5.  Assets Used in Operation

-   Total Assets

Total assets of The Siam Cement Group at the end of 2004 were Baht
265,682 million. Twenty percent of them are current assets, comprising
cash, accounts receivable, and inventories. The rest (80%) are fixed
assets and other assets.

Most assets shown in the financial statements of The Siam Cement Group
and its subsidiaries were built by and belong to the Company and its
subsidiaries. The Siam Cement Group has no policy to place any assets as
collateral, therefore, having no such pledged assets. In necessary cases
to obtain the loans for operation, The Siam Cement Public Company and/or
companies in the Group will guarantee for the loans.

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

Petrochemical 82,017 Million Baht

Paper and Packaging 55,899 Million Baht

Cement 66,674 Million Baht

  Building Products 26,036 Million Baht

Distribution 8,041 Million Baht

From the consolidated financial statements of The Siam Cement Group and
its subsidiaries, land, buildings, machinery, and equipment have
carrying values of Baht 75,227 million, which are 28 percent of total
assets. But their net book values are substantially lower than the
replacement costs; the Company and its subsidiaries engaged American
Appraisal (Thailand) Company Limited, an independent appraiser and
expert to appraise the value of buildings, machinery, and equipment.
Land was newly appraised according to the values of The Department of
Land with a surplus of Baht 72,858 million or 27 percent of total
assets. These represent the values close to the approximate market
values or replacement costs.

  Fixed Assets of The Company and The Business Units

  Million Baht

  ------------------------------------------------------------------------------------------------
                    Land              Building            Machinery            Total     
                                                          and Others                     
  ----------------- -------- -------- ---------- -------- ----------- -------- --------- ---------
  Company           Dec. 31, Dec. 31, Dec. 31,   Dec. 31, Dec. 31,    Dec. 31, Dec. 31,  Dec. 31,
                    2004     2003     2004       2003     2004        2003     2004      2003

  The Siam Cement   1,811    1,864    501        548      119         105      2,431     2,517
  Pcl.                                                                                   

  Petrochemicals    1,471    1,501    1,271      1,288    21,568      23,005   24,310    25,794
  Business                                                                               

  Paper and         1,390    1,216    3,790      3,478    17,995      13,729   23,175    18,423
  Packaging                                                                              
  Business                                                                               

  Cement Business   4,301    4,412    7,603      7,967    31,260      32,509   43,164    44,888

  Building Products 1,216    1,078    1,647      1,572    5,463       4,705    8,326     7,355
  Business                                                                               

  Distribution      475      392      391        398      269         245      1,135     1,035
  Business                                                                               

  Cementhai Holding 8        8        -          -        1           1        9         9

  Cementhai         382      389      218        229      8           9        608       627
  Property                                                                               

  Total             11,054   10,860   15,421     15,480   76,683      74,308   103,158   100,648

  Consolidated      9,315    9,121    12,782     12,842   53,130      50,751   75,227    72,714
  Financial                                                                              
  Statements**                                                                           
  ------------------------------------------------------------------------------------------------

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.

