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. Chumpol NaLamlieng Director

12. Mr. Kan Trakulhoon Director and President

Mr. Worapol Jennapar Secretary of the Board and

Corporate Secretary

The Management Committee comprises

  1. Mr. Kan Trakulhoon President, The Siam Cement Public Company
  Limited

  2. Mr. Roongroote Rangsiyopash Vice President and Chief Financial
  Officer,

  The Siam Cement Public Company Limited

  3. Mr. Cholanat Yanaranop President, Cementhai Chemicals Co. Ltd.

  4. Mr. Chaovalit Ekabut President, The Siam Pulp and Paper Public
  Company Limited

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

  6. Mr. Pichit Maipoom President, Cementhai Building Products Co. Ltd.

  7. Mr. Kajohndet Sangsuban President, Cementhai Distribution Co., Ltd.

8. Mr. Damri Tunshevavong President, Cementhai Holding Co. Ltd.

The Attendance of the Directors in Relevant Committee Meetings in 2005

Unit : Times

+------------------+---------+---------+---------+---------+---------+
| Directors        | Board   | The     | The     | The     | The     |
|                  | of      | Audit   | Gov     | Remun   | Share   |
|                  | Di      | Co      | ernance | eration | holders |
|                  | rectors | mmittee | and     | Co      | O       |
|                  |         |         | Nom     | mmittee | rdinary |
|                  |         |         | ination |         | General |
|                  |         |         | Co      |         | Meeting |
|                  |         |         | mmittee |         | 2005    |
+------------------+---------+---------+---------+---------+---------+
|                  | Total   | Total   | Total   | Total   | Total   |
|                  | (13     | (5      | (5      | (3      | (13     |
|                  | Dir     | M       | M       | M       | Dir     |
|                  | ectors) | embers) | embers) | embers) | ectors) |
|                  |         |         |         |         |         |
|                  | Total 9 | Total 6 | Total 4 | Total 7 | on      |
|                  | Tim     | Tim     | Tim     | Tim     | March   |
|                  | es/Year | es/Year | es/Year | es/Year | 23,     |
|                  |         |         |         |         | 2005    |
+------------------+---------+---------+---------+---------+---------+
| 1. H.E. Dr.      | 8/9     |         |         |         | 1       |
| Chaovana         |         |         |         |         |         |
| Nasylvanta       |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 2. AVM Kamthon   | 9/9     | 6/6     |         |         | 1       |
| Sindhvananda     |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 3. Mr. Paron     | 9/9     | 6/6     | 4/4     |         | 1       |
| Israsena         |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 4. Mr. Snoh      | 9/9     |         | 3/4     |         | 1       |
| Unakul           |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 5. Mr. Sivavong  | 9/9     | 4/6     |         | 7/7     | 1       |
| Changkasiri      |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 6. Mr. Sumet     | 9/9     | 5/6     | 4/4     |         | 1       |
| Tantivejkul      |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 7. Mr. Pricha    | 9/9     | 6/6     |         |         | 1       |
| Attavipach       |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 8. Mr. Panas     | 9/9     |         | 4/4     |         | 1       |
| Simasatien       |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 9. Mr. Yos       | 8/9     |         |         | 7/7     | 1       |
| Euarchukiati     |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 10. Mr. Arsa     | 7/9     |         | 3/4     |         | 1       |
| Sarasin          |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 11. Mr.          | 5/5     |         |         | 4/4     | 1       |
| Boonsithi        |         |         |         |         |         |
| Chokwatana*      |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 12. Mr. Chumpol  | 9/9     |         |         | 3/3     | 1       |
| NaLamlieng       |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+
| 13. Mr. Kan      | 4/4     |         |         |         | 1***    |
| Trakulhoon**     |         |         |         |         |         |
+------------------+---------+---------+---------+---------+---------+

Remark:

* Resigned his Directorship, effective August 1, 2005

** Resolved by the Board of Directors held on August 20, 2005 to replace
Mr. Boonsithi Chokwatana as the director, effective August 20, 2005

*** Attended the Ordinary General Meeting of Shareholders 2005 as the
Management Committee Member

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

-   The five Audit Committee Members are number 2, 3, 5, 6 and 7

-   The five Governance and Nomination Committee Members are number 3,
    4, 6, 8 and 10

-   The three Remuneration Committee Members are number 5, 9 and 12

    (The Board of Directors resolved to appoint Number 12 to be the
    member of The Remuneration Committee to replace Number 11 on August
    20, 2005)

    Independent Directors’ Training

    Conducted by Thai Institute of Directors Association (IOD)

+----------------------------+---------------------+------------------+
|                            | Training Courses    |                  |
+----------------------------+---------------------+------------------+
| Independent Directors      | Directors           | Directors        |
|                            | Certification       | Accreditation    |
|                            |                     |                  |
|                            | 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     |
+----------------------------+---------------------+------------------+

The Board of Directors and The Management Committee

Duly Authorized Directors

Two of the six Company directors, namely, Mr. Chaovana NaSylvanta, or
Mr. Snoh Unakul, or Mr. Yos Euarchukiati, or Mr. Panas Simasathien, or
Mr. Chumpol NaLamlieng, or Mr. Kan Trakulhoon 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 consists of eleven non-executive directors which include six
independent directors, and one is the executive director to ensure
effective and efficient performance. The Board holds 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 of Shareholders 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 retire. A
  retiring director is eligible for re-election.

  The selection of candidates to be directors will select the persons
  who are highly qualified and experienced professionals from various
  fields, showing great leadership, breadth of vision, a proven record
  of ethical and integrity, and ability to express opinions freely.

