5.  Assets Used in Operation

-   Total Assets

Total assets of The Siam Cement Group at the end of 2003 were Baht
249,726 million. Sixteen percent of them are current assets, comprising
cash, accounts receivable, and inventories. The rest 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:

Cement 64,987 Million Baht

Petrochemical 74,490 Million Baht

Paper and Packaging 49,909 Million Baht

  Building Products 23,173 Million Baht

Distribution 6,902 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 72,714 million, which are 29 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 71,009 million or 28 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,
                    2003     2002     2003       2002     2003        2002     2003      2002

  The Siam Cement   1,864    1,941    548        647      105         253      2,517     2,841
  Pcl.                                                                                   

  Cement Business   4,412    4,577    7,967      8,295    32,509      34,144   44,888    47,016

  Petrochemical     1,501    1,551    1,288      1,349    23,005      24,849   25,794    27,749
  Business                                                                               

  Paper and         1,216    1,170    3,478      3,326    13,729      12,445   18,423    16,941
  Packaging                                                                              
  Business                                                                               

  Building Products 1,078    959      1,572      1,640    4,705       3,976    7,355     6,575
  Business                                                                               

  Distribution      392      417      398        415      245         306      1,035     1,138
  Business                                                                               

  Cementhai Holding 8        8        -          -        1           -        9         8

  Cementhai         389      393      229        243      9           12       627       648
  Property                                                                               

  Total             10,860   11,016   15,480     15,915   74,308      75,985   100,648   102,916

  Consolidated      9,121    9,319    12,842     13,278   50,751      52,427   72,714    75,024
  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  | D   | Patent   | Paten | Ex  |
| u | tent | ate |          | lica | ate | for      | t for | pir |
| m | Nu   | Iss |          | tion | Sub | In       |  Prod | y D |
| b | mber | ued |          | Nu   | mit | vention/ | uct D | ate |
| e |      |     |          | mber | ted | Product  | esign |     |
| r |      |     |          |      |     | Design   |       |     |
+===+======+=====+==========+======+=====+==========+=======+=====+
| 1 | 7428 | D   | Thai     | 01   | Ap  | Solution | -     | A   |
|   |      | ec. | Poly     | 3234 | ril | to       |       | pr. |
|   |      | 15, | ethylene |      | 18, | plastic  |       | 17, |
|   |      | 1   | Co.,     |      | 1   | film     |       | 2   |
|   |      | 997 | Ltd.     |      | 991 | layers   |       | 011 |
|   |      |     |          |      |     | st       |       |     |
|   |      |     |          |      |     | ickiness |       |     |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 2 | 9148 | S   | The Siam | 02   | F   | Lacto    | -     | F   |
|   |      | ep. | Pulp and | 1496 | eb. | bacillus |       | eb. |
|   |      | 21, | Paper    |      | 15, | in wet   |       | 14, |
|   |      |     | Public   |      | 1   | bagasse  |       | 2   |
|   |      | 2   | Company  |      | 994 | storage  |       | 014 |
|   |      | 000 | Limited  |      |     |          |       |     |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 3 | 1    | J   | Siam     | 03   | J   | -        | P     | J   |
|   | 1704 | an. | CPAC     | 8859 | ul. |          | aving | ul. |
|   |      | 17, | Block    |      | 31, |          | B     | 30, |
|   |      | 2   | Co.,     |      | 1   |          | locks | 2   |
|   |      | 002 | Ltd.     |      | 997 |          |       | 007 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 4 | 1    | J   | Siam     | 03   | J   | -        | P     | J   |
|   | 1616 | an. | CPAC     | 8858 | ul. |          | aving | ul. |
|   |      | 8,  | Block    |      | 31, |          | B     | 30, |
|   |      | 2   | Co.,     |      | 1   |          | locks | 2   |
|   |      | 002 | Ltd.     |      | 997 |          |       | 007 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 5 | P    | May | Siam     | 99   | D   | Formula  | -     | D   |
|   | etty | 15, | CPAC     | 0300 | ec. | of       |       | ec. |
|   | Pa   | 2   | Block    | 0147 | 2,  | textured |       | 1,  |
|   | tent | 001 | Co.,     |      | 1   | natural  |       | 2   |
|   | 237  |     | Ltd.     |      | 999 | Grani    |       | 005 |
|   |      |     |          |      |     | te-liked |       |     |
|   |      |     |          |      |     | floor    |       |     |
|   |      |     |          |      |     | surface  |       |     |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 6 | P    | J   | Siam     | 00   | D   | Roofing  | -     | D   |
|   | etty | an. | Fiber    | 0300 | ec. | in       |       | ec. |
|   | Pa   | 12, | Glass    | 0422 | 9,  | sulation |       | 8,  |
|   | tent | 2   | Co.,     |      | 1   |          |       | 2   |
|   | 141  | 001 | Ltd.     |      | 999 |          |       | 005 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 7 | P    | J   | Siam     | 99   | D   | Ceiling  | -     | D   |
|   | etty | un. | Fiber    | 0300 | ec. | In       |       | ec. |
|   | Pa   | 2,  | Glass    | 0163 | 13, | sulation |       | 12, |
|   | tent | 2   | Co.,     |      | 1   |          |       | 2   |
|   | 89   | 000 | Ltd.     |      | 999 |          |       | 005 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 8 | 1    | J   | Siam     | 02   | J   | -        | Metal | J   |
|   | 4978 | ul. | Fiber    | 9726 | an. |          | stud  | an. |
|   |      | 18, | Glass    |      | 19, |          |       | 18, |
|   |      | 2   | Co.,     |      | 1   |          |       | 2   |
|   |      | 003 | Ltd.     |      | 996 |          |       | 006 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 9 | 1    | May | The Siam | 02   | J   | Co       |       | J   |
|   | 2688 | 10, | Fibre-   | 9646 | an. | rrugated |       | an. |
|   |      | 2   | Cement   |      | 12, | fibr     |       | 11, |
|   |      | 002 | Co.,     |      | 1   | e-cement |       | 2   |
|   |      |     | ltd.     |      | 996 | sheet    |       | 006 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 1 | 1    | May | The Siam | 02   | J   | Roofing  |       | J   |
| 0 | 4735 | 12, | Fibre-   | 9647 | an. | tile     |       | an. |
|   |      | 2   | Cement   |      | 12, |          |       | 11, |
|   |      | 003 | Co.,     |      | 1   |          |       | 2   |
|   |      |     | ltd.     |      | 996 |          |       | 006 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 1 | 1    | May | The Siam | 03   | F   | Round    |       | F   |
| 1 | 4736 | 12, | Fibre-   | 0045 | eb. | ridge    |       | eb. |
|   |      | 2   | Cement   |      | 14  | end      |       | 13, |
|   |      | 003 | Co.,     |      | 1   |          |       | 2   |
|   |      |     | ltd.     |      | 996 |          |       | 006 |
+---+------+-----+----------+------+-----+----------+-------+-----+
|   |      |     |          |      |     |          |       |     |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 1 | 1287 | May | CPAC     | 0508 | J   | -        | Roof  | J   |
| 2 | 9-81 | 30, | Roof     | 94-6 | un. |          | tile  | un. |
|   |      | 2   | Tile     |      | 7,  |          |       | 6,  |
|   |      | 002 | Co.,     |      | 1   |          |       | 2   |
|   |      |     | Ltd.     |      | 999 |          |       | 009 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 1 | 1288 | May | CPAC     | 0508 | J   | -        | Round | J   |
| 3 | 2-83 | 30, | Roof     | 97-8 | un. |          | apex  | un. |
|   |      | 2   | Tile     |      | 7,  |          |       | 6,  |
|   |      | 002 | Co.,     |      | 1   |          |       | 2   |
|   |      |     | Ltd.     |      | 999 |          |       | 009 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 1 | 1    | J   | CPAC     | 06   | O   | De       |       | O   |
| 4 | 5048 | ul. | Roof     | 9026 | ct. | corative |       | ct. |
|   |      | 31, | Tile     |      | 14, | ridge    |       | 13, |
|   |      | 2   | Co.,     |      | 2   |          |       | 2   |
|   |      | 003 | Ltd.     |      | 001 |          |       | 011 |
+---+------+-----+----------+------+-----+----------+-------+-----+
| 1 | 1346 | Sep | Thai     | 0    | J   | -        | P     | J   |
| 3 | 5-70 | 11, | Co       | 4170 | an. |          | allet | an. |
|   |      | 2   | ntainers | 8-13 | 8,  |          |       | 7,  |
|   |      | 002 | Co.,     |      | 1   |          |       | 2   |
|   |      |     | Ltd.     |      | 998 |          |       | 008 |
+---+------+-----+----------+------+-----+----------+-------+-----+

