:: Annual Report 2007 ::

Contents 6 Report of the Board of Directors to the Shareholders 8 Board of Directors, Audit Committee, and Executive Committee

9 Management Structure

10 Key Figures

11 Achievements and Milestones

12 Vision, Mission, and Core Values

16 Report of the Executive Committee

19 Service Excellence Path to Sustainable Growth 20 Service & Quality Excellence

20 Cement

22 Ready-mix Concrete

24 CONWOOD

25 Aggregates

26 Mortar

27 AFR

28 OH&S : Occupational Health & Safety

30 CSR : Corporate Social Responsibility

32 Summary of Major Developments and Recognitions in 2007

34 Our Corporate Governance Update

36 Industrial Outlook

38 Risk and Risk Management

39 Corporate Identity

40 Report of the Board of Directors’ Responsibilities for Financial Statements

41 Report of the Audit Committee

42 Consolidated Financial Statements

43 Report of the Certifi ed Public Accountant

44 Balance Sheets

47 Income Statements

48 Statements of Changes in Shareholders’ Equity

50 Statements of Cash Flows

51 Notes to Consolidated Financial Statements

68 Management Discussion and Analysis

71 Related Party Transactions

72 Dividend Allocation Over Past Three Years

73 Supplemental Information

85 Customer Service Center and Distribution Centers

86 Summary of Specifi ed Items Per Form 56-2

Siam City Cement recognizes the importance of providing reliable on-time delivery and swift response in consultation and testing services. Well-trained logistic and technical teams, supported by modern equipment, are key elements in providing customers with effective and effi cient solutions.

FASTER service

SIAM CITY CEMENT PUBLIC COMPANY LIMITED

ANNUAL REPORT 2007 4

Southern Ring Road Bangkok: One of the mega projects supplied by Siam City Cement in 2007.



Report of the Board of Directorsto the Shareholders

Two Thousand and Seven was a challenging year for your company. Certain businesses suffered from a mild case of stagflation attributable to high energy costs and the softening of domestic demand. Your company’s reliance on exports to make up for declining domestic prices and volume was negatively impacted by a strong Baht and high freight costs, contributing to overall mediocre quantitative growth.

In all, your company and its management have to rely on its internal strength and resolve to overcome adverse external conditions in order to produce satisfactory results. These tasks were fulfilled in an admirable fashion with particular attention to three key aspects: service, quality and efficiency. These aspects were sustained with substantive progress while the Alternative Fuel & Raw Material policy exhibited concrete development in terms of completing ground work, infrastructure and a successful initial phase of operation. We hope over time that this programme will offer positive contributions in reducing variable costs and diversifying energy options.

With unyielding efforts from the management and employees, the Board of Directors is pleased to report that during 2007, Siam City Cement and its subsidiaries achieved total net sales of 22,800 million Baht, down by only 4 percent from 2006. Net profit amounted to 3,230 million Baht with earnings per share of 14.05 Baht.

Based on the sturdy operating performance and the solid financial position of the company, the Board of Directors decided to propose to the shareholders at the 15th Annual General Meeting the payment of a full-year dividend of 14 Baht per share representing 100 percent of net profits, compared to an 84 percent pay-out in 2006.

An interim dividend of 6.50 Baht per share was paid on September 7, 2007 and so the final dividend of 7.50 Baht per share will be paid on April 30, 2008.

As for 2008, we look forward with confidence to our maintaining positive results in our business operations



whilst seeking to strengthen areas of weakness. We will be fully prepared to weather a turbulent economic landscape should that be the case. We believe the company is well placed to meet the country’s needs when new infrastructure projects reach the execution stage and we will continue to perform for the full benefit of all our shareholders and other stakeholders as the nation’s cement solution provider by offering good quality combined with excellent service.

The Board of Directors wishes to express its sincere gratitude to all our shareholders, customers, suppliers and employees for their continuing support and trust in the company and its management team.

Veraphan Teepsuwan

Chairman

From Left: Mr. Veraphan Teepsuwan, Mr. Paul Heinz Hugentobler, Mr. Prakob Visitkitjakarn, Mr. Vanchai Tosomboon, Ms. Chantana Sukumanont,Mr. Chachchon Ratanarak, Mr. Prabhol Buranasiri, Mr. Marcel Smit, Mr. Thaveepol Kongseri, Mr. Urs Wolfgang Bieri, Mr. Harald Link,Mr. Chet Raktakanishta



Board of Directors, Audit Committee, and Executive CommitteeBoard of Directors

Mr. Veraphan Teepsuwan Chairman

Mr. Paul Heinz Hugentobler Vice Chairman

Mr. Urs Wolfgang Bieri Director

Mr. Harald Link Director

Mr. Ekasak Puripol Director (Retired March 14, 2007)

Mr. Sura Sanittanont Director (Retired March 14, 2007)

Mr. Prakob Visitkitjakarn Director

Mr. Chet Raktakanishta Director

Mr. Chachchon Ratanarak Director

Mr. Prabhol Buranasiri Director (Effective March 14, 2007)

Mr. Thaveepol Kongseri Director (Effective March 14, 2007)

Ms.Chantana Sukumanont Director

Mr. Vanchai Tosomboon Director

Mr. Leo Mittelholzer Managing Director (Resigned February 28, 2007)

Mr. Marcel Smit Managing Director (Effective March 01, 2007)

Audit Committee

Mr. Prakob Visitkitjakarn Chairman

Mr. Harald Link Member

Mr. Chet Raktakanishta Member

Executive Committee

Mr. Leo Mittelholzer Chairman of the Executive Committee (Resigned February 28, 2007)

Mr. Marcel Smit Chairman of the Executive Committee (Effective March 01, 2007)

Ms.Chantana Sukumanont Deputy Chairman of the Executive Committee (Marketing and Sales)

Mr. Vanchai Tosomboon Executive Committee Member Executive Vice President (Saraburi Operations)

Mr. Rungrote Soonthorn Executive Committee Member Senior Vice President (Human Resources and Management Development)

Mr. Andreas Leutenegger Executive Committee Member Senior Vice President (Finance and Controlling)

Mr. Nopporn Thepsithar Executive Committee Member Senior Vice President (Logistics and Exports)



Management Structure

Board of DirectorsAudit Committee

Corporate Governance

Mr. Marcel Smit

Managing Director, Chairman - Executive Committee

Mr. Vanchai Tosomboon

Director,Executive Vice PresidentSaraburi Operations

Ms. Chantana Sukumanont

Director,Deputy Chairman - Executive CommitteeMarketing and Sales

Mr. Nopporn Thepsithar

Senior Vice PresidentLogistics and Exports

Mr. Andreas Leutenegger

Senior Vice PresidentFinance and Controlling

Mr. Rungrote Soonthorn

Senior Vice President Human Resourcesand Management Development



2007 2006 2005 2004

Million tons Clinker production capacity 12.3 12.3 12.3 12.3 Cement production capacity 14.5 14.5 14.5 14.5

Million Baht Net sales 22,800 23,647 22,380 20,772 Operating EBITDA 5,211 6,059 6,307 7,032 EBITDA 5,506 6,344 6,613 7,256 Operating profi t 4,396 5,320 5,567 6,044 Net profi t after minority interests 3,230 3,9142 4,073 4,141 Cash fl ow from operating activities 4,000 4,328 4,232 5,552 Investments in property, plant and equipment - net 1,028 1,177 1,021 877 Total assets 21,503 20,8342 21,029 20,109 Net fi nancial debt 771 73 (1,793) (1,468) Total shareholders’ equity 15,890 15,8802 16,803 15,938

Margin (%) Operating EBITDA 23% 26% 28% 34% EBITDA 24% 27% 30% 35% Operating profi t 19% 22% 25% 29% Net profi t after minority interests 14% 17%2 18% 20% Cash fl ow from operating activities 18% 18% 19% 27%

Financial Ratios Earnings per share (Baht) 14.05 16.572 17.15 17.25 Gross dividend per share (Baht) 14.001 14.00 14.00 13.00 Dividend payout ratio on net profi t (%) 100% 84%2 82% 75% Gearing (%) 5% 0% (11%) (9%) Total liabilities to total assets (%) 26% 24% 20% 21%

Own Personnel Group 3,056 2,927 2,866 2,763 Cement 2,254 2,243 2,163 2,070

Key Figures

1. Proposed by the Board of Directors.2. Restated due to changes in accounting policies (TAS 44, 45). More details disclosed in notes to fi nancial statements and auditor’s report.



Supporting Thailand’s development for more than 30 years by offering innovative solutions in cement products.