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
    shareholders’ 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 human resources
    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 five members:

  1. Air Vice Marshal Kamthon Sindhvananda Chairman

  2. Mr. Paron Israsena Member

  3. Mr. Sumet Tantivejkul Member

  4. Mr. Sivavong Changkasiri 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 five
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 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 three members:

1. Mr. Sivavong Changkasiri Chairman

2. Mr. Yos Euarchukiati Member

3. Mr. Chumpol NaLamlieng Member

(the Board of Directors held on August 20, 2005 had resolutions to
appoint to be the member to replace Mr. Boonsithi Chokwatana who
resigned his directorship on August 1, 2005)

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)

The Siam Cement Group Management Committee comprised eight members:
President of The Siam Cement Public Company Limited together with seven
other executives including the Vice President of the Company and
Presidents responsible for each business unit, namely, chemicals, paper,
cement, building products, distribution, and the holding company. These
seven 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 who are retired by rotation, or whatever
the case may. 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 who are retired by rotation to the
    Board for consideration prior to the Ordinary General Meeting of
    Shareholders 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 shareholders’ 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. If 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 six independent directors can be
  related to any major shareholders.

(3) Board Member and Executive Remuneration in 2005

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 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 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 equal to Baht 216,000 per month, and the other eleven board
members 1 share, or equal to Baht 144,000 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 Governance and Nomination Committee and the Remuneration Committee

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
members of the Committee get 1 share.

  The Remuneration for the Board of Directors and the Subcommittees in
  2005

  -------------------- -------------- ----------- ------------ -------------- ------------ ------------
  Directors            Remuneration                                           Bonus of     Total
                       for 2005                                               2005         

                       Director       The Audit   The          The                         
                                      Committee   Governance   Remuneration                
                                                  and          Committee                   
                                                  Nomination                               
                                                  Committee                                

  1. H.E. Dr. Chaovana 2,592,000      -           -            -              7,200,000    9,792,000
  NaSylvanta¹                                                                              

  2. AVM Kamthon       1,728,000      240,000     -            -              4,800,000    6,768,000
  Sindhvananda²                                                                            

  3. Mr. Paron         1,728,000      160,000     144,000      -              4,800,000    6,832,000
  Israsena³                                                                                

  4. Mr. Snoh Unakul   1,728,000      -           84,000       -              4,800,000    6,612,000

  5. Mr. Sivavong      1,728,000      128,000     -            198,000        4,800,000    6,854,000
  Changkasiri⁵                                                                             

  6. Mr. Sumet         1,728,000      144,000     96,000       -              4,800,000    6,768,000
  Tantivejkul                                                                              

  7. Mr. Pricha        1,728,000      160,000     -            -              4,800,000    6,688,000
  Attavipach                                                                               

  8. Mr. Panas         1,728,000      -           96,000       -              4,800,000    6,624,000
  Simasathien                                                                              

  9. Mr. Yos           1,728,000      -           -            132,000        4,800,000    6,660,000
  Euarchukiati                                                                             

  10. Mr. Arsa Sarasin 1,728,000      -           84,000       -              4,800,000    6,612,000

  11. Mr. Boonsithi    1,008,000      -           -            76,000         4,800,000    5,884,000
  Chokwatana *                                                                             

  12. Mr. Chumpol      1,728,000      -           -            53,600         4,800,000    6,581,600
  NaLamlieng                                                                               

  13. Mr. Kan          631,742        -           -            -              -            631,742
  Trakulhoon **                                                                            

  Total                21,511,742     832,000     504,000      459,600        60,000,000   83,307,342
  -------------------- -------------- ----------- ------------ -------------- ------------ ------------

  * Resigned his Directorship, effective August 1, 2005

  ** Resolved by the Board Directors held on August 20, 2005 to replace
  Mr. Boonsithi Chokwatana as the director, effective August 20, 2005

1.  Chairman

2.  Chairman of the Audit Committee

3.  Chairman of the Governance and Nomination Committee

4.  Chairman of the Remuneration Committee

3. Executive Remuneration

The total remuneration for the 14 executives including 8 members of
Management Committee and 6 former executives who resigned from their
position at the end of 2005 in the form of salaries and other
compensations such as bonuses and variable payment amounted to Baht
200,681,000. For 2005, the Company made the contributions of Baht
10,230,000 to the provident fund for the executives, being the Company’s
employees.

4. Remuneration of the Directors and Executives of Subsidiaries, which
are the SCG’s core businesses

(As at the year ended December 31, 2005)

1.  Director Remuneration listed accordingly to the core businesses:

  Directors of the core businesses, which encompass Chemicals, Paper,
  Cement, Building Products and Distribution businesses, are the
  executives who are not subjected to remuneration paid for being the
  directors. Names of the directors in each business are listed below.

+--------------------------------+-------------------------------------+
| Cementhai Chemicals Co., Ltd.  | The Siam Pulp and Paper Public      |
|                                | Company Limited                     |
+--------------------------------+-------------------------------------+
| 1)  Mr. Kan Trakulhoon *       | 1)  Mr. Kan Trakulhoon *            |
|                                |                                     |
| 2)  Mr. Pramote Techasupatkul  | 2)  Mr. Kajohndet Sangsuban         |
|                                |                                     |
| 3)  Mr. Roongrote Rangsiyopash | 3)  Mr. Pramote Techasupatkul       |
|                                |                                     |
| 4)  Mr. Chonlanat Yanaranop ** | 4)  Mr. Damri Tunshevavong          |
|                                |                                     |
| Siam Cement Industry Co., Ltd. | 5)  Mr. Pichit Maipoom              |
|                                |                                     |
| 1)  Mr. Kan Trakulhoon *       | 6)  Mr. Chonlanat Yanaranop         |
|                                |                                     |
| 2)  Mr. Kajohndet Sangsuban    | 7)  Mr. Roongrote Rangsiyopash      |
|                                |                                     |
| 3)  Mr. Pichit Maipoom         | 8)  Mr. Worapol Jennapar            |
|                                |                                     |
| 4)  Mr. Damri Tunshevavong     | 9)  Mr. Chaovalit Ekabut **         |
|                                |                                     |
| 5)  Mr. Roongrote Rangsiyopash | Cementhai Building Products Co.,    |
|                                | Ltd.                                |
| 6)  Mr. Pramote Techasupatkul  |                                     |
|     **                         | 1)  Mr. Kan Trakulhoon *            |
|                                |                                     |
| Cementhai Distribution Co.,    | 2)  Mr. Kajohndet Sangsuban         |
| Ltd.                           |                                     |
|                                | 3)  Mr. Pramote Techasupatkul       |
| 1)  Mr. Kan Trakulhoon *       |                                     |
|                                | 4)  Mr. Roongrote Rangsiyopash      |
| 2)  Mr. Pramote Techasupatkul  |                                     |
|                                | 5)  Mr. Pichit Maipoom **           |
| 3)  Mr. Damri Tunshevavong     |                                     |
|                                | Remark * Chairman                   |
| 4)  Mr. Chonlanat Yanaranop    |                                     |
|                                | ** President                        |
| 5)  Mr. Pichit Maipoom         |                                     |
|                                |                                     |
| 6)  Mr. Roongrote Rangsiyopash |                                     |
|                                |                                     |
| 7)  Mr. Kajohndet Sangsuban ** |                                     |
+--------------------------------+-------------------------------------+

