5.  Assets Used in Operation

Total Assets

Total assets of The Siam Cement Group at the end of 2008 were Baht
285,776 million of which 29 percent of them are current assets,
comprising of cash and cash equivalents, trade accounts and notes
receivable, and inventories. The rest (71 percent) are investments,
property, plant and equipment, and other assets.

Most assets shown in the financial statements of the Company and its
subsidiaries were built by and belonged to the Company and its
subsidiaries. SCG has no policy to place any assets as collateral;
therefore, having no such pledged assets. Excluding, three of
subsidiaries placed land, building and equipment as collateral for
overdraft lines and long-term debts from financial institutions amounted
to Baht 4,593 million.

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

  --------------------- -------------- ------------------ ----------------
                        2008           2007               

  SCG Chemicals         138,504        123,205            Million Baht

  SCG Paper             51,089         46,454             Million Baht

  SCG Cement            60,770         60,132             Million Baht

  SCG Building          22,654         19,863             Million Baht
  Materials                                               

  SCG Distribution      10,903         11,143             Million Baht
  --------------------- -------------- ------------------ ----------------

From the consolidated financial statements of the Company and its
subsidiaries property, plant and equipment have carrying values of Baht
137,261 million, which are 48 percent of total assets.

Property, Plant and Equipment of the Company and the Business Groups

[]

Remark: Figures in financial statements are classified according to
Business Groups before adjustment of inter-business transactions.

* At Book Value

Intangible Assets

-   Patents

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

[]

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-   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 SCG Cement on page
44-46.

-   BOI Certificates

SCG 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 good corporate governance.

SCG Chemicals

  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 percent reduction of corporate income tax for
  5 years after the exemption period. Details are shown below:

+----------------------+---------------------+-------------------------+
| Project              | Date Acquired       | Expiry of Tax           |
|                      |                     | Incentives              |
+======================+=====================+=========================+
| LDPE                 | Jul. 20, 1995       | Jun. 2008               |
+----------------------+---------------------+-------------------------+
| PP 2                 | Sep. 26, 1995       | Apr. 2010               |
+----------------------+---------------------+-------------------------+
| PP 3                 | Jul. 24, 2007       | Jul. 2023*              |
+----------------------+---------------------+-------------------------+
| HDPE 2               | Jul. 10, 1995       | Aug. 2011               |
+----------------------+---------------------+-------------------------+
| HDPE 3               | Jul. 24, 2000       | Oct. 2014               |
+----------------------+---------------------+-------------------------+
| HDPE 4               | Jul. 24, 2007       | Jul. 2023*              |
+----------------------+---------------------+-------------------------+
| Jetty and Terminal   | Jan. 26, 1998       | Sep. 2011               |
|                      |                     |                         |
|                      | Mar. 31, 1998       | Sep. 2011               |
|                      |                     |                         |
|                      | Oct. 2, 2003        | Dec. 2016               |
|                      |                     |                         |
|                      | May 19, 2004        | Jul. 2017               |
|                      |                     |                         |
|                      | Nov. 25, 2004       | Jan. 2018               |
|                      |                     |                         |
|                      | Dec. 12, 2007       | Jan. 2024*              |
+----------------------+---------------------+-------------------------+
| Olefins (ROC)        | Aug. 14, 1995       | Jan. 2012               |
|                      |                     |                         |
| Olefins (MOC)        | Dec. 25, 2006       | Jan. 2023*              |
+----------------------+---------------------+-------------------------+
| PE Compound          | Feb. 10, 2003       | Mar. 2017               |
|                      |                     |                         |
|                      | Mar. 11, 2004       | Mar. 2018               |
|                      |                     |                         |
|                      | Mar. 26, 2004       | Feb. 2020               |
|                      |                     |                         |
|                      | Apr. 10, 2006       | Nov. 2019               |
|                      |                     |                         |
|                      | May. 23, 2006       | May. 2020               |
|                      |                     |                         |
|                      | Dec. 7, 2007        | Jan. 2024*              |
+----------------------+---------------------+-------------------------+
| Calibration          | Jun. 30, 2003       | May. 2019               |
|                      |                     |                         |
|                      | Nov. 21, 2003       | Jun. 2018               |
+----------------------+---------------------+-------------------------+
| Industrial Zone      | Dec 4, 1997         | Mar. 2018               |
+----------------------+---------------------+-------------------------+
| Waste water          | Mar. 20, 2008       | Jan. 2023*              |
| treatment,           |                     |                         |
|                      |                     |                         |
| Plant Industrial     |                     |                         |
| Waste and Toxic      |                     |                         |
| Chemicals Management |                     |                         |
+----------------------+---------------------+-------------------------+
| PVC 6                | Dec. 21, 1993       | Apr. 2008               |
|                      |                     |                         |
| PVC 7                | Jul. 20, 1995       | Dec. 2009               |
|                      |                     |                         |
| PVC 8                | Aug. 5, 1997        | Aug. 2012               |
|                      |                     |                         |
| PVC 9                | Aug. 5, 2005        | Apr. 2021               |
|                      |                     |                         |
| VCM 2                | Jan. 8, 1996        | May 2012                |
+----------------------+---------------------+-------------------------+

