scg: annual report 2000

2

Statement of Income (Million Baht)

Revenues

Cost and Expenses*

Income before income tax, interest expenses and financial charge, depreciation and amortization (EBITDA)

Income (Loss) before effects from currency exchange and others

Net profit (loss)

Net cash provided by (used in) operating activities

Balance Sheet (Million Baht)

Assets

Liabilities

Shareholders' equity and minority interest

Shareholders' equity

Share Information

Total number of shares issued (Million Shares)

Book value per share (Baht)

Earnings (loss) per share (Baht)

Dividends per share (Baht)

Payout ratio (%)

Return on total revenues (%)

Return on equity (%)

Return on assets (%)

*Exclued Loss (Gain) on exchange rate.

The Siam Cement Public Company Limited and subsidiaries companies

3

128,197 101,851 105,236 122,629 110,708

123,904 99,770 107,977 116,483 103,203

30,386 27,962 23,881 28,840 27,221

5,375 1,913 (1,841) 3,745 6,788

41 (4,785) 19,301 (52,551) 6,788

10,963 4,669 18,979 (4,825) 18,609

260,309 266,348 290,297 350,831 180,812

195,549 202,000 214,124 273,620 138,543

64,760 64,348 76,173 77,211 42,268

54,133 50,006 57,623 57,103 32,820

120 120 120 120 120

451 417 480 476 274

- (40) 161 (438) 57

- - - 10 20

- - - N.A. 35

- (5) 18 (43) 6

- (9) 34 (117) 22

- (2) 6 (20) 4

Restated

2000 1999 1998 1997 1996

4

Although the economy is still in a recovery period, the Siam Cement Group has achieved

improved results for the year 2000. Domestic and exports sales increased, as the performance in

the three main businesses - Cement, Petrochemicals, and Paper and Packaging - improved.

As part of a long-term strategy to achieve higher efficiency in resource allocation and to

build greater institutional strength, Siam Cement restructured into six strategic business units:

Cement, Petrochemicals, Paper and Packaging, Building Products, Ceramics, and Distribution.

As part of this process, Siam Cement also created two new holding companies: Cementhai Holding

to oversee the Group’s investment and Cementhai Property to manage the Group’s real estate

holdings. These changes became effective as of January 2001.

During 2000, Siam Cement farther divested and reduced investment in its non-strategic

business units by a total of approximately 13,000 million baht, including, investment in the Michelin

Siam Group, the Nawaloha Foundry Bang Pakong, and Siam Compressor Industry, etc.

Overall, the Thai economy

grew 4.5% in 2000, compared

to 1999, fueled by rising exports

and private consumption

growths. Lower lending rates

and a slight rise in employment

are added signs of economic

recovery. However, many

obstacles for all economic

recovery remains, such as low

agricultural product prices, high

petroleum prices, and domestic

political uncertainties.Chumpol NaLamliengChaovana NaSylvanta

5

The Company’s mission on business restructuring is now near completion and Siam Cement is

ready to build and grow along more focused business lines.

Investors responded most favorably to Siam Cement’s debentures issues over the past two

years, demonstrating strong confidence in the Group’s prospects. As year 2000, 90,000 million

baht of debenture were issued to relieve foreign borrowing, reducing considerady the Group’s

vulnerability to foreign exchange risk.

Siam Cement has always conducted business in accordance to the principles of good

corporate governance, including effective organizational control, fairness to all stakeholders,

social responsibility, and transparency. In addition, the Group has continuously tried to promote good

corporate governance to entrepreneurs and to people in general through various media, such as

television, radio and publications.

In 2000, Siam Cement formed a joint venture with Accenture (formally known as Andersen

Consulting), the world leading IT consulting firm - to develop information technology and

e-Commerce capabilities to a world-class level, as well as to enhance the competence of the Group’s

staff.

Siam Cement has its long-term commitment to continuous improvements in operations and

to boosting productivity for greater competitiveness by applying the standards of Total Quality

Commitment, or TQC.

Total combined revenues for The Siam Cement Plc and subsidiaries in 2000 amounted to

128,197 million baht, an increase of 26 percent over 1999. However, extraordinary expenses, such

as foreign exchange losses and the cost of restructuring (loss from divestitures), and employees’

early retirement programs, resulted in a net profit for The Siam Cement Plc and subsidiaries of

just 41 million baht. Without such extraordinary expenses, operating profits would have been

approximately 4,848 million baht.

Taking into account of the operating performance and the overall financial status of the

Company and subsidiaries as well as cumulative losses, the Board of Directors has decided not to

pay a dividend for the year 2000.

The Board would like to thank shareholders, joint-venture partners, customers, and staff, as well

as domestic and foreign financial institutions, for their continuing support. We are committed to

meriting your confidence by continuing to develop our management capabilities and our businesses

to ensure our competitiveness and our leadership, both domestically and internationally.

Bangkok, March 1, 2001

(Chaovana NaSylvanta) (Chumpol NaLamlieng)

Chairman President

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The Siam Cement Public Company Limited*

Board of Directors

CementhaiHoldingCo., Ltd.

* Listed Companies in the Stock Exchange of Thailand

CementhaiPropertyCo., Ltd.

Siam CementIndustryCo., Ltd.

CementhaiChemicalsCo., Ltd.

The Siam Pulpand Paper

Plc.*

CementhaiBuilding Products

Co., Ltd.

Audit CommitteeAudit Office

RemunerationCommittee

ManagementCommittee

CorporateFunctions &

Services

CementhaiDistribution

Co., Ltd.

CementhaiCeramicsCo., Ltd.

President

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The Siam Cement Public Company Limited

Chaovana NaSylvanta Chairman

Osot Kosin Vice Chairman

Kamthon Sindhvananda Director

Snoh Unakul Director

Paron Israsena Director

Sivavong Changkasiri Director

Sumet Tantivejkul Director

Yos Euarchukiati Director

Pricha Attavipach Director

M.R. Pridiyathorn Devakula Director

Panas Simasathien Director

Chumpol NaLamlieng Director and President

Suvit Virojanadul Secretary to the Board and Corporate Secretary

The Siam Cement Public Company Limited

Chumpol NaLamlieng Presidentand President, Cementhai Holding Co., Ltd.

Chalaluck Bunnag Vice Presidentand President, Cementhai Property Co., Ltd.

Aviruth Wongbuddhapitak Vice PresidentPramote Techasupatkul Vice PresidentChaisak Saeng-Xuto President, The Siam Pulp and Paper Plc.Sobson Ketsuwan President, Siam Cement Industry Co., Ltd.Apiporn Pasawat President, Cementhai Chemicals Co., Ltd.Dusit Nontanakorn President, Cementhai Distribution Co., Ltd.Kajohndet Sangsuban President, Cementhai Building Products Co., Ltd.Kan Trakulhoon President, Cementhai Ceramics Co., Ltd.

8

StatusBusiness

Paper and Packaging

The Siam Pulp and Paper Plc. After making a tender offer, the Group’s share-holding in the company rose to 87 percent toincrease its role in core business.

Thai Containers Group Ltd. In joint venture with Nippon Hi-Pack by holding74 percent share in Nippon Hi-Pack (Thailand);and set up Thai Containers V&S Co., Ltd., with90 percent shareholding to purchase machines,buildings, and lands from V&S Paper BoxesCo., Ltd.

Automotive Tyres

Michelin Siam Group Co., Ltd. The Group reduced shareholding from 50percent to 40 percent by selling the shares toMichelin of France, present joint venture partner.

Electrical products

Thai CRT Co., Ltd. In joint venture with Sony Corporation (SONY)Thai Electron Gun Co., Ltd. for collaboration agreement in productionCRT Display Technology Co., Ltd. of tubes for 17-inch monitoring screens for

computers manufactured by CRT DisplayTechnology Co., Ltd. By this, SONY movedproduction line from Japan to install in Thailand.Production is expected to begin by the end ofthe second quarter of 2001.

Siam Compressor Industry Co., Ltd. The Group will sell all stake in Siam Compressor(49%) to Mitsubishi Electric Corporation toreduce investment in compressor for air-conditioners. Transaction is expected to becompleted within the first quarter of 2001.

9

StatusBusiness

Metal products

Siam Aisin Co., Ltd. The Group reduced shareholding from 47

percent to only seven percent. The shares were

sold to joint venture partner Aisin Seiki of Japan.

The Nawaloha Foundry Bang Pakong Agreement reached to sell assets to Toyota Group

Co., Ltd. in order to improve the business operations

and reduce the Group’s shareholding. Transaction

is expected to be completed within the first

quarter of 2001.

Iron & Steel

Construction Steel Study on merger with NTS expected to be

concluded in second quarter of 2001.

Siam Industrial Wires Co., Ltd. Negotiations under way with parties interested

in buying the company in a bid to reduce

investment in the business.

Others

The Siam Pipe Products Co., Ltd. Arrangement for closure under way.

Thai Wanaphan Co., Ltd. Arrangement for closure under way.

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The Siam Cement Public Company Limited conducts business with the philosophy that thecompany should demonstrate a keen sense of responsibility towards the best interests of itsshareholders, and that the company should, at the same time, be acutely aware of all environmentalconsiderations and of the well-being of society and the nation as a whole. Although this particularphilosophy was only incorporated into the code of ethics and published about 20 years ago, it hasin fact been at the very heart of how Siam Cement has operated since its establishment in 1913.This philosophy has been introduced into other companies in the group, and has now become theunderlying philosophy of the entire Siam Cement Group (SCG).

Recently, Corporate Governance has been receiving a lot of attention as a key managerialconcept. However, it is in fact the case that acceptance of this concept produces business practiceswhich are very much in line with the way in which SCG has long operated. Therefore, it can be arguedthat SCG has been carrying out its business in tune with the Corporate Governance concept sincewell before the term ever became fashionable.

SCG intends to continue to conduct its business in accordance with the concept of CorporateGovernance. Furthermore, SCG is determined to set an example for others to follow, and is resolvedto encourage other corporations to adopt the practices. In this way, the benefits to society as a wholecan be truly maximized.

Based on the Corporate Governance concept, the role of the Board of Directors is crucial inboth management and the effectiveness of the operations. The Board determines the strategy whichis to be adopted in order to accomplish the set objectives through means that have been approvedby the shareholders and which comply with both the law of the land and SCG’s own regulations.The Board also ensures that effective monitoring, controlling and evaluating systems areproperly in place. Furthermore, the Board collectively oversees the effectiveness and the fairnessof management.

The Board of Directors is committed to preserving the rights and minimizing the risks to share-holders, and is determined to preserve the value of their investment. The Board is also committed toensuring that the responsibilities that are involved in governing the corporation are set out with duetransparency and disclosure, and with the proper means for verification.

Preserving Rights

SCG is fully aware of the rights of shareholders. Shareholders may exercise their rights todefend their investments, to vote for the Directors on the Board, and to vote in decision-making onimportant issues such as the authorization of additional shares. Moreover, it is a fundamental right ofshareholders that they should regularly receive accurate and complete information, and that theyshould have the right to verify that information for themselves or to have it clarified.

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Risk Management

Though corporate objectivesare clearly set out and plans to achievethose objectives are carefully devisedwith precise control and monitoringprocedures, risk management hasalso been regularly highlighted. Riskswhich may arise are identified andthe priorities for controlling themare established. Then, appropriatemeasures and precise procedureswhich have been designed to minimizethe risks are outlined.

Protecting Value

SCG is continuously striving toachieve increased long-term returnsfor its shareholders.

SCG has embraced the CorporateGovernance concept as the basis onwhich it intends to continue to conductbusiness, secure in the knowledge thatthis is the best way to guaranteeintegrity and to promote the good

image of the company. Furthermore, on this same basis, SCG oversees the practices of all companieswhich belong to the group to ensure that they all employ internationally accepted criteria. SCGalso facilitates the effective monitoring of the use of resources and encourages the corporation touse those resources in the most efficient manner possible. In addition, SCG has devised a policyto provide fair and proper incentives for the Board and management to align their interest with thoseof the shareholders, thereby enhancing returns for the shareholders.

Transparency, Disclosure and Verification

SCG belives that transparency, disclosure, verification and management with integrity are allvital factors in maintaining SCG’s reputation and in maintaining shareholders’ trust. SCG willcontinue to conduct its business with transparency and to disclose information accurately, completelyand on a timely basis. Furthermore, SCG will continue to provide the means to clarify and verifythat information.

Social Responsibilities

One of the four cardinal principles of SCG philosophy is “Concern for Social Responsibility”.SCG has always operated on the basis of a firm sense of responsibility toward society - in particular, onthe issue of the environment. SCG’s concern for environment protection is widely recognized by thegeneral public. Moreover, SCG is irrevocably committed to the pursuit of objectives that are in thelong-term interests of the entire country as well as in the long-term interests of its shareholders.

SCG is certain that effective monitoring and control by the Board will strengthen SCG CorporateGovernance and maintain public confidence. This will in turn lead to the best long-term interest of allbeneficiaries and sustainable success.

Consolidated Financial Information

Million Baht

2000 1999 1998 1997 1996

Balance Sheet Data

Total current assets 8,641 3,351 4,055 4,946 4,396

Total assets 70,700 67,887 66,277 83,340 37,569

Total liabilities 55,109 56,670 47,103 65,052 24,370

Shareholders’ equity & Minority interest 15,591 11,217 19,174 18,288 13,199

Statements of Income Data

Total revenues 22,328 22,847 25,507 31,328 35,701

Total costs and expenses* 21,635 21,385 24,734 27,631 31,569

Income (Loss) before effects from

currency exchange and others 98 861 529 3,227 3,584

Net income (Loss) (274) (799) 9,342 (5,832) 4,166

EBITDA 7,231 9,297 8,839 10,517 8,375

*Exclude Loss (Gain) on exchange rate

Major Companies

Subsidiaries Siam Cement Industry Co., Ltd.

The Siam Cement (Lampang) Co., Ltd.

The Siam Cement (Ta Luang) Co., Ltd.

The Siam Cement (Kaeng Khoi) Co., Ltd.

The Siam Cement (Thung Song) Co., Ltd.

The Concrete Products and Aggregate Co., Ltd.

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14

O p e r a t i n g R e s u l t s

Marketing

In the year 2000, SCI continued to

hold the biggest domestic market share,

with the marketing of Oil Well Cement and

Tiger Brand Cement in 25-kg bags.

The Concrete Products and Aggregate

Co., Ltd., has pushed for a new line of

business investment in ready-mixed concrete

called “CPAC Franchise” to expand the

manufacturing and distribution of ready-

mixed concrete nationwide. Moreover, the

company also launched new products

such as CPAC Marine Concrete and

concrete for agricultural projects, with the

opening of a website www.cpac.co.th to

accommodate customers and contractors.

In the year 2000, Siam Cement Industry Co., Ltd. (SCI), earned revenues at a level close to that of

the previous year. As domestic demand for grey cement declined, the company concentrated on exports

and supported investment in the cement industry abroad to expand the base for exports in the future.

15

The Siam White Cement Co., Ltd.,

launched a new product, white cement

under “Tiger Brand” in 2-kg packing. Siam

Mortar Co., Ltd., showed an increase in

sales of 18 percent due to growing market

demand for the product.

Exports

Exports of grey cement increased

20 percent from 1999 resulted from the

improvement in port and handling equip-

ment, together with market expansion to

South Asia, Africa, Europe, North and

South Americas.

Production

Companies operating under SCI

increased efficiency in management with emphasis on operation cost control and environmental

conservation through various measures, as follows:

l Use alternative fuels as substitute for bunker oil, such as petroleum coke, used lubricant and

auto tyres.

l Cooperate with leading foreign companies to provide a fully integrated engineering service to

cement manufacturers locally and abroad.

l Improve the work flow to be in line with the installation of SAP-CS, such as a linkage between

cement distribution system and SAP-CS.

l Printing of bar code on cement bags to be in accordance with international standards.

Foreign investment

l SCI in collaboration with Siam City Cement Plc., and Holderbank Financiere Glaris, bought all

shares in Hyundai Cement (Bangladesh), which operates cement grinding plant in Bangladesh.

SCI holds 19 percent shareholding and will benefit for expanding exports to South Asia.

l The Siam White Cement Co., Ltd., has given the right to produce and distribute white cement

under “White Elephant” brand to Siambangla Industries Ltd., in Bangladesh.

l The Concrete Products and Aggregate Co., Ltd., has set up a ready-mixed concrete plant in

Siem Reap, a third plant in Cambodia, with an annual production capacity of 40,000 cubic metres.


Million Baht

2000 1999 1998 1997 1996

Balance Sheet Data


Total assets 55,343 57,202 57,926 53,850 26,418




Total revenues 40,086 25,059 15,853 12,959 8,112



currency exchange and others 3,057 2,961 1,216 768 (139)

Net income (Loss) 1,558 2,133 981 (4,665) (209)

EBITDA 7,063 6,749 2,819 2,486 1,687

Major Companies

Subsidiaries Cementhai Chemicals Co., Ltd.Thai Polyethylene Co., Ltd.Thai Polyethylene (1993) Co., Ltd.Thai Polypropylene Co., Ltd.Thai Polypropylene (1994) Co., Ltd.Rayong Olefins Co., Ltd.Map Ta Phut Tank Terminal Co., Ltd.

Associated Siam Polystyrene Co., Ltd.Pacific Plastics (Thailand) Ltd.Siam Synthetic Latex Co., Ltd.Siam Styrene Monomer Co., Ltd.Siam Polyethylene Co., Ltd.Thai MMA Co., Ltd.Grand Siam Composites Co., Ltd.Siam Mitsui PTA Co., Ltd.Thai Plastic and Chemicals Plc.

*Exclude Loss (Gain) on exchange rateFigure in 1996-1999 were reclassified to conform with those in 2000.

17

18


In the year 2000, the Petrochemicals Business showed higher total sales and earning before

interest, tax, and depreciation (EBITDA) than the previous year due to the full year operation of

Rayong Olefins Co., Ltd., producer of ethylene. At the same time, the selling prices of ethylene,

propylene and plastic resins increased correspondingly with rising oil prices. However, the higher cost

of raw materials, which was based on higher oil prices, led to lower profit per unit compared with 1999.