-   Intangible Assets

-   Patents

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

+---+------+-----+-----------+------+------+----------+-------+----+
| N | Pa   | D   | Patentee  | App  | Date | Patent   | Paten | E  |
| u | tent | ate |           | lica | S    | for      | t for | xp |
| m | Nu   | Iss |           | tion | ubmi | In       |  Prod | ir |
| b | mber | ued |           | Nu   | tted | vention/ | uct D | y  |
| e |      |     |           | mber |      | Product  | esign | Da |
| r |      |     |           |      |      | Design   |       | te |
+===+======+=====+===========+======+======+==========+=======+====+
| 1 | 7428 | D   | Thai      | 01   | A    | Solution | -     | Ap |
|   |      | ec. | Pol       | 3234 | pril | to       |       | r. |
|   |      | 15, | yethylene |      | 18,  | plastic  |       | 1  |
|   |      | 1   | Co., Ltd. |      | 1991 | film     |       | 7, |
|   |      | 997 |           |      |      | layers   |       | 20 |
|   |      |     |           |      |      | st       |       | 11 |
|   |      |     |           |      |      | ickiness |       |    |
+---+------+-----+-----------+------+------+----------+-------+----+
| 2 | 9148 | S   | The Siam  | 02   | Feb. | Lacto    | -     | Fe |
|   |      | ep. | Pulp and  | 1496 | 15,  | bacillus |       | b. |
|   |      | 21, | Paper     |      | 1994 | in wet   |       | 1  |
|   |      |     | Public    |      |      | bagasse  |       | 4, |
|   |      | 1   | Company   |      |      | storage  |       | 20 |
|   |      | 999 | Limited   |      |      |          |       | 14 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 3 | 1346 | Sep | Thai      | 0    | Jan. | -        | P     | Ja |
|   | 5-70 | 11, | C         | 4170 | 8,   |          | allet | n. |
|   |      | 2   | ontainers | 8-13 | 1998 |          |       | 7, |
|   |      | 002 | Co., Ltd. |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 08 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 4 | 1    | J   | Siam CPAC | 03   | Jul. | -        | P     | Ju |
|   | 1704 | an. | Block     | 8859 | 31,  |          | aving | l. |
|   |      | 17, | Co., Ltd. |      | 1997 |          | B     | 3  |
|   |      | 2   |           |      |      |          | locks | 0, |
|   |      | 002 |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 07 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 5 | 1    | J   | Siam CPAC | 03   | Jul. | -        | P     | Ju |
|   | 1616 | an. | Block     | 8858 | 31,  |          | aving | l. |
|   |      | 8,  | Co., Ltd. |      | 1997 |          | B     | 3  |
|   |      | 2   |           |      |      |          | locks | 0, |
|   |      | 002 |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 07 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 6 | P    | May | Siam CPAC | 99   | Dec. | Formula  | -     | De |
|   | etty | 15, | Block     | 0300 | 2,   | of       |       | c. |
|   | Pa   | 2   | Co., Ltd. | 0147 | 1999 | textured |       | 1, |
|   | tent | 001 |           |      |      | natural  |       | 20 |
|   | 237  |     |           |      |      | Grani    |       | 05 |
|   |      |     |           |      |      | te-liked |       |    |
|   |      |     |           |      |      | floor    |       |    |
|   |      |     |           |      |      | surface  |       |    |
+---+------+-----+-----------+------+------+----------+-------+----+
| 7 | P    | J   | Siam      | 00   | Dec. | Roofing  | -     | De |
|   | etty | an. | Fiber     | 0300 | 9,   | in       |       | c. |
|   | Pa   | 12, | Glass     | 0422 | 1999 | sulation |       | 8, |
|   | tent | 2   | Co., Ltd. |      |      |          |       | 20 |
|   | 141  | 001 |           |      |      |          |       | 05 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 8 | P    | J   | Siam      | 99   | Dec. | Ceiling  | -     | De |
|   | etty | un. | Fiber     | 0300 | 13,  | In       |       | c. |
|   | Pa   | 2,  | Glass     | 0163 | 1999 | sulation |       | 1  |
|   | tent | 2   | Co., Ltd. |      |      |          |       | 2, |
|   | 89   | 000 |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 05 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 9 | 1    | J   | Siam      | 02   | Jan. | -        | Metal | Ja |
|   | 4978 | ul. | Fiber     | 9726 | 19,  |          | stud  | n. |
|   |      | 18, | Glass     |      | 1996 |          |       | 1  |
|   |      | 2   | Co., Ltd. |      |      |          |       | 8, |
|   |      | 003 |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 06 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 1 | 1    | May | The Siam  | 02   | Jan. | Co       |       | Ja |
| 0 | 2688 | 10, | Fibre-    | 9646 | 12,  | rrugated |       | n. |
|   |      | 2   | Cement    |      | 1996 | fibr     |       | 1  |
|   |      | 002 | Co., ltd. |      |      | e-cement |       | 1, |
|   |      |     |           |      |      | sheet    |       | 20 |
|   |      |     |           |      |      |          |       | 06 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 1 | 1    | May | The Siam  | 02   | Jan. | Roofing  |       | Ja |
| 1 | 4735 | 12, | Fibre-    | 9647 | 12,  | tile     |       | n. |
|   |      | 2   | Cement    |      | 1996 |          |       | 1  |
|   |      | 003 | Co., ltd. |      |      |          |       | 1, |
|   |      |     |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 06 |
+---+------+-----+-----------+------+------+----------+-------+----+
|   |      |     |           |      |      |          |       |    |
+---+------+-----+-----------+------+------+----------+-------+----+
| 1 | 1    | May | The Siam  | 03   | Feb. | Round    |       | Fe |
| 2 | 4736 | 12, | Fibre-    | 0045 | 14   | ridge    |       | b. |
|   |      | 2   | Cement    |      | 1996 | end      |       | 1  |
|   |      | 003 | Co., ltd. |      |      |          |       | 3, |
|   |      |     |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 06 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 1 | 1287 | May | CPAC Roof | 0508 | Jun. | -        | Roof  | Ju |
| 3 | 9-81 | 30, | Tile Co., | 94-6 | 7,   |          | tile  | n. |
|   |      | 2   | Ltd.      |      | 1999 |          |       | 6, |
|   |      | 002 |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 09 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 1 | 1288 | May | CPAC Roof | 0508 | Jun. | -        | Round | Ju |
| 4 | 2-83 | 30, | Tile Co., | 97-8 | 7,   |          | apex  | n. |
|   |      | 2   | Ltd.      |      | 1999 |          |       | 6, |
|   |      | 002 |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 09 |
+---+------+-----+-----------+------+------+----------+-------+----+
| 1 | 1    | J   | CPAC Roof | 06   | Oct. | De       |       | Oc |
| 5 | 5048 | ul. | Tile Co., | 9026 | 14,  | corative |       | t. |
|   |      | 31, | Ltd.      |      | 2001 | ridge    |       | 1  |
|   |      | 2   |           |      |      |          |       | 3, |
|   |      | 003 |           |      |      |          |       | 20 |
|   |      |     |           |      |      |          |       | 11 |
+---+------+-----+-----------+------+------+----------+-------+----+

