Management

(1) Management Structure

Names of Management or Controlling Persons

Board of Directors comprises

1. Mr. Chaovana NaSylvanta Chairman

2. Air Vice Marshal Kamthon Sindhvananda Director

3. Mr. Paron Israsena Director

4. Mr. Snoh Unakul Director

5. Mr. Sivavong Changkasiri Director

6. Mr. Sumet Tantivejkul Director

7. Mr. Yos Euarchukiati Director

8. Mr. Pricha Attavipach Director

9. Mr. Panas Simasathien Director

10. Mr. Arsa Sarasin Director

11. Mr. Boonsithi Chokwattana Director

12. Mr. Chumpol NaLamlieng Director and President

The Management Committee comprises

Management (According to Definition of SEC) *

  1. Mr. Chumpol NaLamlieng President, The Siam Cement Public Company
  Limited

  2. Mr. Kan Trakulhoon Executive Vice President, The Siam Cement Public
  Company Limited

  3. Mr. Apiporn Pasawat President, Cementhai Chemicals Co. Ltd.

  4. Mr. Somboon Chuchawal President, The Siam Pulp and Paper Public
  Company Limited

  5. Mr. Pramote Techasupatkul President, Siam Cement Industry Co., Ltd.

  6. Mr. Kajohndet Sangsuban President, Cementhai Building Products Co.
  Ltd.

  7. Mr. Dusit Nontanakorn President, Cementhai Distribution Co., Ltd.

8. Mr. Chalaluck Bunnag President, Cementhai Holding Co. Ltd.

  9. Mr. Aviruth Wongbuddhapitak President, Cementhai Property (2001)
  Public Company Limited

Note: According to the definition of the Securities Exchange Commission
(S.E.C.), "management" refers to the company's President, the first four
executives after the President and every fourth executives

 

Other Executives

  10. Mr. Cholanat Yanaranop Executive Vice President,

  Cementhai Chemicals Co., Ltd.

  11. Mr. Chavalit Ekabut Executive Vice President, The Siam Pulp and
  Paper Public Company Limited.

  12. Mr. Pichit Maipoom Executive Vice President,

  Cementhai Building Products Co., Ltd.

  13. Mr. Damri Tunshevavong Executive Vice President,

  Cementhai Holding Co., Ltd.

  Mr. Worapol Jennapar Secretary to the Board and Corporate Secretary

The Attendance of the Directors in Relevant Committee Meetings in 2004

Unit : Times

+----------------------+-----------+-----------+-----------+-----------+
| Directors            | Board of  | The Audit | The       | The       |
|                      | Directors | Committee | G         | Rem       |
|                      |           |           | overnance | uneration |
|                      |           |           | and       | Committee |
|                      |           |           | N         |           |
|                      |           |           | omination |           |
|                      |           |           | Committee |           |
+----------------------+-----------+-----------+-----------+-----------+
|                      | Total (12 | Total (5  | Total (5  | Total (3  |
|                      | D         | Members)  | Members)  | Members)  |
|                      | irectors) |           |           |           |
|                      |           | Total 6   | Total 4   | Total 5   |
|                      | Total 9   | T         | T         | T         |
|                      | T         | imes/Year | imes/Year | imes/Year |
|                      | imes/Year |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 1. H.E. Dr. Chaovana | 8         |           |           |           |
| Nasylvanta           |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 2. AVM Kamthon       | 6         | 6         |           |           |
| Sindhvananda         |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 3. Mr. Paron         | 9         | 6         | 4         |           |
| Israsena             |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 4. Mr. Snoh Unakul   | 8         |           | 4         |           |
+----------------------+-----------+-----------+-----------+-----------+
| 5. Mr. Sivavong      | 9         | 5         |           | 5         |
| Changkasiri          |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 6. Mr. Sumet         | 9         | 6         | 3         |           |
| Tantivejkul          |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 7. Mr. Yos           | 9         |           |           | 5         |
| Euarchukiati         |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 8. Mr. Pricha        | 9         | 6         |           |           |
| Attavipach           |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 9. Mr. Panas         | 8         |           | 3         |           |
| Simasathien          |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 10. Mr. Arsa Sarasin | 9         |           | 3         |           |
+----------------------+-----------+-----------+-----------+-----------+
| 11. Mr. Boonsithi    | 8         |           |           | 4         |
| Chokwatana           |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+
| 12. Mr. Chumpol      | 9         |           |           |           |
| NaLamlieng           |           |           |           |           |
+----------------------+-----------+-----------+-----------+-----------+

Remark:

-   The seven Independent Directors are number 2, 3, 5, 6, 8, 10 and 11

-   The five Audit Committee Members are number 2, 3, 5, 6 and 8

-   The five Governance and Nomination Committee Members are number 3,
    4, 6, 9 and 10

-   The three Remuneration Committee Members are number 5, 7 and 11

    Independent Directors’ Training

    Conducted by Thai Institute of Directors Association (IOD)

+----------------------------+---------------------+------------------+
|                            | Training Courses    |                  |
+----------------------------+---------------------+------------------+
| Independent Directors      | Directors           | Directors        |
|                            | Certification       | Accreditation    |
| (Total 7 Persons)          |                     |                  |
|                            | Program (DCP)       | Program (DAP)    |
+----------------------------+---------------------+------------------+
| 1. AVM Kamthon             | -                   | Class 18/2004    |
| Sindhavananda              |                     |                  |
+----------------------------+---------------------+------------------+
| 2. Mr. Paron Israsena      | -                   | Class 4/2003     |
+----------------------------+---------------------+------------------+
| 3. Mr. Sivavong            | Class 18/2002       | -                |
| Changkasiri                |                     |                  |
+----------------------------+---------------------+------------------+
| 4. Mr. Sumet Tantivejkul   | Class 30/2003       | -                |
+----------------------------+---------------------+------------------+
| 5. Mr. Pricha Attavipach   | Class 39/2004       | -                |
+----------------------------+---------------------+------------------+
| 6. Mr. Arsa Sarasin        | -                   | Class 5/2003     |
+----------------------------+---------------------+------------------+
| 7. Mr. Boonsithi           | -                   | Class 3/2003     |
| Chokwatana                 |                     |                  |
+----------------------------+---------------------+------------------+

Scope of Authority of The Board of Directors, The Audit Committee,

The Governance and Nomination Committee and The Remuneration Committee

Duly Authorized Directors

Two of the five Company directors, namely, Mr. Chaovana NaSylvanta, or
Mr. Snoh Unakul, or Mr. Yos Euarchukiati, or Mr. Panas Simasathien, or
Mr. Chumpol NaLamlieng jointly signed their names.