Achievements and Milestones

1969 - The Company was established in 1969 as Siam City Cement Company Limited

1972 - Siam City Cement begins producing cement

1977 - Listed on the Stock Exchange of Thailand

1981 - Imported bunker oil kiln fuel replaced with domestic lignite

1989 - Introduction of 1st waste heat recovery system in Southeast Asia

1993 - Changed its status to a public company and its name to Siam City Cement Public Company Limited

1996 - Annual production capacity exceeds 12 million tons

1997 - Awarded ISO 9002 Certifi cation

1998 - Awarded ISO 14001 Certifi cation - Holcim became shareholder in Siam City Cement

1999 - Introduction of Alternative Fuels and Raw Materials (AFR) programme - Debt restructuring and refi nancing completed

2000 - Launch of webSALES initiative - Awarded the 2000 Best Practices on Corporate Governance - Awarded the Audit Committee of the Year 2000

2001 - Awarded TIS 18001 Certifi cation - Government approval for commercial use of AFR

2002 - Launch of INSEE (Eagle) family of cement products - Inauguration of AFR blending plant - Siam City Cement long-term debt reduced to zero

2003 - Launch of INSEE TONG, Thailand’s 1st premium masonry cement - Voted Best Company in Thailand and Best Asian Company in the Construction Sector in Euromoney Asian company survey

2005 - Repositioning corporate and products under the “As I Wish” branding campaign - Introducing “INSEE Mortar Max”: a ready-to-use dry mortar

2006 - OH&S 12 Golden Rules launch to reinforce OH&S performance - INSEE concrete franchise - Start-up aggregate business for Siam City Concrete - Certifi cates from Department of Industrial Works, Ministry of Industry on pleasant and environmental friendly plant in honour of HM the King’s 60th years accession to the Throne

2007 - Certifi cate for supporting The Water Resources Department’s Checkdam Project from the Prime Minister - Award for Outstanding Workplace 2007 (Excellent Labor Relations and Labor Welfare) from the Ministry of Labor - Certification of European standard (EN 197-1) and French standard (NF 002) for INSEE Fah cement (OPC-5)



Vision, Mission, and Core Values

Corporate Vision“To provide foundations for society’s future.”

Corporate Mission

“To increase value to all stakeholders by providing the best cement, aggregates, and related product solutions, achieving above-industry profi tability through quality, service and innovation.”

Core Values

- Commitment to our customers, delivering quality, service and innovation

- Consistent and sound financial performance

- Socially responsible, a good citizen

- An open, respectful and collaborative environment with opportunities for personal development



Achieving above-industry profi tability through quality, service and innovation.

Motto

“At Siam City Cement, We Deliver.”

… by customersTo provide the best solutions on cement, aggregates, and related products

… by communityBe socially responsible and environmentally conscious within communities and Thai society

… by business partnersCollaborate with all stakeholders to grow business opportunities together

Corporate Fundamental Goals:

To be preferred...

… by employeesProvide competitive compensation, benefits and career development opportunities with respect and recognition in a trusted and transparent working environment



Siam City Cement supplies Ready-mix Concrete for the Ramintra Expressway.

Siam City Cement’s objectives is not just to produce high quality products, but also to respond effectively to customers’ demands.

HIGHER quality



Report of the Executive Committee

Mr. Marcel SmitChairman - Executive Committee

Mr. Vanchai TosomboonExecutive Vice PresidentSaraburi Operations

Siam City Cement Public Company Limited faced a challenging situation in 2007.

Political uncertainty in Thailand affected the consumer confidence; this resulted in lower general construction activity and delay of Mega-projects. As a consequence cement consumption decreased by approximately 4-5 percent.

From June 2007 onwards a fierce competitive environment resulted in lower market prices. Because of lower domestic demand, export opportunities were used and export volumes reached record levels of over 6 million tons. But the revenues of these exports were affected by the stronger Thai Baht.

Despite the difficult market conditions Siam City Cement was able to achieve Net Sales of 22,800 million Baht, only 4 percent lower than 2006. Energy costs continued to increase strongly during 2007 and shipping costs reached record levels.

As a consequence of all the negative factors, profitability decreased, especially in the 3rd quarter. Good efficiency in the plants and in logistics, however, helped to achieve reasonable profit levels.Net Profit 2007: 14 percent of Net Sales; in 2006 this was 17 percent.

In the last quarter of 2007 the Executive Committee started a total performance improvement programme.

Ms. Chantana Sukumanont Deputy Chairman - Executive CommitteeMarketing and Sales



Mr. Nopporn ThepsitharSenior Vice PresidentLogistics and Exports

Mr. Andreas Leutenegger Senior Vice President Finance and ControllingMr. Rungrote Soonthorn

Senior Vice PresidentHuman Resources and ManagementDevelopment

This included aligned improvements in relation to our customers, logistics, efficiency, and energy consumption. Also, it was decided to close the two smallest and least energy efficient kilns in Saraburi. In relation to this closure a generous Mutual Separation Programme was offered to the involved staff.

As a result of all the measures, Siam City Cement was able to achieve Earnings Before Interest and Tax (EBIT) of 4,691 million Baht,16 percent lower than 2006, and a Net Profit of 3,230 million Baht,17 percent lower than 2006. Due to good “working capital” management, the Cash Flow from Operating activities declined by only 8 percent to 4,000 million Baht.

Our subsidiary companies, INSEE Concrete, INSEE Aggregates, CONWOOD, and Khmer Cement Industry (KCI) have all contributed positively to the overall results.

Marcel Smit

Chairman - Executive Committee

Outlook 2008:

2008 will be another challenging year for Thailand: the impact of the new government is expected to have a positive effect on business. At the same time some world economies are showing signs of difficulties.Siam City Cement with its aligned strategies, internal improvements and renewed focus on quality and service is well positioned to improve its performance.

“At Siam City Cement, We Deliver.”



SMARTER innovationTo meet the changing needs of increasingly diverse construction projects, Siam City Cement continually develops quality products through innovation and technology improvement. The company also customizes products to meet specifi c customers’ requirements.



Service Excellence Path to Sustainable GrowthAt Siam City Cement, we believe that service, quality, and innovation comprise the key value differentiators that will lead to a sustainable company performance, as well as make us stand out from the competition. Our objective is not only to sell good quality products, but also to respond to our customers’ wishes and needs in term of service excellence in a way that exceeds expectations-faster, higher and smarter.

Our mission a “Solution Provider” is the core key value proposition to which all employees adhere. This means that every member of our company, in every department and in all operational units, is an expert in what they do to provide stakeholders with solutions.

Many resources and efforts have been injected into developing and enhancing Siam City Cement’s service in order to raise it to a higher level. Customer Technical Service was developed to provide total solutions for our customers, both the professional segment and the mass market. At the same time, the Customer Service Center is also being enhanced in terms of systems and personnel so as to offer true excellence.

“Customer-driven Supply Chain Management”, a seamless operational process, was introduced. The concept originates from customers providing demand requirements to supply management who then ensure appropriate logistics, supply chain services and solutions are generated and synchronized with customers needs. A Centralized Logistics Planningand Controlling Center has been established to take care of overall logistics planning, while assuring logistics reliability in, for example, on-time delivery and in-plant loading time.

Moreover, our group companies have also adopted our belief in service excellence by continuously improving their own services, as for example CONWOOD’s Customer Solution Team, which works together with customers, to clearly define their needs and requirements in order to deliver total solutions.

At Siam City Cement, we constantly monitor the changes in market conditions, consumer behavior, and customer needs in order to adjust and continue to improve both our products and our services, and so live up to our promise: “At Siam City Cemennt, WWe DDeliver.”

Our mission a “Solution Provider” is the core key value proposition to which all employees adhere. This means that every member of our company, in every department and in all operational units, is an expert in what they do to provide stakeholders with solutions.



Service & Quality Excellence

Cement

The company’s cement sales volume in 2007 achieved around 14.0 million tons, 4 percent higher than 2006. Of the total, export of cement & clinker volume grew 17 percent compared to 2006.

In 2007, domestic sales volume declined by 4 percent compared to the previous year mainly due to the construction slowdown, especially in the public sector. In terms of sales price, there was intense price competition during the 3rd quarter of 2007. However, a price increase at the end of November pushed the price level up again, close to the level of the beginning of the year 2007.

Export sales volume, including sales to bordering countries, reached approximately 6 million tons in 2007. Vietnam remains the company’s biggest export market for clinker, followed by Bangladesh and the Middle East. Singapore is the largest destination of cement.

During the past couple of years, the market for construction materials has been experiencing a slow



The new channel concept “INSEE SuperPro”.

but significant change in terms of the emergence of a modern trade format. With a change in consumer behavior towards a One-Stop Shop service, and the Do-It-Yourself concept, many new modern businesses have entered the market to capture and serve the needs of this growing market segment.

In response to these new demands, Siam City Cement has developed a new channel concept, called “INSEE SuperPro”, to help transform our key valued strategic agents from traditional stores to a more modern look with systematic processes. Our customer and sales consultants have also been professionally trained to take care of valued dealers in all aspects, providing service, sharing knowledge, offering consultation, and most importantly, delivering solutions.

To ensure product quality, our Customer Technical Support team has extended its service by increasing the number of mobile lab units. We now can serve our customers more effectively and efficiently. In addition to quality checks, mobile lab crews can also provide consultation, advice, and any technical solutions that may be needed.



