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Report on Setting up a subsidiary and connected transaction

BackJun 11, 2007

SF 199/07

8 June 2007

Subject: Reports on Setting up a new subsidiary and Connected Transaction of Ratchayothin Avenue Co., Ltd.

To: President The Stock Exchange of Thailand

With Reference to the Board of Directors' Meeting of Siam Future development PLC No. 6/2006 held on December 13, 2006, the meeting approved the setting up of a new subsidiary, Ratchayothin Avenue Co., Ltd. as follows:

1. Name of subsidiary Ratchayothin Avenue Co., Ltd
2. Type of business developing and operating shopping centers
3. Registered Capital 100,000,000 Baht (No. of shares 10,000,000 shares with Par Value 10 Baht)
4. Paid-up Capital 100,000,000 Baht
5. Shareholding Structure

Siam Future Development PLC 50%

Major Cineplex Group PLC 50%

6. Objective To develop and operate the new lifestyle center, The Avenue Ratchayothin, located at Ratchayothin intersection near Major Ratchayothin Theatre
7. Dividend Policy Not less than 60% of Net profit of the Company Financial Statements after deducting deficits (if any) if there is no expansion.

The Company would like to inform the connected transaction regarding Financial Contribution from Major Cineplex Group PLC to Ratchayothin Avenue Co., Ltd. Herein the details of the transaction to be entered:

1. The transaction Date: 9 March 2007
2. The party involved: Major Cineplex Group PLC, major shareholder of the Company (21.25%)
3. The general characteristics of the transaction: Ratchayothin Avenue Co., Ltd. has borrowed loan from shareholders, Siam Future Development PLC and Major Cineplex Group PLC 50% each by shareholding proportion.
4. Details of transaction: - Type of transaction Loan
  - Value of Transaction Baht 55.63 Million, equivalent to 4.03% of Net Tangible Asset as at 31 March 2007 (55.63 / 1382.06 Million Baht)
  - Interest Rate MLR of Siam Commercial Bank PCL.
  - Term During construction period (approximately 18 months)
  - Repayment Repayment when the project operates and has liquidity
  - Collateral None
  - Other Conditions None
5. Details of connected persons:
Name
% Share / Position
Loan*
1. Siam Future Development PLC
50% / Shareholder
50 Million Baht
2. Major Cineplex Group PLC
50% / Shareholder
50 Million Baht

Mr. Vicha Poolvaraluck, Director of Ratchayothin Avenue Co., Ltd.

*shared by shareholding proportion

6. Characters and Limit of interests: Major Cineplex Group PLC is a major shareholder (21.25%) of Siam Future Development PLC and shareholder of Ratchayothin Avenue Co., Ltd.
7. Source of Fund: Working Capital and loan from financial institutes
8. The Benefit expected to be generated for SF as the result of the said transaction: To expand a new shopping center will benefit the Company in terms of increase in total revenue and earnings ability in the long run.
9. Consideration of the transaction: Directors who have interests have no right to vote in the meeting
10. Opinion of Board of directors and audit committee: Reasonable and fair transaction in terms of interest which is equal both Siam Future Development PLC and Major Cineplex Group PLC and loan shared 50% by shareholding proportion.

Please be informed accordingly.

 

Sincerely Yours,

 

(Mr. Somnuk Pojkasemsin)
President