Scope of authority of the Board of Directors and Committees

The Board of Directors of the Company

The number of directors is currently limited to twelve. The Board of
Directors consist of seven independent directors, four major
shareholders’ representatives, and one Company executive to ensure
effective and efficient performance. The Board holds at least eight
regular scheduled meetings per year. Board members receive the agenda
and all supporting documents for each meeting well in advance to allow
adequate time for preparation. The Board considers all matters with due
regard for the interests of the shareholders and stakeholders. The
chairman ensures that there is sufficient time for a thorough discussion
of each agenda item with a full exchange of views.

Directors' term on Board

  At the Ordinary General Meeting each year, one third of the total
  directors must retire from the office. If it is not possible to divide
  the total number of directors evenly by 3, the number closest to one -
  third must retire from the office. In choosing those directors who
  retire, length of service on the board should be considered with those
  longest serving most eligible to resign. A retiring director is
  eligible for re-election.

The Board of Directors essentially has the following Authorities:

1.  The Board is responsible for establishing corporate vision, the
    mission statement as well as the policy and strategy to align and
    sustain the interests of all stakeholders and create long-term
    shareholder value.

2.  The Board is responsible for reviewing the operating plan and
    ensuring maximum competitiveness in global level.

3.  The Board shall oversee and review the performance of all group
    companies as well as evaluating the performance of the management
    committee.

4.  The Board maintains proactive risk management systems as well as
    overseeing and reviewing corporate governance to ensure compliance
    with internationally accepted practice.

5.  The Board must devote their time and resources to attending and
    performing their duties in an effective and efficient manner. They
    must avoid having competitive interests and be committed to the
    Company’s best interests.

6.  The Board manages and directs the Company’s operations in compliance
    with all laws, the objectives, the Articles of Association and the
    resolution of shareholders’ meetings in good faith and with care to
    preserve the interests of the Company.

7.  The Board conducts the Company’s business in line with The Siam
    Cement Group Corporate Governance as well as the SET Code of Best
    Practice for Directors of Listed Companies and Guidelines of
    Securities and Exchange Commission in pursuit of business
    excellence.

8.  The Board is responsible for overseeing and monitoring the
    performance of each business unit and for the overall performance of
    SCG. The Board ensures that the Group’s operations reporting conform
    to an agreed standard while establishing a corporate policy for the
    development of the Company’s operations and personnel development.

9.  The Board promotes awareness of the importance of business ethics
    among employees at all levels. It also promotes internal controls
    and internal auditing to ensure corporate integrity is maintained
    and to prevent any fraudulent practices.

10. The Board treats all shareholders equally with regard to information
    and protects those right equitably. Shareholders can actively
    exercise their rights and access to corporate information with full
    disclosure and transparency.

11. The Board shall authorize directors, the Board of Executive
    Directors, sub-committees, individuals or juristic persons to
    perform jointly or separately any duty in accordance with the
    objectives and Articles of Association of the Company in return for
    remuneration as determined by the Board. The Board has the right to
    change or revoke the authority given to such persons, or remove such
    persons from duty, and appoint other individuals for replacement, as
    deemed appropriate. The authorized or appointed persons must perform
    their duties in accordance with the regulations, orders and policies
    set by the Board.

The Audit Committee

The Audit Committee of the Company comprises the following members:

  1. Air Vice Marshal Kamthon Sindhvananda Chairman

  2. Mr. Paron Israsena Member

  3. Mr. Sivavong Changkasiri Member

  4. Mr. Sumet Tantivejkul Member

  5. Mr. Pricha Attavipach Member

Scope of authority

The Audit Committee is authorized to fulfill the following duties:

  1. Supervise and review that the Company has appropriate system in
  financial reports in accordance with the legally defined accounting
  principle with transparency and adequacy.

2.  Support the establishment of financial report development in
    compliance with the international accounting standard.

3.  Review and ensure that the Company has appropriate and effective
    internal control and internal audit systems that comply with
    international accepted approaches and standards.

4.  Supervise and ensure that the Company has in place proactive
    operation systems to enhance operating effectiveness and efficiency.

5.  Review corporate risk management.

6.  Review and ensure that the Company is in full compliance with the
    laws on Securities and the Stock Exchange, and other laws relating
    to the Company’s business.

  7. Review the internal audit system on corruption and establish
  preventive measures.

  8. Review the righteousness and effectiveness of the information
  technology system relating to the internal control system, financial
  reports and risk management and suggest an up-to-date improvement
  occasionally.

  9. Review disclosure of corporate data in case there is a connected
  transaction or item that may lead to conflicts of interest to ensure
  accurateness and completeness.

  10. Supervise, review and comment on the operation of the Internal
  Audit Office and also cooperate with the Company’s auditor.

  11. Prepare reports on the supervision of activities of the Audit
  Committee with disclosure in the Company’s annual report which is duly
  signed by the Chairman of the Audit Committee.

  12. Consider, select and propose the appointment and remuneration of
  the Company’s auditor.

  13. Supervise the evaluation of the Internal Audit Office in
  compliance with international standards.

  14. Consider the budgets and manpower of the Internal Audit Office.

  15. Appoint, remove, transfer or terminate the employment of the
  Director of the Internal Audit Office.

16. Take other actions in compliance with the law or assignments by the
    Board of Directors. In actions thereof, the Audit Committee is
    authorized to summon or order management, unit heads, or employees
    concerned to present opinions, attend meetings or submit the
    necessary documents.

  The Audit Committee performs duties within the authority and
  responsibility under the order of the Board of Directors. The Board is
  responsible for the Company’s operations and is directly accountable
  to shareholders, stakeholders and the public.

The Governance and Nomination Committee

The Governance and Nomination Committee comprises the following members:

  1. Mr. Paron Israsena Chairman

  2. Mr. Snoh Unakul Member

  3. Mr. Sumet Tantivejkul Member

  4. Mr. Panas Simasathien Member

  5. Mr. Arsa Sarasin Member

Scope of Authority

1.  To make recommendations to the Board of Directors regarding the best
    practices in corporate governance.

2.  To review the Company's corporate governance affairs and compare
    them with those of the leading international companies. The
    Committee also recommends plans for further improvement of the
    Company's corporate governance from time to time.

3.  To oversee and monitor the effectiveness of the Company's Board and
    Management with reference to The Siam Cement Group Corporate
    Governance. The Committee also gives advice to the Board on
    corporate governance practices.

4.  To develop a succession plan and establish a process for proposing
    nominees to the Board to replace directors who have reached the end
    of their terms.

5.  To propose new nominees to the Board to fill positions made vacant
    by directors who complete their terms. The Committee then makes
    recommendations to the Board for ultimate shareholder approval.