Ready-mix Concrete

The company sold 2.08 million cubic metres of Ready-mix Concrete in 2007. This was an increase over the 1.98 million cubic metres sold in the previous year. A relatively modest increase, mainly due to lower volume from mega projects. At the same time concrete prices were under pressure due to a highly competitive market resulting in lower profitability.

As a result of our determination to provide all-inclusive concrete products and services, the brand INSEE Concrete has been created to fulfill our ultimate goal. Under this brand, we are striving to constantly develop our products and services at all stages of production, from the selection of high-quality raw materials, through the research and development of productsto meet various specifications, to providing on-time delivery, as well as offering consulting and testing services.

Due to the diversity of construction projects, different kinds of concrete applications are required. INSEE Concrete, therefore, has developed different kinds of concrete to serve various customer requirements.Also included are special concretes for specific construction works and complex structures.

As service is viewed as a key to success, the whole organization is dedicated to delivering superior services, exceeding customers’ expectations.



Siam City Cement has supplied a substantial amount of Ready-mix Concrete to the Southern Ring Road project.

INSEE Concrete further customizes its products to meet precisely the specific needs of any particular project and so ensure a superior Ready-mix Concrete for all purposes.

As service is viewed as a key to success, the whole organization of INSEE Concrete is dedicated to delivering superior services, exceeding customers’ expectations. Our Customer Service Center provides solutions to all concrete enquiries from order-takingto tracking delivery status, as well as offering expert consultation and after-sales service by experienced and well-trained staff.

With a plant network covering Greater Bangkok, Eastern Seaboard and major cities upcountry, our Production Team is ready to serve customers’ needs effectively and efficiently, with the service of a qualified and dedicated workforce supported by a computerized batching system.

On-time delivery is ensured by our Logistics Team. In addition to Ready-mix Concrete being delivered to job sites by professional drivers and modern concrete delivery trucks, the implementation of advanced Vehicle Status Control (VSC) and a mapping system applied to delivery trucks incorporating a site survey service further fulfill the promise of problem-free logistics.

Last but not least, testing assurance is provided byour Quality Control Team. Testing by experienced personnel can be conducted either at the job siteor at the batching plant.

Being well aware of the importance of a healthy environment and safety at work, every process at INSEE Concrete has been supervised to ensurethat our business is safe and environmentally sound. The implementation of noise and dust control, water treatment and water recycling, as well as regularmaintenance of delivery trucks, have also all been adopted.

With our constant striving for improvement in allareas of operation, we are proud of the recognitionby international standard institutions that includesISO 9001:2000 for every batching plant, ISO 14001for environmental management, and TIS 18001 on occupational health and safety.



The restaurant of “The Dome at State Tower” is decorated with CONWOOD products.

CONWOOD

In 2007, CONWOOD achieved 5 percent growth,with Net Sales of 764 million Baht. The year also saw CONWOOD successfully start to expand its business into Vietnam.

CONWOOD continues to manufacturing prime quality wood replacement construction materials that are practical and environmentally friendly. Its products are the result of extensive research and innovative technology, and are designed to provide solutions for commercial and residential building construction and renovation projects. The company’s standards are recognized by international certification that includes ISO 9001:2000 and ISO 14001:2004, while in 2007it received the further qualification of ISO TIS/OHSAS 18000.

CONWOOD aims to offer the best service to clients, meeting all needs reliably and efficiently. To deliver on its promise a CONWOOD Solution Team was established. This team consists of sales and marketing professionals, research and development experts,and involves architects and engineers.

In all its endeavours, CONWOOD’s ultimate goal is that it wants to be not only a supplier, but a real business partner.



Aggregates

As a member of Siam City Cement Group, INSEE Aggregates products and services have been developed based not only on knowledge and experience in Thailand, but also from building on the best practice of over 400 aggregates operations within the Holcim Group around the globe. In thisway a worldwide business experience is offered to all customers.

In January 2007, INSEE Aggregates commenced its operation of a limestone quarry at Suphanburi supplying high quality aggregates to Bangkok.The crushing plant at Suphanburi was upgradedin mid-year and the production capacity increasedto over 1 million tons per year.

Also in 2007, modifications to the sand processing plant at Ayudhya were successful, and a new RMX (Ready-mix) sand designed for concrete productswas launched in mid-year. Further, a sand processing plant at Cholburi commenced production of high sand in August.

In 2007, the business unit Aggregates sold 1.2 million tons in its first year of operation and has shown positive results from the start.

INSEE Aggregates concentrates strictly on ensuring quality for all customers. An aggregates laboratory at each production site, as well as a mobile technical support unit, ensures quality control so that all out-going aggregates are compliant with the relevant standards, by using the best equipment and experienced technical support staff.

Our aggregates quality control division also coordinates with the production division in fine-tuning the processing so as to adjust aggregates properties to meet specificcustomers’ requirements.

Reliability is another aspect of our quality & service excellence, specific arrangements can be madeupon customers’ request using INSEE Logistics. Furthermore every out-going delivery truck has to pass a weighing bridge to confirm that the aggregates are of the correct weight. After this check, the truck is sealed to ensure that the contents arrive at the customer’s site in good order.

There is strict quality control for both internal and external supply.



A variety of products are offered, all of

the highest quality.

Mortar

Since the beginning of 2007, the company signed agreements with Novoplast to operate two plants at Ekachai in Samut Sakorn, and Tha-Rue in Kanchanaburi. Mortar sales volume for the year 2007 achieved nearly 200,000 tons.

The market for mortar is viewed as very importantas there is a growing trend for new products over traditional methods. To serve its customers needs, Siam City Cement offers a variety of products, all of the highest quality. To develop new products, the company uses knowledge from the customer inorder to meet specific requirements and to realizetotal satisfaction. Moreover, it also aims to improve cost effectiveness by reducing excess materials and labour costs. Improve effectiveness through reducing work procedures, thus enabling masons to workmore efficiently.

Product quality is matched by extensive technical support services from pre-to post-sales and the company has a technical team to demonstrate products onsite and offer total customer solutions.

INSEE Mortar Max is used in plastering work for a new Tesco Lotus in Chiangmai.



AFR : EcoSiam – Total Waste Management

Since 2005, EcoSiam, a business unit of Siam City Cement responsible for the Alternative Fuels and Raw Materials (AFR), has provided total waste management service solutions to its customers in Thailand. This business unit adheres strictly to international environmental management standards, and uses the unique access to expertise and best practice in waste management within the Holcim network worldwide.

In the near future, EcoSiam will extend its services in waste management solutions by operating one of the world’s most modern Alternative Fuels Preparation Plants located next to our cement plant in Saraburi. This facility has been designed using the latest technology and world-class environmental management systems, and will cover the entire range of pre-processing activities. The project has been granted a 106 License by the Department of Industrial Works, and has obtained investment promotion from Thailand’s Board of Investment (BOI).

In 2008 Eco Siam will be renamed to “Geocycle”; a waste management brand of Holcim. Geocycle is operating in more than 35 countries around the world, which provides access to best practice within this network.

Geocycle provides access to best practice throughthe global Holcim network.



Pro-active Measures To Ensure Safety For All

The safety and well-being of employees and the community at large have always been of paramount concern for Siam City Cement. In 2007, the company implemented a number of initiatives in its ongoing efforts to maintain the highest health and safety standards.

Notable in the year was the implementation of a Hazard Reporting drive, which calls for all employees and contractors to be issued with a report booklet to assist in reporting hazards when they are spotted. This has proved most successful in changing mindsets and raising awareness of safety risks, resulting in hazard reports increasing more than 10-fold compared to the previous year.

In 2007, Siam City Cement was present with a booth at the National Safety Exhibition held in Bangkok. The event, which attracted 40,000-50,000 visitors a day, provided a valuable opportunity for both sharing and disseminating information, while each of the company’s Saraburi plants were honoured with prizes in recognition of TIS (Thailand Industry Standard) 18000 (OH&S) documentation and implementation.

Also in 2007, a Mobile Safety Unit was approved and will become operational in 2008. Fitted out with high-tech safety equipment, the custom-designed vehicle will be used across Thailand for training employees, contractors and customers, as well as for inspections, audits, industrial hygiene monitoring and sampling.

OH&S : Occupational Health & Safety



The proactive stance of the company’s health and safety operations was further illustrated by the level of trainings held during the year for employees and contractors. Included in the training were courses such as advanced risk assessment techniques for engineers, focusing on plant design and hazard elimination.

Beyond the workplace, Siam City Cement extends its health and safety awareness programme into the community at large. A monthly booklet highlighting different kinds of general safety issues is given to all employees to take home and share with their families. The company also goes out to schools in the Saraburi area to conduct classes in safety issues in their homes.Furthermore, a “Think Safe… Drive Safe” campaign was launched in 2007, a year that was very much dedicated to learning and awareness.

The Company takes a proactive stance on health and safety, both in the work place and in the community at large.



CSR : Corporate Social Responsibility

Honouring His Majesty The King’s 80th Birthday

In 2007, the whole Thai nation rejoiced in the celebration of His Majesty King Bhumibol Adulyadej’s 80th birthday. This glorious and auspicious anniversary was an occasion for the people to express their love and devotion to their revered monarch. For Siam City Cement, it was also an opportunity to honour His Majesty through support of royally initiated projects.