4.2 The total remuneration for executives of subsidiaries which are the
SCG’s core business

1)  Remuneration paid as money such as monthly salary, bonus and
    variable payment

2)  Other compensation such as provident fund contributions.

  Details of remuneration are as follows:

  ---- --------------------------- ------------ --------------- --------------
       Subsidiaries which are core Number of    Total           Other
       businesses                  executives   remuneration in compensation
                                                the form of     (Baht)
                                                money (Baht)    

  1.   Cementhai Chemical Co.,Ltd. 3            9,588,275       629,280

  2.   The Siam Pulp and Paper     4            9,786,020       724,800
       Public Company Limited                                   

  3.   Siam Cement Industry        4            22,659,400      1,326,960
       Co.,Ltd.                                                 

  4.   Cementhai Building Products 4            9,978,100       683,160
       Co.,Ltd.                                                 

  5.   Cementhai Distribution      5            12,354,700      857,160
       Co.,Ltd.                                                 
  ---- --------------------------- ------------ --------------- --------------

Remarks : Number of executives and remuneration for the abovementioned
executives, excluding the Presidents and Vice Presidents of subsidiaries
that are the SCG’s core businesses, included the number and remuneration
of the executives of the Siam Cement Public Company Limited, as appeared
on page 168 of the annual report 2005.

(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 the Governance and Nomination Committee
responsible for overseeing and reviewing the Company’s corporate
governance affairs as well as considering and nominating eligible
candidates for vacancies on the Board.

The Management Committee is authorized to oversee and monitor the
Company’s operations and performances at company, business unit and
Group levels. The Management meet 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.

Principles of Good Corporate Governance

4.1 Policy on Corporate Governance

Since its founding, Siam Cement Group (SCG) has conducted its business
in a fair and responsible manner, guided by a Code of Ethics that has
been fine tuned with the changing economic and social circumstances,
which has produced well balanced, lasting benefits.

Believing that good corporate governance is a fundamental requisite to
business success, the Board of Directors assumes full responsibility of
setting the governance policies. Responsibility for regular, annual
monitoring, and evaluating governance practices has been delegated to
the Governance and Nomination Committee. This Committee is responsible
for recommending appropriate improvements, revisions, and significant
changes which are consistent with the global “best practices” trend that
have been implemented and proven by leading global corporations and
leading stock exchanges around the world. Issues related to corporate
governance are one of the leading agenda on the Company’s Board meeting.
The Company has published its “SCG Corporate Governance” booklet for all
of its employees, which they are intended to apply towards their daily
work. Furthermore, complete information on the Group’s good corporate
governance policies and practices is also available on SCG website.
(www.siamcement.com)

The Company has great emphasis on the principles of corporate governance
and its Code of Ethics, both of which are of great value to the
organization, as its operates in a responsible and fair manner for all
of its stakeholders. To achieve this objective, the structure, roles,
responsibilities, independence, and performance standards of the Board
of Directors should be clearly defined; full disclosure of information
with complete transparency; and a strict audit and risk management
system to ensure credibility and to increase shareholder value. The
details of these practices are easily accessible to all stakeholders,
and are contained in the Company’s annual report; Form 56-1; the SET
website; and SCG’s website.

The Board of Directors plays a critical role in governing and monitoring
the Company’s overall business activities, by setting policies, plans,
and operational strategies, as well as comparing the performance
efficiency against targets. For this reason, the Governance and
Nomination Committee must select appropriate Board member candidates who
possess proper qualifications, so as to instill shareholders confidence.

The Company invites stakeholders to participate in improving operating
results by sending suggestions and opinions via email to the Investor
Relations Department which, then, concludes and forwards them to both
the Management and the Board of Directors.

In addition, the Company designates independent Board members to ensure
equal rights for the minority shareholders. If there appears to be
unfair treatment or complaint from minority shareholders, they may wish
to communicate directly with the independent Board members through:
Ind_dir@cementhai.co.th.

4.2 Shareholders’ Rights and Equality

The Company respects the rights of all shareholders equally, as well as
defined by the law, and the Group’s regulations and its Code of Ethics,
which ensures they are well preserved through the following measures:

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

2.  Protection against the misuse of internal information by prohibiting
    the Board members, the Management, and its employees (including
    spouses and minor children) from trading Company shares for a 2-week
    period prior to and 24-hour period after the release of the
    Company’s quarterly and annual financial statements. In addition,
    should the Board members, the Management, and employees (including
    spouses and minor children) have knowledge of confidential
    information that could have any impact on the Company’s share price,
    they would be prohibited from trading the Company shares until after
    the 24 hour period of the public disclosure.

3.  Dissemination of essential information to shareholder
    decision-making via the SET website and SCG website.

4.  Prior to sending its official meeting notification to all
    shareholders, the Company releases an unofficial notification and
    the meeting agenda with detailed information on each meeting agenda
    on SCG’s website at least one month before the meeting date, so as
    to ensure that shareholders have adequate time for make
    considerations.

