5.  Assets Used in Operation

Total Assets

Total assets of The Siam Cement Group at the end of 2006 were Baht
221,897 million. 30 percent of them are current assets, comprising of
cash, accounts receivable, and inventories. The rest (70 percent) are
investments, fixed assets and other assets.

Most assets shown in the financial statements of the Company and its
subsidiaries were built by and belonged to the Company and its
subsidiaries. SCG has no policy to place any assets as collateral;
therefore, having no such pledged assets. Excluding, one of subsidiaries
placed land, building and equipment as collateral to obtain the loans
for Baht 3,972 million.

Total assets can be classified according to main business units as
follows:

  --------------------------- ------------------ -------------------------
  Chemical                    Baht 105,024       million

  Paper                       Baht 40,734        million

  Cement                      Baht 57,791        million

  Building Materials          Baht 20,595        million

  Distribution                Baht 10,610        million
  --------------------------- ------------------ -------------------------

From the consolidated financial statements of the Company and its
subsidiaries, land, buildings and equipment have carrying values of Baht
93,005 million, which are 42 percent of total assets.

  Fixed Assets of the Company and the Business Units

  (Million Baht)

  []

Remarks: Figures in financial statements are classified according to
Business Units before adjustments of inter-business transactions.

* Shown according to consolidated statements after adjustments of
inter-business transactions.

** Book value

Intangible Assets

-   Patents

Hereunder is the list of important patents of the Company and its
operating subsidiaries.

[TABLE]

-   Concession

Concessions in limestone and gypsum mines are long-lived. Their
maturities have been continuously extended because cement is a
fundamental product for construction and infrastructure related to the
country’s economy. Hence, there is a hypothesis that cement market
growth closely links to economic growth of the country.

Details of concessions for the Company and affiliates in cement business
are shown in the Product or Service Features of Cement Business on page
41-43.

-   BOI Certificates

The Siam Cement Group adheres to the policy to apply for the BOI’s
privileges in every business it is eligible for. The Group believes that
it can fully operate under all BOI’s rules and regulations due to its
transparent operation based on its good corporate governance.

Chemicals Business

  The Business acquired BOI tax incentives such as machinery import duty
  exemption, corporate tax exemption for 8 years from the date of first
  revenue received, and 50% reduction of corporate income tax for 5
  years after the exemption period. Details are shown below:

+---------------------------+--------------------+--------------------+
| Project                   | Date Acquired      | Expiry of Tax      |
|                           |                    | Incentives         |
+===========================+====================+====================+
| PP 1                      | May 2, 1989        | Oct., 2006         |
+---------------------------+--------------------+--------------------+
| LDPE                      | July 20, 1995      | Jun. 2008          |
+---------------------------+--------------------+--------------------+
| PP 2                      | Sep 26, 1995       | Apr. 2010          |
+---------------------------+--------------------+--------------------+
| HDPE 2                    | Jul. 10, 1995      | Aug. 2011          |
+---------------------------+--------------------+--------------------+
| Jetty and Terminal        | Jan. 26, 1998      | Sep. 2011          |
|                           |                    |                    |
|                           | Oct. 2, 2003       | Dec. 2016          |
|                           |                    |                    |
|                           | May 19, 2004       | Jul. 2017          |
|                           |                    |                    |
|                           | Nov. 25, 2004      | Jan. 2018          |
+---------------------------+--------------------+--------------------+
| Olefins                   | Aug. 14, 1995      | Jan. 2012          |
+---------------------------+--------------------+--------------------+
| HDPE 3                    | Jul. 24, 2000      | Oct. 2014          |
+---------------------------+--------------------+--------------------+
| PE COMPOUND               | Feb. 10, 2003      | Mar. 2017          |
|                           |                    |                    |
|                           | Mar. 11, 2004      | Feb. 2018          |
|                           |                    |                    |
|                           | Mar. 22, 2004      | Jul. 2018          |
|                           |                    |                    |
|                           | Feb. 21, 2006      | Feb. 2020          |
|                           |                    |                    |
|                           | May. 23, 2006      | May. 2020          |
+---------------------------+--------------------+--------------------+
| CALIBRATION               | Jun. 30, 2003      | Jun. 2016          |
|                           |                    |                    |
|                           | Nov. 21, 2003      | Nov. 2016          |
+---------------------------+--------------------+--------------------+