Following HM the King’s initiative and to celebrate his 80th birthday, the company, in cooperation with the Chaipattana Foundation, launched “INSEE Check Dam Project” to build 880 check dams each year for three consecutive years, totalling 2,640 units. Total contribution to the project will be 27 million Baht. The check dams have been built in needed areas such as Chiangmai, Lamphun and Nan with a concept to block hilly streams through a series of small dams,

helping mountainous communities to better manage thier water resources during times of drought and prevent flooding during the rainy season.

In 2007, the implementation of the project exceeded the yearly target as over 1,000 check dams were built. In addition to “INSEE Check Dam Project”, the company also cooperated with Pha Muang Task Force to build check dams along the Northern border area, where over 16,000 check dams were built

Elsewhere, Siam City Cement continues to work in collaboration on projects that benefit the community. In 2007, the company extended its “Happy Toilet Healthy Life” project with the donation of 400 tons of INSEE cement for the construction of toilets at 80 schools in five central provinces. Fully supported by



Check dams improve the distribution of water in Thailand’s mountainous regions.

the Higher Education Commission, Department of Public Health, and Thailand Environment Institute, the project is part of the company’s “Living Together” concept, which aims at sustainable improvement in three areas, namely social development, environmental preservation and economic progress.

Among other ongoing projects is The Phukae- Chalerm Phrakiat Educational Park for Environmental Rehabilitation Project. Located in the Phukae district of Saraburi Province, the project aims to rehabilitate 1,800 rai of depleted forest reserve.

Working in conjunction with the Royal Forest Department, the company has generated tremendous support from both local officials and members of the community, especially teachers and students.

Re-planting has now been completed and schools around the Phukae Forest have given their commitment to look after the project and help fulfill its long-term objectives of creating eco-tourism sites and areas for nature studies.

Siam City Cement recognizes that compassion and support are important elements of Thai culture and adopts them as part of its own culture, believing that success and prosperity for all are best achieved through responsible social and environmental practice.



Summary of Major Developments and Recognitions in 2007

Ready-mix Concrete trucks delivering low-heat concrete for the construction of the basement of a new offi ce building at Sathorn Square

Major Developments in 2007

Managing Director’s Offi ce1. More than 16,000 checkdams have been built with

Chaipattana Foundation and Pha Muang Task Force to honor HM The King’s 80th Birthday.

2. Redecoration of Celebrated Arch on Ratchadamnoen avenue to honor HM The King’s 80th Birthday.

3. “Happy Toilet Healthy Life” project to build toilets for 80 dream schools with Ministry of Education, Ministry of Public Health and Thailand Environment Institute.

4. 475 rais of reforestation in Saraburi were completed under the project “Phu Kae Chalerm Phrakiat Educational Park for Environmental Rehabilitation” with the Royal Forest Department.

5. Capacity expansion of INSEE Suphanburi quarry to reach 1mio.Tons / annum and establish INSEE Cholburi sandpit operation.

6. Launch of new aggregates product innovation f.e.,-RMX Sand-for high performance concrete.

7. CONWOOD realized its first export into Vietnam.

8. Ecosiam signing MOU on strategic partnership with Wongpanit, Thailand’s largest recycling company, offering integrated waste management solutions.

Marketing and Sales1. Product portfolio management technique was

adopted to ensure sustainable developmen in the company’s products and services.

2. Customer database on web-base has been developed.

Logistics and Exports1. Streamlined Order to Cash process between all

Holcim companies in the region established.2. Implementation of INSEE Service Standard for

INSEE Transporter and Logistics & Exports to realize improved service to both internal & external customers.



Human Resources and Management Development1. Volunteer program for employee in checkdam

construction project to honor HM The King 80th Birthday.

Finance and Controlling1. Implementation of Warehouse Optimization

Program to improve operational efficiency and net working capital.

2. Expansion of Contractor Management and Services sourcing program to achieve cost optimization results.

3. Implementation of Internal Control System for increased reliability of financial reporting, better awareness of financial risks and improved reporting processes.

Saraburi Operations 1. Implementation of “Geotechnical Risk” assessment

program to ensure safety in all areas.2. Implementation of “ProCem+” program to certify

process operation personnel.3. Implementation of “CO2 Assurance” program for

future environment and suatainable development.4. Implementation of “Raw material optimization” to

save natural resources and raw materials costs.5. Completion and operation of new AFR feeding

systems at Kiln 4 and Kiln 3 respectively.6. BOI privilege for Alternative Fuels Preparation Plant

Project was granted.7. CONWOOD achieved 90% OEE in their operation.

Recognitions in 2007

1. Certificate for supporting The Water Resources Department’ s Checkdam Project from the Prime Minister.

2. Award for Outstanding Workplace 2007 (Excellent Labor Relations and Labor Welfare) from the Ministry of Labor.

3. Awarded “Best Enterprise Award concerning Safety, Occupational Health and Working Environment” from Safety and Health at Work Promotion Association (Thailand) during National Safety Week 2007.

4. Certification of European standard (EN 197-1) and French standard (NF 002) for INSEE Fah cement (OPC-5).

5. CONWOOD received TIS/OHSAS 18001:1999 certificate from AJA.



Our Corporate Governance Update

During 2007 the Company focused specially on corporate governance issues. The Companycommunicated clearly to its stakeholders that it strives to be a good corporate governance company, and wants to be environmentally conscious within the community it operates (Saraburi) and Thai society.

Key achievements in 2007 for Corporate Governance and Internal Control improvement included:

1. Adoption of Group Code of Conduct. To make it easy to understand how we will

achieve the above Corporate Strategy, the Board of Directors, in May 2007 adopted the Code of Conduct, a common and consistent framework in Siam City Cement Group Companies for how we will achieve our mission and goals, and how we conduct our daily business. The Code of Conduct reflects 10 aspects, namely; corporate governance, corporate social responsibility, sustainable environmental performance, compliance, use and protection of assets and information, conflict of

interest avoidance, gifts and donations, records and accounting, communication, and responsibility. This policy is communicated within the group companies and among our personnel as basic principles for everyday work. Code of Conduct was communicated with employees from all levels and throughout all the group companies.

2. Reaching international control standard.

The Internal Control System (ICS) project establishes, formalizes, and implements key elements of the internal control system (ICS) relating to our business activities. The ICS contributes to increased reliability of financial reporting, better awareness of financial risks, and improved reporting processes. Through our compliance with the underpinning legal requirements, ICS will improve investor confidence, the reputation of Siam City Cement and ultimately the long-term growth potential of the Company.



3. Adopting Board and Executive Manual. This manual is to facilitate members of both the

board of directors and the executive committee in their supervision over the Company, especially for the new members. It contains, for example, organizational regulations (specifying roles and responsibilities of directors and executive committees), key board events and agendas (scheduling key responsibilities to be discharged by board members, Audit Committee or executive members throughout the year), manual of authorities (setting out types of responsibilities that the board, CEO and executive committee have over the various areas in the Company), the Company reporting to third parties (setting out routine types of reporting, whether financial or operational reports, to ensure that other key stakeholders are identified and considered in the company’s operations, and that the company is in compliance with local regulations and made timely and adequate disclosure accordingly. The manual is subject to review by company secretary on bi-annually basis, or when data contained therein has changed.

4. Structural support on compliance. Cement business is a permit-intensive business.

Our members of the Audit Committee, who are experienced in financial, accounting, and other business aspects, are competent in meeting duties and responsibilities delegated specified under the Charter of the Audit Committee. However, not only internal audit works independently and reports directly to the Audit Committee, the management has assigned the compliance function to have a secondary reporting line (dotted line) to the Audit Committee. This is to ensure full support to the Audit Committee for any inquiry on operational level. Members of executive committee who supervise different areas also deligate compliance staffs to ensure all time compliance of their functions. These compliance officers work hand-in-hand and help safeguard the Company in each area of their expertise, e.g., environment, safety, and legal.

5. Contract management system. Through teamwork with a world class cement group, Holcim Ltd., the Company implemented a system to monitor contract preparation and enforcement. This will elevate the reliability of fi nancial reporting, better cash management of the Company, and risk minimization.

6. Routine confl ict of interest declaration. To ensure the practice of the good governance

concerning the conflict of interest avoidance, the Company initiated an online conflict of interest declaration. Delegated assignees for this activity

include all personnel under supervision of MD and CFO, and all managers in all other functions across the group. Delegated assignees were all open in their declaration. Report of this activity went to the management and the Audit Committee, in order to monitor and put preventive measures for the Company if necessary. From the report, it was concluded that no executive members or managers entered into business transactions with the group for their personal benefit.

In identifying activities in compliance with the Principles of Good Corporate Governance for Listed Companies, introduced by to SET, this information is put in the Annual Statements (Form 56-1), which are published on the company website (www.siamcitycement.com).

The Audit Committee, commented that the internal audit system within the company is sufficient and suitable for the business operations. Report of the Audit Committee is shown in page 41.