5.  During the shareholders’ meeting, the Company allows all
    participants who arrive after the start of the meeting to vote on
    agenda items under consideration at that time, or which have not
    been voted on yet. Moreover, the late comer will still be counted
    towards the meeting’s quorum, unless decided otherwise by the
    meeting.

6.  The Board has assigned responsibility to the independent directors
    in the areas of minority shareholders interests. For example, the
    independent directors can be contacted directly through email by the
    minority shareholders who can appoint an independent director as
    their proxy during the shareholders’ meeting.

7.  The Company operates strictly in accordance within the laws,
    principles, and regulations of the SEC, the SET, and other
    government entities, conscientiously monitoring any changes to
    ensure the Company is up-to-date, thereby, instilling confidence in
    shareholders that the Company is operating transparently and
    forthrightly.

8.  Half of the Company’s Board of Directors (six directors) are
    independent to ensure that stakeholders will receive fair and
    equitable treatment, with no preference to any group of
    stakeholders. To give stakeholders the highest confidence in the
    Company operations, qualifications of the independent directors, as
    indicate by the Company, are more stringent than those of the SET.

To be an “independent director” of the Company, one must be independent
of major shareholders, Management, and those with a relationship with
the Company, in addition to possessing the following qualifications:

1.  Holding not more than one percent of the total outstanding voting
    shares of a) the Company, b) an affiliated company, c) a subsidiary
    or an associated company, or d) in any juridical person with a
    conflict of interest, including shares held by a spouse or minor
    children.

2.  Must not a) hold any management activities, b) be an employee or an
    adviser on retainer, c) be a supervisor, nor a service provider such
    as an auditor, lawyer, etc., to either the Company, its affiliated
    company, or its subsidiary and associated companies, or any
    juridical person with a conflict of interest, nor gain any benefit
    from or obligations to these entities for at least the past 18
    months.

3.  Must not hold any business relationship with the Company, its
    affiliated company, its subsidiary or associated companies, 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, its affiliated company, its
        subsidiary, or its associated company of a value exceeding 1
        percent the combined income of any such company or of more than
        10 percent of her/his own company in which she/he has 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, its associated company, its
        subsidiary, or its affiliated company of a value exceeding one
        percent of the total assets of such companies.

4.  No relationship by blood 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.  Manage to attend the Board meetings and make independent decisions.

8.  Is not a person whom the SET has determined that he/she 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 fonciers, or commercial banking laws, or life
    or non-life insurance laws, or moneylaundering 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 express independent opinions
    concerning the operations of the Company.

4.3 Shareholder Meetings

The Company convenes the Ordinary General Meeting of Shareholders within
three months of the end of the financial year. At the 12^(th) Ordinary
Shareholders Meeting was held on March 23, 2005 at the Company’s
headquarters. The date, time, and venue are set as same as the previous
year to avoid confusion for shareholders. In addition, a map of the
meeting location was included with the notice of the meeting.

Before the meeting commences, the chairman of the meeting will explain
voting procedures and clarify shareholders’ rights. Article 23 of the
Company’s regulations stipulated that resolutions are passed with a
major vote of those present and eligible to vote. In the event of a tie
in vote, the meeting chairman’s vote will be final and binding.

During the shareholders meeting, as stipulated in Article 21 of the
Company regulations, the chairman of the Board is also the chairman of
the meeting and duly to conducts the meeting according to the agenda,
allowing sufficient time for discussion of each agenda item, for
responses to questions, and for hearing the opinions and suggestions of
shareholders before calling for a vote on a resolution. The 2005
shareholders meeting lasted an hour and a half with all directors,
chairman of the committee, and the Management attending, their names
appearing in the minutes of the 12^(th) shareholders meeting proposed
for approval by shareholders as the first agenda item.

The shareholders meeting follows the order of the agenda items, as set
forth in the notice of the meeting, and provides an opportunity for
shareholders to express opinions and ask questions about the Company’s
operations. The president of the Company and those responsible for
specific aspects of operations will provide substantive responses
accordingly. After all agenda items have been fully addressed,
shareholders representing not less than one-third of all outstanding
shares can propose other matters for discussion. Five or more
shareholders can jointly propose a resolution for voting by secret
ballot. Registration for the meeting begins at 12:30 hours, an hour and
a half before the meetings commences.

After the meeting, the Company will publish accurate, detailed, and
complete minutes which are reviewed by the president, and submitted to
the Ministry of Commerce, within 14 days of the meeting and will post
the minutes on SCG’s website.

Shareholders representing at least one-fifth of the shares sold, or at
least 25 shareholders with at least one-tenth of the shares 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 an Extraordinary Meeting of Shareholders within one
month after the receipt of the written request.

The Company set the 13^(th) Annual Ordinary Meeting of Shareholders for
2006 on March 22, 2006 at 14:00 hours at the Company headquarters with
shareholder registration beginning at 12:00 hour. Shareholders can
access and download a range of detailed information on SCG’s website,
including the notice of the meeting; related documents and the Company
financial statements; starting from the beginning of February 2006,
including a proxy form and a list of independent directors who can serve
as proxies.

4.4 Access to Information Related to the Shareholders Meeting

The Company sends the notice of the meeting with the agenda and related
documents, including the following:

1.  Ministry of Commerce proxy forms A, B, and C with detailed
    instructions for assigning a proxy. Form B includes a names list of
    the Company’s independent directors whom a shareholder can appoint
    as a representative in shareholders meetings.

2.  Documents relating to the various agenda items to facilitate
    shareholders with sufficient information for making decisions, such
    as minutes of the 12^(th) Annual General Meeting of Shareholders;
    endorsement of the minutes; or, in the case of the agenda items
    proposing candidates for appointment as directors to the Company,
    biographical information, including name, age, current position,
    education, work experience, other directorships, and what qualifies
    each person to serve as an independent director.

3.  Opinions, comments, and explanations by the Board for each agenda
    item.

4.  Company regulations covering shareholders’ rights and details about
    documents to prepare with instructions and stating the steps to take
    to gain admittance to the shareholders meetings.