 

Paper Business

Details of companies receiving BOI privileges:

+---------------------------+--------------------+--------------------+
| Project                   | Date Acquired      | Expiry of Tax      |
|                           |                    | Incentives         |
+---------------------------+--------------------+--------------------+
| Pulp                      | Dec. 3, 1999       | Sep. 2009          |
+---------------------------+--------------------+--------------------+
| Bleached Short-Fibered    | Dec. 26, 1990      | Sep. 2007          |
| Pulp                      |                    |                    |
+---------------------------+--------------------+--------------------+
| Corrugated Sheets and     | Jul. 4, 1994       | Dec. 2008          |
| Corrugated Paper Boxes    |                    |                    |
+---------------------------+--------------------+--------------------+
| Corrugated Sheets and     | Jan 30, 1997       | Feb. 2009          |
| Corrugated Paper Boxes    |                    |                    |
+---------------------------+--------------------+--------------------+
| Kraft Paper               | Jan. 1, 1997       | Dec. 2011          |
+---------------------------+--------------------+--------------------+

-   Trademarks

The key trademarks of The Siam Cement Public Company Limited and
Subsidiaries comprise of “Elephant” in a hexagon, “Elephant” in a
circle, “Erawan Elephant” in a circle, and “Tiger” in a circle, etc.
About 365 trademarks are registered at The Department of Intellectual
Property.

[]

[]

[]

[]

Investment Policy in Subsidiaries and Associates

The Siam Cement Public Company Limited established a holding company for
each business units to oversee and control business operation along the
organization structure. Every business unit independently operates under
SCG policy.

SCG investment emphasizes on business expertise, self-operated
capability, and potential for a fair return and long-term growth. Such
management and investment must enable the Group to have more competitive
advantages than its competitors both within Thailand and ASEAN
countries, especially in Chemical, Paper and Cement Business, which are
the core business of the Group. It will maintain and divest its
investment in other non-core businesses that either need venture
partners’ technology or employ normal technology in the market. Hence,
SCG can use existing resources to support its core businesses.

As at December 31, 2006, the Company’s investments in subsidiaries,
associates, and other companies, based on equity method in the financial
statements, totalled Baht 116,688 million. Investments in subsidiaries
and associates amounted to Baht 110,870 million and in other companies
amounted to Baht 5,818 million with details as follows: Million Baht

+--------------+--------------+----------------+-------------+---------+
| Business     | Original     | Investment in  | Investment  | Total   |
| Unit         | Investment   | Subsidiaries   | in Other    |         |
|              | in           | and Associates | Companies   | (4) =   |
|              | Subsidiaries |                |             | (2) +   |
|              | and          | (Equity        | (Original   | (3)     |
|              | Associates   | Method)        | Cost)       |         |
|              |              |                |             |         |
|              | (1)          | (2)            | (3)         |         |
+--------------+--------------+----------------+-------------+---------+
| Chemicals    | 36,507       | 61,044         | 2,706       | 63,750  |
+--------------+--------------+----------------+-------------+---------+
| Paper        | 10,265       | 16,487         | -           | 16,487  |
+--------------+--------------+----------------+-------------+---------+
| Cement       | 9,518        | 12,695         | 1,119       | 13,814  |
+--------------+--------------+----------------+-------------+---------+
| Building     | 5,107        | 6,483          | 299         | 6,782   |
| Products     |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Distribution | 2,800        | 2,196          | -           | 2,196   |
+--------------+--------------+----------------+-------------+---------+
| Cementhai    | 9,375        | 10,444         | 1,694       | 12,138  |
| Holding      |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Cementhai    | 2,177        | 1,521          | -           | 1,521   |
| Property     |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Total        | 75,749       | 110,870        | 5,818       | 116,688 |
+--------------+--------------+----------------+-------------+---------+