Olefins

Domestic demand for ethylene

and propylene was lower than

in 1999, following production

cutback among the manufacturers

of plastic resins due to sharp

increase in the prices of raw

materials. However, the Business

was able to run at full capacity,

with exports of ethylene and

propylene to Asian and European

countries.

19

Investment

There was progress in investment projects for expansion of production capacity to cope

with economic recovery to attain leadership position in the petrochemicals industry in the

Asia-Pacific region, as follows:

Polyolefins

Domestic sales rose

10 percent from the

previous year in line

with market expansion,

accounting for 60 percent

of total sales. Exports also

increased 13 percent from

the previous year. Major

export markets are Japan,

China, Indochina, and

South East Asia.

Company Product Production (Ton/Year) Start-up

Previous New (Expansion)

Siam Styrene Monomer Co., Ltd. Styrene 240,000 300,000 Q2 Y2000

Monomer

Rayong Olefins Co., Ltd. Ethylene 600,000 800,000 Q3 Y2001

Thai Polyethylene Co., Ltd. HDPE 300,000 500,000 Q4 Y2001

Thai Polypropylene Co., Ltd. and Polypropylene 260,000 320,000 Q3 Y2001

Thai Polypropylene (1994) Co., Ltd.

Siam Mitsui PTA Co., Ltd. PTA 400,000 800,000 Q1 Y2003

(2nd Plant)


Million Baht2000 1999 1998 1997 1996

Balance Sheet Data


Total assets 36,416 36,325 40,482 49,431 28,286




Total revenues 27,465 21,764 19,865 17,086 16,217



currency exchange and others 3,171 1,660 792 753 761

Net income (Loss) 2,798 1,183 4,159 (5,735) 682

EBITDA 8,061 6,351 5,735 5,050 4,262


Major Companies

Subsidiaries The Siam Pulp and Paper Public Company LimitedSiam Cellulose Co., Ltd.The Siam Forestry Co., Ltd.Thai Paper Co., Ltd.Thai Union Paper Public Company LimitedThai Union Paper Industry Co., Ltd.Siam Kraft Industry Co., Ltd.Thai Kraft Paper Industry Co., Ltd.Thai Containers Ltd.Thai Containers Industry Co., Ltd.Thai Containers Ratchaburi (1989) Co., Ltd.Thai Containers Songkhla (1994) Co., Ltd.Thai Containers Chonburi (1995) Co., Ltd.

Associated Siam Toppan Packaging Co., Ltd.United Pulp & Paper Co., Inc. (The Philippines)

21

22


In the year 2000, world market prices for paper and packaging increased. Higher domestic

demand for the products led to rising sales for the business. The overall operating results of the

Paper and Packaging Business was quite satisfactory and reflected the best performance ever.

Industrial paper (Kraft Paper/Duplex Board/Gypsum Paper)

In the first half of the year

2000, world market prices for

pulp and waste paper rose

continuously and enabled adjust-

ments of prices for the domestic

market and exports.

The country’s economy and

exports began to show signs of

recovery together with that of

other countries in the Asian

region, leading to higher demand

for industrial paper. Domestic

23

sales increased 43 per-

cent and exports rose

26 percent. Major export

markets are China, Hong

Kong, Malaysia, Singapore,

the United States and

Indochina.

In the same year, the

business has installed

SAP system and launched

e-Commerce to facilitate

sales and enhance services

to customers.

Packaging

Domestic demandfor packaging products increased 38 percent due to the transfer of manufacturing base for electrical

appliances and consumer goods to Thailand. The business increased production capacity by 39,000

tons, thereby enhancing the potential in customer services.

Printing/Writing Paper

Demand for printing/writing paper in 2000 increased 13 percent leading to an increase in domestic

sales of 30 percent while exports rose 27 percent. Major markets are Hong Kong, South East Asia

and the United States. Emphasis was put on exports of coated printing and writing paper, thus

increasing revenues for the business.



Million Baht

2000 1999 1998 1997 1996

Balance Sheet Data


Total assets 16,190 16,842 18,230 19,380 10,868




Total revenues 8,664 8,145 8,111 11,565 10,949



currency exchange and others 361 335 (272) 1,065 1,080

Net income (Loss) 26 189 965 (1,123) 1,049

EBITDA 1,997 1,789 1,480 2,476 2,149

Major Companies

Subsidiaries Cementhai Building Products Co., Ltd.The Siam Fibre-Cement Co., Ltd.Tip Fibre-Cement Co., Ltd.The CPAC Roof Tile Co., Ltd.

The CPAC Roof Tile Industry Co., Ltd.

Thai Ceramic Roof Tile Co., Ltd.

The CPAC Concrete Products Co., Ltd.The CPAC Concrete Industry Co., Ltd.The Siam CPAC Block Co., Ltd.The CPAC Block Industry Co., Ltd.Saraburirat Co., Ltd.PT Siam-Indo Concrete Products (Indonesia)

The Siam Gypsum Industry Co., Ltd.

The Siam Gypsum Industry (Saraburi)

Co., Ltd.The Siam Gypsum Industry (Songkhla) Co., Ltd.The Siam Moulding Plaster Co., Ltd.PT Siam-Indo Gypsum Products (Indonesia)Siam Fiberglass Co., Ltd.The Siam Nawaphan Co., Ltd.

25

26


When the Siam Cement Group embarked upon a corporate restructuring in late 2000,

Roofing and Concrete Products Business, and Gypsum Business were grouped together as

Building Products Business under management of Cementhai Building Products Co., Ltd. Major

products are roof tiles, concrete paving blocks and gypsum boards.

The economic recovery,

improving conditions in the real

estate sector and declining

interest rates resulted in higher

sales of Cementhai Building

Products Co., Ltd. Major policies

enforced during the year were

the strengthening of market

stability, development of pro-

duction efficiency, increase in

exports, work system improve-

ment, launches of new products

ready for competition under the

ASEAN Free Trade Area (AFTA).

27

Marketing

Recovery in the real

estate sector in the year

2000, with a new strategy

among developers in offering

furnished residential units,

led to product demand in

advance. The company

continued to explore new

market segments such as

government office buildings

and exports, to compensate

for the falling demand in

existing markets. Moreover,

there were new products such as Roman tiles in bright green color,

“OK” Brand corrugated roof tiles, “Neustile” roof tiles, and “Sornsila”

concrete paving blocks.

Exports

Though overall exports in the year 2000 declined from the previous year, shipments to the

ASEAN markets continued to increase due to the consistently expanding demand for construction

materials.

Major markets are Laos, Malaysia, Taiwan, and Cambodia. Export products mainly were

gypsum boards and roof tiles. There were efforts to boost export volume for construction materials

to ASEAN countries to cope with future expansion of the manufacturing base.

Production

The annual production capacity for ceramic roof tiles was expanded by 300,000 square metres,

to a total of 600,000 square metres, to meet the rising demand for the product.


Million Baht

2000 1999 1998 1997 1996

Balance Sheet Data


Total assets 11,245 11,075 11,870 11,897 5,405




Total revenues 4,779 3,555 3,193 4,303 2,779



currency exchange and others (221) (750) (578) (81) 103

Net income (Loss) (279) (890) (130) (1,186) 103

EBITDA 988 353 482 855 578

Major Companies

Subsidiaries Cementhai Ceramics Co., Ltd.

Thai Ceramic Co., Ltd.

Sosuco Ceramic Co., Ltd.

The Sosuco Group Industries Co., Ltd.

PT. Surya Siam Keramik (Indonesia)

Beijing Cementhai Ceramic Co., Ltd. (China)

Associated Siam Sanitary Ware Co., Ltd.

Siam Sanitary Ware Industry Co., Ltd.

The Siam Sanitary Fittings Co., Ltd.

Mariwasa Manufacturing, Inc. (The Philippines)

Siam Mariwasa TOTO, Inc. (The Philippines)

*Exclude Loss (Gain) on exchange rateFigure in 1996-1999 were reclassified to conform with those in 2000.

29

30


In the year 2000, overall domestic demand increased for ceramic tiles, sanitary wares, and

sanitary fittings. Price competition was less severe because local manufacturers focused more on

expanding export markets, thus help reducing the capacity surplus. Also, several new marketing

promotion activities have been initiated to differentiate the products and avoid price cut.

Marketing and exports

Total sales in the year 2000 had about 35

percent growth due to continued expansion in

exports. At present, “COTTO” brand has become

well known and more acceptable in world

markets. Major export markets are the U.S.A.,

ASEAN countries, Australia and Europe.

Production

There was an expansion in the production

capacity for sanitary wares at Siam Sanitary Ware

Industry (Nongkae) Co., Ltd. The objective of this

project was mainly for exports. Commercial run is

expected to start in the middle of 2001.

31

Foreign Business Operations

The Philippines. Com-

petition in domestic market

became more intense than

in the previous year, mainly

due to surplus capacity and

low import duties, leading

to price competition from

imported products. Domestic

manufacturers also flooded

the market with low-price

products. However, Mariwasa

Manufacturing, Inc. still

maintained its leading posi-

tion in terms of market sharefor ceramic tiles, with constant product development and marketing promotion programs. Siam

Mariwasa TOTO, Inc., having 25 percent of share in domestic market, has increased its exports, with

the USA as its major market.

Indonesia. Surya Siam Keramik has imported COTTO ceramic tiles from Thailand to establish

a market base for future expansion. The company also exported its local brand “DK” to New Zealand

and Madagascar.


Million Baht

2000 1999 1998 1997 1996

Balance Sheet Data


Total assets 7,345 5,851 10,145 7,087 7,585


Shareholders’ equity & Minority interest 1,627 938 2,127 1,285 1,088


Total revenues 46,890 45,064 47,867 63,171 62,046



currency exchange and others 84 364 62 159 (404)

Net income (Loss) 192 207 47 298 (362)

EBITDA 402 1,286 677 755 989


Major Companies

Subsidiaries Cementhai Distribution Co., Ltd.

Cementhai Sales and Marketing Co., Ltd.

SCT Co., Ltd.

Cementhai Logistics Co., Ltd.

Associated Thai Prosperity Terminal Co., Ltd.

Rayong Bulk Terminal Co., Ltd.

33

34


In the year 2000, the domestic construction business showed a slight growth from the

previous year, with higher sales in the local markets and international trade. Major export products

were cement, steel, building and decorative products of Group companies. Major import

goods included energy products, waste paper and scrap iron.

The Distribution Business

has installed the sophisticated

System Application & Products

in Data Processing (SAP)

network for use in every tran-

saction to enhance efficiency in

customer service and serve as

the base for other technologies

required to meet new pattern

of market demand and boost

the competitiveness for future

business expansion.

Cementhai Sales and Mar-

keting Co., Ltd., which operates

domestic marketing of products,

35

has installed the SAP

system and e-Commerce

to replace the online

system previously used

in purchase orders. The

sys tem e n a b l e s the

company to have a fully-

integrated data system

connecting with the Group

manufacturers, intra-

Group units concerned,

and more than 500

distributors nationwide.

The SAP system

enables distributors toplace orders, check inventory and track product deliveries through the Internet from their offices.

SCT Co., Ltd., has connected the SAP system through the Electronic Data Interchange with

the Customs Department and commercial banks. In addition, the company opened a representative

office in Bangladesh during the year to increase the potential in market expansion to South Asia

and developed a network of distributors in Cambodia as well.

Cementhai Logistics Co., Ltd., used SAP Warehouse Management and Barcode Scanning

system to enhance efficiency in storing and discharging of products at the Distribution Centre,

development of product distribution for cost reduction, and set up a centre for the purpose at

Rangsit, and three hubs in the North, Northeast and South.

36

Awards and StandardsCompanies

Siam Cement Industry Co., Ltd.

The Siam Cement (Ta Luang) Co., Ltd. Ta Luang Plant l TIS 18001 Certification for occasional health

and safety managementl Standard Certification - API Monogram for

Oil Well Cement (License No. 10A-0060)l Outstanding industry for total quality

management

Khao Wong Plant l Certification for calibration in test and

analytical laboratories according to Homo-logation (Spain)

The Siam Cement (Kaeng Khoi) Co., Ltd. l TIS 18001 Certification for occasional healthand safety management

l Outstanding workplace in safety, health, andenvironment at national level

l Best Manufacturer Award for environmentl EIA Award

The Siam Cement (Thung Song) Co., Ltd. l ISO 14001 Certification for environmentmanagement

l TIS 18001 Certification for occasional healthand safety management

The Siam Cement (Lampang) Co., Ltd. l Outstanding workplace in safety at national levell ISO/IEC Guide 25 Certificate for calibration

laboratories

The Concrete Products and Aggregate Co., Ltd.

(Chiang Rak Yai) l TIS 18001 Certification for occasional healthand safety management

Siam Mortar Co., Ltd. l TIS Certification for general plaster mortar,fine plaster mortar, and concrete plaster mortar

l Outstanding workplace in safety, health and

work environment at provincial level

37

Cementhai Chemicals Co., Ltd.

Thai Polyethylene Co., Ltd. l ISO/IEC Guide 25 Certificate for calibration

laboratoriesl ISO 9002 Certification for 2nd HDPE plantl Outstanding workplace in safety at national levell “Golden Certificate” for pleasant, hygienic

workplace and safety

Rayong Olefins Co., Ltd. l ISO 9002 Certification for quality managementl Outstanding Industry Award for environ-

mental management

Map Ta Phut Tank Terminal Co., Ltd. l ISO 9002 Certification for quality management

The Siam Pulp and Paper Plc.

Siam Kraft Industry Co., Ltd. l TIS 18001 Certification for occasional health

and safety managementl Outstanding Industry Award in environ-

mental quality conservation

Thai Containers Ltd. l ISO 14001 Certification for environmental

(Nava Nakorn Industrial Estate) management

Thai Containers Ratchaburi (1989) Co., Ltd.

Thai Containers Chonburi (1995) Co., Ltd.

Thai Paper Co., Ltd. l Best Manufacturer Award for work safetyl Best Industrial Award for safety, hygiene, and

work environment at national level

Cementhai Building Products Co., Ltd.

The Siam Fibre-Cement Co., Ltd.

(Saraburi Plant) l ISO 9002 Certification for quality manage-

ment for colored tiles

The Siam Gypsum Industry (Songkhla) Co., Ltd. l ISO 9002 Certification for quality management

Thai Ceramic Roof Tiles Co., Ltd. l ISO 9002 Certification for quality management


38


Cementhai Ceramics Co., Ltd.

Thai Ceramic Co., Ltd. l Prime Minister’s Export Award for company’s

own brand namel Prime Minister’s Export Award for best

design

Siam Sanitary Ware Industry Co., Ltd. l ISO 14001 Certification for environmental

management

The Siam Sanitary Fittings Co., Ltd. l Prime Minister’s Export Award for best

design

Cementhai Distribution Co., Ltd.

SCT Co., Ltd. l Gold Card for international trading

entrepreneur

39

The Audit Committee has fulfilled its commitment assigned by the Company’s Board ofDirectors, which included supervision and scrutiny of the company’s financial statements andconsolidated financial statements to be in full conformity with the standard accounting practicesdeemed appropriate for business operations, good corporate governance, in compliance with theregulations of the Stock Exchange of Thailand and all statutes concerned. The Committee hasalso organized efficient arrangement for internal control system for business operations as well assupervised the company’s audit system including the auditing in management, financial, operations,and information technology in accordance with generally accepted auditing standards. Moreover,the Committee also responsible for selected and proposed appointment of auditor, and carried outother Board’s assignments.

In the financial year 2000, there were improvements for the rules on the Audit Committeebased on the company’s Code of Ethics, the criteria of the Stock Exchange of Thailand, and goodcorporate governance. In the improvements thereof, there were additionally essential issues in thereview of accuracy and effectiveness of information technology, with recommendations to modernizethe overall system, assessment of organizational risk management system, support for developmentof the financial system reports to international accounting standards.

The Audit Committee has reviewed the quarterly and annual financial statements for thefinancial year 2000 of the company, and the consolidated financial statements of the Group, withemphasis on full conformity with the new accounting standard practices, and adequate disclosureof financial statements. The Committee also received reports and questioned the auditor to utmostsatisfaction that the financial statements were properly in conformity with the generally acceptedstandard accounting practices. To enable the users to benefit from timely and appropriate use thefinancial statements, the Committee presented for approval by the Board, the unaudited quarterlyfinancial statements to be submitted to the Stock Exchange of Thailand within 30 days after the bookof account was closed.

In the year 2000, the Group developed the computerized system to achieve more efficiencywith the installation of the SAP system for marketing and distribution of products, to be connectedwith the accounting and financial system to ensure a fully integrated system of performancevaluation without redundancy. The system also serves as the base for technology, which facilitatese-Commerce business, enabling customers and distributors to place purchase orders through theInternet for products under the Group more promptly and accurately.

In the assessment of the internal control system, the Company and subsidiaries have a systemappropriate for business environment, and without significant weak points. This assessment was fullyendorsed by the auditor. In addition, there was also essential valuation on risk management in relationto marketing, finance, production, personnel, legal and general business atmosphere, with reliability inthe data system required by the management, and without significant risks, which might cause damageto business. This was more specific in financial management whereby foreign debts were convertedinto the local currency to substantially reduce risks caused by the weaker foreign exchange rates.

For the year 2001, the Audit Committee has proposed to the Board to appoint Mr. MetheeRattanasrimetha or Miss Wipa Jindanuwat or Mr. Pisit Chiwaruangroch of SGV-Na Thalang &Co., Ltd., as auditor by one more year. The proposal will be presented to the shareholders’ meetingfor approval.