5.  A map of where the meeting is held.

The Company sends the notice of the meeting include related documents to
shareholders no less than 14 days prior to the meeting and posted on
SCG’s website approximately one month prior to the meeting date.

4.5 Stakeholders’ Rights

SCG conducts business responsibly to ensure mutual benefits to all
stakeholders. To reassure stakeholders that their rights are strictly
upheld, as prescribed by law and as specified in Siam Cement Group’s
published Principles of Good Corporate Governance and Code of Ethics,
the Board has established a reliable, consistent, and rigorous
management system as follows:

  Shareholders: Respect the basic rights of shareholders and treat all
  equally, such as the right to request a determination of the number of
  shares; the right to receive share certificates; the right to attend
  shareholders meetings and vote; the right to freely express opinions
  during shareholders meetings; and the right to see an appropriate
  return.

  Customers: Dedicate to provide customers with maximum benefit in terms
  of quality at a given price. Moreover, the support office has been set
  for providing product information, problem solving, and receiving
  complaints to assure customers’ satisfaction.

  Trading partners: Operate within a competitive context by strictly
  honoring promises and commitments to trading partners including
  quality products and on-time delivery.

  Commercial competitors: Operate within a competitive context by being
  fair and under the law, as attested by not a single dispute arising
  during 2005.

  Creditors: Perform according to the terms of loans and respect
  obligations toward creditors. Moreover, the Company organizes various
  activities to keep relations with the creditors e.g. activities with
  debenture holders.

  Employees: Continuously develop staffs, based on a business strategy
  to prepare them for continued growth. For example, adopt a corporate
  culture that encourages staff to be open minded, thinking out of the
  box, assertive, risk taking, and eager to learn. Cultivate and develop
  staff to work internationally and develop local staff in offshore
  locations where the Group has invested. In addition, the Group
  emphasizes work satisfaction by providing a safe, pleasant working
  environment that facilitates operations. The Group also provides
  excellent benefits, including health and recreation, as well as fair
  compensation, based on the performance of the individual and the
  Business. These systems are accepted to be fair for both employees and
  the organization.

  Society: The Group has provided continuing support over a long time
  for a range of activities that benefit local communities where
  factories are located and the nation, as a whole, especially those
  that develop people’s capabilities, such as education and sports,
  while also making donations that benefit the public. Some more
  significant programs in 2005 include the Thailand Rescue Robot
  Championship; Go for Gold, an integrated badminton program for youth
  up to international competition; SCG Science Camp; Young Thai Artist
  Award program; SCG Excellence Internship; assistance to tsunami
  victims with the Community Boatyards and SCG Tsunami Relief Fund to
  help with livelihood and restoring communities.

  The environment: The Group has invested heavily in protecting and
  preserving the environment with a clear plan for doing so, including
  constant auditing. In 2005, the Group launched the Do It Green program
  to instill greater environmental awareness following the 3R Concept:
  Reduce the use of resources; Reuse & Recycle used or waste materials;
  and Replenish the environment and use practices and processes that
  generate the least possible negative impact. Information on the
  Group’s activities relating to the environment, society, and safety
  has been available at SCG’s website, dating back to 2001.

4.6 Leadership and Vision

The Company’s Board of Directors is made up of individuals nationally
recognized for their knowledge and capabilities, and has a deep
understanding towards their inherent roles and responsibilities. The
Board plays the important role of defining the Company’s vision and,
along with the 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 overseeing, auditing,
and assessing the Group’s performance to ensure the maximum possible
value to shareholders.

The Board works closely with the Management in determining operational
directions and taking initiative in such critical matters as human
resources development policies and fostering an innovative organization
culture.

4.7 Separating the Roles of the Board and the Management

The Company makes a clear separation between the roles and
responsibilities of the Board of Directors and the Management. The
Board’s role is to establish policies and oversees the Management’s
implementation of those policies. The Management’s role is to implement
the policies initiated by the Board and see that they are carried
through.

The Board places great importance in the selection process of the
Management team, and follows a transparent procedure that ensures that
each person selected is fully equipped with professional management
capabilities and can operate independently of the major shareholders or
any others parties.

4.8 Director and Management Capabilities Enhancement

The Board of Directors and the Management reflects positively on the
attendance of professional courses on a regular basis, in order for
further enhancement of knowledge and capabilities, which is vital for
the Group’s continued development. Such courses have the added benefit
of allowing the opportunity to meet with the Board members and
management from other organizations, which would allow for the exchange
of opinions and new practices. The courses are organized by the Group’s
own staff learning center or by relevant government agencies, or by
independent organizations, such as the Thai Institute of Directors
Association (IOD). The SEC requires directors of all listed companies to
complete one of the following IOD training courses: 1) the Directors
Certification Program (DCP), 2) Directors Accreditation Program (DAP),
or 3) the Audit Committee Program (ACP).

4.9 Internal Information Controls

The Company transparently follows the regulations covering conflict of
interest, as per the SEC and SET, in a strict, comprehensive, and fair
manner. Any connected transaction must be considered carefully, openly,
and in a timely manner to protect the overall interests of the Group.

SCG has an established policy governing the use of internal information,
including oversight and employee regulations with specific penalties for
management and staff in the event whereby internal information is
divulged to the public or used for personal benefit. In addition, the
purchase and sale of Company shares is prohibited during specified
“blackout” periods as further means of protecting shareholder interests
and preventing conflicts of interest.

SCG’s shareholding structure is clear and transparent without any
cross-holdings with major shareholders, thus, ensuring there are no
conflicts of interest. In addition, the roles of the Board, the
Management, and shareholders are carefully defined to minimize
interference. If a member of the Board or Management has a stake in any
item which is on the Board’s meeting agenda, they will either abstain
themselves from the meeting, or be excluded from voting to ensure
decisions always benefit shareholders.

Company shareholder structure is clearly stated in the annual report, as
are Board member common share and debenture holdings in the Company and
subsidiaries.

