Connected Transactions

The Board of Directors accentuates the importance of considering and
granting approval for connected transactions or related transactions or
transactions that may cause conflict of interests. In this regard, SCG
Code of Conduct has set out a policy for determining transactions, as
follows:

Connected Transactions between the Company and its Subsidiaries

SCG comprises a large number of companies whose businesses are bound to
make transactions with one another in such manners as service providing,
trading of raw materials and products, financial support, technical or
human resource assistance, etc. In operating businesses or performing
duties related to such matters, all employees and parties concerned are
required to comply with the laws, the rules and regulations of the
government agencies as well as the rules of SCG and any criteria and
condition prescribed by local communities.

Transactions with External Entities

In making transactions with external entities or other companies, the
company shall proceed through fair methods and comply with terms and
conditions as agreed upon honestly. The company shall also avoid making
transactions that may cause troubles or damages to external parties. The
company has specified guidelines and procedures for consideration of
granting approval for connected transactions, related transactions or
transactions with potential conflict of interests for the best interest
of the company in accordance with rules and regulations as prescribed by
law. The directors and management shall inform potential stakes to the
company in advance. The company, in turn, shall consider the
appropriateness of transactions, and in cases where such transactions
need approval in accordance with the regulations and procedures as
prescribed by law, the management shall propose such matters to the
Board of Directors or at the shareholders’ meetings and shall disclose
the information to investors in a transparent manner. Under no
circumstance shall directors or management concerned be allowed to
participate in the process of approval consideration.

In any case, SCG Code of Conduct and Corporate Governance allow the
company to make transaction decisions based on market price mechanism,
which is the company’s normal, efficient tool of effective business
operation.

Future Connected Transaction

Connected transactions in the future will continue to be based on
traditional business practices and will follow the policy of the market
controlling prices in negotiated transactions, as in the past. No
special benefit will accrue either to companies or individuals from
connected transactions.

Report of Connected Transactions in 2009

Transaction Regarding to Financial Assistance: One loan between
subsidiaries amounted to 152.3 Million Baht.

-   The installation project of solid waste pretreatment plant of SCI
    Eco Services Co., Ltd. at Kaeng Khoi cement plant.

The above one transaction in 2009, although connected, was exempted from
disclosure according to the rules on Disclosure of Information and Other
Acts of listed company of SET for the following reasons:

1.  It is a transaction between the company and a subsidiary that has
    other connected person that holds no more than 10% of total shares
    of a subsidiary.

2.  It is a transaction between subsidiaries that has other connected
    person that holds no more than 10% of total shares of a subsidiary.

3.  The value of the transaction does not exceed 0.03% of the value of
    the company’s net tangible assets.

4.  It is a transaction between the company/ subsidiary and other
    connected person which is a juristic person. An authorized person of
    the company/subsidiary, as the shareholder of the juristic person,
    has assigned that person to take care of the juristic person which
    the company/ subsidiary is a shareholder.

5.  It is a fair transaction that will not lead to the transfer of
    business interests.

The Audit Committee has approved the review of the information
disclosure and the connected transaction in compliance with the
notification of SEC and SET. The transaction was a normal business
practice, reasonable, and comparable to the market value. It has been
approved and complied with the law pertaining to SEC, rules, notices,
orders, or the regulations of the SET.

[]

[]

[]

[]