Related party transactions with persons who may have conflict of
interests with the company

The connected transaction & connected persons

The connected transactions with persons, who may have conflict of
interest with TCB are between TCB, its subsidiary / associated companies
and TCB’s major shareholder namely Thai Rayon Public Co.,Ltd

Connected transaction:

Renouncement of share in the increase share capital of Associated company

At the Annual General Meeting of the Shareholders on 26 April 2007, it was resolved that the Company would not exercise its allotted rights to participate in the share offering of Alexandria Fiber Co., S.A.E. (3,755,125 ordinary shares of EGP 10 each). Subsequently, that company allotted the shares to which the Company did not subscribe to Thai Acrylic Fiber Co., Ltd., which is an associated company. In May 2007 Alexandria Fiber Co., S.A.E. increased its share capital as mentioned above, and after such share increase, the Company’s direct shareholding was diluted from 27.5% to 14.4%. As a result, the Company reclassifies the investment in that company from investments in associated company to investments in related parties

Rational of transaction

  Audit committee has recommended that since the renouncement of shares
  will take place at par value and AFCO is having accumulated loss of LE
  14 million as on 31^(st) Dec’06 and having lossed of 20 million LE in
  2006 and since this renouncement will help TCB to focus on its core
  business of Carbon Black. Also company wants to use its funds to
  invest in proposed Carbon black projects in Mexico, Oman etc., this
  transaction will be beneficial to shareholders

Corporate guarantee for Associated company 

The company has given undertaking for a maximum limit of totaling US$ 6.3 million to the two overseas financial institutions to obtain various types of credit facilities by M/S Alexandria Fibre Co.,Ltd (AFCO), the company’s associated company in Egypt in which it holds 14.4% equity.

Rational of transaction

  Company provided guarantee to AFCO in proportion of its shareholding
  in the company. The transaction was approved by the Audit Committee
  and the Board of Director also and it is a normal requirement for
  Banks / Financial institutions to ask such guarantee from the
  shareholder for financing the project.

Corporate guarantee for Subsidiary company

The company has given guarantee to one commercial bank in China for maximum amount of totaling US$5.1 million to obtain credit facilities by its subsidiary company, Liaoning Birla Carbon Co.,Ltd, in which the company holds 89% equity.

Rational of transaction

The transaction was approved by the board of directors and it is a normal requirement for Banks/Financial institutions to ask such guarantees from the shareholder for financing the project.

Type of business with person who may have conflict of interests:

Sale of steam & power

Thai carbon black Pcl is having the transaction of sell of electricity
and steam, which is generated from the waste heat gases generated during
its process of manufacturing of carbon black to Thai Rayon Pcl.

Rational of transaction

  The company sells electricity and steam which is generated during the
  process of manufacturing of carbon black to Thai Rayon Pcl in the
  normal course of business. The electricity selling price is based on
  PEA electricity selling price and steam selling price is bease on
  energy value of steam linked with PEA electricity selling price. The
  audit committee reviewed the transaction and considered this
  transaction as normal business transaction with underlying market
  price and selling price as reasonable.

The complete details of related party transactions with subsidiary and
related companies are given in note no.6 of financial statement.