6.  To recommend a plan to the Board for the succession of the Company's
    President and senior management.

7.  To implement a process for assessing the effectiveness of other
    committees and the Board of Directors and follow up the results.

8.  To assess the independence of the Board in fulfilling its
    responsibilities and to recommend a plan for improvement.

The Remuneration Committee

The Remuneration Committee comprises the following members:

1. Mr. Sivavong Changkasiri Chairman

2. Mr. Yos Euarchukiati Member

3. Mr. Boonsithi Chokwatana Member

Scope of Authority

  1. Propose guidelines and methods of payment of remuneration to the
  Board of Directors, and committees appointed by the Board.

  2. Propose policy on management incentives in line with the Company’s
  operating results, and the performance of each management executive,
  and whenever it deems appropriate, the committee shall consider the
  hiring of consulting firms to advise on project implementation.

  3. Consider the annual remuneration for each member of the management
  committee and propose it to the Board for approval.

  4. To consider, before presenting to the Board of Directors, the
  budget for the salary increase, change of wage/remuneration and bonus
  of the senior executives.

Executives (Management Committee)

In addition to the President, the Siam Cement Group Management Committee
comprises twelve other executives which include: the Executive Vice
President of the Company and Presidents and Executive Vice President
responsible for each business unit, namely, petrochemicals, paper and
packaging, cement, building products, distribution, property, and the
holding company. These twelve executives report directly to the
President. The Management Committee is authorized to manage and direct
the Group’s operations in accordance with policies set by the Board; to
take responsibility for the Group’s operating results; to control
expenses and capital expenditure limits as approved by the Board and as
stated in the Annual Operating Plan; to manage personnel in line with
the Group’s policy; to resolve problems or conflicts that may affect the
Group; and to maintain effective communication with the stakeholders.

(2) Election of Executives and Directors

The Governance and Nomination Committee is responsible for nominating
candidates to replace directors whose terms are expiring or who are
unable to complete their terms. The Committee then makes recommendations
to the Board for ultimate shareholder approval. Candidates come from a
diversity or backgrounds and experience. Personal qualities sought
include leadership, vision, ethical integrity, clean work records, and
independence of opinions.

Rule and procedures for the election of directors are as follows:

1.  The Governance and Nomination Committee proposes the names of
    persons to replace directors whose term are expiring to the Board
    for consideration prior to the ordinary general shareholders’
    meeting for election during the meeting. All shareholders have an
    equal right to propose other candidates, since the authority choose
    directors rests with the shareholders.

2.  In case the number of candidates nominated for directors does not
    exceed the number of directors required for that election, the
    meeting shall elect all of them as directors.

3.  In case the number of candidates nominated for directors exceeds the
    number of directors required for that election, it shall be decided
    by vote at the shareholder meeting. The shareholders may elect the
    candidates nominated for director, but not exceeding the number of
    directors required for that election and the directors shall be
    individually elected. Each shareholder or proxy shall have one vote
    for each share he holds or represents for the election of each
    director. The candidates shall be ranked in descending order from
    the highest number of votes received to the lowest, and shall be
    appointed as directors in that order until all of the director
    position are filled. Where the votes cast for candidates in
    descending order are tied, which would otherwise cause the number of
    directors to be exceeded, the remaining appointment shall be made by
    the chairman of the meeting who shall cast the deciding vote.

  Neither the President, nor any of the seven independent directors can
  be related to any major shareholders.

Selecting senior executive replacements

The senior executive selection process for the Siam Cement Group starts
with talented and ethical people. The Group seeks young talent with the
potential to develop into senior management. Selection includes a number
of stages, each with and assessment of such considerations as integrity,
leadership qualities, and management capabilities. The outstanding
employees who demonstrate high potential will each have an
individualized development plan that includes challenging job
assignments and job rotation throughout the organization to ensure they
gain a broad knowledge and understanding as a result they are properly
prepared to replace the positions at all level that may become vacant.
The Board of Director will select employees who show the greatest
potential and have the appropriate credentials for the placement in
senior executive positions.

(3) Board Member and Executive Remuneration in 2004

1. Director Remuneration

In the eleventh ordinary general meeting of shareholders held on March
24, 2004, a resolution passed concerning the remuneration and bonus of
directors. Monthly remuneration for all directors was set at 1,800,000
Baht (previously set 900,000 Baht per month) and shall be distributed
amongst the directors in such manner they may themselves consider
appropriately. Regarding bonuses, permission was granted that the board
itself would determine the appropriate amount, but that amount cannot
exceed 0.5 percent of total dividends paid to shareholders (previously
set at 1 percent of total dividends) and shall be distributed amongst
the directors in such manner they may themselves consider appropriately.
This will be in effect from the day the resolution was passed by a vote
of the shareholders onwards until the shareholders’ meeting determined
otherwise.

The Appointment of Board Remuneration and Bonuses

Monthly Remuneration

The Board of Directors passed a resolution to pay the chairman a 1.5
share, or 216,000 Baht per month, and the other eleven board member 1
share, or 144,000 Baht per month.

Director Bonuses

The Board of Directors passed a resolution to pay the chairman a bonus
of 1.5 share and the other eleven board members bonuses of 1 share of
total bonuses.

2. Remuneration for the Board Committees

The Board of Directors passed a resolution to remunerate members of the
Board Committees on the basis of fixed fee and attendance fee, as
follow:

Audit Committee

Annual fixed fee (Baht) Attendance fee (Baht)

Chairman 96,000 24,000

Director 64,000 16,000

The Remuneration Committee, and the Governance and Nomination Committees

Annual fixed fee (Baht) Attendance fee (Baht)

Chairman 72,000 18,000

Director 48,000 12,000

The chairman of the Board Committees’ remuneration is 1.5 share while
numbers of the Committee get 1 share.