March 1, 2001On behalf of the Audit Committee

Air Vice Marshal

(Kamthon Sindhavananda)Chairman of the Audit Committee

Report of Certified Public Accountant ........................................ 41

Consolidated Balance Sheets....................................................... 42

Consolidated Statements of Income ............................................ 45

Consolidated Statements of Changes in Shareholders’ Equity ... 46

Consolidated Statements of Retained Earnings (Deficit) ............ 48

Consolidated Statements of Cash Flows ..................................... 49

Notes to Consolidated Financial Statements ............................... 51

To the Shareholders of The Siam Cement Public Company Limited

I have audited the consolidated balance sheets of The Siam Cement Public Company Limited and

subsidiaries as at December 31, 2000 and 1999, and the related consolidated statements of income,

changes in shareholders’ equity, retained earnings and cash flows for the years then ended. These financial

statements are the responsibility of the Company’s management as to their correctness and completeness

of the presentation. My responsibility is to express an opinion on these financial statements based on

my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards

require that I plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement. An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial statements. An audit also includes assessing

the accounting principles used and significant estimates made by management, as well as evaluating the

overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the

financial position of The Siam Cement Public Company Limited and subsidiaries as at December 31,

2000 and 1999, and the results of their operations and their cash flows for the years then ended in conformity

with generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, the Company has given retroactive effect

to the change in reporting entity in the consolidated financial statements.

Methee Ratanasrimetha

C.P.A. (THAILAND)

Registration No. 3425

Certified Public Accountants

A Member Firm of Arthur Andersen

22nd Floor, Siam Tower 989 Rama I Road,

Pathumwan Bangkok 10330

February 14, 2001

41

42

Assets Notes 2000 1999

(Restated)

Current Assets

Cash in hand and at banks 3,230,400 7,765,117

Short-term investments 342,244 691,468

Accounts and notes receivable - trade - net

- Affiliated companies 1, 4 1,700,960 1,768,352

- Other companies 3 10,924,600 10,114,819

Receivables from and loans to affiliated companies 1, 4 316,365 1,505,789

Inventories - net 5 23,998,117 21,166,899

Other current assets 2,533,165 3,137,262

Total Current Assets 43,045,851 46,149,706

Long-Term Portion of Accounts

Receivable - Net 1,188,505 667,485

Investments in and long - Term Loans

to Associated and Other Companies - Net 6 25,835,759 28,134,926

Property, Plant and Equipment - at cost - Net 7 98,219,228 103,799,802

Assets Revaluation Surplus 7 65,724,140 62,709,858

Other Assets 8 26,295,663 24,886,719

Total Assets 260,309,146 266,348,496

December 31, 2000 and 1999

In Thousand Baht

The accompanying notes are an integral part of these financial statements.

43

Liabilities and Shareholders’Equity Notes 2000 1999

(Restated)

Current LiabilitiesBank overdrafts and loans from financial institutions 9 17,840,225 24,613,362

Accounts payable - trade

- Affiliated companies 1, 4 1,252,020 1,217,367

- Other companies 7,365,483 7,192,766

Current portion of long-term debt 11 11,418,342 15,181,392

Payables to and loans from

Affiliated companies - net 1, 4 1,045,932 1,914,213

Accrued expenses 4,086,543 3,415,364

Income tax payable 286,887 205,098

Other current liabilities 1,310,987 1,663,341

Total Current Liabilities 44,606,419 55,402,903

Provident Fund 10 690,930 697,061

Long - Term Debt - Net of current portion 11 62,497,254 95,750,647

Debentures 12 86,519,110 49,028,000

Other Liabilities 10 1,235,695 1,121,732

Total Liabilities 195,549,408 202,000,343

Shareholders’ Equity

Share capital - common stock, Baht 10 par value

Authorized shares - 160,000,000 shares issued and

fully paid share capital - 120,000,000 shares 1,200,000 1,200,000

Premium on share capital 10,752 10,752

Revaluation surplus in property 7 63,592,163 58,281,990

Unrealized gain (loss) on investment on securities 6 ( 87,174) 1,159,391

Accumulated foreign currency translation adjustments (109,153) (314,302)

Equity in associated companies

- From change in percentage of holdings 488,412 613,331

- From unrealized gain on investment on securities 40,909 -

- From accumulated foreign currency

translation adjustments (98,824) -

430,497 613,331

Retained earnings (Deficit)

Appropriated

Reserve fund 13 120,000 120,000

General reserve 10,062,000 10,062,000

Unappropriated (Deficit)

- From operations of the company and subsidiaries (16,217,677) (16,183,537)

- From operations of associated companies (4,868,501) (4,943,843)

(21,086,178) (21,127,380)

Total Shareholders’ Equity 54,132,907 50,005,782

In Thousand Baht

44


In Thousand Baht


(Restated)

Minority Interest in Subsidiaries

- From capital and operations 8,494,854 9,914,503

- From assets revaluation surplus 7 2,131,977 4,427,868

Total minority interest in subsidiaries 10,626,831 14,342,371

Total Shareholders’ Equity and Minority Interest 64,759,738 64,348,153

Total Liabilities and Shareholders’ Equity 260,309,146 266,348,496

Chumpol NaLamliengPresident

For and on behalf of the Board of Directors

(Continued)

Chaovana NaSylvantaChairman


45

In Thousand Baht

Notes 2000 1999

(Restated)

Revenues

Net sales 126,217,521 99,987,116

Other income 14 1,979,834 1,864,010

Total Revenues 128,197,355 101,851,126

Costs and Expenses

Cost of sales 96,890,239 75,618,363

Selling expenses 6,125,917 4,968,583

Administrative expenses 15 6,833,247 6,410,748

Director fee 23,987 22,133

Interest expense and financial charges 16 14,030,418 12,750,115

Loss on exchange rate 2,954,651 5,954,117

Total Costs and Expenses 126,858,459 105,724,059

Income (Loss) Before Income Tax 1,338,896 (3,872,933)

Income tax 17 (596,514) (598,788)

Income (Loss) from Operations 1,935,410 (3,274,145)

Minority interest in income (loss) of subsidiaries - net (943,854) (1,075,335)

Income (Loss) Before Equity in income of

Associated Companies 991,556 (4,349,480)

Equity in Income (Loss) of associated companies- net 901,877 1,612,169

Income (Loss) Before Investments and Assets

Sold for Restructuring, Provision for

Decline in Value of Investments and Mutual

Separation Plan Expense 1,893,433 (2,737,311)

Loss on investments and assets sold for

restructuring and provision for decline in value of

investments - net of income tax 6, 7 (1,271,443) (964,408)

Mutual separation plan expense - net of income tax 18 (580,788) (1,083,424)

Net Income (Loss) 41,202 (4,785,143)

Earnings (Loss) per Share (In Baht) 0.34 ( 39.88)

For the years ended December 31, 2000 and 1999


46

2000 1999

(Restated)

Common shareBeginning balance 1,200,000 1,200,000Addition - -Deduction - -Ending balance 1,200,000 1,200,000Premium on shareBeginning balance 10,752 10,752Addition - -Deduction - -Ending balance 10,752 10,752Revaluation surplus in propertyBeginning balance 58,281,990 60,474,566Addition 5,310,173 -Deduction - 2,192,576Ending balance 63,592,163 58,281,990Unrealized gain (loss) on investmenton securitiesBeginning balance 1,159,391 -Addition - 1,159,391Deduction 1,246,565 -Ending balance (87,174) 1,159,391Accumulated foreign currencytranslation adjustmentsBeginning balance (314,302) (626,218)Addition 205,149 311,916Deduction - -Ending balance (109,153) (314,302)Equity in associated companies- From change in percentage of holdings 488,412 613,331- From unrealized gain on investment on securities 40,909 -- From accumulated foreign currency translation adjustments (98,824) -Total Equity in associated companies 430,497 613,331


In Thousand Baht

47


In Thousand Baht

(Continued)

2000 1999

(Restated)

Appropriated Retained earningsReserve fundBeginning balance 120,000 120,000Addition - -Deduction - -Ending balance 120,000 120,000General reserveBeginning balance 10,062,000 10,062,000Addition - -Deduction - -

Ending balance 10,062,000 10,062,000

Unappropriated (Deficit)

- From operations of the Company and subsidiaries

Beginning balance (15,990,569) (10,750,818)

Adjustments (192,968) (106,210)

As adjusted (16,183,537) (10,857,028)

Addition - -

Deduction 34,140 5,326,509

Ending balance (16,217,677) (16,183,537)

- From operations of associated companies (4,868,501) (4,943,843)

(21,086,178) (21,127,380)

Total Shareholders’ equity 54,132,907 50,005,782

Minority interest in subsidiaries

- From capital and operations 8,494,854 9,914,503

- From assets revaluation surplus 2,131,977 4,427,868

Total minority interest in subsidiaries 10,626,831 14,342,371

Total Shareholders’ equity and Minority Interest 64,759,738 64,348,153


48


In Thousand Baht

2000 1999

(Restated)

Deficit at beginning of year (20,751,494) (14,978,609)

Adjustment on prior years

Interest in subsidiaries and associated companies (375,886) (1,363,628)

As adjusted (21,127,380) (16,342,237)

Net income (loss) for the year 41,202 (4,785,143)

Deficit (21,086,178) (21,127,380)

Appropriated retained earnings

Reserve fund 120,000 120,000

General reserve 10,062,000 10,062,000

Total appropriated retained earnings 10,182,000 10,182,000

Total Deficit (10,904,178) (10,945,380)


49

2000 1999

(Restated)

Cash flows from operating activities:

Net income (loss) 41,202 (4,785,143)

Adjustments to reconcile net income

(loss) to net cash provided by (used in) operating activities:

Unrealized loss on foreign currency exchange 3,141,900 2,684,783

Depreciation and amortization 11,949,496 13,043,414

Provision for decline in value of Investments - net (108,474) 2,101,483

Impairment loss in assets and diminution in investments 777,096 -

Cumulative operating results of subsidiaries disposed - net - ( 75,898)

Gain on sales of fixed assets (27,254) (128,176)

Loss (Gain) on sales of investments - net 602,821 (1,061,177)

Equity in income of associated companies (901,877) (1,612,169)

Minority interest in income of subsidiaries 943,854 1,075,335

Provision for provident fund - net (6,131) (209,239)

Deferred income tax - net (1,290,508) (948,721)

Changes in operating assets and liabilities:

Accounts and notes receivable - trade - net (556,908) (875,250)

Receivables from affiliated companies 373,038 8,930

Inventories - net (2,831,219) (3,526,232)

Other current assets 604,097 (640,913)

Other assets (1,629,465) (1,261,625)

Accounts payable - trade 117,492 958,217

Payables to affiliated companies (135,271) 174,640

Other current liabilities (100,554) (253,428)

Net Cash Provided by Operating Activities 10,963,335 4,668,831

In Thousand Baht


50

In Thousand Baht

2000 1999

(Restated)

Cash flows from investing activities:

Investments in associated and other companies 5,793 (2,868,104)

Dividend income from associated companies 1,024,589 1,076,249

Property, plant and equipment (6,684,383) (4,067,262)

Proceeds from sales of investments 1,730,460 5,255,012

Net assets of the disposal subsidiaries - (913,757)

Proceeds from sales of fixed assets 540,784 399,433

Loans to affiliated companies (52,489) 126,860

Accumulated foreign currency translation adjustments 205,147 105,849

Net Cash Used in Investing Activities (3,230,099) (885,720)

Cash flows from financing activities:

Bank overdrafts and loans from financial institutions (6,988,500) (24,273,698)

Long-term debt (40,137,242) (25,170,805)

Loans from affiliated companies (733,008) (1,373,898)

Minority interest in subsidiaries (2,363,503) (772,494)

Debentures 37,491,110 49,028,000

Other liabilities 113,965 68,291

Net Cash Used in Financing Activities (12,617,178) ( 2,494,604)

Net increase (decrease) in cash and cash equivalent (4,883,942) 1,288,507

Cash and cash equivalent at beginning of year 8,456,586 7,168,079

Cash and Cash Equivalent at End of Year 3,572,644 8,456,586

Supplemental Disclosures of Cash Flows Information

Cash and cash equivalent

This consists of


Short-term investments 342,244 691,469

Total 3,572,644 8,456,586


(Continued)


51


1. Basis for Financial Statements and Principles of Consolidation

1.1 Nature of Operations

The Siam Cement Public Company Limited (“The parent company”) is a Thai public company limited,

listed on the Stock Exchange of Thailand (stock code “SCC”). SCC was incorporated in 1913, and is

located at 1 Siam Cement Road, Bangsue, Bangkok 10800, Thailand. SCC is Thailand’s largest industrial

group, with leading market positions in each of its businesses of cement, petrochemicals and paper.

The Company’s other operations included Building Products, Ceramics, Distribution, Cementhai Holding

and Cementhai Property.

1.2 Basis of Financial Statement Presentation

The Company owns substantial portion of the capital shares of the companies in The Siam Cement Group.

A substantial portion of the Company’s business is represented by transactions with subsidiaries, associated

and other companies and the financial statements reflect the effects of these transactions on the basis

determined by the companies concerned which are in the normal course of business.

The consolidated financial statements include the accounts of The Siam Cement Public Company Limited

and subsidiaries which the Company has controlling power and/or significant influence in identifying

financial management policies and operations.

Subsidiaries included in the consolidated financial statements (only those with significant operations) are as

follows:

Direct/Indirect Direct/Indirect

Holding (%) Holding (%)

Cement Business

The Siam Cement Industry Co., Ltd. 100

The Siam Cement (Lampang) Co., Ltd. 100

The Siam Cement (Ta Luang) Co., Ltd. 100

The Siam Cement (Kaeng Khoi) Co., Ltd. 100

The Siam Cement (Thung Song) Co., Ltd. 100

The Concrete Products and Aggregate Co., Ltd. 100

Petrochemicals Business

Cementhai Chemicals Co., Ltd. 100

Rayong Olefins Co., Ltd. 51

Thai Polyethylene Co., Ltd. 100

Thai Polyethylene (1993) Co., Ltd. 100

Thai Polypropylene Co., Ltd. 100

Thai Polypropylene (1994) Co., Ltd. 100

Map Ta Phut Tank Terminal Co., Ltd. 78

Paper Business

The Siam Pulp and Paper Plc. 87

Siam Cellulose Co., Ltd. 87

Thai Paper Co., Ltd. 87

Thai Union Paper Plc. 87

Thai Union Paper Industry Co., Ltd. 87

Siam Kraft Industry Co., Ltd. 87

Thai Kraft Paper Industry Co., Ltd. 87

Thai Containers Co., Ltd. 61

Thai Containers Ratchaburi (1989) Co., Ltd. 61

Thai Containers Songkhla (1994) Co., Ltd. 61

Thai Containers Chonburi (1995) Co., Ltd. 61

Building Products Business

Cementhai Building Products Co., Ltd. 100

The Siam Fibre-Cement Co., Ltd. 100

The CPAC Roof Tile Co., Ltd. 75

Thai Ceramic Roof Tile Co., Ltd. 75

The Siam CPAC Block Co., Ltd. 100

The CPAC Block Industry Co., Ltd. 100

The CPAC Concrete Products Co., Ltd. 100

The Siam Gypsum Industry Co., Ltd. 100

The Siam Gypsum Industry (Saraburi) Co., Ltd. 100

52

Most of the above subsidiaries are established in Thailand.

Starting in the first quarter of 1999, the Company accounted for its investments in another nine associated

companies and added another two associated companies in the second quarter of 1999, by the equity method

because the Company does have significant influence in management of these Companies. Prior to 1999,

these investments (listed below) were accounted for by the cost method.

The Siam United Steel (1995) Co., Ltd. Thai Carbon Product Co., Ltd.

Siam Aisin Co., Ltd. Thai Kayaba Co., Ltd.

Siam Styrene Monomer Co., Ltd. Thai MMA Co., Ltd.

The Deves Insurance Public Co., Ltd. Siam Polyethylene Co., Ltd.

Thai Plastic and Chemical Public Co., Ltd. Grand Siam Composites Co., Ltd.

Siam Mariwasa TOTO, Inc.

The Company applied the above change retroactively to the periods in which the investments were acquired.

Furthermore, during 1999, the Company increased the percentage of holding in CPAC Monier Phillippines,

Inc. until it changed from associated company to be a subsidiary. Prior years, this investment was accounted

for by the equity method. Moreover, the Company changed / decrease its participation in 13 subsidiaries

listed below until the percentage of holding decreased to be associated companies.

Siam Yamato Steel Co., Ltd. Siam Compressor Industry Co., Ltd.

Thai Engineering Products Co., Ltd. CRT Display Technology Co., Ltd.

Siam NGK Technocera Co., Ltd. Siam Lemmerz Co., Ltd.

The Nawaplastic Industries (Saraburi) Co., Ltd. Sichuan Cementhai Machinery Co., Ltd.

Siam Toppan Packaging Co., Ltd. Michelin Siam (Singapore) Holding Pte, Ltd.

Cementhai Machinery (Singapore) Pte, Ltd. MSF Tire & Rubber, Inc.

Nawa Plastic Industry Co., Ltd.

As a result, the consolidated financial statements for the year ended December 31, 1999 did not include

those companies. However, the Company accounted these investments by the equity method.

Ceramics Business

Cementhai Ceramics Co., Ltd. 100

Thai Ceramic Co., Ltd. 100

Sosuco Ceramic Co., Ltd. 51

The Sosuco Group Industries Co., Ltd. 90

Distribution

Cementhai Distribution Co., Ltd. 100

SCT Co., Ltd. 100

Cementhai Sales and Marketing Co., Ltd. 100

Cementhai Logistics Co., Ltd. 100

Cementhai Holdings

Cementhai Holdings Co., Ltd. 100

The Siam Iron and Steel Co., Ltd. 100

The Siam Construction Steel Co., Ltd. 100

The Siam Industrial Wire Co., Ltd. 100

The Siam Nawaloha Foundry Co., Ltd. 60

The Siam Refractory Industry Co., Ltd. 100

Thai CRT Co., Ltd. 47

Siam Tyre Public Company Limited 99

Siam Furukawa Co., Ltd. 59

Cementhai Property

Industrial Land Holding Co., Ltd. 100

Rayong Industrial Land Co., Ltd. 100

SIL Industrial land Co., Ltd. 100

SCG Car Services Co., Ltd. 100

Direct/Indirect Direct/Indirect

Holding (%) Holding (%)

53

During 1999, the Company sold or had agreed to sell its investments for all or substantial portion of its

investment in 6 companies as follows:

Siam Guardian Glass Co., Ltd. Siam Magotteaux Co., Ltd.

