Approval to pay dividend & Information Connected transaction
BackMar 15, 2006
Subject: Report on Resolution of the Board of Directors' Meeting No. 3/2006 Attention: Managing Director, The Stock Exchange of Thailand (the "SET") Enclosure: Information Memorandum of Connected Transactions of the Listed Companies and the subsidiaries We, Big C Supercenter Public Company Limited (the "Company"), would like to inform you of the resolution of the Board of Directors' Meeting No. 3/2006 held on 14 March 2006 at 10:00 a.m., as follows: 1. Approval of the payment of dividend for the operating period year 2005. 2. Approval of the appointment of JONES LANG LASALLE as the Independent Appraisal for valuation of the asset transaction including the appointment of SICCO ADVISORY COMPANY LIMITED as the Independent Financial Advisor of the Company for the connected transaction 3. Fixing the date, time and place for the Annual General Shareholders' Meeting for the year 2005 to be held on the 27th April 2006 at 9:00 a.m. in Arnoma I Room, at the 3rd Floor of Arnoma Hotel, No.99 Rajdamri road, Lumpini Sub-District, Pathumwan District, Bangkok, and the fixed the agendas for this Annual General Shareholders' Meeting as follows: (1) To consider and approve the Minutes of the Annual General Shareholders' Meeting for the year 2005 held on 28 April 2005. Opinion of the Board: To propose to the Annual General Shareholders' Meeting to approve the Minutes of the Annual General Shareholders' Meeting for the year 2005. (2) To consider and approve the Annual Report and the Financial Statements of the Company for the year ended 31 December 2005 audited by the Company's auditor. Opinion of the Board: To propose to the Annual General Shareholders' Meeting to acknowledge and approve Annual Report and the Financial Statements of the Company for the Year ended 31 December 2005 audited by the auditor. (3) To consider and approve the allocation of profit, payment of dividend and legal reserve for the year 2005. Opinion of the Board: To propose to the Annual General Shareholders' Meeting to approve the payment of dividend for the year 2004 at the rate of 70% of the net profit after deduction of the statutory reserve, allocation of profit, payment of dividend and statutory reserve for the year 2005 as follows: Allocation for dividend payment: 1,252,044,753.23 Baht Payment for each ordinary share: 1.56 Baht (per share) Statutory Reserve: 94,138,703.25 Baht Date of dividend payment: May 27, 2006 As such, the Company will fix the date for closing the Company Share Register for designation the Right of shareholders to receive the dividend on the 7th of April 2006 at 12.00 hr. (4) To consider and approve the election of directors in place of those retiring from the office by rotation. The retiring directors at this Meeting are (1) Mr. Suthichart Chirathivat (2) Mr. Tos Chirathivat (3) Mr. Thierry Bourgeron (4) Mr. John Sian-Zu Lin (5) Mr. Viet Hung Do Opinion of the Board: To propose to the Annual General Shareholders' Meeting to re-appoint all retiring directors. (5) To consider and approve the appoint an auditor of the Company and fix his/her remuneration. Opinion of the Board: -To appoint Ms.Saifon Inkaew, auditor license no.4434 and/or Ms.Ratana Jala, auditor license no.3734 and/or Ms.Tippawan Nananuwat, auditor license no. 3459 of Ernst & Young office to be the Company's auditor and to appoint Mr.Wichart Lokatekrawee, auditor license no.4451 and/or Ms.Kamontip Lertwitworatep, auditor license no.4377 of Ernst & Young office to be the auditor of the Company's subsidiaries for the financial year ending 31 December 2006. -To approve the remuneration of Baht3,400,000 (Baht Three Million Four Hundred Thousand) for the Company only and of Baht6,010,000 (Baht Six Million and Ten Thousand) for the whole group. (6) To consider and approve the connected transactions regarding the renewal of the land and building lease agreements including service agreement relating to Wongsawang. Opinion of the Board: -This connected transaction has given at the most benefits to the Company because it is a renewal of the lease for Wongsawang which is currently one of the Company's branches. In order that the Company will be able to continue its business operation in Wongsawang for