  The remuneration paid to the 12 directors for company’s directorship,
  committees, and bonuses for 2004 totaled 74,854,262 Baht, which
  details as follows:

+------------------------+------------------------+----------+--------+
| Directors              | Position               | Remu     | Bonus  |
|                        |                        | neration | for    |
|                        |                        | for 2004 | 2004   |
|                        |                        | (Ba      | (Baht) |
|                        |                        | ht/year) |        |
+========================+========================+==========+========+
| 1. H.E. Dr. Chaovana   | Chairman               | 2        | 6,4    |
| NaSylvanta             |                        | ,295,871 | 80,000 |
+------------------------+------------------------+----------+--------+
| 2. AVM Kamthon         | Director               | 1        | 4,3    |
| Sindhvananda           |                        | ,530,581 | 20,000 |
|                        | Chairman of The Audit  |          |        |
|                        | Committee              | 240,000  |        |
+------------------------+------------------------+----------+--------+
| 3. Mr. Paron Israsena  | Director               | 1        | 4,3    |
|                        |                        | ,530,581 | 20,000 |
|                        | Member of The Audit    |          |        |
|                        | Committee              | 160,000  |        |
|                        |                        |          |        |
|                        | Chairman of The        | 144,000  |        |
|                        | Governance and         |          |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 4. Mr. Snoh Unakul     | Director               | 1        | 4,3    |
|                        |                        | ,530,581 | 20,000 |
|                        | Member of The          |          |        |
|                        | Governance and         | 96,000   |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 5. Mr. Sivavong        | Director               | 1        | 4,3    |
| Changkasiri            |                        | ,530,581 | 20,000 |
|                        | Member of The Audit    |          |        |
|                        | Committee              | 144,000  |        |
|                        |                        |          |        |
|                        | Chairman of The        | 162,000  |        |
|                        | Remuneration Committee |          |        |
+------------------------+------------------------+----------+--------+
| 6. Mr. Sumet           | Director               | 1        | 4,3    |
| Tantivejkul            |                        | ,530,581 | 20,000 |
|                        | Member of The Audit    |          |        |
|                        | Committee              | 160,000  |        |
|                        |                        |          |        |
|                        | Member of The          | 84,000   |        |
|                        | Governance and         |          |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 7. Mr. Yos             | Director               | 1        | 4,3    |
| Euarchukiati           |                        | ,530,581 | 20,000 |
|                        | Member of The          |          |        |
|                        | Remuneration Committee | 108,000  |        |
+------------------------+------------------------+----------+--------+
| 8. Mr. Pricha          | Director               | 1        | 4,3    |
| Attavipach             |                        | ,530,581 | 20,000 |
|                        | Member of The Audit    |          |        |
|                        | Committee              | 160,000  |        |
+------------------------+------------------------+----------+--------+
| 9. Mr. Panas           | Director               | 1        | 4,3    |
| Simasathien            |                        | ,530,581 | 20,000 |
|                        | Member of The          |          |        |
|                        | Governance and         | 84,000   |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 10. Mr. Arsa Sarasin   | Director               | 1        | 4,3    |
|                        |                        | ,530,581 | 20,000 |
|                        | Member of The          |          |        |
|                        | Governance and         | 84,000   |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 11. Mr. Boonsithi      | Director               | 1        | 4,3    |
| Chokwatana             |                        | ,530,581 | 20,000 |
|                        | Member of The          |          |        |
|                        | Remuneration Committee | 96,000   |        |
+------------------------+------------------------+----------+--------+
| 12. Mr. Chumpol        | President              | 1        | 4,3    |
| NaLamlieng             |                        | ,530,581 | 20,000 |
+------------------------+------------------------+----------+--------+
| Total                  |                        | 20       | 54,0   |
|                        |                        | ,854,262 | 00,000 |
+------------------------+------------------------+----------+--------+

3. Executive Remuneration

The total remuneration for the 13 executives (the Management Committee)
in the form of salaries and other compensation such as bonuses,
provident fund contribution, and variable pay amounted to 193,110,600
Baht, apportioned as 50 percent based salary and 50 percent other
compensation, an apportionment consistent with practices of
international leading companies (In 2004, the Company contributed to the
provident fund for the executives as the Company’s employee in the
amount of 9,129,600 Baht).

4. Remuneration of the Directors and Executives of The Company’s core
business Subsidiaries

(As at December 31, 2004)

1.  Itemized Remuneration of the Directors and the Executives of The
    Company’s core business Subsidiaries

  As Director of the Company ’s core businesses, the following list of
  Directors do not receive any additional remuneration for their role as
  Director, other than their basic stipulated compensation as Management
  within the Company. The Company’s core businesses consist of the
  following: petrochemicals, paper and packaging, cement, building
  material, and distribution.

+--------------------------------+-------------------------------------+
| Cementhai Chemicals Co., Ltd.  | The Siam Pulp and Paper Public      |
|                                | Company Limited                     |
+--------------------------------+-------------------------------------+
| 1)  Mr. Chumpol NaLamlieng *   | 1)  Mr. Chumpol NaLamlieng *        |
|                                |                                     |
| 2)  Mr. Aviruth                | 2)  Mr. Dusit Nontanakorn           |
|     Wongbuddhapitak            |                                     |
|                                | 3)  Mr. Chalaluck Bunnag            |
| 3)  Mr. Pramote Techasupatkul  |                                     |
|                                | 4)  Mr. Apiporn Pasawat             |
| 4)  Mr. Kan Trakulhoon         |                                     |
|                                | 5)  Mr. Aviruth Wongbuddhapitak     |
| 5)  Mr. Somboon Chuchawal      |                                     |
|                                | 6)  Mr. Kajohndet Sangsuban         |
| 6)  Mr. Apiporn Pasawat **     |                                     |
|                                | 7)  Mr. Pramote Techasupatkul       |
| Siam Cement Industry Co., Ltd. |                                     |
|                                | 8)  Mr. Kan Trakulhoon              |
| 1)  Mr. Chumpol NaLamlieng *   |                                     |
|                                | 9)  Mr. Somboon Chuchawal **        |
| 2)  Mr. Dusit Nontanakorn      |                                     |
|                                | Cementhai Building Products Co.,    |
| 3)  Mr. Kajohndet Sangsuban    | Ltd.                                |
|                                |                                     |
| 4)  Mr. Aviruth                | 1)  Mr. Chumpol NaLamlieng *        |
|     Wongbuddhapitak            |                                     |
|                                | 2)  Mr. Dusit Nontanakorn           |
| 5)  Mr. Chalaluck Bunnag       |                                     |
|                                | 3)  Mr. Aviruth Wongbuddhapitak     |
| 6)  Mr. Kan Trakulhoon         |                                     |
|                                | 4)  Mr. Pramote Techasupatkul       |
| 7)  Mr. Pramote Techasupatkul  |                                     |
|     **                         | 5)  Mr. Kan Trakulhoon              |
|                                |                                     |
| Cementhai Distribution Co.,    | 6)  Mr. Kajohndet Sangsuban **      |
| Ltd.                           |                                     |
|                                | Remark * Chairman                   |
| 1)  Mr. Chumpol NaLamlieng *   |                                     |
|                                | ** President                        |
| 2)  Mr. Pramote Techasupatkul  |                                     |
|                                |                                     |
| 3)  Mr. Kajohndet Sangsuban    |                                     |
|                                |                                     |
| 4)  Mr. Somboon Chachawal      |                                     |
|                                |                                     |
| 5)  Mr. Apiporn Pasawat        |                                     |
|                                |                                     |
| 6)  Mr. Aviruth                |                                     |
|     Wongbuddhapitak            |                                     |
|                                |                                     |
| 7)  Mr. Chalaluck Bunnag       |                                     |
|                                |                                     |
| 8)  Mr. Kan Trakulhoon         |                                     |
|                                |                                     |
| 9)  Mr. Dusit Nontanakorn **   |                                     |
+--------------------------------+-------------------------------------+