Tianjin Cementhai Gypsum Products Co., Ltd. TileCera, Inc.

Lamosa Revestimientos S.A. de C. V. TileCera Distributing, Inc.

As a result, the consolidated financial statements did not include these companies’ financial statements.

The loss on investments sold and provision for loss on decline in value of those investments amounted by

approximately Baht 964 million which was presented as part of “Gain (Loss) on investments and assets sold

for restructuring and provision for decline in value of investments - net of income tax” in 1999.

Furthermore, starting in second quarter of 2000, the management of the Company agreed to change the

reporting entity by including the results of operation of its associated companies - Thai CRT Co., Ltd. and

subsidiaries in the consolidated financial statements starting January 1, 2000, due to the Company has

controlling power and/or substantial influence in identifying the financial management policies and

operation. Accordingly, the consolidated financial statements for the year ended December 31, 2000

included the financial statements of these companies. In prior years, the Company accounts for these

investments by equity method.

In 2000, the Company sold a portion of its investments in Michelin Siam Co., Ltd. and its subsidiaries

and Tianjin Plastic Products Co., Ltd. and decreased its participation in management of SMH Co., Ltd. and

Siam Mitsui PTA Co., Ltd. As a result, the consolidated financial statements for the year ended December

31, 2000 did not included those companies. However, the Company accounted those investments by

the equity method.

The Company adopted the change retroactively to the consolidated financial statements for the year ended

December 31, 1999. As a result of the change, the consolidated total assets as of December 31, 1999

decreased Baht 5,133 million.

In the first quarter of 2000, the Company started to accounts for its investments in another 25 associated

companies by the equity method. Prior to 2000, these investments were accounted for by the cost method.

The Company did not adopted the change retroactive to the periods in which the investments were acquired

due to the effect is immaterial.

All significant intercompany transactions with subsidiaries included in the consolidated financial

statements have been eliminated.

The Company maintains its official accounting records in Thai Baht and prepares its statutory financial

statements in the Thai language in conformity with financial accounting standards in Thailand and may

differ from generally accepted accounting principles in other countries. Accordingly, the users of these

financial statements should have sufficient knowledge about Thai accounting principles and practices.

For the convenience of the reader, an English translation of financial statements has been prepared from the

statutory Thai language financial statements which are issued for domestic reporting purposes.

The accompanying consolidated financial statements for the years 2000 and 1999, include the effects of

the economic crisis to the extent they are known and can be estimated. The operations of the Company

and subsidiaries have been affected and may continue to be affected for the foreseeable future by the country’s

crisis. The accompanying consolidated financial statements do not include any adjustment that might result

from these uncertainties. Related effects will be reported in the financial statements as they become known

and estimable.

54

2. Significant Accounting Policies

Revenue Recognition

The Company recognizes revenue from the sale of goods when the Company has transferred to the buyer the

significant risks and reward of ownership of the goods.

Divedends are recognized when declared.

Service fee income is recognized on an accrual basis in accordance with the terms of agreement.

Interest income is recognized on a time proportion basis that reflects the effective yield on the asset.

Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts equal to the estimated collection losses that may

be incurred in the collection of all receivables. The estimated losses are based on historical collection

experience coupled with a review of the current status of existing receivables.

Investments in Shares

The Company accounts for its investments in shares in associated companies by equity method.

Investments in other companies are valued at cost and provision is taken up in the accounts for possible loss

on decline in value of the investments. Investments in marketable securities are valued at market.

Inventory Valuation

The Company values its inventories at cost or net realizable value, whichever is lower by the following

methods:

Finished goods - at standard cost which approximates current production cost - at average

cost.

Merchandise - at average cost

Goods in process - at standard cost which includes raw materials and variable labor and

manufacturing overhead costs.

Raw materials, spare parts, - at average cost

stores, supplies and others

Property, Plant and Equipment and Depreciation and Amortization

Depreciation of property, plant and equipment has been computed by the straight-line method at the maximum

rates allowed by law or the rates which approximate the economic useful life of the assets as follows:

Period (Years)

Land improvements 10 - 40

Building and structures 20

Plant machinery and equipment 5 - 10

Furniture, fixtures and office equipment 5

Transportation equipment 5

Other assets recorded as deferred charges are amortized over one (1) to twenty (20) years.

Development costs of products are deferred and amortized by the straight-line method over five (5) and

fifteen (15) years.

55

Income Tax

The Company and subsidiaries provide for deferred income tax resulting from temporary differences in

reporting expenses for financial reporting purposes compared to income tax reporting purposes e.g.

allowance for doubtful accounts, loss carry forwards up to 5 years. The deferred income tax is amortized

as the temporary differences later reverse.

Deferred income tax is recognized to the extent that it is probable that the future taxable profit will be

available against which the temporary difference can be utilized.

Foreign Currency Transactions and Translation of Foreign Currencies Financial Statements

Foreign currency transactions are recorded at the exchange rates prevailing at the dates of transactions.

Monetary assets and liabilities denominated in foreign currencies are translated at the year - end exchange

rates unless hedged by forward foreign exchange contracts in which case they are translated at the rates

specified in the forward contracts. Gains or losses on translation are recognized in the statement of income.

Fees on hedging contracts are amortized over the life of the contract.

The financial statements of the foreign subsidiaries have been translated into Baht at the rates prevailing at

the balance sheet date for assets and liabilities. Revenues and expenses accounts are translated at average

rates of exchange prevailing during the year. Translation adjustments that arise from the translation of

foreign subsidiaries’ financial statements are accumulated as a separate component of shareholders’ equity.

Financial instruments

Financial assets and financial liabilities carried on the balance sheet include cash and cash equivalents,

marketable securities, trade and other accounts receivable and payable, long-term receivables, loans,

borrowings, investments, and bonds receivable and payable. The accounting policies on recognition and

measurement of these items are disclosed in the respective accounting policies found in this Note.

The Company and subsidiaries operates internationally and is exposed to market risks from changes in

interest and foreign exchange rates. The Company and certain subsidiaries use derivative financial

instruments to mitigate those risks. All other gains and losses on hedge transactions are recognized in the

income statement in the same period as the exchange differences on the items covered by the hedge.

Costs on such contracts are amortized over the life of the contracts.

Earnings (Loss) per share

Earnings (loss) per share is determined by the net income (loss) by the weighted average number of shares

outstanding during the year (120,000,000 shares for 2000 and 1999).

3. Accounts and Notes Receivable - Trade

In Million Baht

2000 1999

Accounts receivable-trade 10,717 9,660

Less: Allowance for doubtful accounts 757 701

Net 9,960 8,959

Notes receivable 965 1,155

Total 10,925 10,114

56

As at December 31, 2000 and 1999, the Company and subsidiaries have long outstanding account receivable

aged as follows:

In Million Baht

2000 1999

Over 3 to 6 months 76 157

Over 6 to 12 months 93 71

Over 1 year 876 997

Total 1,045 1,225

The Company and subsidiaries provided the allowance for doubtful accounts amounted to approximately

Baht 757 million in 2000 and Baht 701 million in 1999 which is adequate to absorb possible losses and

comply with accounting policy for allowance for doubtful accounts.

4. Related Company Transactions

In Million Baht

2000 1999

Accounts receivable - trade

Siam Polyethylene Co., Ltd. 321 379

Thai Plastic and Chemical Public Co., Ltd. 319 180

HMC Polymers Co., Ltd. 282 197

Bangkok Synthetic Co., Ltd. 141 142

Siam Chemical Trading (China) Co., Ltd. 124 90

Siam Styrene Monomer Co., Ltd. 117 -

Grand Siam Composites Co., Ltd. 78 78

Cementhai Trading (M) SDN. BSD. 75 35

NEC Australia PTY. Ltd. - 280

Other companies 244 387

Total 1,701 1,768

Receivables and loans

Current accounts

Mariwasa Holding, Inc. 74 80

Siam Michelin Marketing and Sales Co., Ltd. 68 24

Siam Compressor Industry Co., Ltd. 2 73

Siam Asahi Technoglass Co., Ltd. 1 80


256 634

Notes receivable

TOTO Siam Mariwasa Inc. 39 29

Siam Lemmerz Co., Ltd. - 550

Grand Siam Composites Co., Ltd. - 115


60 872

Total 316 1,506

57

In Million Baht

2000 1999

Accounts payable - trade

Siam Yamato Steel Co., Ltd. 321 129

Siam Asahi Technoglass Co., Ltd. 302 352

National Petrochemical Public Co., Ltd. 260 188

Siam Polyethylene Co., Ltd. 182 81

Siam Sanitary Ware Industry Co., Ltd. 97 70


Total 1,252 1,217

Payables and loans

Current accounts

PT. Trans-Pacific Polyethylene Indonesia 98 88


131 266

Notes payable

The Siam Kubota Industry Co., Ltd. 680 1,173

Siam Yamato Steel Co., Ltd. 180 30

The Siam Sanitary Fittings Co., Ltd. - 165

Siam Aisin Co., Ltd. - 95

Siam Compressor Industry Co., Ltd. - 65


915 1,648

Total 1,046 1,914

5. Inventories

In Million Baht

2000 1999

Finished goods 11,811 11,064

Goods in process 1,415 979

Raw materials 5,040 3,878

Spare parts 3,931 3,899

Stores, supplies and others 1,244 969

Raw materials and spare parts in transit 622 512

Total 24,063 21,301

Less: Allowance for

obsolescence and slow moving items 65 134

Inventories - Net 23,998 21,167

58

6. Investments in Shares and Long-Term Loans to Associated and Other Companies - Net

Percentage of Direct

and Indirect Holdings In Million Baht

2000 1999 2000 1999

A. Subsidiaries Companies (Sold in 2000)

- At Cost

TileCrea Distributing, Inc. - 100 - 926

TileCera, Inc. - 100 - 4,198

- 5,124

B. Associated Companies

- At Equity

Siam Yamato Steel Co., Lltd. 46 46 2,161 2,051

Siam Mitsui PTA Co., Ltd. 50 50 1,820 1,634

Siam Styrene Monomer Co., Ltd. 50 50 1,681 1,092

Thai Plastic and Chemical Public Company Limited 26 26 1,547 1,423

Michelin Siam Group Co., Ltd. 39 49 1,384 1,447

Siam Compressor Industry Co., Ltd. 49 49 1,342 934

United Pulp and Paper Co., Ltd. 37 37 977 1,021

The Siam Kubota Industry Co., Ltd. 42 42 970 970

Siam Asahi Technoglass Co., Ltd. 27 27 949 796

Thai MMA Co., Ltd. 46 46 837 616

Siam Polyethylene Co., Ltd. 50 50 765 1,291

Mitsubishi Electric Consumer

Products (Thailand) Co., Ltd. 20 20 726 481

Siam Toyota Manufacturing Co., Ltd. 20 20 492 385

Nava 84 Co., Ltd. 25 25 303 301

The Deves Insurance Public Co., Ltd. 21 21 303 307

The Siam United Steel (1995) Co., Ltd. 29 29 3 1,362

Mariwasa Manufacturing, Inc. 46 46 271 471

Pacific Plastics (Thailand) Co., Ltd. 48 48 225 195

Siam Aisin Co., Ltd. 47 47 215 213

Thai Carbon Product Co., Ltd. 22 22 159 131

Siam Synthetic Latex Co., Ltd. 50 50 184 153

Michelin Siam (Singapore) Holding Pte., Ltd. 27 27 - 206

Siam Polystyrene Co., Ltd. 50 50 136 133

PT Trans - Pacific Petrochemical Indotama 20 20 174 174

Musashi Auto Parts Co., Ltd. 21 21 203 160

Siam Toppan Packaging Co., Ltd. 49 49 154 146

Other companies 1,064 1,721

19,045 19,814

59

Percentage of Direct

and Indirect Holdings In Million Baht

2000 1999 2000 1999

C. Other Companies

- At Cost

Asia Cement Public Co., Ltd. 10 10 1,255 1,255

Thai Olefins Co., Ltd. 17 17 1,133 1,133

Toyota Motor Thailand Co., Ltd. 10 10 581 581

Bangkok Synthetic Co., Ltd. 18 18 352 352

Asia Industrial Park (Map Ta Phut) Co., Ltd. 13 19 333 333

Finfloor S.R.L. 10 10 299 299

Others companies 341 383

4,294 4,336

- At Market

Thai Farmers Bank Public Company Limited N.A. N.A. 39 327

Siam Commercial Bank Public Company Limited N.A. N.A. 39 89

National Petrochemical Public Company Limited 17 17 1,478 2,090

The Aromatics (Thailand) Public Company Limited 15 15 181 604

Thai Industrial Gases Public Co., Ltd. 8 8 105 105

Thai Gypsum Product Public Co., Ltd. 4 - 74 -

1,916 3,215

Total 25,255 32,489

Less: Allowance for decline in value of investments 710 5,171

Investment in associated and other companies - net 24,545 27,318

Long-term loans to associated company and other company

The Aromatic (Thailand) Public Company Limited 1,129 677

United Pulp and Paper Co., Inc. 162 140

Total long-term loans to associated company and

other companies 1,291 817

Total Investment in and Long-Term

Loans to Related and Other Companies 25,836 28,135

The aggregate values of the above investments in shares of other companies, based on the latest available

audited/reviewed financial statements or the quoted market prices in the Stock Exchange as at December 31,

2000, is as follows:

In Million Baht

Net Book Allowance for Unrealized

Value/ Decline Loss on

Quoted In value of Investments

Cost Market Price Investments In securities

Non-marketable 4,294 3,733 710 -

Marketable 2,003 1,916 - (87)

Total 6,297 5,649 710 (87)

60

7. Property, Plant and Equipment

In Million Baht

Balance as of Balance as of

December 31, December 31,

1999 Increase Decrease 2000

At Cost

Land and Land improvements 13,437 1,178 358 14,257

Quarries 5 - 5 -

Buildings and structures 25,916 648 388 26,176

Plant machinery and equipment 139,086 3,830 2,473 140,443

Transportation equipment 4,795 570 524 4,841

Furniture, fixtures and office

equipment 4,311 413 254 4,470

Other depreciable assets 760 5 661 104

Construction in progress 7,663 3,745 2,139 9,269

Advances for purchases of

land, machinery and equipment 10 41 28 23

Total 195,983 10,430 6,830 199,583

Less: Accumulated depreciation

and depletion 92,183 101,364

Property, Plant and

Equipment - Net 103,800 98,219

Portion of the interest and other related financial charges incurred in 2000 and 1999 amounting to Baht 163

million and Baht 579 million, respectively, were capitalized as part of the cost of constructing new plant

facilities.

Depreciation and amortization expenses amounted to Baht 11,352 million in 2000 and Baht 12,540 million

in 1999.

The Company and subsidiaries entered into agreements with various companies in connection with the

expansion of its plant and the acquisition of machinery. As at December 31, the Company and subsidiaries

had outstanding commitments under these agreements totalling approximately Baht 2,296 million in 2000

and Baht 1,310 million in 1999.

Revaluation Surplus

In 1997 accounting period, the Company and certain consolidated subsidiaries adopted a policy to present

3 class of assets which carrying values are substantially lower than the replacement costs. This includes

land, buildings and machinery and equipment. The Company engaged American Appraisal Company

(Thailand) Limited, as independent appraiser to appraise the value of buildings, machinery and equipment.

The Company also has a policy to revaluate the valuation of assets every year without presenting the

revaluation surplus in the consolidated statement of income. The revaluation surplus will be presented in

the consolidated balance sheet as Assets Revaluation Surplus, and under the shareholders’ Equity caption as

Revaluation surplus in property and the minority interest in consolidated subsidiaries - assets revaluation

surplus. Summarize below are basis for the revaluation:

As at December 31, 1999, the Company and subsidiaries appraised their property, plant and equipment as

follows:

61

- Land - at appraised value of the Land Department has revaluation surplus of Baht 10,149 million.

- Buildings, machinery and equipment - at appraised value reported by an independent appraiser dated

January 14, 2000, have revaluation surplus of Baht 52,561 million as at December 31, 1999, consisting of

Baht 5,209 million for buildings and Baht 47,352 million for machinery and equipment.

As at December 31, 2000, the Company and subsidiaries appraised their property, plant and equipment as

follows:



January 10, 2001, have revaluation surplus of Baht 55,575 million as at December 31, 2000 consisting of

Baht 5,511 million for buildings and Baht 50,064 million for machinery and equipment.

8. Other Assets

In Million Baht

2000 1999

Deferred income tax - net 19,886 19,508

Deposits, claims and deferred charges - net 1,803 2,187

Land, building and land improvements not used in

operations - net of accumulated depreciation

on improvements 1,472 1,519

Excess of cost over net book value of

investments in net assets - net 2,085 527

Development costs of products 375 421

Others 675 725

Total 26,296 24,887

9. Bank Overdrafts and Loans from Financial Institutions

In Million Baht

2000 1999

Bank overdrafts 1,379 902

Loans 9,120 15,459

Notes payable 7,286 8,181

Acceptances payables and liabilities under trusts receipts 55 71

Total 17,840 24,613

Under the terms of the agreements covering the Company’s liabilities under trust receipts, certain raw

materials, finished goods, spare parts, machinery and equipment have been released to the Company in trust

for the banks. The Company is accountable to the banks for the trusteed raw materials, finished goods, spare

parts, machinery and equipment or their sales proceeds.

10. Provident Fund

The Company and certain subsidiaries have provident fund plans to provide retirement and gratuity benefits

to employees. For most of the plans, the benefits made solely by the companies are payables to the employees

upon resignation at 5% to 10% of the employees’ salaries depending on the length of employment. In addition

to the above provident fund, since April, 1995, the Company and subsidiaries had established contributory

funded provident fund covering substantially all employees. This fund was registered with the Ministry of

62

Finance under the Provident Fund Act B.E. 2530. Membership is voluntary upon attaining permanent status.