Industrial Outlook

Business Overview of the Cement Industry in 2007The year 2007 meant difficult times for the Thai cement industry as the country experienced an economic slowdown.

Postponements of many mega-projects, lowerinvestor / consumer confidence due to political uncertainties, and continuously rising energy prices affecting production costs had a substantial impact on the cement industry performance in Thailand.

The country’s domestic cement demand decreased by 4-5 percent in comparison to 2006, and at the same time, the cost of production increased.

ExportThe decline in domestic cement demand has affected the whole industry during 2007, so cement manufacturers focused more on their export to keep optimal efficiency in production. However, high freight costs were forcing cement exporters to focus their business on nearby countries such as Vietnam, Bangladesh and Cambodia. Thailand’s cement export volume in 2007 was 18.2 million tons, a 24 percent increase over the previous year.

Higher production costs, together with a stronger Thai Baht have influenced Siam City Cement Public Company Limited (SCCC) to temporarily close two kilns and therefore lower its production capacity, starting early 2008. Because of this, the 2008 year-end volume will decline by several million tons.



Business Forecast for the Cement Industry in 2008Looking ahead, it is expected that domestic cement demand will remain approximately the same as during 2007. The newly formed government will have to restore the investor / consumer confidence and mega projects are expected only to have some positive impact on cement or concrete supplies towards the end of 2008.

Airport Rail Link project under construction. Siam City Cement has supplied a substantial amount of Ready-mix Concrete to this mega-project.



The Executive Committee of Siam City Cement Public Company Limited established a business risk management unit to study and understand the possible risks related to the company for the upcoming 5 years. This business unit then reports to the Executive Committee on possible risk factors and recommends solutions on how to manage these risks. In this way the company is well aware of the possible risks and makes sure these risks are managed properly.

Two risks are identified that can have a substantial impact on the performance of the companyin the near future:

1. Risk from Increasing Oil and Coal Prices

Higher oil and coal prices have an impact on costs of energy, transportation and paper. Therefore, the company has invested in alternative fuels, made long term contracts with key coal suppliers, utilized NGV instead of gasoline for transportation cost, and extended its waste heat recovery project.

2. Risk from Currency Exchange Rate Fluctuation between the Thai Baht and the U.S. Dollar

A strong Thai Baht against a weak U.S. Dollar will result in lower export revenues. On the other hand, this has a positive impact on coal import. The company partially hedges the difference between the export and import currency-exposure.

Risk and Risk Management Southern Ring Road project is supplied by INSEE Ready-mix Concrete.



Siam City Cement has modified its corporate identity. Our brand “INSEE” is now combined with the red eagle-head on a white background, looking left.

You will see our brand and logo being used very consistently by all our business units throughout Thailand.

Corporate Identity



Report of the Board of Directors’ Responsibilities for Financial StatementsThe consolidated financial statements of the Company and its subsidiaries and the separate financial statements of the Company have been prepared in accordance with generally accepted accounting principles in Thailand, in compliance with Accountancy Act B.E. 2543. The Company has chosen with careful consideration its accounting policies, which are proper to business operations, and has always strictly adhered to these policies. All material information has been sufficiently disclosed in the notes to the financial statements.

The Board of Directors of the Company is held accountable for correctness and completeness of the aforementioned financial statements, including financial data as shown in the annual report. The Board has also adopted an effective internal control which makes reasonably assure that the financial data and report are accurate, complete and adequate to protect assets and prevent possible wrongdoing or other irregularities in the operations of the Company.

The Audit Committee, consisting of three independent directors performing its duties in compliance with the SET guidelines on Best Practice Guidelines for Audit Committee, assists the Board of Directors by overseeing internal and external audit matters on its behalf, and operates under a written charter adopted by the Committee and the Board of Directors. The report of the Audit Committee and the report of the certified external authorized auditors appear in this annual report.

Veraphan Teepsuwan

Chairman

Marcellinus Simon Hendrikus Maria Smit

Managing Director



Report of the Audit Committee

To the Shareholders of Siam City Cement Public Company Limited

We are pleased to present our report for the financial year ended 31 December 2007.

The Audit Committee is comprised solely of independent directors and operates under a written charter adopted by the Committee and the Board of Directors. In 2007, the Audit Committee held four ordinary meetings. The Committee discussed with the Company’s external auditors their plans for audits during the year and discussed the results of their examinations and evaluations of the Company’s internal controls, and the quality of financial reporting.

The Management reported to the Committee that the Company’s quarterly and annual consolidated financial statements were prepared in accordance with generally accepted accounting principles. The Committee has reviewed and discussed the consolidated financial statements and the separate financial statements of Siam City Cement Public Company Limited, including the disclosure of connected transactions and transactions of conflicts of interest, with management and the external auditor. Based on the reviews and discussions, the Committee reported to the Board of Directors that the audited consolidated financial statements for the years ended 31 December 2007 and 2006 have been prepared in compliance with generally accepted accounting principles, and reflect the financial performance of the Company and its subsidiaries.

The Committee reviewed the internal auditor’s plans to assess internal controls in selected areas of the Company’s operations for 2007. The Committee also reviewed the results of these assessments with the internal auditors and management. Where improvements are required to internal controls, the Committee was satisfied that management is taking appropriate remedial action.

Whilst reviewing the quarterly and annual financial statements for 2007, and the above mentioned assessments performed by the external and internal auditors, the Committee did not note non-compliance of the Company’s activities with the Securities and Exchange Act and with rules and regulations of the Stock Exchange of Thailand.

The Committee recommends to the Board of Directors and the Annual General Meeting, the retention of Ms. Saifon Inkaew, Ms. Ratana Jala and Ms. Kamontip Lertwitworatep of Ernst & Young Office Limited as the Company’s external auditors for 2008 and the proposed remuneration.

Prakob Visitkitjakarn

Chairman of the Audit Committee

January 30, 2008For and on behalf of the Audit CommitteeSiam City Cement Public Company Limited



Consolidated Financial Statements



Report of Certifi ed Public Accountant

To The Shareholders of Siam City Cement Public Company Limited

I have audited the accompanying consolidated balance sheet of Siam City Cement Public Company Limitedand its subsidiaries as at 31 December 2007, and the related consolidated statements of income, changes in shareholders’ equity and cash flows for the year then ended, and the separate financial statements of Siam City Cement Public Company Limited for the same year. These financial statements are the responsibility of the management of the Company and its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audit.The consolidated financial statements of Siam City Cement Public Company Limited and its subsidiaries, and the separate financial statements of Siam City Cement Public Company Limited for the year ended31 December 2006, as presented herein for comparative purpose, were audited by another auditor of ourfirm who expressed an unqualified opinion on those statements, under his report dated 8 February 2007.

I conducted my audit 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 statements presentation.I believe that my audit provides 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 Siam City Cement Public Company Limited and its subsidiaries and of Siam City Cement Public Company Limited as at 31 December 2007, the results of their operations and cash flows for the year then ended,in accordance with generally accepted accounting principles.

Without qualifying my opinion on the above financial statements, I draw attention to the matters as discussedin Note 4.1 to the financial statements whereby, effective 1 January 2007, the Company changed its accounting policy for recording investments in subsidiary and associated companies. The Company has thus restated the financial statements as at 31 December 2006 and for the year then end to reflect this accounting change. In my opinion, the adjustments made for the preparation of such statements are appropriate and have been properly applied.

Saifon Inkaew

Certifi ed Public Accoutat (Thailand) No.4434Ernst & Young Offi ce LimitedBangkok : 7 Febuary 2008



As at 31 December 2007 and 2006 Balance Sheets

(Unit : Baht)

Consolidated Financial Statements Separate Financial Statements

Note 2007 2006 2007 2006

(Restated) (Restated)

ASSETS

CURRENT ASSETS

Cash and cash equivalents 6 503,148,104 710,304,130 352,466,266 545,610,844

Trade accounts receivable

Subsidiaries and related companies 7, 8 454,815,719 322,782,982 881,740,237 691,440,736

Other companies - net 9 2,292,241,183 2,239,385,632 1,432,658,077 1,483,869,156

Inventories - net 10 1,578,588,098 1,672,880,938 1,385,470,191 1,563,958,077

Other debtors - subsidiary and related companies 7 2,317,370 7,620,461 211,251,571 160,728,029

Advance payments to suppliers - other companies 31,971,203 170,088,002 30,997,926 144,429,478

Other current assets 113,297,189 131,936,810 88,939,831 96,108,587

TOTAL CURRENT ASSETS 4,976,378,866 5,254,998,955 4,383,524,099 4,686,144,907

NON-CURRENT ASSETS

Investments in subsidiary companies - net 11 - - 700,149,097 700,148,497

Investments in associated company 12 927,515,316 830,283,476 483,426,543 483,426,543

Other investments - related company 13 368,119,260 368,119,260 - -

Long-term loans to subsidiaries - net 7, 14 - - 1,832,033,107 1,283,125,433

Property, plant and equipment - net 15 12,518,609,059 12,088,237,575 10,522,371,689 10,145,600,593