4.2 Total value of Executives’ remuneration (core business subsidiaries
only)

1)  Remuneration for Executives in the form of salaries, bonuses and
    variable payment

2)  Remuneration in kind which the Company contributed to provident fund
    for the Executives

  which details as follows:

  ---- --------------------------- ------------ --------------- --------------
       The Company’s core business Total of     Remuneration in Remuneration
       Subsidiaries                Executives   the form of     in kind (Baht)
                                                cash (Baht)     

  1.   Cementhai Chemical Co.,Ltd. 3            8,694,300       558,960

  2.   The Siam Pulp and Paper     4            9,909,816       733,320
       Public Company Limited                                   

  3.   Siam Cement Industry        4            19,973,900      1,200,360
       Co.,Ltd.                                                 

  4.   Cementhai Building Products 4            9,254,800       652,320
       Co.,Ltd.                                                 

  5.   Cementhai Distribution      5            13,372,400      930,360
       Co.,Ltd.                                                 
  ---- --------------------------- ------------ --------------- --------------

Remarks : The number of Executives and their remuneration, excluding the
President and Executive Vice President of each subsidiary in the core
business since stated on page 133 of The Company’s 2004 Annual Report.

(4) Supervision

The Board of Directors pledged its commitment to operate in tune with
the Code of Best Practices as prescribed by the Stock Exchange of
Thailand. Moreover, the Company has embraced the international best
practice by establishing a Governance and Nomination Committee
responsible for overseeing and reviewing the Company’s corporate
governance affairs and carrying out nominations for the selection of
Directors in replacement for the directors who complete their terms.

The Management Team is authorized to oversee and monitor the Company’s
operations and performances at company, strategic business unit, and
Group levels. The Management meets and prepare a report according to the
specified format on a monthly basis. They are under consistent
supervision of the Board of Directors to ensure the Company’s operations
are followed up closely and proper corrective actions are taken to
improve the Company’s performance.

4.1 Policy on Corporate Governance

Since its founding, the Siam Cement Group has conducted business in a
fair and responsible manner, guided by the SCG Code of Ethics that have
evolved with the changing economic and social environments to produce
balanced, lasting benefits.

The Board of Directors is committed to the proper implementation of the
SCG Corporate Governance that has been of demonstrable value to the
organization. The Group’s adherence to these principles earns
credibility, thereby, increasing shareholder value by clearly specifying
organizational structure; the Board of Directors’ composition,
structure, scope of responsibilities, and independence roles;
transparency and information disclosure; and risk management; etc.

In 2002, the Board established a Governance and Nomination Committee to
oversee Group corporate governance matters with the mandate to ensure
that the Group’s corporate governance practices are consistently in line
with the international “best practices”, as implemented by leading
global companies recognized internationally for their good corporate
governance and as prescribed by leading stock exchanges in the world.
Moreover, the corporate governance is one of the main agenda in the
Company Board meeting.

The Board maintains its important role for governance by setting
operational policies, plans, and strategies and by being accountable for
achieving targets with the maximum efficiency. The Governance and
Nomination Committee helps ensure the Board has directors of the quality
needed by clearly delineating the appropriate credentials. The Board has
supported the establishment of the requirement whereby that the Board
must evaluate its own performance as the Governance and Nomination
Committee’s suggestions for improvement across the whole spectrum of the
Board’s activities.

4.2 Shareholders’ Rights

The Company respects the rights of all shareholders equally and provides
for these rights in the following ways:

1.  To ensure transparency and shareholder access to information, the
    Company fully discloses the operational structure and all
    investments in subsidiaries and associated companies.

2.  To protect against the misuse of internal information, the Company
    imposes a blackout period on the Board, management, employees, and
    their spouses and minor children. (For details, see topic 4.15
    Protecting the Usage of Internal Information)

3.  Disseminate information of interest to shareholders via the Stock
    Exchange of Thailand (SET) website and the Group’s own website:
    www.siamcement.com.

4.  Expanded communications channels for shareholder access to meeting
    notices and meeting documents more quickly and at all times via the
    Group website, thereby, giving shareholders a better opportunity to
    fully review the documents prior to meetings.

5.  Extended to shareholders the right to attend shareholder meetings,
    even after a meeting has started and to vote on any resolutions
    under consideration or not yet considered, unless decided otherwise
    at the meeting.

6.  Facilitated direct communication between minor shareholders and
    independent directors via e-mail concerning shareholder rights. In
    addition, shareholders can authorize any independent director as
    their proxy for shareholder meetings. Independent directors have
    undergone director training run by the Thai Institute of Directors
    (IOD) using a curriculum approved by the Securities and Exchange
    Commission (SEC).

4.3 Shareholder Meetings

The Company convenes the ordinary general shareholders’ meeting within
three months of the end of the financial year. In 2004, the eleventh
ordinary meeting of shareholders was held at Company headquarters on
Wednesday, 24 March, with notice of the meeting sent not less than 14
days prior along with a detailed agenda, a proxy form, and documents
relating to agenda items, including expressions of the Board’s opinions.
This is the earliest possible timing under the laws and relevant
procedures of the Thailand Securities Depositary Co., Ltd, which is the
registrar of the Company.

For 2005, the twelfth ordinary general shareholder meeting will be held
on Wednesday, 23 March, at 14:00 at Company headquarters. Shareholders
will have access to the meeting notice; the agenda; documents relating
to agenda items; the annual report; and financial statements via the
Company’s website by early March. Shareholders can download all this
information, plus a proxy form in which the Company provides the names
of independent directors who can be appointed a proxy in the annual
general meeting of shareholders.

Before the meeting commences, the chairman of the meeting will explain
voting procedures to shareholders and clarify shareholder rights. The
meeting will proceed according to the agenda provided with the meeting
notice and shareholders will be given the opportunity to freely express
their opinions and ask any questions under each agenda item. Five or
more shareholders can jointly propose a resolution for voting by secret
ballot. Registration for the meeting will be open an hour and a half
prior to the commencement of the meeting.

Shareholders representing at least one-fifth of the shares sold, or at
least 25 shareholders with at least one-tenth of the share sold can
jointly submit a request in writing, with adequate reasons, for the
Board to hold an extraordinary meeting of shareholders anytime. The
Board must organize a shareholders’ meeting within one month after the
receipt of the written request.