Under the regulations of the fund, members are required to make monthly contribution to the fund at 3% to

10% of the members’ basic salaries and the Company is required to make monthly contribution to the fund

at 5% to 10% of the members’ basic salaries, depending on the length of employment.

Total provision and contribution to the above funds amounted to approximately Baht 414 million and

Baht 494 million in 2000 and 1999, respectively.

11. Long-Term Debt

In Million Baht2000 1999

Deferred payment plans 7,638 11,646

Foreign loans 20,165 45,572

Local loans 46,112 53,714

Total 73,915 110,932

Less: Portion due within one year 11,418 15,181

Long-Term Debt - Net 62,497 95,751

The above liabilities arising from the expansion projects and for the Company’s working capital bear interest

at the rates ranging from 2.17% to 10.75% per annum and extend up to June, 2009.

The repayments of liabilities amounting to approximately Baht 1,705 million in 2000 and Baht 2,554 million

in 1999 arising from purchases of certain machinery and equipment and foreign loans are guaranteed

by a group of local banks and certain foreign financial institutions.

The Company and subsidiaries hedges part of its foreign exchange risk by entering into Currency SWAP

Agreements with foreign banks, whereby the company will repay the loans by other foreign currencies as

specified in the agreements.

12. Debentures

As at December 31, 2000, the Company issued unsubordinated and unsecured debentures totalling of

Baht 90,000 million by issuance in 8 placements, the details are as follows:

Debentures In Million Baht Interest rate Term Maturity date Fair Value**

No. 1/1999 5,200 *floating rate+ 5 years April 1, 2004 1,022

3.50% p.a.

No. 2/1999 8,800 10.5% p.a. 5 years April 1, 2004 1,113

No. 3/1999 12,000 8.0% p.a. 3.5 years April 1, 2003 1,035

No. 4/1999 12,000 9.50% p.a. 5.5 years April 1, 2005 1,080

No. 5/1999 6,000 8.0% p.a. 4 years November 1, 2003 1,050


No. 1/2000 25,000 7.75% p.a. for first 6 years March 31, 2006 1,006

4 years and *floating

rate+2.00% p.a.

for last 2 years

No. 2/2000 15,000 5.75% p.a. 2 years October 1, 2002 1,015

90,000

* Floating rate is equal average rate of 12 month fixed deposit of 4 banks.

** Latest price (Baht per unit) as at December 31, 2000.

63

13. Reserve Fund

As at December 31, 2000 and 1999, the Company’s reserve fund is equivalent to the 10% of the authorized

share capital as required by the Limited Public Company Act B.E. 2535. The reserve is not available for

dividend distribution.

14. Other Income

In Million Baht

2000 1999

Gain on scrap sold and others 310 285

Interest income from financial institutions 304 279

Management fee income 250 195

Gain on fixed assets sold 119 204

Rental Income 116 128

Import service income 99 72

Income from delay payment 96 130

Dividend income from other companies 75 44

Others 611 527

Total 1,980 1,864

15. Administrative Expenses

In Million Baht

2000 1999

Salary and wages 3,524 3,288

Depreciation expense 661 716

Amortization of excess of cost 431 207

Outside wages 286 140

Perdium and travellings 283 240

Communication and transportation 282 294

License fees and other fees 250 279

Staff welfare 192 216

Professional fee 179 157

Employee training and development 163 134

Repair and maintenance 161 170

Bad debt 101 351

Others 320 219

Total 6,833 6,411

64

16. Interest Expense and Financial Charges

In Million Baht

2000 1999

Interest - loans local 10,753 7,444

Interest - loans abroad 3,194 5,215

Interest - provident fund 83 91

Total 14,030 12,750

17. Income Tax

Provision for income tax for the year ended December 31, are as follows:

In Million Baht

2000 1999

Corporate income tax payable for the year 535 188

Deferred income tax - net (1,132) (787)

Provision for Income Tax (597) (599)

18. Mutual Separation Plan Expense

The Company and subsidiaries had established the Mutual Separation Plan which is presented this mutual

separation plan expense net of income tax of Baht 581 million in 2000 and Baht 1,083 million in 1999, are

presented as seperate component of operations in the consolidated statement of income.

19. Agreements

As at December 31, 2000:

A. Certain subsidiaries had entered into agreements with several foreign companies for the latter to provide

technical information, technical know-how and technical assistance to manufacture licensed products in the

manufacture of certain products. As at December 31, 2000, the subsidiaries are committed to pay technical

know-how fee for a lump sum amount and royalty fee based on certain percentage of net sales of products as

indicated in the agreements.

B. A subsidiary jointly with certain local companies, had entered into raw materials sales agreement with a

local company for the latter to be the sole supplier of the raw materials. The sale prices of such raw materials

would be committed from time to time for the agreed period. The agreement shall continue in force at least

15 years from the date of commercial operations and is renewable.

65

20. Segment Information

Information relating to industry segment for the year 2000 as compared with 1999 are as follows:

In Million Baht

Income (loss)

before the effect

exchange rate Net income

Total Assets Total Sales EBITDA (1) and others (loss)

2000 1999 2000 1999 2000 1999 2000 1999 2000 1999

Total consolidated 260,309 266,348 126,218 99,987 30,386 27,962 5,375 1,913 41 (4,785)

Business group

Cement 70,700 67,887 22,098 22,685 7,231 9,297 98 861 (274) (799)

Petrochemicals 55,343 57,202 39,820 24,703 7,063 6,749 3,057 2,961 1,558 2,133

Paper 36,416 36,325 27,350 21,629 8,061 6,351 3,171 1,660 2,798 1,183

Building Products 16,190 16,842 8,596 7,921 1,997 1,789 361 335 26 189

Ceramics 11,245 11,075 4,726 3,489 988 353 (221) (750) (279) (890)

Distribution 7,345 5,851 46,498 44,812 402 1,286 84 364 192 207

Cementhai Holding 38,239 41,036 17,436 15,042 2,460 2,428 1,285 1,638 (332) 744

Cementhai Property 7,371 7,518 733 794 477 471 (76) 33 (82) (31)

(1) represents income before income tax, interest expense and financial charges, depreciation and amortization

and mutual seperation plan expense.

66

21. Operations of Group Business

Business Group (In Million Baht)Cement Petrochemicals Paper Building Products

2000 1999 2000 1999 2000 1999 2000 1999

Information fromBalance SheetsCurrent Assets 8,641 3,351 11,628 12,251 8,100 7,228 3,339 3,287Property, Plant andEquipment - Net 50,205 52,922 28,144 28,007 15,137 15,691 5,668 6,557Asset RevaluationSurplus 4,764 4,163 2,342 2,484 10,575 10,353 5,947 5,791Other Assets 7,090 7,451 13,229 14,460 2,604 3,053 1,236 1,207Total Assets 70,700 67,887 55,343 57,202 36,416 36,325 16,190 16,842Short Term Loan 50,362 48,956 7,836 7,376 6,188 8,078 6,531 4,828Current Liabilities 4,534 7,486 2,710 3,490 1,693 1,354 1,307 2,727Long Term Loan - - 21,597 24,144 8,767 10,272 939 1,114Other Liabilities 213 228 844 848 43 38 221 242Total Liabilities 55,109 56,670 32,987 35,858 16,691 19,742 8,998 8,911Total Shareholders’Equity and MinorityInterest in subsidiaries 15,591 11,217 22,356 21,344 19,725 16,583 7,192 7,931Total Liabilities andShareholders’ Equity 70,700 67,887 55,343 57,202 36,416 36,325 16,190 16,842Information fromStatement of IncomeNet sales 22,098 22,685 39,820 24,703 27,350 21,629 8,596 7,921Cost of sales (15,498) (16,531) (33,837) (19,190) (20,043) (16,201) (6,275) (6,153)Gross margin 6,600 6,154 5,983 5,513 7,307 5,428 2,321 1,768Operating expenses (2,458) (1,405) (1,414) (995) (1,893) (1,786) (1,239) (1,066)Income from operationbefore interest expenseand income tax 4,142 4,749 4,569 4,518 5,414 3,642 1,082 702Interest expense (3,679) (3,449) (1,449) (1,261) (1,306) (1,554) (513) (594)Loss fromexchange rate (220) (1,562) (1,459) (871) (529) (628) (292) (121)Other income 230 162 266 356 115 135 68 224Income beforeincome tax 473 (100) 1,927 2,742 3,694 1,595 345 211Income tax (542) (375) (6) (13) (819) (257) (295) (36)Income (loss) fromoperation (69) (475) 1,921 2,729 2,875 1,338 50 175Minority Interest inincome 3 6 (581) (971) (30) (42) 164 47Equity in income (loss)of associated companies - - 277 371 (47) (48) - -Income (loss) beforeextraordinary items (66) (469) 1,617 2,129 2,798 1,248 214 222Extraordinary items (208) (330) (59) 4 - (65) (188) (33)Net income (loss) (274) (799) 1,558 2,133 2,798 1,183 26 189Additional InformationDepreciation andAmortization 2,857 4,383 2,157 1,831 2,532 2,574 787 879

67

Business Group (In Million Baht)Ceramics Distribution Cementhai Holding Cementhai Property

2000 1999 2000 1999 2000 1999 2000 1999

Information fromBalance SheetsCurrent Assets 2,435 1,726 5,595 4,051 6,460 7,831 5,069 5,434Property, Plant andEquipment - Net 4,299 4,279 1,334 1,442 15,529 16,919 1,379 1,085Asset RevaluationSurplus 2,759 2,890 11 - 4,319 3,407 - -Other Assets 1,752 2,180 405 358 11,931 12,879 923 999Total Assets 11,245 11,075 7,345 5,851 38,239 41,036 7,371 7,518Short Term Loan 3,031 3,120 826 2,429 11,980 10,475 1,644 1,134Current Liabilities 975 1,150 4,796 2,395 9,665 9,667 205 784Long Term Loan 1,631 1,739 41 67 4,939 6,129 - -Other Liabilities 51 44 55 22 150 143 - 1Total Liabilities 5,688 6,053 5,718 4,913 26,734 26,414 1,849 1,919Total Shareholders’Equity and MinorityInterest in subsidiaries 5,557 5,022 1,627 938 11,505 14,622 5,522 5,599Total Liabilities andShareholders’ Equity 11,245 11,075 7,345 5,851 38,239 41,036 7,371 7,518Information fromStatement of IncomeNet sales 4,726 3,489 46,498 44,812 17,436 15,042 733 794Cost of sales (3,584) (3,110) (42,337) (40,655) (15,326) (13,269) (563) (586)Gross margin 1,142 379 4,161 4,157 2,110 1,773 170 208Operating expenses (967) (904) (4,280) (3,416) (1,614) (1,508) (108) (115)Income from operationbefore interest expenseand income tax 175 (525) (119) 741 496 265 62 93Interest expense (339) (325) (106) (484) (824) (952) (88) (122)Gain (loss) fromexchange rate 4 (163) 115 (16) (1,253) (789) (5) (81)Other income 53 66 392 252 389 502 80 32Income beforeincome tax (107) (947) 282 493 (1,192) (974) 49 (78)Income tax (113) 159 (86) (168) (332) 215 (131) 54Income (loss) fromoperation (220) (788) 196 325 (1,524) (759) (82) (24)Minority Interest inincome 56 114 (6) 7 (272) 207 - 4Equity in income (loss)of associated companies (103) (210) (24) 16 1,842 1,483 3 -Income (loss) beforeextraordinary items (267) (884) 166 348 46 931 (79) (20)Extraordinary items (12) (6) 26 (141) (378) (187) (3) (11)Net income (loss) (279) (890) 192 207 (332) 744 (82) (31)Additional InformationDepreciation andAmortization 744 769 128 253 1,539 1,656 335 346

68

22. Disclosure of Financial Instrument

Credit risk

Credit risk arises from the possibility that customers may not be able to settle obligation to the Company as

contracts which caused to have financial loss. The Company and subsidiaries have a policy to protect this

risk by assessing the credit of customers, defining the credit limit, asking for bank guarantees and/or personnel

guarantees, credit term, controlling for using credit and reviewing collections. Fair value of receivables

which are presented in the balance sheet are the balances net of allowance for doubtful accounts which are

provided as a policy. The Managements believe that they are adequate.

Interest risk

Interest rate risk arises from the changing of interest rate in the market which it effects to net interest

expense. The Company and subsidiaries manage debt by using both fixed interest rate and float interest rate

depending on the market circumstance.

Foreign exchange risk

Foreign exchange risk arises from the fluctuation of foreign exchange rates.

Shown below are the composition of Baht and foreign currency loans as of December 31, 2000 and 1999.

In Million Baht

Short-term Long-term Total

Currency 2000 1999 2000 1999 2000 1999

Baht 24,723 19,817 126,778 97,915 151,501 117,732

Foreign 5,451 21,626 22,238 46,864 27,689 68,490

Total 30,174 41,443 149,016 144,779 179,190 186,222

The Company and subsidiaries use derivative instruments as part of its managing risk on foreign debt.

This is in compliance with the policy and guideline agreed and approved by the Board of Directors and

there are controls on operating procedures for compliance with the policy.

The financial derivatives are forward exchange contracts and cross currency SWAP etc.

As of December 31, 2000, the Company and subsidiaries have the financial derivative aged as follows:

In Million Baht

Less than More than

1 Year 1 Year Total

US. Dollars 1,882 10,889 12,771

Japanese Yen 6,814 5,174 11,988

Others 282 655 937

Total 8,978 16,718 25,696

Fair values of the above financial instruments are valued at approximately the contract amounts.

In managing foreign exchange risk, the Company and subsidiaries obtained more Baht loans up to 85% of

total borrowings as at the end of 2000. Furthermore, the Company and subsidiaries also have adequate

export and other income in foreign currencies to reduce impact of exchange rates.

69

23. Commitments and Contingent Liabilities

As at December 31, the Company and subsidiaries had:

In Million Baht

2000 1999

a) Contingent liabilities for

- guaranteed on loans of related companies 11,282 14,669

- bank guarantee issued by banks to government agencies 869 1,134

b) Unused letter of credit 7,639 918

c) Commitment for purchase of raw material contracts 715 1,931

24. Reclassification of Accounts

Certain accounts in 1999 were reclassified to conform with those in the 2000 financial statements.

Report of Certified Public Accountant ........................................ 71

Balance Sheets ............................................................................. 72

Statements of Income .................................................................. 74

Statements of Changes in Shareholders’ Equity ......................... 75

Statements of Retained Earnings (Deficit) .................................. 76

Statements of Cash Flows ........................................................... 77

Notes to Financial Statements ..................................................... 79

To the Shareholders of The Siam Cement Public Company Limited

I have audited the balance sheets of The Siam Cement Public Company Limited as at December 31, 2000

and 1999, and the related statements of income, changes in shareholders’ equity, retained earnings and

cash flows for the years then ended. These financial statements are the responsibility of the Company’s

management as to their correctness and completeness of the presentation. My responsibility is to express

an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards

require that I plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement. An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by management, as well as evaluating the overall

financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the

financial position of The Siam Cement Public Company Limited as at December 31, 2000 and 1999, and

the results of its operations and its cash flows for the years then ended in conformity with generally

accepted accounting principles.

As discussed in Note 2 to the financial statements, the Company have given retroactive effect to the

change in the accounting for investments in shares of subsidiaries and associates in accordance with the

Accounting Standard Nos. 44 and 45.