another 10 years period. -This connected transaction has been approved by majority vote (8/10) of the directors whom have no conflict of interest in this respect. The directors who are considered as the connected persons are Khun Suthichart and Khun Tos Chirathivat have not made any vote to this transaction. -There is no dissent opinion from any director whom is acting as the Audit Committee to the said majority votes of the Board. The Audit Committee will have a meeting to consider again after their receipt of the opinion report of the Independent Financial Advisor. -To approve this connected transaction regarding the renewal of the land and building lease agreement including service agreement relating to Wongsawang. (7) To consider and approve the revenue recognition for the cancellation of the Dividend amount of Baht 55,974 (Fifty Five Thousand Nine Hundred Seventy Four Baht) due to the non qualification of the shareholders to receive the dividend. Opinion of the Board: To approve the Revenue Recognition for the cancelled Dividend of the Year 2005 at the amount of Baht 55,974 (Fifty Five Thousand Nine Hundred Seventy Four Baht). (8) Other business (if any). 4. Fixing the date for closing the Company Share Register Book for designating the right to attend the Annual General Shareholders' Meeting for the year 2005 on the 7th of April 2006 at 12:00 hr. until the Annual General Shareholders' Meeting is completed.. To comply with the SET regulations and to disclose information to interested investors, we hereby notify you of the Resolutions of the Board of Directors' Meeting No.3/2006. Please be informed accordingly. Sincerely Yours, Ms. Rumpa Kumhomreun Vice President, Finance and Accounting Appendix 1 Big C Supercenter Public Company Limited Registration No. Bor Mor Jor. 137 Information Memorandum of Connected Transaction of the Listed Company and thesubsidiary According to the Board of Directors Meeting No 3/2006 of Big C Supercenter Public Company Limited ("Big C, Listed Company") held on 14 March 2006 has approved the renewal of land and building lease and service agreement at the building called Central Wongsawang from Central Department Store Co., Ltd. (Owner of the land and building). Such transaction is considered as the connected transaction with following particulars: 1. Date of Transaction and Related Party 1.1 Date of transaction 1) Land Lease Agreement 2) Building Lease and Service Agreement Both transactions will come effective immediately when the Annual General Meeting of shareholders of Big C for the year 2006 pass a resolution to approve the transaction. 1.2 Related party Land Lessor : Central Department Store Co., Ltd. Lessee : Central Superstore Co., Ltd. (Subsidiary) Building Lease and Service Agreement Lessor/ Service provider : Central Department Store Co., Ltd. Lessee/ Service receiver : Big C Supercenter Public Company Limited 2. Details of related assets This transaction is to renew the land and building lease and service agreement at the building located at Wongsawang Shopping Center with details as follows: 2.1 Land Lease Agreement 2.2.1 Leased premises To lease the land, Deed title Nos. 153304, 35763, 24219 Land Nos 678, 2378, 1978, Bang Sue Sub-district, Bang Khen (Bang Sue) District, Bangkok, totaling 3 plots of land with an area of 3 Ngan, 38.3 Square Wah. 2.2.2 Objective of lease To use a building as an office and a warehouse 2.2.3 Lease period 10 years, starting form 1 April 2006 - 31 March 2016 with an option to renew for another 2 years at the same rental rate of the 10th year 2.2 Building Lease and Service Agreement 2.2.1 Leased premises To lease the area of 8,345.25 Square Meters of the 1st and 2nd floors of Wongsawang Town Center located at No. 888 Piboonsongkram Road, Bang Sue Sub-district, Bang Sue District, Bangkok 2.2.2 Objective of lease To operate a supercenter under the name of "Big C Supercenter" 2.2.3 Lease period 10 years, starting form 1 April 2006 - 31 March 2016 with an option to renew for another 2 years at the same rental rate of the 10th year 2.2.4 Scope of service To provide a facilities service such as air-conditioning system, escalator, elevator, emergency electricity, electricity, water and gas supply including cleaning and maintenance services etc. 2.2.5 