 08
4,950,000
7,420,000
1 Jan 09 - 31 Dec 09
5,197,500
7,791,000

4. The total value of the consideration :
Maximum value is 89,040,000 baht in 2008 and 93,492,000 baht in 2009. The total consideration for these 2 years is 182,532,000 baht or 1.48% of book value of net tangible assets per reviewed financial statements as of June 30, 2007.

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 :

Connected Person
Position in CPN
% shares held in CPN
Position in HCDS
% shares held in HCDS
1.Mr.Vanchai Chirathivat Chairman
0.11%
Chairman
0.25%
2.Mr.Suthichai Chirathivat Director,Executive Director
1.92%
Director
6.87%
3.Mr.Suthikiati Chirathivat Director,Executive Director
1.92%
Director
6.86%
4.Mr.Suthichart Chirathivat Director,Executive Director
1.07%
 Director
3.83%
5.Mr.Sudthisak Chirathivat Director,Executive Director
0.65%
Director
2.33%
6.Mr.Sudthitham Chirathivat Director,Executive Director
1.18%
Director
2.01%
7.Mr.Prin Chirathivat Director,Executive Director
1.38%
Director
1.24%
8.Mr.Kobchai Chirathivat Director, CEO
1.22%
-
4.35%
9.Mr.Sudthidej Chirathivat Executive Vice President
0.94%
-
2.68%
10.Mr.Sudthipak Chirathivat Senior Vice President
0.59%
-
2.10%
11.Ms.Wallaya Chirathivat Senior Vice President
0.39%
-
1.40%
12.Chirathivat Family Shareholders
46.70%
Director/ Shareholders
66.06%
Total  
58.07%
 
100.00%

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)
Corporate Secretary