Methee Ratanasrimetha

C.P.A. (Thailand)

Registration No. 3425

Certified Public Accountants

A Member Firm of Arthur Andersen

22nd Floor, Siam Tower 989 Rama I Road,

Pathumwan Bangkok 10330

February 14, 2001

71

72



In Thousand Baht

Assets Notes 2000 1999

(Restated)

Current AssetsCash in hand and at banks 1,079,947 5,789,160Short-term investments - 131,400Accounts and notes receivable - trade - net- Affiliated companies 1, 4 - 717,837- Other companies 3 174 606,621Receivables from and loans toaffiliated companies 1, 4 73,473,806 78,844,071Advance for share subscription - subsidiaries 268,581 414,680Other current assets 75,700 642,183Total Current Assets 74,898,208 87,145,952Long-Term Portion of AccountsReceivable - Net 1,054,598 625,289Investments in and Long-Term Loansto Subsidiaries, Associated and OtherCompanies - Net 5 102,480,518 87,724,405Property, Plant and Equipment- at cost - Net 6 3,082,105 3,455,547Assets Revaluation Surplus 6 8,412,552 8,287,217Other Assets 7 6,216,739 3,355,300

Total Assets 196,144,720 190,593,710

73

In Thousand Baht


(Restated)

Current LiabilitiesBank overdrafts and loans from financial institutions 8 4,282,365 11,426,699Accounts payable - trade- Affiliated companies 1, 4 8,107 1,109,810- Other companies 75,885 390,642Current portion of long-term debt 10 2,236,761 6,598,235Payables to and loans fromaffiliated companies - net 1, 4 5,407,088 6,108,828Accrued expenses 2,334,863 1,885,360Other current liabilities 189,620 256,517Total Current Liabilities 14,534,689 27,776,091Provident Fund 9 14,632 35,561Long-Term Debt - Net of current portion 10 37,428,056 62,724,929Debentures 12 90,000,000 50,000,000Other Liabilities 9 334,846 216,081Total Liabilities 142,312,223 140,752,662Shareholders’ EquityShare capital - common stock, Baht 10 par valueAuthorized shares - 160,000,000 shares,issued and fully paid share capital- 120,000,000 shares 1,200,000 1,200,000Revaluation surplus in property 6 8,412,552 8,287,217Unrealized gain (loss) on investment on securities 5 ( 87,209) 1,159,391Equity of subsidiaries and associated companies- From revaluation surplus in property 55,179,612 49,994,773- From accumulated foreign currency translation adjustments 31,720 145,047

55,211,332 50,139,820Retained earningsAppropriatedReserve fund 13 120,000 120,000General reserve 10,062,000 10,062,000Unappropriated- From operation of the Company 2,027,330 2,826,196- From operations of subsidiaries and associated companies (23,113,508) (23,953,576)

(21,086,178) (21,127,380)Total Shareholders’ Equity 53,832,497 49,841,048Total Liabilities and Shareholders’ Equity 196,144,720 190,593,710

Chaovana NaSylvantaChairman

Chumpol NaLamliengPresident

For and on behalf of the Board of Directors

74


Notes 2000 1999

(Restated)

Revenues

Net sales - 35,283,923

Other income 14 1,612,004 604,555

Total Revenues 1,612,004 35,888,478

Costs and Expenses

Cost of sales - 28,816,650

Selling expenses - 339,511

Administrative expenses 15 168,491 2,094,983

Director fee 15,073 15,517

Interest expense and financial charges 16 6,898,266 6,938,616

Loss on exchange rate 284,518 2,604,571

Total Costs and Expenses 7,366,348 40,809,848

Loss Before Income Tax (5,754,344) (4,921,370)

Income tax 17 (2,149,551) (815,720)

Loss From Operations (3,604,793) (4,105,650)

Equity in income (loss) of subsidiaries

and associated companies - net 4,000,514 (18,123,912)

Income (Loss) Before Investments

and Assets sold for Restructuring,

Provision for Decline in Value

of Investments and Mutual

Separation Plan Expense 395,721 (22,229,562)

Gain (Loss) on investments and assets

sold for restructuring and provision

for decline in value of investments - net of

income tax 5, 6 (222,786) 18,036,331

Mutual separation plan expense

- net of income tax 18 (131,733) ( 591,912)

Net Income (Loss) 41,202 (4,785,143)

Earnings (Loss) per Share (In Baht) 0.34 (39.88)


In Thousand Baht

75


In Thousand Baht

2000 1999

(Restated)

Common share

Beginning balance 1,200,000 1,200,000

Addition - -

Deduction - -

Ending balance 1,200,000 1,200,000

Revaluation surplus in property

Beginning balance 8,287,217 33,008,695

Addition 125,335 -

Deduction - 24,721,478

Ending balance 8,412,552 8,287,217

Unrealized gain (loss) on investment on securities

Beginning balance 1,159,391 -

Addition - 1,159,391

Deduction 1,246,600 -

Ending balance (87,209) 1,159,391

Equity in subsidiaries and associated companies

- From accumulated foreign currency translation adjustments 31,720 145,047

- From revaluation surplus in property 55,179,612 49,994,773

Total Equity in subsidiaries and associated 55,211,332 50,139,820

Appropriated retained earnings

Reserve fund

Beginning balance 120,000 120,000

Addition - -

Deduction - -

Ending balance 120,000 120,000

76


2000 1999

(Restated)

Unappropriated retained earnings (Deficit)at beginning of year 160,455 (15,347,213)Adjustment on prior years interest in subsidiariesand associated companies ( 21,287,835) (995,024)As Adjusted ( 21,127,380) (16,342,237)Net income (loss) for the year 41,202 (4,785,143)Deficit ( 21,086,178) (21,127,380)Appropriated retained earningsReserve fund 120,000 120,000General reserve 10,062,000 10,062,000Total appropriated retained earnings 10,182,000 10,182,000Total Deficit ( 10,904,178) (10,945,380)

In Thousand Baht



2000 1999

(Restated)

General reserveBeginning balance 10,062,000 10,062,000Addition - -Deduction - -Ending balance 10,062,000 10,062,000Unappropriated (Deficit)- From operation of the companyBeginning balance 160,455 (15,347,213)Adjustment 2,665,741 5,392,844As adjusted 2,826,196 (9,954,369)Addition - 12,780,565Deduction 798,866 -

Ending balance 2,027,330 2,826,196 - From operations of subsidiaries and associated companies (23,113,508) (23,953,576)

Total Deficit (21,086,178) (21,127,380)

Total Shareholders’ equity 53,832,497 49,841,048

In Thousand Baht

(Continued)

77


2000 1999

(Restated)

Cash flows from operating activities:

Net income (loss) 41,202 ( 4,785,143)

Adjustments to reconcile net income (loss) to net cash

provided by (used in) operating activities:

Unrealized loss on foreign currency exchange 378,986 463,648

Depreciation and amortization 439,824 3,426,349

Provision for decline in value of investments - net (136,792) 1,361,074

Diminution in investments 480,379 -

Gain on sales of fixed assets (5,777) (26,821,516)

Gain on sales of investments - net (120,802) (622,343)

Equity in loss (income) of subsidiaries

and associated companies (4,000,514) 18,123,912

Provision for provident fund - net ( 34,266) (275,220)

Deferred income tax - net (2,691,879) 6,157,889

Income recognized from service fee receivable in advance 132,104 (68,655)

Changes in operating assets and liabilities:

Accounts and notes receivable - trade - net 1,324,284 3,231,405

Receivables from affiliated companies 3,603,549 (6,813,839)

Inventories - net - 2,356,576

Other current assets 566,483 68,683

Other assets (74,081) (6,702)

Accounts payable - trade (1,416,460) (58,211)

Payables to affiliated companies 17,364 (1,886)

Other current liabilities 56,810 56,654

Net Cash Used in Operating Activities (1,439,586) (4,207,325)

In Thousand Baht

78


(Continued)

2000 1999

(Restated)

Cash flows from investing activities:

Investments in subsidiaries, associated and other companies (8,921,044) (15,676,928)

Dividend income from subsidiaries and associates 3,915,059 2,887,014

Advance for shares subscription

in subsidiaries companies 146,099 (171,289)

Property, plant and equipment (70,129) (583,457)

Proceeds from sales of investments 2,395,244 11,979,911

Proceeds from sales of fixed assets 9,524 45,757,663

Loans to affiliated companies (2,577,869) (41,679,792)

Net Cash Provided by (Used in) Investing Activities (5,103,116) 2,513,122

Cash flows from financing activities:

Bank overdrafts and loans from financial institutions (7,144,334) (18,098,535)

Long-term debt (30,373,943) (21,184,305)

Loan from affiliated companies (779,634) ( 8,274,907)

Debentures 40,000,000 50,000,000

Net Cash Provided by Financing Activities 1,702,089 2,442,253

Net increase (decrease) in cash and cash equivalent ( 4,840,613) 748,050

Cash and cash equivalent at beginning of year 5,920,560 5,172,510

Cash and Cash Equivalent at End of Year 1,079,947 5,920,560

Supplemental Disclosures of Cash Flows Information

Cash and cash equivalent

This consists of


Short-term investments - 131,400

Total 1,079,947 5,920,560

Cash paid during the year

Interest expense 9,777,610 8,459,729

Income tax - -

In Thousand Baht


79


1. Basis for Financial Statements

1.1 Nature of Operations

The Siam Cement Public Company Limited is a parent company of The Siam Cement Group, listed

on the Stock Exchange of Thailand (stock code “SCC”). The Company is incorporated in 1913, and is

located at 1 Siam Cement Road, Bangsue, Bangkok 10800, Thailand.

1.2 Basis for financial statement presentation

All significant intercompany transactions with subsidiaries and associated companies included in the

consolidated financial statements have been eliminated.

In Million Baht

2000 1999

Purchases - 17,506

Sales - 6,869

Service income and others 1,612 604

Interest income - net of interest expense 3,927 2,081

The Company maintains its official accounting records in Thai Baht and prepares its statutoryfinancial statements in the Thai language in conformity with financial accounting standards in Thailandand may differ from generally accepted accounting principles in other countries. Accordingly, the usersof these financial statements should have sufficient knowledge about Thai accounting principles andpractices.

For the convenience of the reader, an English translation of financial statements has been prepared fromthe statutory Thai language financial statements which are issued for domestic reporting purposes.

The accompanying financial statements for the years 2000 and 1999, include the effects of theeconomic crisis to the extent they are known and can be estimated. The operations of the Companyhave been affected and may continue to be affected for the foreseeable future by the country’s crisis.The accompanying financial statements do not include any adjustment that might result from theseuncertainties. Related effects will be reported in the financial statements as they become known andestimable.

2. Significant Accounting Policies

Revenue Recognition

The Company recognises revenue from the sale of goods when the Company has transferred tothe buyer the significant risks and reward of ownership of the goods.

Divedends are recognised when declare.

Service fee income is recognised on an accrual basis in accordance with the terms of agreement.

Interest income is recognised on a time proportion basis that reflects the effective yield on the asset.

80

Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts equal to the estimated collection losses that

may be incurred in the collection of all receivables. The estimated losses are based on historical collectionexperience coupled with a review of the current status of existing receivables.


The Company accounts for its investments in shares in subsidiaries and associated companies by

the equity method.

Investments in other companies are valued at cost and provision in taken up in the accounts for

possible loss on decline in value of the investments. These investments in marketable securities are

valued at market.

In accordance with the Accounting Standard Nos. 44 and 45 issued by The Institute of Certified

Accountants and Auditors of Thailand, the Company has given retroactive effect to the change in

accounting for investments in shares of subsidiaries and associates, from the cost method to the equity

method. The change has affected as follows:

Increase (Decrease) : In Million Baht

2000 1999

Unappropriated retained earnings, as of January 1, (21,288) ( 995)

Net income for the year ended December 31, 4,001 (18,124)

Property, Plant and Equipment and

Depreciation and Amortization

Depreciation of property, plant and equipment has been computed by the straight-line method at the

maximum rates allowed by law or the rates which approximate the economic useful life of the assets

as follows:

Period (Years)

Land improvements 10 - 20

Building and structures 20

Plant, machinery and equipment 5 - 10

Furniture, fixtures and office equipment 5

Transportation equipment 5

Other assets recorded as deferred charges are amortized over five (5) twenty (20) years.

Income Tax

The Company provided for deferred income tax resulting from temporary differences in reporting

expenses for financial reporting purposes compared to income tax reporting purposes e.g. allowance

for doubtful accounts, loss carryforwards up to 5 years. The deferred income tax is amortized as thetemporary differences later reverse.

Deferred income tax is recognized to the extent that it is probable that the future taxable profit will be

available against, which the temporary difference can be utilized.

81

Foreign Currency Transactions

All foreign currency transactions are recorded at the rates prevailing on the dates of thetransactions. Assets and Liabilities denominated in foreign currencies at the balance sheet date aretranslated to Baht at the prevailing rates at that date. Liabilities covered by forward exchangecontracts are recorded at the forward contract rates. Gains or losses on translation are credited orcharged to operations.

Earnings (Loss) per Share

Earnings (loss) per share is determined by dividing the net income (loss) by the weightedaverage number of shares outstanding during the year (120,000,000 shares for 2000 and 1999).

3. Accounts and Notes Receivable - Trade

In Million Baht

2000 1999

Accounts receivable-trade 142 156Less Allowance for doubtful accounts 142 156Net - -Notes receivable - 607Total - 607

As at December 31, 2000 and 1999, the Company has long outstanding account receivable aged asfollows:

In Million Baht

2000 1999

Over 1 year 142 156Total 142 156

The Company provided the allowance for doubtful accounts amounted to approximately Baht 142million in 2000 and Baht 156 million in 1999 which is adequate to absorb possible losses and complywith the accounting policy for allowance for doubtful accounts.

4. Related Company Transactions

In Million Baht

2000 1999

Accounts receivable - trade - 717Receivable and loansCurrent accountsCementhai Holdings Co., Ltd. 6,396 4,939The Siam Cement Industry Co., Ltd. 1,347 1,257Cementhai Sales and Marketing Co., Ltd. 525 -SCT Co., Ltd. 213 633The Siam Cement (Taluang) Co., Ltd. 151 -The Siam Cement (Thungsong) Co., Ltd. 146 -The Siam Cement (Kaeng Khoi) Co., Ltd. 144 -Cementhai Building Products Co., Ltd. 112 -Others 436 6,270

9,470 13,099

82

In Million Baht

2000 1999

Notes receivableThe Siam Cement Industry Co., Ltd. 50,309 769Bangsue Management Co., Ltd. 3,573 996The Siam Fibre - Cement Co., Ltd. 2,143 1,160Cementhai Ceramics Co., Ltd. 1,415 1,742Siam Nawaloha Foundry Co., Ltd. 1,283 1,613The Siam Gypsum Industry Co., Ltd. 1,005 1,110SCG Car Services Co., Ltd. 913 690Cementhai Building Products Co., Ltd. 829 -Rayong Industrial Land Co., Ltd. 547 264The Siam Refractory Industry Co., Ltd. 464 654The Nawaloha Foundry Bangpakong Co., Ltd. 290 -The CPAC Roof Tile Co., Ltd, 277 231Siam Tyre Public Company Limited 250 -Cementhai Distribution Co., Ltd. 231 -Siam Nawaphan Co., Ltd. 155 165RIL 1996 Co., Ltd. 102 -Siam Fibreglass Co., Ltd. 88 88Thai Ceramic Holding Co., Ltd. 60 45The Siam Cement (Thung Song) Co., Ltd. - 14,318The Siam Cement (Kaeng Khoi) Co., Ltd. - 11,843The Siam Cement (Ta Luang) Co., Ltd. - 9,900The Concrete Products and Aggregate Co., Ltd. - 6,450The Siam Cement (Lampang) Co., Ltd. - 5,116Cementhai Steel Co., Ltd. - 3,940Cementhai Sales and Marketing Co., Ltd. - 2,291Other companies - 1,625

63,934 65,010Short - term loans to subsidiariesSiam Fiberglass Co., Ltd. 70 70Other companies - 665

70 735Total 73,474 78,844Accounts payable 8 1,110Payables and loansCurrent accounts 237 220Notes payableCementhai Holdings Co., Ltd. 2,773 -The Siam Kubota Industry Co., Ltd. 680 600Cementhai Gypsum (singapore) Pte., Ltd. 167 -Others 631 4,115

4,251 4,715Short - term loans - subsidiariesTuban Petrochemicals Pte., Ltd. 651 566Cementhai Gypsum (Singapore) Pte., Ltd. 268 -Other companies - 608

919 1,174Total 5,407 6,109

83

5. Investments in Shares and Long-Term Loans toSubsidiaries, Associated and Other Companies-Net


Percentage of Directand Indirect Holdings In Million Baht

2000 1999 2000 1999

A. Subsidiaries Companies (sold in 2000)- At CostTileCera Distributing, Inc. - 100 - 926TileCera, Inc. - 100 - 4,198

- 5,124B. Subsidiaries and Associated Companies- At EquitySiam Cement Industry Co., Ltd. and Subsidiaries 100 100 23,478 17,102Cementhai Chemicals Co., Ltd. and Subsidiaries 100 100 23,336 22,434The Siam Pulp and Paper Public CompanyLimited and Subsidiaries 87 63 19,114 10,923Cementhai Building Products Co., Ltd.and Subsidiaries 100 100 9,836 10,633Cementhai Ceramics Co., Ltd. and Subsidiaries 100 100 4,649 4,253Cementhai Distribution Co., Ltd. and Subsidiaries 100 100 2,228 1,562Cementhai Holdings Co., Ltd. and Subsidiaries 100 100 4,941 7,824Cementhai Property Co., Ltd. and Subsidiaries 100 100 5,316 5,259Total Subsidiaries and Associated - At Equity 92,898 79,990C. Other Companies- At CostCementhai Chemicals GroupThai Olefins Co., Ltd. 17 17 1,133 1,133Cementhai Holdings GroupToyota Motor Thailand Co., Ltd. 10 10 581 581Other Companies 6 100Cementhai Ceramics GroupFinfloor S.R.L. 10 10 299 299Cementhai Property GroupAsia Industrial Park (Map Ta Phut) Co., Ltd. 13 19 333 333Total Other Companies - At Cost 2,352 2,446- At MarketThai Farmers Bank PublicCompany Limited N.A. N.A. 39 327Siam Commercial Bank Public Company Limited N.A. N.A. 39 89Cementhai Chemicals GroupNational Petrochemical Public Company Limited 17 17 1,478 2,090The Aromatics (Thailand) Public Company Limited 15 15 181 604Cementhai Holdings GroupThai Industrial Gases Public Company Limited 8 8 105 105Total Other Companies - At Market 1,842 3,215Total Other Companies 4,194 5,661Total Investments in Shares 97,092 90,775

Less Allowance for decline in value of investments 541 5,027

84

Percentage of Directand Indirect Holdings In Million Baht

2000 1999 2000 1999

Investments in Subsidiaries,

Associated and Other Companies - net 96,551 85,748

Long-Term Loans to Subsidiaries and

Other Companies

Siam Pulp and Paper Public Company Limited 4,300 1,300

Cementhai Ceramics Co., Ltd. 300 -

Cementhai Chemicals Co., Ltd. 200 -

The Aromatics (Thailand) Public Company Limited 1,129 677

Total Long-Term Loans to Subsidiaries

and Other Companies 5,929 1,977

Total Investments in Shares

and Long-Term Loans to Subsidiaries, Associated

and Other Companies 102,480 87,725

Allowance of Baht 5,302 million for the year ended December 31, 1999 have been provided for

the possible losses on the decline in book value of investments in subsidiaries and other companies -

mainly in TileCera, Inc. and TileCera Distributing, Inc. for the possible losses on the decline in

book value of investments in associated and other companies which mainly are Joint - Venture in

Petrochemical projects in Indonesia and listed companies. Management believes that such allowance

is adequate to absorb possible losses on the decline. The Company presented loss from these

joint-venture companies as a separate component of operations under the caption of “Gain (Loss) on

investments and assets sold for restructuring and provision for decline in value of investments - net of

income tax” in the statement of income.

The aggregate values of the above investments in shares of other companies, based on the latest

available audited/ reviewed statements or the quoted market prices in the Stock Exchange as at

December 31, 2000 is as follows:

In Million Baht

Net Book Allowance for Unrealized

value/ decline loss on

Quoted in value of investments

Cost Market Price investments in securities

Non Marketable 2,352 2,039 541 -

Marketable 1,929 1,842 - (87)

Total 4,281 3,881 541 (87)

85

6. Property, Plant and Equipment

Depreciation and amortization expenses amounted to Baht 440 million in 2000 and Baht 3,426 million

in 1999.