4.4 Stakeholders

The Group conducts business with all stakeholders in a responsible way
by ensuring all parties benefit equitably. The Board has established a
reliable, consistent, and rigorous management system to deal with
stakeholders encompassing shareholders, employees, customers, local
communities and business associates based on the SCG Code of Ethics
published in the employees’ handbook.

For a very long time, the Group has supported a range of activities that
benefit neighboring communities and society as a whole in such important
areas as the environment, education, sports, community projects, and
projects for the broader public benefit. Examples of such projects
include the Thailand Rescue Robot Championships; a comprehensive
badminton sponsorship program for local, national and international
competitions; the Do It Clean waste management program; and financial
assistance to various foundations and charities nationwide. In addition,
for the six southern provinces devastated by the tsunami disaster in
December 2004, SCG has provided both urgent and long-term assistance to
help those stricken by the devastation to recover and rebuild, getting
their lives back to normal. The long-term plan focuses on restoration of
occupation, communities, and education. The rehabilitation efforts will
be carried out with the emphasis on immediacy, equality, to ensure the
long-term sustainability of the communities.

The Group invests heavily in environmental protection, preservation, and
restoration with a clear set of guidelines for Group companies with
system for regular follow-up and assessment. Since 2001, information on
the Group’s environmental, social, and safety activities has been
available in the annual sustainability report, which can be viewed and
downloaded from the Group’s website.

The year 2004 was a year of significant developments in human resources
management for the Group with the implementation of eHR by PeopleSoft.
Management and staff can access relevant data quickly and conveniently
from anywhere at anytime through an intranet network.

In addition to this initiative, the Group introduced a program to change
the corporate culture into innovative organization through courses and
new training and development programs. A part of the process is the
refurbishment of workplace environment for greater convenience, a more
modern look, better information exchange, and an atmosphere that
stimulates creative thinking and life-long learning.

The Group compensates staff fairly, using a performance-based pay to
motivate employees to achieve greater efficiency. In addition to total
compensation, employees received extra cash payment “variable pay”
determined by individual performance and the performance of the business
unit. In 2004, the total remuneration within the Group was at the upper
end and consistent with practices of international leading companies.
The proportion earned as based salary for employees in general was about
70 percent, while the proportion earned in other compensation was about
30 percent. For Executives, the proportion was 50 percent as based
salary and 50 percent as other compensation.

4.5 Leadership and Vision

The Board plays the important role of defining the Group’s vision and,
along with senior management, of developing short-term and long-term
plans covering financial policies, risk management, and the overall
picture of the organization. Other important roles include oversight,
auditing, and assessing the Group’s performance to ensure the maximum
possible value to shareholders.

The Board works closely with senior management in determining
operational directions and takes the initiative in such critical matters
as human resources development and fostering a new corporate culture.

Important to the continuing development of the Group is for Board
members and senior management to undergo advanced training courses and
seminars, and to gain knowledge and experience from discussions with
their counterparts in other organizations

4.6 Conflicts of Interest

The Group follows SET’s and SEC’s conflict of interest regulations
strictly, paying careful attention to potential conflicts of interest in
a fair and transparent way. If an issue arises, it gets full attention
and full disclosure in a timely manner to protect the interests of the
Group.

Group policy controls access to internal or inside information and under
threat of punishment prohibits its disclosure or use by management or
staff for personal benefit. As an added measure to further protect
shareholder rights and prevent conflicts of interest, the Group imposes
a blackout period during which trading of the Company shares by
directors, management and relevant employees is prohibited.

The Group’s shareholder structure is clear and transparent. There are no
cross-holdings of major shareholders to create a conflict of interest.
Moreover, roles and responsibilities are clearly divided between the
Board, management, and shareholders with no overlap. To protect
shareholder interests, if any member of the Board or of the management
has any stake in a matter under consideration, that person is excluded
from participating in the pertinent consideration and decision-making
process.

The Group’s shareholder structure is published in the annual report, as
are Board member common share and debenture holdings in the Company and
Group companies.

4.7 Business Ethics

The Board considers the SCG Code of Ethics followed since its founding
to be of critical importance and requires all staff adhere to them with
senior management serving as examples. Ethical principles have played an
important role in the Group’s continuing growth and stability by
engendering credibility and trust in the business community. In 1987,
the Group published a code of ethics and, then, issued a latest updated
version in 2004 to more accurately reflect economic and social changes.
Every employee has been delivered a copy of the booklet which is also
available on the Group’s website.

4.8 Balance of Power for Non-executive Directors

The Company Board has 12 members only one of whom is from management:
the president. More than half are independent directors. The Board has
defined the qualifications of an “independent director” based on
recommendations from the Governance and Nomination Committee that are
consistent with international practices and are more strict than those
defined by the SEC and the SET (See topic 4.16 The Qualification of an
Independent Director). This approach inspires confidence that the
Company’s Board will perform its duties in an dependent manner, helping
ensure effective decision-making.

The Group selects directors with solid credentials who have diverse
expertise, leadership qualities, a broad perspective, integrity, ethics,
a transparent work record, independence of thought, and a willingness to
express opinions. In addition, to promote the effectiveness of members,
the Board defines director roles and responsibilities clearly.

4.9 Roles of the Chairman and the President

The Chairman is the leader of the Board of Directors in setting
policies, in defining the missions of senior management, and in
evaluating their performance. The role of the president is to provide
leadership for the management team and to ensure successful operational
results. These two roles are separated clearly to provide a healthy
balance between the two kinds of authorities.

4.10 Remuneration for Director and Management

With the approval of shareholders in the ordinary general shareholder
meeting, the Company sets remuneration for the Board at rates comparable
to other top companies in the same industry. Remuneration for the
management is set by the Board, based on their responsibilities,
performance, and the operational results of the Company.

In addition to basic salary, the Company has a policy of paying bonuses
to Board members according to guidelines approved in the shareholders’
meeting. The management’s variable pay use operating results as the
basis to align their interest with the Company’s benefits. This method
correlates remuneration with employee performance and with how well the
Company has done. (On the other hand, payment in the form of shares in
the company, or ESOP, may be influenced by share prices on the SET or by
investor trading activity, rather than by Company operating results.)

4.11 Board Meetings

The Company’s Board considers member Board meeting attendance extremely
important to ensure that members are properly informed and take part in
decision-making concerning Company business operations. There are at
least 8 regular meetings per year with a specific agenda provided ahead
of time for each. Special meetings are convened to consider matters of
importance or urgency.

