5.  Assets Used in Operation

Total Assets

Total assets of The Siam Cement Group at the end of 2005 were Baht
199,370 million. 28% of them are current assets, comprising of cash,
accounts receivable, and inventories. The rest (72%) are investments,
fixed assets and other assets.

Most assets shown in the financial statements of The Siam Cement Group
and its subsidiaries were built by and belong to the Company and its
subsidiaries. The Siam Cement Group has no policy to place any assets as
collateral; therefore, having no such pledged assets. Excluding, one of
subsidiaries placed land, building and equipment as collateral to obtain
the loans for Baht 4,086 million.

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

  --------------------------- ------------------ -------------------------
  Chemical                    78,656             Million Baht

  Paper                       38,575             Million Baht

  Cement                      55,953             Million Baht

  Building Products           20,259             Million Baht

  Distribution                8,560              Million Baht
  --------------------------- ------------------ -------------------------

From the consolidated financial statements of The Siam Cement Group and
its subsidiaries, land, buildings and equipment have carrying values of
Baht 81,775 million, which are 41 percent of total assets. In the
preparation of the financial statements for the year ended 31 December
2005, the Company has changed its accounting policy from revalued amount
to cost for the valuation of property, plant and equipment.

  Fixed Assets of The Company and The Business Units

  []

Remarks: Figures in financial statements are classified according to
Business Units before adjustments of inter-business transactions.

* Shown according to consolidated statements after adjustments of
inter-business transactions.

Intangible Assets

-   Patents

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

[TABLE]

  ---- ---------- --------- ----------- ------------ ------ --------------- -------- ------
  7    14736      May 12,   The Siam    030045       Feb.   Round ridge end          Feb.
                  2003      Fibre-                   14                              13,
                            Cement Co.,              1996                            2006
                            ltd.                                                     

  8    14735      May 12,   The Siam    029647       Jan.   Roofing tile             Jan.
                  2003      Fibre-                   12,                             11,
                            Cement Co.,              1996                            2006
                            ltd.                                                     

  9    12688      May 10,   The Siam    029646       Jan.   Corrugated               Jan.
                  2002      Fibre-                   12,    fibre-cement             11,
                            Cement Co.,              1996   sheet                    2006
                            ltd.                                                     

  10   15048      Jul. 31,  CPAC Roof   069026       Oct.   Decorative               Oct.
                  2003      Tile Co.,                14,    ridge                    13,
                            Ltd.                     2001                            2011

  11   12882-83   May 30,   CPAC Roof   050897-8     Jun.   -               Round    Jun.
                  2002      Tile Co.,                7,                     apex     6,
                            Ltd.                     1999                            2009

  12   12879-81   May 30,   CPAC Roof   050894-6     Jun.   -               Roof     Jun.
                  2002      Tile Co.,                7,                     tile     6,
                            Ltd.                     1999                            2009

  13   11704      Jan.17,   Siam CPAC   038859       Jul.   -               Paving   Jul.
                  2002      Block Co.,               31,                    Blocks   30,
                            Ltd.                     1997                            2007

  14   11616      Jan. 8,   Siam CPAC   038858       Jul.   -               Paving   Jul.
                  2002      Block Co.,               31,                    Blocks   30,
                            Ltd.                     1997                            2007

  15   Petty      May 15,   Siam CPAC   9903000147   Dec.   Formula of      -        Dec.
       Patent 237 2001      Block Co.,               2,     textured                 1,
                            Ltd.                     1999   natural                  2005
                                                            Granite-liked            
                                                            floor surface            

  16   14978      Jul. 18,  Siam Fiber  029726       Jan.   -               Metal    Jan.
                  2003      Glass Co.,               19,                    stud     18,
                            Ltd.                     1996                            2006

  17   Petty      Jan. 12,  Siam Fiber  0003000422   Dec.   Roofing         -        Dec.
       Patent 141 2001      Glass Co.,               9,     insulation               8,
                            Ltd.                     1999                            2005

  18   Petty      Jun. 2,   Siam Fiber  9903000163   Dec.   Ceiling         -        Dec.
       Patent 89  2000      Glass Co.,               13,    Insulation               12,
                            Ltd.                     1999                            2005
  ---- ---------- --------- ----------- ------------ ------ --------------- -------- ------

-   Concession

  Concessions in limestone and gypsum mines are long-lived. Their
  maturities have been continuously extended because cement is a
  fundamental product for construction and infrastructure related to the
  country’s economy. Hence, there is a hypothesis that cement market
  growth closely links to economic growth of the country.

  Details of concessions for the Company and affiliates in cement
  business are shown in the Product or Service Features of Cement
  Business on page 43-46.

-   BOI Certificates

  The Siam Cement Group adheres to the policy to apply for the BOI’s
  privileges in every business it is eligible for. The Group believes
  that it can fully operate under all BOI’s rules and regulations due to
  its transparent operation based on its good corporate governance.