The Company, entered into agreements with various companies in connection with the expansion projects.

As at December 31, the Company had outstanding contracted commitments totalling approximately

Baht 855 million in 2000 and Baht 1,207 million in 1999.

Following to the corporate restructuring of the Siam Cement Group, the Company, on December 31, 1999,

sold out its cement business includes trade receivables, stock, fixed assets, trade payable and others to

several subsidiaries within cement business and distribution business at book value except land, building

and machinery which were transferred at appraised value. The Company presented gain on these net assets

sold amounted approximately Baht 18,775 million net of income tax as part of gain (loss) on investment

and assets sold for restructuring and provision for decline in value of investments net of income tax.

Revaluation Surplus

In 1997 accounting period, the Company adopted a policy to present 3 class of assets which carrying

values are substantially lower than the replacement costs. This includes land, buildings and machinery

and equipment. The Company engaged American Appraisal Company (Thailand) Limited, as independent

appraiser, to appraise the value of buildings and machinery. The Company also has a policy to revaluate

the valuation of assets every year without presenting the revaluation surplus in the statement of income.

The revaluation surplus will be presented in the balance sheet as Assets Revaluation Surplus, and under

the Shareholders’ Equity capital as Revaluation surplus in property. Summarize below are basis for the

revaluation:

In Million Baht

Balance as of Balance as of

December December

31, 1999 Increase Decrease 31,2000

At Cost

Land and land improvement 1,601 10 3 1,608

Building and structures 2,162 3 24 2,141

Plant and machinery and equipment 1,863 1 - 1,864

Transportation equipment 75 - 14 61

Furniture, fixtures and office equipment 1,061 79 23 1,117

Other depreciable assets 20 - 20 -

Construction in progress 89 1 - 90

Advances for purchase of

Land, machinery and equipment 2 - 2 -

Total 6,873 94 86 6,881

Less Accumulated

Depreciation and depletion 3,417 3,799

Property, plant and equipment

- Net 3,456 3,082

86

As at December 31, 1999, the Company appraised its property, plant and equipment as follows:



January 14, 2000 have revaluation surplus of Baht 1,696 million as at December 31, 1999 consisting of

Baht 689 million for buildings and Baht 1,007 million for machinery and equipment.

As at December 31, 2000, the Company appraised its property, plant and equipment as follows:



January 10, 2001, have revaluation surplus of Baht 1,822 million as at December 31, 2000 consisting of

Baht 692 million for building and Baht 1,130 million for machinery and equipment.

7. Other Assets

In Million Baht

2000 1999

Deferred income tax - net 5,788 3,000

Deposits, claims and deferred charges - net 121 315

Land, building and land improvements

not used in operations - net of accumulated depreciation 40 40

Others 268 -

Total 6,217 3,355

8. Bank Overdrafts and Loans from Financial Institutions

In Million Baht

2000 1999

Bank overdrafts 16 -

Loans - 4,919

Notes payable 4,267 6,508

Total 4,283 11,427

9. Provident Fund

The Company has provident fund plans to provide retirement and gratuity benefits to employees. For most

of the plans, the benefits made solely by the companies are payables to the employees upon resignation at

5% to 10% of the employees’ salaries depending on the length of employment. In addition to the above

provident fund, since April, 1995, the Company had established contributory funded provident fund

covering substantially all employees. This fund was registered with the Ministry of Finance under the

Provident Fund Act B.E. 2530. Membership is voluntary upon attaining permanent status. Under the

regulations of the fund, members are required to make monthly contribution to the fund at 3% to 10% of the

members’ basic salaries and the Company is required to make monthly contribution to the fund at 5% to

10% of the members’ basic salaries, depending on the length of employment.

87

Total provision and contribution to the above funds amounted to approximately Baht 40 million and Baht

174 million in 2000 and 1999, respectively.

10. Long - Term Debt

In Million Baht

2000 1999

Deferred payment plans 6,780 8,801

Foreign loans 99 26,916

Local loans 32,786 33,606

Total 39,665 69,323

Less: Portion due within one year 2,237 6,598

Long-Term Debt - Net 37,428 62,725

The above liabilities arising from the expansion projects and for the Company’s working capital bear

interest at the rates ranging from 2.17% to 8.5% per annum and extend up to June, 2009.

The repayments of liabilities amounting to approximately Baht 1,705 million in 2000 and Baht 2,554

million in 1999 arising from purchases of certain machinery and equipment are foreign loans are

guaranteed by a group of local banks and certain foreign financial institutions.

Foreign and local long-term loans are guaranteed by 4 subsidiaries.

The Company hedges part of its foreign exchange risk by entering into Currency SWAP Agreements

with foreign banks, whereby the Company will repay the loans by other foreign currencies as specified

in the agreements.

11. Composition of Loans

As at December 31, 2000, the composition of loans of the Company are as follows:

In Million Baht

Currency Short-Term Long-Term Total

Baht 10,468 123,737 134,205

Foreign 1,205 3,691 4,896

Total 11,673 127,428 139,101

88

12. DebenturesAs at December 31, 2000, the Company issued unsubordinated and unsecured debentures totalling

of Baht 90,000 million by issuance in 8 placements, the details are as follows:

Debentures In Million Baht Interes rate Term Maturity date Fair Value**

No. 1/1999 5,200 *floating rate+ 5 years April 1, 2004 1,022

3.50% p.a.

No. 2/1999 8,800 10.5% p.a. 5 years April 1, 2004 1,113

No. 3/1999 12,000 8.0% p.a. 3.5 years April 1, 2003 1,035

No. 4/1999 12,000 9.50% p.a. 5.5 years April 1, 2005 1,080



No. 1/2000 25,000 7.75% p.a. for 6 years March 31, 2006 1,006

first 4 years

and *floating

rate+2.00% p.a.

for last 2 years

No. 2/2000 15,000 5.75% p.a. 2 years October 1, 2002 1,015

90,000

* Floating rate is equal average rate of 12 month fixed deposit of 4 banks.

** Latest price (Baht per unit) as at December 31, 2000.

The above debentures are guaranteed by 4 subsidiaries.

13. Reserve Fund

As at December 31, 2000 and 1999, the Company’s reserve fund is equivalent to the 10% of the

authorized share capital as required by the Limited Public Company Act B.E. 2535. The reserve is not

available for dividend distribution.

14. Other Income

In Million Baht

2000 1999

Dividend from other companies 73 24

Interest income from bank/finance institution 83 163

Gain on scrap sold and others 4 -

Refunded duty - 30

Gain on fixed assets sold 6 -

Penalty income 1 57

Management & intellectual property fee 1,238 54

Others 207 276

Total 1,612 604

89

15. Administrative Expenses

In Million Baht

2000 1999

Salary and wages 440 1,084

Depreciation 226 485

Bad debt ( 9) 126

Communication and transportation 69 160

License fees and other 23 162

Rent 105 112

Perdium and travellings 18 80

Staff benefit 16 101

Professional fees 42 71

Repair and maintenance 66 101

Outside wages 27 55

Reimbursed amount (1,075) (1,005)

Others 220 563

Total 168 2,095

The numbers of the Company’s employees at the end of years is 523 persons in 2000 and 4,557 persons

in 1999.

16. Interest Expense and Financial Charges

In Million Baht

2000 1999

Interest - loans abroad 1,505 2,722

Interest - loans local 5,377 4,177

Interest - provident fund 16 40

Total 6,898 6,939

17. Income Tax

Provision for income tax of 2000 and 1999 are as follows:

In Million Baht

2000 1999

Corporate income tax payable for the year - 6,353

Deferred income tax - net (2,150) (7,168)

Provision for income tax (2,150) (815)

90

18. Mutual Separation Plan Expense

The Company has established the Mutual Separation Plan which is presented this mutual separation plan

expense net of income tax of Baht 132 Million in 2000 and Baht 592 Million in 1999 million as separate

component of operations in the statement of income.

19. Commitments and Contingent Liabilities

As at December 31, 2000 the Company had:

In Million Baht

2000 1999

a) Contingent liabilities for

- guaranteed on loans of related companies 32,645 28,541

- bank guarantee issued by banks to government agencies 273 496

b) Unused letter of credit - 18

20. Reclassification of Accounts

Certain accounts in 1999 were reclassified to conform with those in the 2000 financial statements.

91

Cement Business

Subsidiaries

1. Siam Cement Industry Co., Ltd. Bangkok 586-3333 Holding company 12,236 100 100

2. The Siam Cement (Lampang) Co., Ltd. Lampang (054) 228266 Cement 2,427 100 100

3. The Siam Cement (Ta Luang) Co., Ltd. Bangkok 586-3333 Cement 2,300 100 100

4. The Siam Cement (Kaeng Khoi) Co., Ltd. Bangkok 586-3333 Cement 2,500 100 100

5. The Siam Cement (Thung Song) Co., Ltd. Bangkok 586-3333 Cement 3,500 100 100

6. The Siam White Cement Co., Ltd. Bangkok 586-3333 Cement 200 100 100

7. Siam Mortar Co., Ltd. Bangkok 555-5000 Dry mortar 163 100 100

8. The Concrete Products and Bangkok 555-5000 Ready-mixed 460 100 100

Aggregate Co., Ltd. Concrete

Associated and Other Companies

9. Asia Cement Plc. Bangkok 375-4540 Cement 7,800 10 10

Petrochemicals Business

Subsidiaries

10. Cementhai Chemicals Co., Ltd. Bangkok 586-4865 Holding company 7,108 100 100

11. Rayong Olefins Co., Ltd. Bangkok 586-3882 Raw materials for 7,700 51 51

plastic resins

12. Thai Polyethylene Co., Ltd. Bangkok 586-4750 Plastic resins 1,100 100 100

13. Thai Polyethylene (1993) Co., Ltd. Bangkok 586-4750 Plastic resins 450 100 100

14. Thai Polypropylene Co., Ltd. Bangkok 586-4750 Plastic resins 700 100 100

15. Thai Polypropylene (1994) Co., Ltd. Bangkok 586-4750 Plastic resins 600 100 100

16. Map Ta Phut Tank Terminal Co., Ltd. Bangkok 586-3333 Warehouse and 1,500 78 78

transportation service


17. Siam Mitsui PTA Co., Ltd. Bangkok 586-5281 Product PTA 2,800 50 50

18. Siam Polystyrene Co., Ltd. Bangkok 381-1038 Plastic resins 1,015 50 50

19. Pacific Plastics (Thailand) Ltd. Bangkok 381-1038 Plastic resins 539 48 48

20. Siam Synthetic Latex Co., Ltd. Bangkok 381-1038 Synthetic latex 325 49 50

21. Siam Styrene Monomer Co., Ltd. Bangkok 381-1038 Raw materials for 3,500 49 50

polystyrene

22. Siam Polyethylene Co., Ltd. Bangkok 381-1038 Plastic resins 3,300 49 50

23. Grand Siam Composites Co., Ltd. Bangkok 586-2515 Raw materials for 60 46 46

plastic resins

24. Thai MFC Co., Ltd. Bangkok 586-3333 Melamine 200 45 45

25. Thai MMA Co., Ltd. Bangkok 586-3882 Raw materials for 1,300 45 46

coating resins

1. Investment in subsidiaries, associated, and other companies of which their operations are significant.

Location Principal Registered Direct/Indirect Indirect

Name (Head Office) Telephone Business Shares Holding Holding

(Million Baht) (%) (%)

92

26. Thai Plastic and Chemicals Plc. Bangkok 676-6000 Plastic resins 875 26 26

27. Bangkok Synthetic Co., Ltd. Bangkok 679-5120 Raw materials for 1,173 18 18

plastic resins

28. National Petrochemical Plc. Bangkok 260-1311 Raw materials for 3,100 16 17

plastic resins

29. Thai Olefins Co., Ltd. Bangkok 537-5400 Raw materials for 8,483 13 17

plastic resins

30. The Aromatics (Thailand) Plc. Bangkok 537-5700 Raw materials for 4,000 15 15

plastic resins

Paper and Packaging Business

Subsidiairies

31. The Siam Pulp and Paper Plc. Bangkok 586-3333 Bleached pulp and 1,563 87 87

holding company

32. Siam Cellulose Co., Ltd. Bangkok 586-3333 Bleached pulp 750 100 87

33. Thai Paper Co., Ltd. Bangkok 586-3333 Printing and 2,280 100 87

writing paper

34. Thai Union Paper Plc. Samut Prakan 394-0622 Printing and 430 100 87

writing paper

35. Thai Union Paper Industry Co., Ltd. Bangkok 586-3333 Printing and 400 100 87

writing paper

36. Siam Kraft Industry Co., Ltd. Bangkok 586-3333 Kraft paper 250 100 87

37. Thai Kraft Paper Industry Co., Ltd. Bangkok 586-3333 Kraft paper 4,200 100 87

38. Thai Containers Ltd. Pathum Thani 529-3370-3 Corrugated boxes 110 70 61

39. Thai Containers Industry Co., Ltd. Samut Prakan 324-0761 Corrugated boxes 160 70 61

40. Thai Containers Ratchaburi (1989) Co., Ltd. Bangkok 586-3333 Corrugated boxes 100 70 61

41. Thai Containers Songkhla (1994) Co., Ltd. Bangkok 586-3333 Corrugated boxes 280 70 61

42. Thai Containers Chonburi (1995) Co., Ltd. Chon Buri (038) 338500-1 Corrugated boxes 380 70 61


43. Siam Toppan Packaging Co., Ltd. Samut Prakan 324-0592 Offset-printed 500 49 43

cartons

Building Products Business

Subsidiaries

44. Cementhai Building Products Co., Ltd. Bangkok 586-3333 Holding company 1 100 100

45. The Siam Fibre-Cement Co., Ltd. Bangkok 586-3333 Roofing sheets 200 100 100

46. Tip Fibre-Cement Co., Ltd. Samut Prakan 526-8761 Roofing sheets 50 100 100

47. The CPAC Roof Tile Co., Ltd. Bangkok 586-3333 Concrete roof tiles 211 75 75

48. The CPAC Roof Tile Industry Co., Ltd. Bangkok 586-3333 Concrete roof tiles 60 75 75

49. Thai Ceramic Roof Tile Co., Ltd. Bangkok 586-5081 Ceramic roof tiles 200 75 75

50. The Siam CPAC Block Co., Ltd. Nonthaburi 526-1981 Concrete paving 60 100 100

blocks

51. The CPAC Block Industry Co., Ltd. Nonthaburi 526-1981 Concrete 40 100 100

paving blocks




93

52. Saraburirat Co., Ltd. Nonthaburi 526-1981 Concrete floor tiles 148 83 83

53. The CPAC Concrete Products Co., Ltd. Nonthaburi 526-1981 Ready-to-use 80 100 100

concrete products

54. The CPAC Concrete Industry Co., Ltd. Nonthaburi 526-1981 Ready-to-use 160 100 100

concrete products

55. Cementhai Gypsum Co., Ltd. Bangkok 586-3987 Holding company 690 100 100

56. The Siam Gypsum Industry Co., Ltd. Bangkok 586-3987 Gypsum boards 150 100 100

57. The Siam Gypsum Industry Bangkok 586-3987 Gypsum boards 470 100 100

(Saraburi) Co., Ltd.

58. The Siam Gypsum Industry Bangkok 586-3987 Gypsum boards 120 100 100

(Songkhla) Co., Ltd.

59. The Siam Moulding Plaster Co., Ltd. Saraburi (036) 373578-82 Moulding plaster 125 70 70

60. The Siam Nawaphan Co., Ltd. Samut Prakan 394-2146 Steel doors 168 100 100

61. Siam Fiberglass Co., Ltd. Saraburi (036) 373441-4 Glass wools 350 83 83

Ceramics Business

Subsidiaries

62. Cementhai Ceramics Co., Ltd. Bangkok 586-3333 Holding company 475 100 100

63. Thai Ceramic Co., Ltd. Bangkok 586-4094-9 Ceramic tiles 450 100 100

64. Sosuco Ceramic Co., Ltd. Bangkok 913-2156-62 Ceramic tiles 260 51 51

65. The Sosuco Group Industries Co., Ltd. Bangkok 913-2156-62 Ceramic tiles 960 90 90

66. PT. Surya Siam Keramik Indonesia (6221) 5380811 Ceramic tiles 87 66 66

67. Beijing Cementhai Ceramic Co., Ltd. China (8610) 82912233 Ceramic tiles 767 69 69


68. Siam Sanitary Ware Co., Ltd. Bangkok 973-5040-54 Sanitary wares 80 36 36

69. Siam Sanitary Ware Industry Co., Ltd. Bangkok 973-5040-54 Sanitary wares 200 - 36

70. The Siam Sanitary Fittings Co., Ltd. Bangkok 973-5101-7 Sanitary fittings 200 33 45

71. Mariwasa Manufacturing, Inc. Philippines (632) 655-0281 Ceramic tiles 909 40 46

72. Siam Mariwasa TOTO, Inc. Philippines (632) 655-0281 Sanitary wares 430 21 30

Distribution

Subsidiaries

73. Cementhai Distribution Co., Ltd. Bangkok 586-3333 Holding company 825 100 100

74. SCT Co., Ltd. Bangkok 586-3333 International 400 100 100

trading

75. Cementhai Sales and Marketing Co., Ltd. Bangkok 586-3333 Trading 545 100 100

and distribution

76. Cementhai Logistics Co., Ltd. Bangkok 586-3333 Transportation 40 100 100


77. Thai Prosperity Terminal Co., Ltd. Samut Prakan 384-7591 Ports 100 50 50




94

Cementhai Holding

Subsidiaries

78. Cementhai Holding Co., Ltd. Bangkok 586-3333 Holding company 1 100 100

79. Cementhai Steel Co., Ltd. Bangkok 586-2617 Holding company 5,000 100 100

80. The Siam Iron and Steel Co., Ltd. Bangkok 586-4072 Construction steel 1,000 100 100

81. The Siam Construction Steel Co., Ltd. Bangkok 586-3333 Construction steel 1,750 100 100

82. The Siam Industrial Wire Co., Ltd. Bangkok 586-4065 Construction steel 260 100 100

83. The Siam Nawaloha Foundry Co., Ltd. Saraburi (036) 336531-45 Cast iron 308 65 65

84. The Nawaloha Foundry Chon Buri (038) 214969-70 Cast iron 570 100 100

Bang Pakong Co., Ltd.