4.10 Controlling and Internal Auditing

1) Internal Controls

  Appreciating the critical importance of internal controls, the Board
  has established the following guidelines:

  • Instill a corporate culture by establishing a structure with
  explicit duties and responsibilities; delegate authority for
  independent supervision; select high-quality people; instill awareness
  of internal controls; and encourage people to continually improve
  their performance.

  • Set control practices, establishing stated roles and publishing work
  manuals that includes proper practices, rules, regulations, authority
  covering scope of duty and responsibility by function to foster
  delegation of authority and to enhance productivity. The Group ensures
  a consistent standard throughout the organization, while improving
  risk management and encouraging self assessment systematically.

  • Encourage the practices of good corporate governance by putting in
  writing, SCG’s corporate governance and Code of Ethics that provides
  guidance and is regularly updating, so as to be in line with the
  business context and international standards.

  • Develop information technology: The Group has developed a modern
  advanced information system to enhance responsiveness to all in
  contact with the Group. The system, which boosts the efficiency of
  internal controls, reports, gives performance measurements, and
  monitors items such as Customer Relationship Management;
  Transportation Management, etc.

  • Monitoring results The Group monitors the performance of the
  internal control system to keep it evolving with the prevailing
  business environment and to ensure the maximum dissemination of
  correct, complete information to improve efficiency and productivity
  in the delegation of work. In addition, the Board of Directors
  receives regular reports through the Internal Audit Office to help
  instill confidence in the internal controls system.

2) Internal Audit

  The Audit Office is responsible to ensure that the Board of Director’s
  guidelines for internal controls are followed, through applying the
  policy of preventive audit. Others responsibility includes ensuring
  the accuracy of the financial reports including the sufficient
  disclosure of information. The Audit Office also operates with
  conscientious efforts under SCG’s corporate governance guidelines, and
  in accordance to the international standards. Moreover, the following
  modern practices have been adopted for increased confidence in the
  Company:

  • Audit Management: The principal policy for internal auditing is to
  prevention of problems from occurring. Auditing stresses the discovery
  of a root cause to an issue, and making suggestion for improvements
  that yield the maximum benefits.

  • Control Self Assessment (CSA) is a preventive method used by
  operation units to achieve their control targets and for continuous
  improvement in their business practices. It promotes greater
  responsibility in managers and supervisors for internal controls by
  providing information on a timely basis that they can use to identify
  and solve problems more efficiently, and to make improvements in work
  practices.

  • Setting an internal auditing key performance index: The auditors
  jointly set key standards and provide quality assurance by
  establishing common key performance indexes that measure performance,
  the individual auditor, and the satisfaction of those who have been
  audited.

  • Knowledge Management to promote the sharing of knowledge and work
  experience ideas between auditors and operation units staff through a
  sophisticated IT system, resulting in continuing improvements in
  working efficiency.

  • Establishing a web-based information system that links all the
  business units with the Auditing Office and allows for on-line
  consulting for ensuring standard practices, conformation to rules, and
  fitting to the business environment.

3) Risk Management

  The Audit Committee sets policies and establishes a system for
  preventing and managing risk that applies throughout the organization
  with follow up, analysis, specification, and risk assessment for each
  business in the Group. The Committee reports to the Board regularly on
  the status of risk management.

4.11 Business Ethics

The Board seeks to instill the Group’s Code of Ethics in its staffs, for
consistent application in their daily work. These values have been
shared among the Group’s employees since its founding in 1913 and were
first published in 1987. The most recent edition was published in 2004
to more accurately reflect to current economic and social changes. Aimed
at employees at all levels, the Code is available on the Company’s
intranet, as well as at its website.

All of the Group’s employees at all levels apply SCG’s business ethics
from day one of their working life, and senior management provides the
leadership example to follow. The Code has helped the Group with its
tremendous business progress, and has gained the Group much recognition
and acceptance in the business circles.

SCG’s Code of Ethics includes the Group’s following core values: 1)
adherence to fairness; 2) dedication to excellence; 3) belief in the
value of the individual; and 4) concern for social responsibility. It
also stipulates the following business ethics: 1) fairness to all having
business relationship with the Group; 2) making business gains in a
proper manner; 3) non-partisan in politics; and 4) non-discriminatory
treatments. In addition, there are codes of conduct guidance for
employees: 1) protecting the properties of the Group; 2) conflict of
interest; 3) personal conduct that might affect the Group; and 4)
employees’ behavior with fellow employees.

4.12 Structure of the Board of Directors

The Company’s regulation has limited the number of directors at a
maximum of twelve with a minimum of nine, as determined at a
shareholders’ meeting. At present, the Board has twelve directors,
comprising of eleven individual non-executive directors and one
executive director who is the Company’s president. All twelve directors
must have integrity, knowledge, ability, and experience in the
businesses which are beneficial for the Company.

The Board has further established the following committees: Audit
Committee; Governance and Nomination Committee; and Remuneration
Committee, which are all responsible to their specific areas and all
report directly to the Board.

At the Annual General Meeting of Shareholders, the Company’s regulation
requires that one third of the longest serving directors retire. At the
2005 Annual General Meeting of Shareholders, 4 directors retired: Mr.
Sumet Tantivejkul; Mr. Yos Euarchukiati; Mr. Pricha Attavipach; and Mr.
Boonsithi Chokwatana. The Governance and Nomination Committee, after due
consideration according to the approval principles established by the
Company’s Board of Directors (excluding those directors who may have an
interest), decided to propose all four of these retiring directors for
approval at the annual general shareholders meeting. All four were
approved by a majority vote for an additional term.

The Company has a secretary to the Board who coordinates between the
Board and the Management, in addition to the office of the corporate
secretary which is responsible for overseeing legal matters, relevant
standard practices, activities of the Board, and ensuring implementation
of the Board’s resolutions.