In 2004, nine Board meetings were held, providing the agenda and
relevant documents well ahead of time to allow sufficient time for
proper review. Consideration of each agenda item took into account the
benefit to the organization and the rights and benefits of stakeholders.
When considering each item, Board members were given the opportunity to
express their opinions with the chairman allowing an appropriate amount
of time for consideration. Decisions are based on a majority vote of
members attending with each member having one vote, except when a member
excluded from voting, because of a personal stake in the matter under
consideration. In cases of a tie, the chairman has a casting vote.

Management usually attends Board meetings to provide necessary
information and to be informed of policies subject to their
implementation, except in some agenda that only the Board attends for
its independence in consideration.

In addition, the secretary to the Board of Directors has educational
background and working experience in law, which can support the
directors in term of information regarding law and regulations.

4.12 The Board Committees

The Company’s Board has established committees with specific areas of
responsibility. Each committee has a clearly-defined set of objectives,
scope of work, and specific responsibilities and reports to the Board
within prescribed period. They are the Audit Committee, the Governance
and Nomination Committee, and the Remuneration Committee. The Board may
establish other committees for specific purposes as necessary and as
appropriate to circumstances.

4.13 Controlling and Internal Auditing

The Board has recognized the importance of a reliable internal controls
system for a very long time and continually seeks to enhance its
effectiveness to prevent potential damage to Group businesses, whether
finances, investments, or operations. This system enables management to
oversee and direct operations efficiently and in accordance with good
governance principles, thereby, protecting Group assets and benefits of
the organization, shareholders, and stakeholders.

Comprised entirely of independent directors, the Audit Committee
oversees and reviews the appropriateness of the internal controls
system. With the internal audit office that follows international audit
standards and regularly reports directly to the Audit Committee. Details
as follows:

  1. Internal Control System

  The Group has established an internal controls system according to
  international standards, as follows:

  1.1 The organizational environment

  To promote awareness, understanding, and observance of the internal
  controls system by all concerned parties, the Group has published
  handbooks on SCG Code of Ethics and SCG Corporate Governance. In
  addition, the Group has published a handbook describing policies,
  operational authority, and business practices covering all aspects of
  operations that clarifies responsibilities and authority. The
  organizational structure is designed to fit the overall work plan,
  including hiring and developing quality staff on a continuing basis to
  equip them to handle changing business conditions.

  1.2 Assessing risk management

  The systematic assessment of risk management makes it possible to
  anticipate risks and convert crisis into opportunities, or minimize
  any negative. Thus, risk assessment is a tool that the Group uses to
  measure the efficiency and productivity of operations and to adjust
  the internal controls system to fit risks factors that may arise.

  1.3 Control activities

  The Group has established efficient control practices appropriate to
  business operations, such as dividing roles to provide check and
  balance; delegating authority to employees in line with their
  responsibilities; establishing procedures for managing and maintaining
  organizational assets; implementing an accurate and timely reporting
  system; etc. All these control activities are computerized to
  facilitate monitoring in every stage.

  1.4 The information and communications system

  Because of the importance of the information and communications system
  to ensure a quality internal controls system, the Group uses a
  highly-efficient, modern system with specialized software that fits
  particular functions. For example, for planning and resource
  management: SAP’s Enterprise Resources Planning; for managing
  relationships with business associates from producers through to
  customers: Supply Chain Management; for fast, accurate, and
  customer-specific responsiveness: Customer Relationship Management;
  and human resources management: eHR. All of these systems are backed
  up and secured.

  2. Internal audit

  The Group maintains an internal audit system that meets international
  standards and conforms to good governance practices to help ensure the
  internal controls system functions consistently and reliably with
  adjustments made, according to changing circumstances.

  2.1 Independence

  The Board has appointed 5 independent directors to the Audit Committee
  to oversee the internal controls system and ensure strict adherence to
  procedures and to principles of good governance. To engender
  confidence in the transparency of the process, they operate with
  complete independence and their purview extends to all aspects of
  management. An important component is a dedicated internal audit
  office that reports directly to the Audit Committee.

  2.2 Audit standard

  The Group has prescribed a set of auditing procedures and principles
  that conform to international standards and published them in a
  handbook serve as a reference. A work unit is responsible for the
  continuing development of the auditing process with an emphasis on
  prevention. The process includes:

  ● A Control self assessment system to help ensure units are conforming
  to procedures, identifying issues, analyzing the causes of such
  issues, and correcting them expeditiously.

  ● A risk management assessment process to reduce risks by creating
  risk warning indicators and a reliable follow-up procedure.

  ● A Best Practices system which focus on the conformity with Best
  Practice and gathers information regularly from auditing units that
  can improve auditing performance.

  ● A follow-up system that ensures suggestions received are implemented
  in a timely fashion to get problems solved expeditiously.

  Group audit practices follow the SCG Corporate Governance and SET
  regulations, including a review of connected transactions and
  conflicts of interest with disclosure of the results.

  2.3 Auditing performance quality assessment

  The audit process undergoes regular assessment with the audit unit in
  each department assessing their own performance, as well as the units
  who are audited also review the performance of the audit unit
  independently and recommending improvements. The Audit Committee
  performs an annual assessment of their performance.

4.14 Investor relations

The Group gives high priority to investor relations and has an
established investor relations office that is directly responsible for
improving disclosure and disseminating accurate, complete information of
interest to investors on an equitable and timely basis. The office
responds to inquiries from interested parties within 24 hours.

The Group has a policy of providing information to investors on an equal
basis, in a timely fashion, and in sufficient details for making
informed decisions. For example, the Group makes available the same
information used by senior management in presentations to investors, by
domestic and international roadshows; and by organizing quarterly
analyst conferences. Information from these events is made available
immediately on the Group website to ensure equal access to information
for investors unable to attend events. Reporting significant information
sent to the SET is also placed on the website at the same time.

Another method the company uses to inform the varied types of
shareholders among whom are foreign investors, especially institutional
investors, is to provide an explanation of key financial information
with a comparison to US accounting standard.

The Group arranges regular meetings of senior executives with investors.
In 2004, these activities included ten international roadshows; six
domestic investor meetings; three SET mobile events; and several
meetings with senior executives. In addition, visits to four businesses’
plants were organized: Petrochemicals; Paper and Packaging; Cement; and
Building Products.

The Company participated in events for investor relations professionals
organized by the SET for exchanging ideas; getting updated; training;
and counseling with the purpose of making SET competitive with foreign
stock exchanges.

4.15 Protecting the Usage of Internal Information

In addition to strictly enforce laws and company regulations regarding
internal information e.g. the Securities and Stock Exchange Act of 1992,
the Group also imposes a blackout period before financial information is
released during which directors and employees are prohibited from
trading Company shares for a period of two weeks prior to the release of
quarterly and annual financial information and for 24 hours after the
release of such information.

