10. Internal Control

The Board of Directors appointed the Audit Committee to firstly oversee
the Group’s financial reports to comply with appropriate accounting
standards, the regulations of the Stock Exchange of Thailand, other
related laws, Good Corporate Governance, and business ethics. Secondly,
the Committee assesses risk management and internal control to ensure
its efficiency. Thirdly, it supervises auditing systems to meet good
auditing standards. Fourthly, it selects and appoints the external
auditors. Fifthly, the Committee engages in any assignments given by the
Board. The Audit Committee assigned the Audit Office, a unit in The Siam
Cement Public Company Limited, to do the audit and directly report the
result quarterly to the Audit Committee for consideration and
evaluation. The Audit Committee then quarterly reports to the Board.

In 2004, The Audit Committee had an opinion that the company had
conformed to account standards of the Accounting ACT 2000, the
announcements of the Securities Exchange Commission (SEC) and the Stock
Exchange of Thailand (SET) in quarterly and annual reports for 2004. The
Company also provides timely available and sufficient financial
information. The internal control was deemed proper for business nature
and no material weakness was found, aligned with the external auditor’s
report (Details in the Auditor Committee’s report page 112-113).

The Audit Committee’s Report for 2004

The Audit Committee carried out its commitment to the Company’s Board of
Directors according to the Charter of the Audit Committee, including
monitoring good governance practices to conform with SCG Corporate
Governance and SCG Code of Ethics, financial statements, risk
management, internal audit and internal control, as well as IT auditing
capabilities development. Details can be summarized as follows:

1. Good governance monitoring Provided constant monitoring of the
Company’s conformity to the published SCG corporate governance and SCG
Code of Ethics, as well as those required by the Securities Exchange
Commission (SEC), the Stock Exchange of Thailand (SET), and relevant
laws. This practices were applaused thus earning the Company both
domestic and foreign recognition, as reported elsewhere in this annual
report. In addition, the Audit Committee also assessed its own
performance.

2. Quarterly and annual monitoring of the Company’s financial statements
and the Group’s consolidated financial statements 2004 Monitored the
financial statements of the Company and the Group on a quarterly and
annual basis to ensure consistent conformity to the accounting standards
stipulated in the Accounting Act of 2000, as well as to rules
promulgated by the SEC and SET, including adequate transparency and
timely availability of information ahead of the quarterly and annual SET
submission deadlines. Auditors, who have been invited to attend meetings
when quarterly and annual financial statements are reviewed, have not
recommended any significant corrections and their suggestions have been
accepted and implemented.

3. Monitoring risk management Monitored risk management in all business
units for conformity to established principles, recognizing its
importance in the annual and medium-term planning. In 2004, a risk
warning system and additional controls were implemented to further
decrease risks. Details about significant risk and risk management of
the business have also shown in this annual report.

4. Assessing internal controls The internal controls system was assessed
and adjusted to conform to changing economic circumstances. The
assessment revealed the system was functioning satisfactorily and
efficiently. The auditors confirmed this, finding no significant issues
to resolve. In addition, the control self-assessments system for the
business units was reviewed to boost efficiency by serving as a
management tool to facilitate performance improvements.

5. Monitoring internal auditing Reviewed the internal audit results as
the approved quarterly action plan, as well as reviewed the half-year
policies and action plan, and manpower model to ensure they were in line
with the changing environments. The audit results were grouped into
major categories for more efficiency in reviewing. The recommendations
were cover resolution guidelines and timeframe for improvement process.
Thus it can function properly and truly benefit. In addition, the
sections that underwent review were asked to evaluate the internal audit
team’s practice and make recommendations for increasing its efficiency.
In 2004, more than 200 issues were resolved and a summary report was
sent to all business units with recommendations for solutions and ways
to prevent repeating incidents. IT auditing resulted in continued
development of ways to get the optimum use out of computers, while
maintaining maximum security. The Group confidents that its IT auditing
system is one of the most advanced in Thailand.

The Audit Committee has examined the performance of the Company’s
auditors and considers it satisfactory and benefit to business.
Consequently, the Audit Committee has recommended to the Board of
Committee to seek approval at the ordinary general shareholders’ meeting
for the appointment of Mr. Vichien Thamtrakul or Mr. Winid Silamongkol
of KPMG Phoomchai Auditors Ltd., as the Company’s auditors for 2005.

On behalf of the Audit Committee

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  Air Vice Marshal Kamthon Sindhvananda

Chairman of the Audit Committee