4.13 Board of Directors Meetings

The Company considers consistent Board meeting attendance important. It
is the duty of the directors to be properly informed and to participate
in the decision making process of the business operations. The Board
meets a minimum of eight times a year with the specific agenda
distributed in advance. Special Board meetings are called to consider
important or time-sensitive matters. The chairman and the president
jointly prepare relevant agendas and ensure that it includes every
significant matter that bears on the Company’s operations that warrants
full consideration. Every Board member can propose, at will, an agenda
item to the chairman or president.

In 2005, the Board met nine times: eight regular and one special
meeting. In every Board meeting, in addition to considering and deciding
on the agenda items, the Board reviews the Company’s operations and the
status of other matters previously approved in prior meetings to ensure
policies are being implemented properly. For the effectiveness of the
meetings, directors receive the agenda and related documents well ahead
of the scheduled meeting to allow enough time for due consideration. Any
director can request further information from the chairman, the
president, or secretary to the Board.

When considering the matters presented to the Board, there must be
consideration of the Group’s long-term stable progress, as well as the
benefits and rights of all stakeholders. The chairman chairs the
meetings and encourages every director to express their opinions freely,
while ensuring each matter gets due consideration. To pass a resolutions
require a majority vote from directors present, with each director being
assigned one vote, while any director with any interest in the issue
under consideration is to be absent during the vote. If there is a tie
vote, the chairman of the meeting will vote and give the binding result.

The Management is encouraged to attend the Board meetings, in order to
provide updated information to the Board, and also learn about the
Board’s initiatives. However, the Management is not allowed to attend
the Board’s exclusive meetings of the Board, including non-executive
directors in certain cases to ensure uninhibited discussion.

After the meeting, the secretary to the Board is responsible for
preparing the minutes, and sending the certified copies to the
directors. The minutes must then be approved at the following Board
meeting, where directors may make comments, corrections, or additions to
ensure the greatest accuracy and completeness.

After approval, the meeting minutes of the Board are stored securely in
the corporate secretary office with all related documents backed up
electronically to facilitate data searches.

4.14 The Board Committees

To ensure proper consideration of all matters, the Board has established
committees with responsibility for specific matters and for reporting
directly to the Board, as follows:

1.  The Audit Committee consists of 5 independent directors who possess
    expertise and recognized experience in either accounting or finance
    areas. The committee is responsible for ensuring that the Company’s
    audit policies and regulations are in accordance to the laws,
    regulations, and rules of governing authorities, as well as
    international standards. In addition, this committee is responsible
    for reviewing the Company’s internal controls system, internal audit
    system, and the risk management system that they are appropriate,
    up-to-date, and efficient. This committee is independent and has an
    internal Audit Office reporting directly to it. The committee is
    also responsible for the regular liaising with the outside auditors,
    advisers, and legal and accounting experts. Further, the committee
    has the ability to seek external consultation at the Company’s
    expense coverage.

2.  The Governance and Nomination Committee consists of 5 directors who
    must all be non-executives, and the committee chairman must be an
    independent director. The committee is responsible for 1) overseeing
    and upgrading the Company’s good corporate governance; 2) selecting
    qualified candidates to replace outgoing directors, or whatever the
    case may; 3) enhancing the performance assessment system of
    management and of other committees; and 4) planning the succession
    of the President.

3.  The Remuneration Committee consists of 3 directors, and the
    committee chairman must be an independent director. The committee is
    responsible for tracking the changes and trends in remuneration for
    the directors and the Management to ensure that their compensation
    packages offers appropriate incentives to foster the continuing
    development of the Company and to attract and retain outstanding and
    moral staffs.

Each Board committee has their policies and their scope of duties that
are clearly defined in writing and are subject to a performance
assessment and review at least once per year. In addition, the Board can
establish additional committees as it deems appropriate and commensurate
with changing situations.

4.15 Nominating Board Members

The Governance and Nomination Committee is responsible for selecting
qualified candidates to the Board for consideration to replace outgoing
directors or for other reasons, and proposing them for election at the
following shareholders meeting. This committee selects candidates who
have possessed credentials in a range of professions, with leadership
qualities, broadmindedness, integrity and ethics, and have a record of
transparency.

Clause 30 of the Company regulations stipulates that if the number of
candidates does not exceeds the number of directors required for that
election, the meeting shall elect all of them as directors. When there
are more candidates than the number of directors up for election, each
candidate is then elected individually. Shareholders are free to propose
candidates themselves.

The Company sets no age requirement, nor does it set the number of
boards the candidate can serve, as the Company believes that the
competence of a director does not depend on age, nor on the number of
directorships held, as long as the person is capable; can dedicate the
necessary time to the Company; can make policy; and provide advice on
how to solve business operation problems at the standard aspired to by
the Company as the maximum expected of the position. The Company
believes that it is the shareholders’ rights to choose a director and
represent them in the decision making process.

4.16 Achieving a Proper Balance of Non-executive Directors

To instill confidence and promote efficient decision-making, the Company
sets the number of directors from the Management at one the President
and a minimum of six independent directors, equivalent to half the total
number of directors authorized. The qualifications of an independent
director are more rigorous than those required by either the SEC or the
SET and are observed strictly.

In selecting Board candidates for shareholders to elect, the Company
chooses according to basic qualifications; diversity of expertise;
leadership; wide, long-term vision; integrity; ethics; a transparent,
unblemished work history; and independence of thought. In addition, the
Company defines the role and responsibilities clearly to ensure
efficient performance.

4.17 Roles of Chairman and President

With respect to the differences in duties and responsibilities between
the Chairman, as the head at the policy level, and the President, as the
head of the Management, the Company deems it appropriate that the two
positions shall not be held by the same person. The unambiguous
segregation of the holders of the chairmanship and the presidency is to
ensure the balance of authority.

4.18 Assessing the Board’s Performance

The Board’s performance is assessed annually, as prescribed by the
Governance and Nomination Committee. In 2005, the Board’s performance
was assessed using two methods: 1) the entire Board, including
Committees: Audit, Governance and Nomination, and Remuneration; and 2)
self-assessment by individual as a director and a member of committee.
The results are reviewed with the intention of finding ways for
continued improvement.