In addition, directors, management, and employees working with company
significant information (including their spouses and minor children) who
have knowledge of information prior to its release to the public that
could have an impact on Company share prices are prohibited from trading
Company shares for a period of 24 hours, starting from the time the
information is released to the public.

4.16 The Qualification of an Independent Director

An independent director must be independent of major shareholders,
management, and other related parties, and must have the following
qualifications:

1.  Hold no more than 1 percent of the total outstanding voting shares
    of the Company, an affiliated company, a subsidiary, or an
    associated company, or in any juridical person with a conflict of
    interest, including shares held by a spouse or minor children.

2.  No role in management, nor be an employee nor an adviser on
    retainer, a supervisor, nor a service provider, such as an auditor,
    lawyer, etc., to the Company, an affiliated company, a subsidiary,
    or an associated company, or any juridical person with a conflict of
    interest, nor any benefit from or obligations to these entities for
    at least 18 months after any relationship ceases.

3.  No business relationship with the Company, an affiliated company, a
    subsidiary, or an associated company, or with any juridical person
    with a conflict of interest that would impair or impede the
    independence of her/his judgment, such as the following:

    1.  Received no benefit directly or indirectly from trade or
        services with the Company, an affiliated company, a subsidiary,
        or an associated company of a value exceeding 1 percent of the
        total annual income of any such company or of more than 10
        percent of her/his own company in which she/he has management
        authority for a period of at least one financial year.

    2.  Received no benefit directly or indirectly from borrowing from
        or lending to the Company, an affiliated company, a subsidiary,
        or an associated company, of a value exceeding 1 percent of the
        Company total assets.

4.  No connection by consanguinity or marriage or legal registration
    with any person who may have a conflict of interest, whether
    parents, spouse, children, or close relatives.

5.  Can look after the interests of all shareholders equally.

6.  Can prevent conflicts of interest.

7.  Can attend Board meetings and make independent decisions.

8.  Is not a person whom the SET has determined is inappropriate to
    serve as an executive, according to SET regulations.

9.  Has never been convicted of violating security or stock exchange
    laws, nor laws governing the investment business, securities
    brokering, or credit fanciers, or commercial banking laws, or life
    or non-life insurance laws, or money laundering laws, or any other
    laws of a similar nature, whether Thai or foreign, and is guilty of
    wrongful acts relating to trading in shares or the perpetration of
    deceptions, embezzlement, or corruption.

10. No other impediments or impairments to expressing independent
    opinions concerning the operations of the Company.

(5) Controlling the usage of internal data

The Company has defined as a Code of Ethics of the Siam Cement Group
that “no employees shall exploit any company’s information for the
interest of self or others despite the fact that the Siam Cement Group
may lose no benefits.” The penalties for executives or employees
exploiting the Company’s internal data for their own interests or
disclosing information to the public are clearly stated in the Company’s
approval authority.

The Company has designated that only the directly involved persons can
access to specific information. Moreover, the Company has restricted
on-line access to information which is classified as confidential or
which may affect the Company’s operations, with a system of access
control rights and passwords. In addition, the Company sets a policy in
protecting internal information as in 4.15 Protecting the Usage of
Internal Information.

(6) Human Resource 

Human resource is a critical factor in organizational success. To
accomplish the corporate objective, high calibre staff must be involved
in operation, result assessment, and strategic move development. The
Siam Cement Group has given human resources management a high priority
since its founding more than 90 years ago, as reflected in one of the
business philosophy: “Belief in the value of the individual”. The
continued progress of the subsidiaries under the corporate over the
years has earned recognition for the Group as a national leader in
efficient human resources management.

The Group’s quality in human resources management begins with
highly-selective new hiring. “Cementhai Career Choice” is a proactive
program that seeks to attract bachelor’s degree-level graduates of
Thailand’s leading universities. To persuade MBA graduates from the top
10 universities in the United States and Europe, the Group has a program
called the “Top Ten University Recruitment”.

Because personnel development is viewed as a long-term investment that
helps ensure success and adds value to the organization, the Group
undertakes a wide range of human resource development activities
consistent with its growth strategy. Examples include the promulgation
of Best Practices for various disciplines among Group companies through
ongoing, year-round activities; the establishment of a Knowledge
Management database system; constantly update training programs to keep
abreast of changes in methods and practices; etc.

To encourage continued learning, the Group also provides scholarships
for personnel to earn master’s degrees, work observation visits, and
staff rotation. The Group operates a Competency-Based Management system
that provides clear and continuous human resource management. Another
program that enhance the competence of the workforce is the Group’s
ongoing networking with various internationally-recognized educational
and research institutions that help keep Group personnel at the leading
edge, both domestically and regionally.

To ensure that staff at all levels set performance targets align with
the organizational strategy, the Group communicates clearly the
corporate direction and goals to personnel at all levels. Individual
evaluations are based on performance, as well as on integrity,
leadership, and managerial characteristics. This system helps ensure the
continuing development of quality staff to assume management
responsibilities.

A compensation system based on performance is another method the Group
uses to encourage excellence and dedication, using the results of
surveys of other leading companies to ensure competitive compensation
packages. The Group’s Variable Pay system determines bonus levels, based
on the performance of each company and of each individual.

In 2004, because the Group sees information technology as an important
means of boosting staff management efficiency, the “Cementhai e-HR”
personnel management software has been implemented to increase the speed
and accuracy of data, to reduce paperwork significantly, and to provide
more convenience to staff, who can manage their own information
directly.

A commitment to ongoing improvement of our personnel management system
has had a significant impact on human resource development and earned
continuing recognition, as well as certification. These are not as
important as having high-quality human resources with knowledge,
capabilities, and integrity. They are a force for change and builders of
a new corporate culture that can compete successfully in satisfying
consumer needs on a global basis. They ensure the Group will continue to
evolve and grow, while adding shareholder value and strengthening
Thailand.

As at December 31, 2004, The Siam Cement Public Company Limited had 317
employees with a compensation of Baht 433 million. Total employees of
the Group were 19,030 with a compensation of Baht 4,542 million.
(Compensation includes salary, bonuses, and provident fund)

Number of Employees in Each Business of The Siam Cement Group

As at December 31, 2004 and 2003

  ---------------------------------- ------------------ ------------------
  Company/Business Unit              Number of          
                                     Employees          

                                     2004               2003

  The Siam Cement Public Company     317                304
  Limited                                               

  Petrochemicals Business            1,043              1,044

  Paper and Packaging Business       6,065              5,633

  Cement Business                    4,141              4,341

  Building Products Business         5,378              5,025

  Distribution Business              1,094              1,031

  Others                             992                898

  Total                              19,030             18,276
  ---------------------------------- ------------------ ------------------