Service period Same as the lease period 3. Size of transaction According to calculation of the value of land and building lease and service agreement for 10 years, the total amount of the transaction is of Baht 497,638,044.61 (Four Hundred Ninety Seven Million Six Hundred Thirty Eight Thousand Forty Four Baht and Sixty One Satang). The transaction is considered as connected transaction in category 4 which is an asset transaction. Comparing to a value of tangible asset of Big C and Subsidiary, the size of the transaction is equal to 3.75 percent, according to the financial statement audited by the Company Auditor as of 31 December 2005. The listed Company has to perform and disclose the transactions agreement pursuant to the Notification of the Stock Exchange of Thailand Re: Rules, Procedures and a Disclosure of Connected Transactions of the Listed Company. Whereas, the size of this transaction is over or equivalent to Baht 20 Million or 3 percent of the book value of the tangible assets of Big C and subsidiaries, therefore, the transaction has to be approved by the shareholders and has to be disclosed 4. Name of Connected Persons and Related Persons 4.1 Connection with the Listed Company Central Department Store Co.,Ltd. is a shareholder of Big C who holds 9,632,000 shares or 1.20 percent as of 12 April 2005. 4.2 Connected persons are the persons directly and indirectly holding the shares of Big C and Central Department Store Co.,Ltd. as follows: shareholders % of Total Shares of % of Total Shares of Big C Central Department Store Co., Ltd. 1. Mr.Tos Chirathivat 3.03 0.0000009 2. Mr.Suthisak Chirathivat 2.79 0.0000009 3. Mr.Pichai Chirathivat 2.79 -- 4. Ms.Nattaya Chirathivat 2.39 -- 5. Mr.Sutthichai Chirathivat 0.79 0.0000009 6. Central Retail Corporation Ltd.- 99.9999919 Total 11.79 99.99 The Connected Persons and the other persons being relative to the Connected Persons hold an approximately 11.79% of the total distributed shares of Big C as of April 12, 2005. In accordance with the Notification of the Stock Exchange of Thailand Re: Rules, Procedures and Disclosure of Connected Transaction of the Listed Companies, the said transaction is required to be approved by a resolution of the Company's Shareholders whom do not have any interests from such transaction. 4.3 Directors whom are the Connected Persons Mr. Suthichart Chirathivat and Mr. Tos Chirathivat did not attend the meeting of this Agenda and have no right to vote in the said meeting. Those persons have the management power in Big C and Central Department Store Limited. 5. Total Consideration, Payment Method, Installment Payment 5.1 Rental Rate, Payment and Installment Payment for Land 1st - 3rd Year, Rate of Monthly Rental is 458,544 Baht which will be increased at 15% in every 3 years and the installment payment will be made in every 6 months in advance. 5.2 Rental Rate, Service Rate for 1st and 2nd Floors of the Building and Payment Method as well as Installment Payment (a) Rental Rate at 300 Baht per square meter being the total monthly rental of 2,503,575 Baht of which will be increased at 10% in every 3 years. (b) Service Fee for common area at 20 Baht per square and service fee for air-conditioning at 65 Baht per square meter, totaling 85 Baht per square meter. Therefore, a monthly service fee is equivalent to Baht 709,346.25 In addition, the service fee for air-conditioning will be increased in accordance with the electricity, inflation rate and others related expenses. 6. Use of Fund: Big C's working capital 7. Opinion of the Board of Directors of Big C and Audit Committee: The Board of Directors of Big C has agreed to approve a resolution for this Connected Transaction due to their market prices which have an appropriate reference. The Connected Transaction is also given the most beneficial to Big C because it is an extension of the lease period for Land and Building of Big C Wongsawang which is one of Big C stores. Thus, Big C is able to operate its business in Big C Wongsawang continuously. The extension term of the lease will be renewed for another 10 years thereto. In this regards, the Audit Committee will have a meeting to consider such Connected Transaction again after they have received an opinion report of the Independent Financial Advisor.