85. The Siam Refractory Industry Co., Ltd. Bangkok 586-3333 Refractory 300 100 100

86. The Siam Research and Development Bangkok 585-9677 Product research 100 100 100

(Bangkok) Co., Ltd.

87. Thai CRT Co., Ltd. Chon Buri (038) 490232 TV tubes 1,700 47 47

88. CRT Display Technology Co., Ltd. Bangkok 586-3333 Cathode ray tubes 2,000 47 47

for computer

monitors

89. Thai Electron Gun Co., Ltd. Chon Buri (038) 954756-63 Electron guns in 120 47 47

picture tubes

90. Siam Tyre Plc. Samut Prakan 615-0177-9 Holding company 72 99 99

91. Siam Furukawa Co., Ltd. Saraburi (036) 373570 Automotive and 240 59 59

motorcycle

batteries


92. Siam NGK Technocera Co., Ltd. Bangkok 586-3333 Processing 40 29 29

apparatus electronic

components

93. Siam Compressor Industry Co., Ltd. Chon Buri (038) 490900 Compressors for 720 49 49

air-conditioners

94. Siam Yamato Steel Co., Ltd. Bangkok 586-3333 Structural steel 7,000 46 46

95. The Siam Kubota Industry Co., Ltd. Bangkok 909-0300 Agricultural diesel 208 42 42

96. The Nawaloha Industry Co., Ltd. Saraburi (036) 336531-45 Cast iron 300 30 30

97. Siam AT Industry Co., Ltd. Chon Buri (038) 215011-9 Automotive 240 30 30

spare parts

98. Thai Engineering Products Co., Ltd. Pathum Thani 529-3518-22 Automotive 85 29 30

spare parts

99. The Siam United Steel (1995) Co., Ltd. Bangkok 586-3333 Cold-rolled steel 6,000 29 29

100. Siam Asahi Technoglass Co., Ltd. Chon Buri (038) 490680 TV glass bulbs for 1,600 27 27

color picture tubes

101. Musashi Auto Parts Co., Ltd. Pathum Thani 529-1753 Motorcycle 200 21 21

spare parts

102. Siam Toyota Manufacturing Co., Ltd. Chon Buri (038) 213421 Automotive 850 20 20

engines




95

103.Mitsubishi Electric Consumer Chon Buri (038) 214870 Air conditioners 1,200 20 20

Products (Thailand) Co., Ltd.

104.Toyota Motor Thailand Co., Ltd. Samut Prakan 386-1000 Automotives 4,520 10 10

105. Siam Tyre Phra Pradaeng Co., Ltd. Samut Prakan 384-4171 Automotive tyres 200 39 39

106. Siam Tyre Industry Co., Ltd. Saraburi (036) 373276 Truck tyres 400 39 39

107.Michelin Siam Co., Ltd. Chon Buri (038) 490534 Automotive tyres 500 39 39

108. Michelin Siam Marketing and Sales Co., Ltd. Bangkok 619-3000-19 Automotive tyres 200 39 39

109. The Siam Steel Cord Co., Ltd. Rayong (038) 892100 Tyre bead wires 1,260 39 39

and steel tyre cords

110. Thai Tyre Mould Co., Ltd. Chon Buri (038) 490534 Tyre moulds 15 39 39

111. Siam Lemmerz Co., Ltd. Saraburi (036) 373311 Meg wheels 428 29 29

112. Thai Carbon Products Co., Ltd. Bangkok - Carbon black 800 20 22

113. The Deves Insurance Plc. Bangkok 280-0985 Insurance 120 21 21

Cementhai Property

Subsidiaries

114. Cementhai Property Co., Ltd. Bangkok 586-2059 Holding company 1 100 100

115. Rayong Industrial Land Co., Ltd. Bangkok 586-2059 Industrial sites 2,220 100 100

116. SIL Industrial Land Co., Ltd. Bangkok 586-2059 Industrial sites 2,000 100 100

117. RIL 1996 Co., Ltd. Bangkok 586-2059 Industrial sites 1,100 100 100

118. SCG Car Services Co., Ltd. Bangkok 586-3333 Car rental 60 100 100

Note: Registered share is ordinary share only.




96

2. Summary of significant information1. General information

1.1 Company’s name and location (front and back covers)

1.2 Investment in companies with 10 percent

or more equity (pp.91-95)

1.3 Other reference

Registrars Thailand Securities Depository Co., Ltd.

62 The Stock Exchange of Thailand

Rachadapisek Road, Klongtoey, Bangkok 10110

Tel. 359-1200-1 Fax. 359-1259

Debentureholder’s representative National Finance Public Company Limited

Auditors SGV-Na Thalang & Co., Ltd.

989 Siam Tower Building 20th-23rd Floors,

Rama 1 Road, Pathumwan, Bangkok 10330

Mr. Thavach Phusitphoykai or Mr. Teerapong

Kaewratanapatma or Mr. Methee Ratanasrimetha

Tel. 658-0658 Fax. 658-0060-3

Legal advisors None

Financial advisors None

Advisors/Managers None

Financial institutions Domestic and foreign commercial banks and

with established relations finance companies number approximately 60 institutions

2. Summary of financial data

2.1 Financial Statements (pp.2-3)

2.2 Financial ratio (pp.2-3)

97

3. Principal activities

3.1 Summary of significant information (pp.13-35)

3.2 Ratio of revenues from each business group (pp.13-35)

4. Risk Factors

The Company has credit risks as well as foreign currency risks, and taken steps to manage those risks with

due care in credit extension, setting credit limits and appropriate levels of guarantee, and engaging in transactions of

financial derivatives. These measures represent the preparedness of the Company to cope with possible risks, as

disclosed in No. 22 of the notes on consolidated financial statements.

5. Shareholders and management

5.1 Shareholders

First 10 major shareholders as at March 9, 2000

No. Name No. of Shares % of total Shares

1. Bureau of the Crown Property 42,720,000 35.60

2. Thailand Securities Depository Co., Ltd. for Depositors 7,623,719 6.35

3. HSBC Bank Plc. 3,129,824 2.61

4. Chase Nominees Limited 1 3,113,575 2.59

5. HSBC (Singapore) Nominees Pte Ltd. 2,575,955 2.15

6. The Siam Commercial Bank Public Company Limited 2,391,490 1.99

7. State Street Bank and Trust Company 1,872,249 1.56

8. Littledown Nominees Limited 5 1,633,856 1.36

9. Office of the Privy Purse 1,547,300 1.29

10. Randery Burahmakan Co., Ltd. 1,481,040 1.23

98

5.2 Management Structure

(1) Group’s Management Chart (pp.6-7)

Directors

1. Chaovana NaSylvanta Chairman Privy Councillor 400 - 1,296,000

2. Osot Kosin Vice Chairman and Former Chairman of - - 864,000

Independent Director Siam Tyre Plc.

3. Kamthon Sindhvananda Director and Chairman Privy Councillor - - 1,044,000

of Audit Committee

4. Snoh Unakul Director Former Deputy - - 864,000

Prime Minister

5. Paron Israsena Director, Chairman of Chairman of - - 984,000

Remuneration Committee Shin Satellite Plc.

and Audit Committee

6. Sivavong Changkasiri Director, Independent Chairman of - - 864,000

Director and Krung Thai Bank Plc.

Remuneration Committee

7. Sumet Tantivejkul Director and Director and Secretary, - - 984,000

Audit Committee Chai Pattana Foundation

8. Yos Euarchukiati Director and Chairman of Thai Plastics 25,000 25,000 864,000

Remuneration Committee and Chemicals Plc.

9. Pricha Attavipach Director Former Industry - - 864,000

Permanent Secretary

10. M.R. Pridiyathorn Devakula Director and President of Ex-Im - - 864,000

Remuneration Committee Bank of Thailand

11. Panas Simasathien Director Former Minister of - - 864,000

Finance

12. Chumpol NaLamlieng Director and President Director and President 150,100 - 864,000

Suvit Virojanadul Secretary to the Board

Remark: - Nos. 1 and 2 with a company car.

- Nos. 3,5 and 10 hold 33,000 units, 33,000 units and 70,000 units in The Siam Cement Plc’s debentures respectively,

which increased by 20,000 units, 13,000 units and 20,000 units respectively during the fiscal year.

- No. 10 hold 86,424 shares in The Siam Pulp and Paper Plc., without change during the fiscal year.

No. 12 sold 1,700 shares in The Siam Pulp and Paper Plc during the fiscal year.

AnnualIncomereceivedfrom the

Company(Baht)

No. ofShares

increased(decreased)during thefiscal year

No. ofSharesas at

December31, 2000

Name Position ExperienceNo.

99

Directors who are authorized to sign their names on behalf of the Company

Two directors of the Company jointly sign their names, with the corporate seal affixed.

Scope of authority of the Board of Directors of the Company

The Board of Directors essentially has the following authorities.

1. The Board is authorized to manage and direct the Company’s operations in line with

the objectives, the Articles of Association and the resolution of shareholders’ meetings.

2. 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.

3. The Board must have a meeting once every three months.

4. The Board must hold the annual general meeting of shareholders within four months

after the end of the Company’s fiscal year.

The Board shall hold an extraordinary meeting of shareholders anytime as deemed

appropriate; or a number of shareholders with at least one-fifth of the shares sold, or at

least 25 shareholders with a total of 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. In this case, the Board must organize a shareholders’

meeting within one month after the receipt of the written request from the said

shareholders.

5. The Board must arrange to have the balance sheet and the profit and loss statement at

the end of the fiscal year, the annual report, for the shareholders’ meeting as required

by law.

6. The Board has the authority to propose dividend payment to shareholders based on the

profit made in any year, or accumulated from previous years, or propose that the profit

should be arranged for any other objectives.

The Board may consider interim dividend payments to shareholders from time to

time, when the Company earns sufficient profits for the purpose, and after the dividends

have been paid, such dividend payment shall be reported to the shareholders in the

following shareholders’ meeting.

100

The Audit Committee

The Audit Committee of the Company has the following members:

1. Kamthon Sindhvananda Chairman

2. Paron Israsena Member

3. Sumet Tantivejkul Member

Scope of Authority

The Audit Committee is authorized to fulfill the following duty.

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 establishment of financial report development to compliance with the

accounting standards set by GAAP.

3. Review and ensure that the Company has appropriate and effective internal control and

internal audit systems.

4. Review on corporate risk management.

5. 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.

6 Review the internal audit system on corruption.

7. Review the internal control system, plans, and guidelines for inspection including

assessment of the result of inspection, and all proceedings of the Company in accordance

with the generally accepted standard and principle.

8. Review the righteous and effectiveness of the information technology system relating

to internal control system, financial reports and risk management and suggest an up to

date improvement occasionally.

9. Consider disclosure of corporate data in cases of, or in relation to probable conflicts of

interest and ensure full propriety.

10. Supervise, review and comment on the operation of the Internal Audit Office also

cooperate with the Company’s auditor.

11. Prepare reports on 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, propose appointment and remuneration of Company’s auditor.

13. Appoint, remove, transfer or terminate the employment of the Director of the Internal

Audit Office.

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

15. Take other actions in compliance with laws or assignments by the Board of Directors.

Inactions thereof, the Audit Committee is authorized to summon or order management,

unit heads, or employees concerned to present opinions, attend meetings or submit

necessary documents.

The Audit Committee performs duty within the authority and responsibility under the

order of the Board of Directors. The Board is responsible for company’s operations and is

directly accountable to shareholders, stakeholders and any person.

101

Remuneration Committee

The Remuneration Committee comprises of

1. Paron Israsena Chairman

2. Sivavong Changkasiri Member

3. Yos Euarchukiati Member

4. M.R. Pridiyathorn Devakula Member

Scope of Authority

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

and committees appointed by the Board.

2. Propose policy on management incentives in line with the Company’s operating

results, and the performance of each management executive, and whenever it deems

appropriate, the committee shall consider hiring of consulting firms to advise on project

implementation.

3. Consider the annual remuneration for each member of the management team prior to

further submission 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.

102

Management (As at December 31, 2000)

Management

No. Name Position Experience

1. Chumpol NaLamlieng President Corporate planning,

financial planning and

marketing management

2. Wirash Krittaphol Vice President Manufacturing management

3. Chaisak Saeng-Xuto President, The Siam Pulp and Paper Plc. Manufacturing management,

marketing and computer

4. Sobson Ketsuwan President, Siam Cement Industry Co., Ltd. Corporate planning, manufacturing

management and marketing

5. Dusit Nontanakorn President, Cementhai Distribution Co., Ltd. Marketing and manufacturing

management

6. Chalaluck Bunnag Vice President Marketing and manufacturing

management

7. Apiporn Pasawat President, Cementhai Chemicals Co., Ltd. Corporate planning and business

management in Petrochemicals

8. Aviruth Wongbuddhapitak Vice President Corporate planning, manufacturing

management, financial planning

and human resources management

9. Kajohndej Sangsuban President, Cementhai Gypsum Co., Ltd. Manufacturing management

and marketing

10. Pramote Techasupatkul President, Cementhai Roofing and Manufacturing management and

Concrete Products Co., Ltd. marketing

11. Kan Trakulhoon President, Cementhai Ceramics Co., Ltd. Manufacturing management

and marketing

Related Managers

1. Padungdej Indralak Corporate Treasurer Marketing and finance

2. Amphol Raungturakit Corporate Accounting Business management,

Division Manager accounting management and

information system

No. Name Position Experience

103

(2) Election of Executives and Directors

The election of Directors shall be carried out in accordance with the following rules and

procedures.

1. 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.

2. In case the number of candidates nominated for Directors exceeds the number of

Directors required for that election, it shall be decided by votes of the shareholder meeting.

The shareholders may elect the candidates nominated for Directors, but not exceeding

the number of Directors required for that election and the Directors shall be individually

elected. Each shareholder of proxy shall have one vote for each share he holds or represents

for the election of each Director. The candidates shall be ranked in order descending from

the highest number of votes received to the lowest, and shall be appointed as Directors in

that order until all of the Director positions are filled. Where the votes cast for candidates

in descending order are tied, which would otherwise cause the number of Directors to be

exceeded, the remaining appointment shall be made by the chairman of meeting who shall

have a casting vote.

(3) Remuneration for Executives

(1) Financial remuneration

In the year 2000, the 12 directors earned cash remuneration from being directors totalling

10,800,000 Baht. The 3 members of Audit Committee earned cash remuneration from being

audit committee totalling 420,000 Baht. The 11 executives (management team) earned

salaries and cash benefits from the company totalling 78,777,500 Baht.

(2) Remuneration in kind

Company’s Contribution to the provident fund for directors or the management executives

(management team) as being Company’s employees totalling 7,111,200 Baht.

(4) Supervision

The Company has abided by the Code of Best Practices set by the Stock Exchange of Thailand

for directors of listed companies.

(5) Supervision on the use of internal information

The Company has defined as a Code of Ethics of the Siam Cement Group that no employees shall

exploit any company’s information for the interest of self or others despite the fact that the

Siam Cement Group may lose no benefits .

(6) Internal Control

The Company has an Internal Audit with the responsibility to conduct audit, evaluation, and

improve the internal control system to ensure efficiency and effectiveness under consistent

supervision of the Audit Committee (according to the Audit Committee’s Report on page 39)

Moreover, there are also outside auditors, who have studied and assessed the efficiency of the

internal control on the Company’s accounts. A report of SGV - Na Thalang & Co., Ltd., which

serves as the Company’s auditor, mentioned in its study and assessment on the Company’s

accounts that “We have not found any flaw in the internal control system relating to accounting

practices which could have substantial impact on the opinions on the financial statements of

each year ended at December 31, 2000 and 1999.”

104

6. Inter-company accounts

Disclosures of inter-company accounts are listed clearly in Notes on Financial Statements No. 1 and No. 4.

Transactions of goods comprise of the trading of raw materials or products, whereby sales of goods to

outside individuals, subsidiaries through the channels of trading firms, such as Cementhai Sales and

Marketing Co., Ltd., SCT Co., Ltd., and Cementhai Chemicals Co., Ltd.

Transactions between Group companies under normal business terms and conditions as those

concluded with others not related to the Group, and in accordance with market prices with discount in

line with prevailing competition in the market.

Setting the credit term between 30-45 days for transactions of goods and services.

The Company has defined the scope of authority and procedure for inter-company transactions based

on traditional trading practices, in accordance with the Company’s operational authority with approval

of the Board of Directors.

7. Explanation and analysis on financial status and operating results.

Previous operations and financial status

In the year 2000, the consolidated financial statements of The Siam Cement Plc., and subsidiaries

showed total revenues of 128,197 million baht, compared with 101,851 million baht in the previous year,

representing an increase of 26,346 million baht, or 26 percent. Domestic sales revenues increased 21

percent, while export sales revenues increased 43 percent. The increases from total sales were mainly

from the Petrochemicals and Paper and Packaging Businesses.

In conclusion, the Company and subsidiaries earned a net income of 41 million baht in the year 2000, which

included foreign exchange losses of 2,955 million baht, and 601 million baht losses in the sales of

investment in various businesses. Besides, the Company has included a reserve of 670 million baht

for impairment and diminution of assets of ceramics business in China, natural rubber business in

the Philippines, and Nawaloha Bang Pakong, which may be sold in the year 2001, 581 million baht

of expenses for mutual separation plan. Prior to the accounting of these items, the Company had an

operating profit of 4,848 million baht.

Total consolidated assets of the Company and subsidiaries at December 31, 2000 amounted to 260,309

million baht, compared with 266,348 million baht at the end of the previous year, representing a decrease

of 6,039 million baht, or two percent.

8. Financial Statements (pp.40-90)

scg: annual report 2000

Documents

siam cement group

siam cement isready

siam compressor industry

main businesses cement

siam cements debentures

groups investment

business restructuring

share bahtearnings loss