-   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 23-24.

-   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.

Petrochemical 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          |
+---------------------------+--------------------+--------------------+
| Olefins                   | Aug. 14, 1995      | Jan. 2012          |
+---------------------------+--------------------+--------------------+
| HDPE 3                    | Jul. 24, 2000      | Oct. 2014          |
+---------------------------+--------------------+--------------------+
| PE COMPOUND               | Feb. 10, 2003      | Mar. 2017          |
+---------------------------+--------------------+--------------------+
| 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, 1995       | Dec., 27, 2008     |
| Corrugated Paper Boxes    |                    |                    |
+---------------------------+--------------------+--------------------+
| Corrugated Sheets and     | Jan 30, 1997       | Jan. 30, 2004      |
| Corrugated Paper Boxes    |                    |                    |
+---------------------------+--------------------+--------------------+

-   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 351
  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 cement, petrochemical and
paper businesses, 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. In the last 2-3 years, the Group has lowered its role or
sold some businesses with no expertise or potential even though they
still have good performance. These investments are mainly under The
Cementhai Holding Co., Ltd.

As at December 31, 2003, the Company’s investments in subsidiaries,
associates, and other companies, based on equity method in the financial
statements, totalled Baht 128,883 million. Investments in subsidiaries
and associates amounted to Baht 114,964 million and in other companies
amounted to Baht 13,919 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)         |         |
+--------------+--------------+----------------+-------------+---------+
| Cement       | 13,460       | 33,998         | -           | 33,998  |
+--------------+--------------+----------------+-------------+---------+
| P            | 19,381       | 33,848         | 12,738      | 46,586  |
| etrochemical |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Paper and    | 7,347        | 23,985         | -           | 23,985  |
| Packaging    |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Building     | 4,854        | 13,707         | 299         | 14,006  |
| Products     |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Distribution | 910          | 449            | -           | 449     |
+--------------+--------------+----------------+-------------+---------+
| Cementhai    | 3,308        | 6,092          | 882         | 6,974   |
| Holding      |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Cementhai    | 3,480        | 2,885          | -           | 2,885   |
| Property     |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Total        | 52,740       | 114,964        | 13,919      | 128,883 |
+--------------+--------------+----------------+-------------+---------+