 Remark: * Estimate date 

SCG Paper

Details of companies receiving BOI privileges:

+---------------------------+---------------+--------------------------+
| Project                   | Date Acquired | Expiry of Tax Incentives |
+---------------------------+---------------+--------------------------+
| Pulp                      | Dec. 3, 1999  | Sep. 2009                |
+---------------------------+---------------+--------------------------+
| Pulp Mould                | Jun. 26, 1996 | Feb. 2010                |
+---------------------------+---------------+--------------------------+
| Sheetboard and Corrugated | Jan. 30, 1997 | Aug. 2010                |
| Container                 |               |                          |
+---------------------------+---------------+--------------------------+
| Sheetboard                | Sep. 12, 2008 | Sep. 2011                |
+---------------------------+---------------+--------------------------+
| Paper Recycling Business  | Jan. 4, 2008  | Aug, 2015                |
+---------------------------+---------------+--------------------------+
| Cogeneration Plant        | Sep. 22, 2005 | 8 years from the date of |
|                           |               | first                    |
|                           |               |                          |
|                           |               | revenue received         |
+---------------------------+---------------+--------------------------+
| Kraft Paper               | Mar. 28, 1997 | Mar. 2011                |
+---------------------------+---------------+--------------------------+
| New Operator of 25 Mega   | Jan. 19, 2005 | Jan. 2012                |
| Watt Cogeneration Plant   |               |                          |
+---------------------------+---------------+--------------------------+
| Printing and Writing      | Jan.11, 2007  | May 2016                 |
| Paper                     |               |                          |
+---------------------------+---------------+--------------------------+
| Kraft Paper (Vina Kraft   | Jan. 18, 2007 | 13 years from the date   |
| Paper Co., Ltd)           |               | of first                 |
|                           |               |                          |
|                           |               | revenue received         |
+---------------------------+---------------+--------------------------+

SCG Building Materials

Details of companies receiving BOI privileges:

+---------------------------+---------------+--------------------------+
| Project                   | Date Acquired | Expiry of Tax Incentives |
+---------------------------+---------------+--------------------------+
| Production line of        | Oct. 15, 2001 | Oct. 2008                |
| ceramic roof tile         |               |                          |
+---------------------------+---------------+--------------------------+
| Production line of ridge  | Jun. 20, 2006 | Jun. 2013                |
| tile                      |               |                          |
+---------------------------+---------------+--------------------------+

-   Trademarks

 

The key trademarks of The Siam Cement Public Company Limited and its
subsidiaries comprise of “Elephant” in a hexagon, “Elephant” in a
circle, “Erawan Elephant” in a circle, and “Tiger” in a circle,
“Elephant” in a hexagon and “SCG” trademark etc. About 443 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
SCG policy.

SCG’ investments emphasizes on business expertise, self-operated
capability, and potential for a fair return and long-term growth. Such
management and investments must enable the Group to have more
competitive advantages than its competitors both within Thailand and
ASEAN countries, especially in SCG Chemicals, SCG Paper and SCG Cement,
which are the core businesses of the Group. It will maintain and divest
its investments in other non-core businesses that either need venture
partners’ technology or employ normal technology in the market. Hence,
SCG can use existing resources to support its core businesses.

As at December 31, 2008, the Company’s investments in subsidiaries,
associates, and other companies, based on cost method in the financial
statements, totalled Baht 66,851 million. Investments in subsidiaries
and associates amounted to Baht 63,338 million and in other companies
amounted to Baht 3,513 million with details as follows: in million Baht

+--------------------+-----------------+-------------------+----------+
| Business Unit      | Investments in  | Investments in    | Total    |
|                    | Subsidiaries    | Other Companies   |          |
|                    | and Associates  |                   |          |
|                    |                 | (Cost Method      |          |
|                    | (Cost Method)   | and/or Market     |          |
|                    |                 | price)            |          |
+--------------------+-----------------+-------------------+----------+
|   SCG Chemicals    | 36,471          | -                 | 36,471   |
+--------------------+-----------------+-------------------+----------+
|   SCG Paper        | 7,431           | -                 | 7,431    |
+--------------------+-----------------+-------------------+----------+
|   SCG Cement       | 9,518           | 1,119             | 10,637   |
+--------------------+-----------------+-------------------+----------+
|   SCG Building     | 4,760           | 299               | 5,059    |
|   Materials        |                 |                   |          |
+--------------------+-----------------+-------------------+----------+
|   SCG Distribution | 2,800           | -                 | 2,800    |
+--------------------+-----------------+-------------------+----------+
|   SCG Investment   | 2,358           | 2,095             | 4,453    |
+--------------------+-----------------+-------------------+----------+
|   Total            | 63,338          | 3,513             | 66,851   |
+--------------------+-----------------+-------------------+----------+