Chemicals Business

  The Business acquired BOI tax incentives such as machinery import duty
  exemption, corporate tax exemption for 8 years from the date of first
  revenue received, and 50% reduction of corporate income tax for 5
  years after the exemption period. Details are shown below:

+---------------------------+--------------------+--------------------+
| Project                   | Date Acquired      | Expiry of Tax      |
|                           |                    | Incentives         |
+===========================+====================+====================+
| PP 1                      | May 2, 1989        | Oct., 2006         |
+---------------------------+--------------------+--------------------+
| LDPE                      | July 20, 1995      | Jun. 2008          |
+---------------------------+--------------------+--------------------+
| PP 2                      | Sep 26, 1995       | Apr. 2010          |
+---------------------------+--------------------+--------------------+
| HDPE 2                    | Jul. 10, 1995      | Aug. 2011          |
+---------------------------+--------------------+--------------------+
| Jetty and Terminal        | Jan. 26, 1998      | Sep. 2011          |
|                           |                    |                    |
|                           | Oct. 2, 2003       | Dec. 2016          |
|                           |                    |                    |
|                           | May 19, 2004       | Jul. 2017          |
|                           |                    |                    |
|                           | Nov. 25, 2004      | Jan. 2018          |
+---------------------------+--------------------+--------------------+
| Olefins                   | Aug. 14, 1995      | Jan. 2012          |
+---------------------------+--------------------+--------------------+
| HDPE 3                    | Jul. 24, 2000      | Oct. 2014          |
+---------------------------+--------------------+--------------------+
| PE COMPOUND               | Feb. 10, 2003      | Mar. 2017          |
|                           |                    |                    |
|                           | Mar. 11, 2004      | Feb. 2018          |
|                           |                    |                    |
|                           | Mar. 22, 2004      | Jul. 2018          |
+---------------------------+--------------------+--------------------+
| CALIBRATION               | Jun. 30, 2003      | Jun. 2016          |
|                           |                    |                    |
|                           | Nov. 21, 2003      | Nov. 2016          |
+---------------------------+--------------------+--------------------+

 

Paper Business

Details of companies receiving BOI privileges:

+---------------------------+--------------------+--------------------+
| Project                   | Date Acquired      | Expiry of Tax      |
|                           |                    | Incentives         |
+---------------------------+--------------------+--------------------+
| Semi-Chemical Pulp        | Aug. 13,1996       | Dec. 2005          |
+---------------------------+--------------------+--------------------+
| Pulp                      | Dec. 3, 1999       | Sep. 2009          |
+---------------------------+--------------------+--------------------+
| Bleached Short-Fibered    | Dec. 26, 1990      | Sep. 2007          |
| Pulp                      |                    |                    |
+---------------------------+--------------------+--------------------+
| Corrugated Sheets and     | Jul. 4, 1994       | Dec. 2008          |
| Corrugated Paper Boxes    |                    |                    |
+---------------------------+--------------------+--------------------+
| Corrugated Sheets and     | Jan 30, 1997       | Feb. 2009          |
| Corrugated Paper Boxes    |                    |                    |
+---------------------------+--------------------+--------------------+
| Kraft Paper               | Jan. 1, 1997       | Dec. 2011          |
+---------------------------+--------------------+--------------------+

-   Trademarks

  The key trademarks of The Siam Cement Public Company Limited and
  Subsidiaries comprise of “Elephant” in a hexagon, “Elephant” in a
  circle, “Erawan Elephant” in a circle, and “Tiger” in a circle, etc.
  About 365 trademarks are registered at The Department of Intellectual
  Property.

[]

[]

Investment Policy in Subsidiaries and Associates

The Siam Cement Public Company Limited established a holding company for
each business units to oversee and control business operation along the
organization structure. Every business unit independently operates under
The Siam Cement Group policy.

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

As at December 31, 2005, the Company’s investments in subsidiaries,
associates, and other companies, based on equity method in the financial
statements, totalled Baht 102,759 million. Investments in subsidiaries
and associates amounted to Baht 101,309 million and in other companies
amounted to Baht 1,450 million. Details are displayed below: Million
Baht

+--------------+--------------+----------------+-------------+---------+
| Business     | Original     | Investment in  | Investment  | Total   |
| Unit         | Investment   | Subsidiaries   | in Other    |         |
|              | in           | and Associates | Companies   | (4) =   |
|              | Subsidiaries |                |             | (2) +   |
|              | and          | (Equity        | (Original   | (3)     |
|              | Associates   | Method)        | Cost)       |         |
|              |              |                |             |         |
|              | (1)          | (2)            | (3)         |         |
+--------------+--------------+----------------+-------------+---------+
| Chemicals    | 30,433       | 49,926         | -           | 49,926  |
+--------------+--------------+----------------+-------------+---------+
| Paper        | 12,155       | 18,691         | -           | 18,691  |
+--------------+--------------+----------------+-------------+---------+
| Cement       | 9,518        | 9,262          | -           | 9,262   |
+--------------+--------------+----------------+-------------+---------+
| Building     | 5,106        | 11,228         | 299         | 11,527  |
| Products     |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Distribution | 2,841        | 1,390          | -           | 1,390   |
+--------------+--------------+----------------+-------------+---------+
| Cementhai    | 3,129        | 9,203          | 1,151       | 10,354  |
| Holding      |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Cementhai    | 2,092        | 1,609          | -           | 1,609   |
| Property     |              |                |             |         |
+--------------+--------------+----------------+-------------+---------+
| Total        | 65,274       | 101,309        | 1,450       | 102,759 |
+--------------+--------------+----------------+-------------+---------+