-   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 46-47.

-   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.

Petrochemicals 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          |
+---------------------------+--------------------+--------------------+
| CALIBRATION               | Jun. 30, 2003      | Jun. 2016          |
|                           |                    |                    |
|                           | Nov. 21, 2003      | Nov. 2016          |
+---------------------------+--------------------+--------------------+

Paper and Packaging Business

Details of companies receiving BOI privileges:

+---------------------------+--------------------+--------------------+
| Project                   | Date Acquired      | Expiry of Tax      |
|                           |                    | Incentives         |
+---------------------------+--------------------+--------------------+
| Semi-Chemical Pulp        | Aug. 13,1996       | Dec. 31, 2005      |
+---------------------------+--------------------+--------------------+
| Pulp                      | Dec. 3, 1999       | Sep. 23, 2009      |
+---------------------------+--------------------+--------------------+
| Bleached Short-Fibered    | Dec. 26, 1990      | Sep. 30, 2007      |
| Pulp                      |                    |                    |
+---------------------------+--------------------+--------------------+
| Corrugated Sheets and     | Jul. 4, 1994       | Dec., 27, 2008     |
| Corrugated Paper Boxes    |                    |                    |
+---------------------------+--------------------+--------------------+
| Corrugated Sheets and     | Jan 30, 1997       | Jan. 30, 2004      |
| Corrugated Paper Boxes    |                    |                    |
+---------------------------+--------------------+--------------------+
| Kraft Paper               | Jan. 1, 1997       | Dec. 31, 2011      |
+---------------------------+--------------------+--------------------+

-   Trademarks

  Key trademarks of The Siam Cement Public Company Limited and
  Subsidiaries comprise “Elephant” in a hexagon, “Elephant” in a circle,
  “Erawan Elephant” in a circle, and “Tiger” in a circle, etc. About 359
  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
The Siam Cement Group policy.

The Group 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 compete in both
Thailand and ASEAN countries, especially in petrochemical, paper and
packaging and cement business, which are the heart of the Group. It will
not invest or else reduce its investment in other non-core businesses
that either need venture partners’ technology or employ normal
technology in the market. Hence, it can collaborate existing resources
to support its core businesses.

As at December 31, 2004, the Company’s investments in subsidiaries,
associates, and other companies, recorded in the financial statements,
totalled Baht 151,404 million. Investments in subsidiaries and
associates amounted to Baht 141,755 million and in other companies
amounted to Baht 9,649 million. Details are displayed below: Million
Baht

+--------------+--------------+----------------+-------------+---------+
| Business     | Original     | Investment in  | Investment  | Total   |
| Unit         | Investment   | Subsidiaries   | in Other    |         |
|              | in           | and Associates | Companies   | (4) =   |
|              | Subsidiaries | (Equity        | (Original   | (2) +   |
|              | and          | Method)        | Cost/       | (3)     |
|              | Associates   |                | Market      |         |
|              |              | (2)            | Value)      |         |
|              | (1)          |                |             |         |
|              |              |                | (3)         |         |
+--------------+--------------+----------------+-------------+---------+
| P            | 21,504       | 46,110         | 8,465       | 54,575  |
| etrochemical |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Paper and    | 7,351        | 27,523         | -           | 27,523  |
| Packaging    |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Cement       | 5,878        | 37,175         | -           | 37,175  |
+--------------+--------------+----------------+-------------+---------+
| Building     | 5,106        | 16,738         | 299         | 17,037  |
| Products     |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Distribution | 2,800        | 1,854          | -           | 1,854   |
+--------------+--------------+----------------+-------------+---------+
| Cementhai    | 2,973        | 9,463          | 885         | 10,348  |
| Holding      |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Cementhai    | 3,498        | 2,892          | -           | 2,892   |
| Property     |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Total        | 49,110       | 141,755        | 9,649       | 151,404 |
+--------------+--------------+----------------+-------------+---------+