4.19 Assessing the President’s Performance

The Board works in conjunction with the Remuneration Committee to assess
the performance of the President, based on the Company’s operating
results and on implementing Board policies, taking into account economic
and social circumstances as a whole. The Remuneration Committee will
then consider the appropriate compensation corresponding to his
performance for the President to the Board.

4.20 Remuneration for the Board and the Management

With the approval of shareholders in the ordinary general shareholder
meeting, the Company sets remuneration for the Board and the Management
at rates comparable to other top companies in the same industries.
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 an incentive policy of
paying bonuses to Board members according to guidelines approved in the
shareholders meeting. The Management’s variable pay uses 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. In addition, current Thai law does not favor
this practice, since a tax must be paid on the transfer of the shares.)

The current principles and methods for setting director remuneration and
bonuses were approved at the March 2004 shareholders meeting and will
remain in effect until a resolution is passed to change them. The Board
will report on these to the shareholders annually.

4.21 Investor Relations

The Group places high priority to investor relations and has established
Investor Relations Department that is directly responsible for improving
disclosure and disseminating accurate, complete information of interest
to investors on an equitable and timely basis. This department 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 road show; and by organizing quarterly
analyst conferences. Information from these events is made available
immediately on SCG 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 significant financial
statements with a comparison to US accounting standard to accommodate
their better understanding.

The Group also arranges regular meetings of senior executives with
investors. In 2005, these activities included nine international road
show; four domestic investor meetings; two SET mobile events; and
several face-to-face meetings with senior executives. In addition,
visits to two businesses’ plants were organized: Chemicals 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 more competitive with
foreign stock exchanges.

 (5) Controlling the usage of internal data

The Company has defined as a Code of Ethics of Siam Cement Group that
“no employees shall exploit any company’s information for the interest
of self or others despite the fact that 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. (For additional information, refer to 4.9
Internal Information Controls)

(6) Human Resource 

Throughout its over 90 years of operation , Siam Cement Group
consistently steps up to the front line of the business while
continuously generates attractive return to shareholders. With the
current rigid competition circumstance and the way to get competitive
advantages has been changed from focusing on cost saving to
differentiate products and services, SCG arranges strategies to achieve
goal for the incoming 5 years as follows.

1.  Expand the investment to other countries.

2.  Products and services development which generate value added to the
    Group.

According to the strategies, Human resource is a critical factor in the
organizational success. Therefore, The Group has improved the Human
resource management by drawing up tactics to foster the success by
planning for the next 5 years as described below.

1.  Human resource preparedness to support the future investment

  The Group has prepared the quantity, skills and also the human
  resource management system to support operations abroad by the way of;

1.  Arrange manpower to serve an expansion

  While the Group expands to other countries, it requires planning its
  staff both for going to the other countries and for replacing the
  former group and also organized home staff from our invested country.
  It has built data bank for interested employees who yearn for overseas
  working, meanwhile it has recruited foreign staff to come to join SCG
  for readiness.

2.  Employee capability development

  SCG has planned to encourage instilling international working
  capability to its employees in many ways such as culture, language,
  skills, special expertise and knowledge on international business. In
  addition, it has prepared to transfer technologies and has developed
  home country staff’s capability.

3.  Modification on human resource management to encourage for going
    overseas

  Aims to have same standard for human resource management as Group’s in
  bound companies and also suitable for the culture, the oversea
  companies implement Group’s e-HR to ensure the Group human resource
  management and comparable with the other multinational companies.
  Furthermore, staff benefits and care taking for oversea staff is
  viewed as the importance in order to motivate the current interested
  employees as well as external ones to join SCG as its international
  staff.

2.  Encourage new culture lead to innovative organization

    1.  Change the culture to have new employee styles; Open Mined,
        Think Out of the Box, Assertive, Risk Taking and Eager to learn.

  SCG designs 5 employees’ characters for revolution to innovative
  organization which are Open Mined, Think Out of the Box, Assertive,
  Risk Taking and Eager to learn. Also, leaders would have 3
  qualifications which are change leader, change support and change
  management role model. To foster changing, various activities convened
  to exchange their knowledge and opinions through the year, for
  example, e-learning, constructionism and Sharing for Best Practices.
  Moreover, SCG implement IT to gather knowledge as Knowledge Management
  database system.

2.  Develop employees’ specialized skills, knowledge and capability

  The Company changes its human resource development approach to learn
  and work together such as cross functional work, learning through
  working project, constructionism learning, etc.

3.  Modify human resource management to enhance innovative organization

  The Company set the People System Committee to oversee human resource
  management in four vital ways that are comprised of;

-   Selection process: Strengthen corporate image as international firm
    to motivate high caliber, capable people to involve working with the
    Group. Moreover, The Group operates a Competency-Based Management
    system that applies to be the criteria on employee selection.

-   Revise performance evaluation and compensation system to associate
    with innovation indicators.

-   Different Career Management match to each working group such as
    management expert and research and development.

-   Human resource development emphasized on Innovation Competency via
    training program to boost Creative Thinking and Coaching Skill for
    managers.

  SCG believes that concerning on human resource development, capable
  and ethical employees will guide to international innovation
  organization. Furthermore, it will lead the Group growing
  consistently, crating benefit to stakeholder and being core
  organization of the country in the long-run.

  As at December 31, 2005, The Siam Cement Public Company Limited had
  338 employees with a compensation of Baht 439 million. Total employees
  of the Group were 20,866 with a compensation of Baht 4,775 million.
  (Compensation includes salary, bonuses, and provident fund)

Number of Employees in Each Business of The Siam Cement Group

As at December 31, 2005 and 2004

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

                                     2005               2004

  The Siam Cement Public Company     338                317
  Limited                                               

  Petrochemicals Business            1,249              1,043

  Paper and Packaging Business       6,123              6,065

  Cement Business                    4,198              4,141

  Building Products Business         5,555              5,378

  Distribution Business              1,055              1,094

  Others                             2,348              992

  Total                              20,866             19,030
  ---------------------------------- ------------------ ------------------