Assets not used in operations - net 16 824,975,079 1,128,654,987 800,144,466 1,103,678,608

Intangible assets - net 17 915,821,520 380,830,725 731,080,195 378,210,919

Other non-current assets

Deferred income tax 18 678,024,671 597,258,794 558,754,539 535,712,717

Others 293,658,610 186,043,575 154,691,428 146,316,630

TOTAL NON-CURRENT ASSETS 16,526,723,515 15,579,428,392 15,782,651,064 14,776,219,940

TOTAL ASSETS 21,503,102,381 20,834,427,347 20,166,175,163 19,462,364,847

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




(Unit : Baht)


Note 2007 2006 2007 2006


LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES

Short-term loans from financial institutions 19 1,008,388,487 443,544,467 1,000,000,000 400,000,000

Trade accounts payable

Subsidiaries and related companies 7, 20 270,898,309 185,359,181 329,336,577 237,567,750

Other companies 1,245,084,629 1,142,904,093 934,086,505 885,439,787

Current portion of long-term loans 21 54,000,000 50,000,000 - -

Current portion of long-term liabilities for concession 22 32,876,946 30,870,372 32,876,946 30,870,372

Other current liabilities

Accrued rebate 228,181,228 209,874,950 223,332,734 205,874,950

Accrued electricity 238,054,479 232,586,537 226,851,784 230,606,900

Corporate income tax payable 579,513,192 760,581,194 550,428,948 735,458,475

Other accrued expenses 799,648,268 618,352,488 733,594,823 549,897,900

Advances from customers 19,244,873 30,628,345 14,263,389 26,061,700

Others 35,389,933 61,008,347 24,667,514 54,254,062

TOTAL CURRENT LIABILITIES 4,511,280,344 3,765,709,974 4,069,439,220 3,356,031,896

NON-CURRENT LIABILITIES

Long-term loans - net of current portion 21 212,000,000 289,000,000 - -

Other liabilities

Long-term liabilities for concession - net of current portion 22 247,333,140 280,210,086 247,333,140 280,210,086

Provident fund 23 513,608,411 471,506,658 452,615,128 417,584,602

Reserve for employee retirement benefit plan 24 128,589,131 148,080,972 117,119,030 137,419,521

TOTAL NON-CURRENT LIABILITIES 1,101,530,682 1,188,797,716 817,067,298 835,214,209

TOTAL LIABILITIES 5,612,811,026 4,954,507,690 4,886,506,518 4,191,246,105



As at 31 December 2007 and 2006 Balance Sheets

(Unit : Baht)


Note 2007 2006 2007 2006


SHAREHOLDERS’ EQUITY

Share capital

Registered

287,500,000 ordinary shares of Baht 10 each

(2006 : 300,000,000 ordinary shares of Baht 10 each) 26 2,875,000,000 3,000,000,000 2,875,000,000 3,000,000,000

Issued and fully paid up

237,500,000 ordinary shares of Baht 10 each

(2006 : 250,000,000 ordinary shares of Baht 10 each) 26 2,375,000,000 2,500,000,000 2,375,000,000 2,500,000,000

Share premium 10,106,266,730 10,106,266,730 10,106,266,730 10,106,266,730

Translation adjustment 61,136 25,580 - -

Retained earnings

Appropriated - statutory reserve 25 300,000,000 300,000,000 300,000,000 300,000,000

- treasury stock reserve 26 1,710,643,745 4,696,067,693 1,710,643,745 4,696,067,693

Unappropriated 3,108,794,195 2,973,254,867 2,498,401,915 2,364,852,012

Equity attributable to the Company’s shareholders 17,600,765,806 20,575,614,870 16,990,312,390 19,967,186,435

Less : Treasury stock 26 (1,710,643,745) (4,696,067,693) (1,710,643,745) (4,696,067,693)

EQUITY ATTRIBUTABLE TO

THE COMPANY’S SHAREHOLDERS - NET 15,890,122,061 15,879,547,177 15,279,668,645 15,271,118,742

MINORITY INTERESTS - EQUITY ATTRIBUTABLE TO

MINORITY SHAREHOLDERS OF SUBSIDIARIES 169,294 372,480 - -

TOTAL SHAREHOLDERS’ EQUITY 15,890,291,355 15,879,919,657 15,279,668,645 15,271,118,742

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 21,503,102,381 20,834,427,347 20,166,175,163 19,462,364,847




Income Statements


(Unit : Baht)


Note 2007 2006 2007 2006


REVENUES

Net sales 7 22,800,424,169 23,647,362,689 20,045,278,327 20,975,928,019

Dividend income 12 - - 81,873,646 54,792,364

Other income 115,367,298 149,868,825 242,499,849 230,296,849

Share of income from investment in associated company

accounted for under equity method 12 179,105,486 164,683,904 - -

TOTAL REVENUES 23,094,896,953 23,961,915,418 20,369,651,822 21,261,017,232

EXPENSES

Cost of sales 7, 27 16,372,605,252 16,270,011,849 14,007,049,969 14,056,075,005

Selling and administrative expenses 27 2,030,808,630 2,056,262,051 1,696,351,645 1,789,605,701

Other expenses 16 - 29,703,109 - 17,703,109

TOTAL EXPENSES 18,403,413,882 18,355,977,009 15,703,401,614 15,863,383,815

INCOME BEFORE INTEREST EXPENSES

AND CORPORATE INCOME TAX 4,691,483,071 5,605,938,409 4,666,250,208 5,397,633,417

INTEREST EXPENSES (102,193,119) (82,272,805) (72,075,035) (44,756,820)

CORPORATE INCOME TAX 18 (1,359,024,836) (1,607,744,547) (1,365,685,044) (1,571,823,345)

INCOME AFTER CORPORATE INCOME TAX 3,230,265,116 3,915,921,057 3,228,490,129 3,781,053,252

NET LOSS (INCOME) ATTRIBUTABLE

TO MINORITY INTERESTS 214,438 (1,746,500) - -

NET INCOME FOR THE YEAR 3,230,479,554 3,914,174,557 3,228,490,129 3,781,053,252

BASIC EARNINGS PER SHARE 28

Net income 14.05 16.68 14.04 16.11

Weighted average number of ordinary share - net (share) 230,000,000 234,711,139 230,000,000 234,711,139

For the Years Ended 31 December 2007 and 2006



Statements of Changes in Shareholders’ Equity

Balance as at 31 December 2005

- as previously reported 2,500,000,000 10,106,266,730 (149,697) 300,000,000 2,985,423,948 3,897,809,628 (2,985,423,948) (1,406,196) 16,802,520,465

Cumulative effect of the change

in accounting policy for recording

investments in subsidiary and

associated companies 4 - - - - - 133,936,334 - - 133,936,334



deferred income tax in subsidiary

company 4 - - - - - 32,916,893 - - 32,916,893


- as restated 2,500,000,000 10,106,266,730 (149,697) 300,000,000 2,985,423,948 4,064,662,855 (2,985,423,948) (1,406,196) 16,969,373,692

Translation adjustment - - 175,277 - - - - - 175,277

Increase in treasury stock

during the year 26 - - - - - - (1,710,643,745) - (1,710,643,745)

Increase in treasury stock reserve 26 - - - - 1,710,643,745 (1,710,643,745) - - -

Net income for the year (restated) - - - - - 3,914,174,557 - - 3,914,174,557

Increase in minority interests - - - - - - - 1,778,676 1,778,676

Dividend paid 29 - - - - - (3,294,938,800) - - (3,294,938,800)


- as restated 2,500,000,000 10,106,266,730 25,580 300,000,000 4,696,067,693 2,973,254,867 (4,696,067,693) 372,480 15,879,919,657

Translation adjustment - - 35,556 - - - - - 35,556

Net income for the year - - - - - 3,230,479,554 - - 3,230,479,554

Decrease in minority interests - - - - - - - (203,186) (203,186)

Treasury stock cancellation 26 (125,000,000) - - - (2,985,423,948) 125,000,000 2,985,423,948 - -

Dividend paid 29 - - - - - (3,219,940,226) - - (3,219,940,226)

Balance as at 31 December 2007 2,375,000,000 10,106,266,730 61,136 300,000,000 1,710,643,745 3,108,794,195 (1,710,643,745) 169,294 15,890,291,355



(Unit : Baht)

Consolidated Financial Statements

Retained earnings

Issued and fully paid up share capital

Sharepremium

Translation adjustment

Statutory reserve Note

Treasury stock reserve Unappropriated

Treasury stock

Minority interests - equity attributable

to minority shareholders of

subsidiaries Total

Appropriated





- as previously reported 2,500,000,000 10,106,266,730 (149,697) 300,000,000 2,985,423,948 3,897,809,628 (2,985,423,948) 16,803,926,661



investments in subsidiary and

associated companies 4 - - 149,697 - - (308,428,323) - (308,278,626)


- as restated 2,500,000,000 10,106,266,730 - 300,000,000 2,985,423,948 3,589,381,305 (2,985,423,948) 16,495,648,035

Increase in treasury stock during the year 26 - - - - - - (1,710,643,745) (1,710,643,745)

Increase in treasury stock reserve 26 - - - - 1,710,643,745 (1,710,643,745) - -

Net income for the year (restated) - - - - - 3,781,053,252 - 3,781,053,252

Dividend paid 29 - - - - - (3,294,938,800) - (3,294,938,800)


- as restated 2,500,000,000 10,106,266,730 - 300,000,000 4,696,067,693 2,364,852,012 (4,696,067,693) 15,271,118,742

Net income for the year - - - - - 3,228,490,129 - 3,228,490,129

Treasury stock cancellation 26 (125,000,000) - - - (2,985,423,948) 125,000,000 2,985,423,948 -

Dividend paid 29 - - - - - (3,219,940,226) - (3,219,940,226)

Balance as at 31 December 2007 2,375,000,000 10,106,266,730 - 300,000,000 1,710,643,745 2,498,401,915 (1,710,643,745) 15,279,668,645

(Unit : Baht)

Separate Financial Statements

Retained earnings

Issued and fully paid up share capital

Sharepremium

Translation adjustment

Statutory reserve Note

Treasury stock reserve Unappropriated

Treasury stock Total

Appropriated




(Unit : Baht)


Note 2007 2006 2007 2006


Cash flows from operating activities

Net income for the year 3,230,479,554 3,914,174,557 3,228,490,129 3,781,053,252

Adjustments to reconcile net income to

net cash provided by (paid from) operating activities :

Share of income from investment in associated company

accounted for under equity method (179,105,486) (164,683,904) - -

Dividend received from associated company - - (81,873,646) (54,792,364)

Increase (decrease) in minority interests (215,038) 1,746,500 - -

Allowance for doubtful accounts and obsolete inventories 141,628,194 3,809,655 40,225,413 507,524

Depreciation and amortization 814,796,873 739,414,323 651,840,824 618,180,359

Allowance for loss on impairment of assets not used in operations - 28,532,707 - 17,703,109

Allowance for doubtful accounts of long-term loans to subsidiary - - 27,492,326 28,339,855

Loss on disposals of fixed assets 84,659,644 65,441,210 82,481,847 66,018,299

Allowance for provident fund and employee retirement benefit 60,217,408 101,027,852 51,105,534 91,295,127

Unrealised loss (gain) on exchange (9,651,790) 6,007,471 (9,699,197) 5,878,768

Increase in deferred income tax (80,765,877) (87,719,106) (23,041,821) (59,089,923)

Net income before changes in operating assets and liabilities 4,062,043,482 4,607,751,265 3,967,021,409 4,495,094,006

Decrease (increase) in operating assets :

Trade accounts receivable (294,160,634) (604,887,220) (148,513,720) (540,455,271)

Inventories 68,764,047 70,928,465 154,514,827 94,929,997

Other debtors - subsidiary and related companies 5,303,091 (7,620,461) (50,523,542) (39,175,914)

Other current assets 28,028,119 (18,437,546) 29,085,297 (73,073,570)

Increase (decrease) in operating liabilities :-

Trade accounts payable 187,750,241 14,402,586 140,446,155 41,102,209

Corporate income tax payable (181,068,002) 83,695,201 (185,029,527) 71,916,534

Accrued expenses and other current liabilities 161,028,171 189,687,678 149,033,194 194,127,965

Provident fund and reserve for employee retirement benefit plan (37,607,496) (7,849,449) (36,375,499) (6,819,126)

Net cash from operating activities 4,000,081,019 4,327,670,519 4,019,658,594 4,237,646,830

Cash flows from investing activities

Proceeds from sales of fixed assets 220,646,143 299,210,844 393,244,758 298,633,536

Purchase of fixed assets (1,601,734,333) (1,475,509,642) (1,441,528,954) (1,158,835,133)

Increase in long-term loan to subsidiary - - (576,400,000) (320,300,000)

Increase in intangible assets (44,011,772) (17,808,009) (13,377,510) (17,879,223)

Increase in other non-current assets (105,044,151) (47,514,750) (5,804,514) (27,709,760)

Dividend received 81,873,646 54,792,364 81,873,646 54,792,364

Net cash used in investing activities (1,448,270,467) (1,186,829,193) (1,561,992,574) (1,171,298,216)

Cash flows from financing activities Increase in short-term loans from financial institutions 564,844,020 393,445,467 600,000,000 400,000,000

Dividend paid (3,219,940,226) (3,294,938,800) (3,219,940,226) (3,294,938,800)

Repayment of long-term liabilities for concession (30,870,372) - (30,870,372) -

Increase in treasury stock - (1,710,643,745) - (1,710,643,745)

Repayment of long-term loans (73,000,000) (46,000,000) - -

Net cash used in financing activities (2,758,966,578) (4,658,137,078) (2,650,810,598) (4,605,582,545)

Net decrease in cash and cash equivalents (207,156,026) (1,517,295,752) (193,144,578) (1,539,233,931)

Cash and cash equivalents at beginning of year 710,304,130 2,227,599,882 545,610,844 2,084,844,775

Cash and cash equivalents at end of year 6 503,148,104 710,304,130 352,466,266 545,610,844

Supplemental cash flows information :

Cash paid during the year for :

Interest expenses 103,984,080 81,484,303 72,075,035 44,756,820

Corporate income tax 1,616,844,479 1,597,300,459 1,573,624,385 1,558,950,276

Non-cash related transactions :

Transferred property, plant and equipment to intangible assets 527,749,700 - 363,578,700 -


Statements of Cash Flows



For the Years Ended 31 December 2007 and 2006 Notes to Consolidated Financial Statements

1. GENERAL INFORMATION Siam City Cement Public Company Limited (“the Company”) was incorporated as a limited company under Thai laws and registered

the change of the status of the Company to a public limited company under the Public Limited Company Act on 5 November 1993. The Company operates in Thailand and its principal activity is manufacturing of cement with the registered address at 199, 7th - 12th Floor, Column Tower, Ratchadapisek Road, Klongtoey, Bangkok and its factory address is at 99 Moo 9 and 219 Moo 5, Mitraparp Road Km. 129 - 131, Tabkwang, Kaengkhoi, Saraburi.

2. BASIS OF PREPARATION 2.1 The fi nancial statements have been prepared in accordance with accounting standards enunciated under the Accounting

Profession Act B.E. 2547, except for the early adoption of Accounting Standard No. 56 “Accounting for Income Tax” which is in line with International Accounting Standard (IAS) No. 12 “Income Taxes” (revised 1996), and the adoption of International Accounting Standard (IAS) No. 19 “Employee Benefi ts” and International Accounting Standard (IAS) No. 39 “Financial Instruments: Recognition and Measurement”.

The presentation of the fi nancial statements has been made in compliance with the stipulations of the Notifi cation of the Department of Business Development dated 14 September 2001, issued under the Accounting Act B.E. 2543.

The fi nancial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of consolidation a) The consolidated fi nancial statements include the fi nancial statements of Siam City Cement Public Company Limited and

the following subsidiary companies:

Percentage

Country of of shareholding

Company’s name incorporation Registered capital by the Company Nature of business

2007 2006 2007 2006

Million Million Percent Percent

Baht Baht

Siam City Concrete Co., Ltd. Thailand 400 400 99.99 99.99 Ready-mix concrete

and aggregates

Eagle Cement Holdings Co., Ltd. Thailand 700 700 99.99 99.99 Holding

Conwood Co., Ltd. Thailand 300 300 99.99 99.99 Construction material

Khmer Cement Industry Co., Ltd. Cambodia USD USD 75.00 75.00 Cement trading

0.005 0.005

million million

b) The fi nancial statements of overseas subsidiary company are translated into Thai Baht at the closing average exchange rate as to assets and liabilities, and at monthly average exchange rate as to revenues and expenses. The resultant differences have been shown under the caption of “Translation adjustment” in shareholders’ equity.

c) Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated fi nancial statements.

d) Investments in the subsidiary companies as recorded in the Company’s books of account are eliminated against the equity of the subsidiary companies.

2.3 The separate fi nancial statements, which present investments in subsidiaries and associate presented under the cost method, have been prepared solely for the benefi t of the public.

3. ADOPTION OF NEW ACCOUNTING STANDARDS The Federation of Accounting Professions (FAP) has issued Notifi cations No. 9/2550, 38/2550 and 62/2550 regarding Accounting

Standards. The notifi cations mandate the use of the following new Accounting Standards.

3.1 Thai Accounting Standards which are effective for the current year TAS 44 (revised 2007) Consolidated Financial Statements and Separate Financial Statements TAS 45 (revised 2007) Investments in Associates TAS 46 (revised 2007) Interests in Joint Ventures

These accounting standards became effective for the fi nancial statements for fi scal years beginning on or after 1 January 2007. During the fi rst quarter of the current year, the Company changed its accounting policy for recording investments in subsidiaries and associate in the separate fi nancial statements in order to comply with the revised Thai Accounting Standards No. 44 and 45 as discussed in Note 4.1.



3.2 Thai Accounting Standards which are not effective for the current year TAS 25 (revised 2007) Cash Flow Statements TAS 29 (revised 2007) Leases TAS 31 (revised 2007) Inventories TAS 33 (revised 2007) Borrowing Costs TAS 35 (revised 2007) Presentation of Financial Statements TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors TAS 41 (revised 2007) Interim Financial Reporting TAS 43 (revised 2007) Business Combinations TAS 49 (revised 2007) Construction Contracts TAS 51 Intangible Assets

These accounting standards will become effective for the fi nancial statements for fi scal years beginning on or after 1 January 2008. The management has assessed the effect of these revised accounting standards and believes that they will not have any signifi cant impact on the fi nancial statements for the year in which they are initially applied.

4. CHANGE IN ACCOUNTING POLICY 4.1 Investments in subsidiary and associated companies On 1 January 2007, the Company changed its accounting policy for recording investment in subsidiary and associated

companies in the separate fi nancial statements from the equity method to the cost method, in compliance with Accounting Standard No. 44 (revised 2007) regarding “Consolidated Financial Statements and Separate Financial Statements”, under which investments in subsidiaries, jointly controlled entities and associates are to be presented in the separate fi nancial statements under the cost method.

In this regard, the Company has restated the previous year’s fi nancial statements for comparative purposes. In consequence to the change in this accounting policy, the Company reversed the deferred tax liability in both separate fi nancial statements and consolidated fi nancial statements.

The effects of the change in accounting policy are as follows :

(Unit : Baht)

Consolidated fi nancial Separate fi nancial

statements statements

2006 2005 2006 2005

Balance sheet as at 31 December

Increase (decrease) in retained earnings 163,985,953 133,936,334 (382,870,911) (308,428,323)

Increase (decrease) in currency translation - - (25,580) 149,697

Increase (decrease) in shareholders’ equity / total assets 163,985,953 133,936,334 (382,896,491) (308,278,626)

(Unit : Baht)



Income statements for the year ended 31 December 2006

Increase in dividend income - 54,792,364

Decrease in share of income from investments accounted for under equity method - (159,284,571)

Decrease in corporate income tax 30,049,619 30,049,619

Increase (decrease) in net income 30,049,619 (74,442,588)

Increase (decrease) in basic earnings per share 0.13 (0.32)

4.2 Deferred income tax in subsidiary company During the year 2007, a subsidiary company changed its accounting policy for recording deferred income tax. In this regard,

the Company has restated the previous period’s consolidated fi nancial statements for comparative purpose. The change has the effect of increasing net income in the consolidated income statement for the year ended 31 December 2006 by Baht 28.6 million (Baht 0.12 per share). The cumulative effect of the change in accounting policy has been presented under the heading of “Cumulative effect of the change in accounting policy for recording deferred income tax in subsidiary company” in the consolidated statements of changes in shareholders’ equity.

Notes to Consolidated Financial Statements For the Years Ended 31 December 2007 and 2006



5. SIGNIFICANT ACCOUNTING POLICIES 5.1 Revenue recognition a) Sales of goods Sales of goods are recognized when the signifi cant risks and rewards of ownership of the goods have passed to the

buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting goods returns, discounts and allowances.

b) Interest income Interest income is recognised on an accrual basis based on the effective interest rate. c) Dividends Dividends are recognised when the right to receive the dividends is established.

5.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand, cash at bank, and all highly liquid investments with an original maturity

of three months or less and not subject to withdrawal restrictions.

5.3 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the

estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debtor aging.

5.4 Inventories Inventories are valued at lower of cost (on an average method and fi rst-in fi rst-out basis) and net realisable value.

Cost of fi nished goods and work in process comprises all production costs and attributable factory overhead.

Raw materials and store supplies are charged to production costs whenever consumed.

Allowance for diminution in value of inventories and obsolete inventories is made for obsolete or deteriorated inventories.

5.5 Investments in shares Investments in associated company are accounted for in the consolidated fi nancial statements using the equity method.

Investments in subsidiary and associated companies are accounted for in the separate fi nancial statements using the cost method.

Other investments in related company of a subsidiary company are accounted for using the cost method.

Allowance for impairment loss will be made when the net realisable value is lower than the cost of investments.

5.6 Property, plant and equipment and depreciation Land is stated at cost less allowance for impairment (if any). Mineral reserves are stated at cost less accumulated

depreciation, which are depreciated based on the physical unit-of-production method over their estimated commercial lives.

Building and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of asset (if any). Depreciation of plant and equipment is calculated by reference to their costs on a straight-line basis over the estimated useful lives as follows :-

Building and structures 5 - 30 years

Machinery and equipment 5 - 30 years

Furniture, fi xtures and offi ce equipment 3 - 5 years

Motor vehicles 5 years

No depreciation is provided on land and construction in progress.

Depreciation is included in determining income.



5.7 Intangible assets and amortisation Intangible assets are stated at cost less accumulated amortisation.

Amortisation of intangible assets, except mining concession of aggregate business, is calculated by reference to cost on a straight - line basis over the expected future period of economic benefi t of each type of intangible asset, as follows :-

Mining concession 20 - 25 years

Computer software 3 years

Mining concession of aggregate business is amortised based on the physical unit-of-production method over their estimated commercial lives.

The amortisation is included in determining income.

5.8 Treasury stock Treasury stock is stated at cost and presented as a reduction from shareholders’ equity. Gains on disposal of treasury stock are

determined by reference to its carrying amount and are taken to premium on treasury stock, losses on disposal of treasury stock are determined by reference to its carrying amount and are taken to premium on treasury stock and retained earnings, consecutively.

5.9 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by the Company, whether directly or

indirectly, or which are under common control with the Company.

They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them signifi cant infl uence over the Company, and key management personnel, directors and offi cers with authority in the planning and direction of the Company’s operations.

5.10 Operating lease Leases not transferring a signifi cant portion of the risks and rewards of ownership to the lessee are classifi ed as operating

leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statements over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

5.11 Foreign currencies Foreign currency transactions are translated into Baht at the rates ruling at the transactions dates. Assets and liabilities denominated

in foreign currencies outstanding at the balance sheet date are translated into Baht at the rates ruling on the balance sheet date.

Gains and losses on exchange are included in determining income.

5.12 Impairment of assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such

indication exists, the Company makes an estimate of the asset’s recoverable amount. Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in the income statement. An asset’s recoverable amount is the higher of fair value less costs to sell or value in use.

5.13 Employee benefi ts The Company and its employees have jointly established a provident fund. The fund is monthly contributed to by employees

and by the Company. The Company’s contributions are recognised as expenses when incurred.

The Company has provided a retirement benefi t plan which includes a resignation plan and a long service award for employees. The Company’s contributions are recognised as expenses when incurred.




The provident fund liability and the reserve for retirement benefi t plan are measured at the present value of estimated future cash fl ows using a discount rate that is similar to the interest rate on government bonds. A professionally qualifi ed independent actuary values the fund’s liability and certain obligations on regular basis.

5.14 Provisions Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable that an

outfl ow of resources embodying economic benefi ts will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

5.15 Corporate Income Tax a) Current tax The Company and subsidiary companies in Thailand calculate corporate income tax in accordance with the basis

regulated in the Revenue Code.

Overseas subsidiary company calculates corporate income tax in accordance with tax rate regulated in tax law of that country.

b) Deferred Tax Deferred income tax is calculated based on temporary differences at the balance sheet date between the tax bases of

assets and liabilities and their carrying amounts, by using the enacted tax rate at the balance sheet date.

The Company recognises deferred tax liabilities for taxable temporary differences and recognises deferred tax assets for deductible temporary differences and tax losses carried forward. The Company recognises deferred tax assets to the extent that it is probable that future taxable profi t will be available against which such deductible temporary differences and tax losses carried forward can be utilized.

At each balance sheet date, the Company reviews and reduces the carrying amount of deferred tax assets to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred tax asset to be utilised.

5.16 Use of accounting estimates Preparation of fi nancial statements in conformity with generally accepted accounting principles requires management to

make estimates and assumptions in certain circumstances, affecting amounts reported in these fi nancial statements and related notes. Actual results could differ from these estimates.

5.17 Financial instruments Financial instruments presented in the balance sheets consist of cash and cash at bank, accounts receivable, accounts

payable and loans. The accounting policy is separately disclosed in the related notes.

Forward exchange contracts Forward exchange contracts are the contracts under which the counter-parties to the contract are committed to deliver/take

delivery of the pre-determined amounts of foreign currencies on the pre-determined dates.

The Company records obligations under forward exchange contracts entered into for hedging foreign exchange risk at fair values. Gains or losses arising from changes in fair value of the contracts are recognised in the income statement.

The Company has no policy to speculate in or engage in the trading of any fi nancial derivative instruments.

6. CASH AND CASH EQUIVALENTS As at 31 December 2007 and 2006, cash and cash equivalents consist of the following :

(Unit : Baht)



2007 2006 2007 2006

Cash in hand and at banks 502,903,069 710,303,099 352,465,202 545,609,813

Short-term investments in fi xed deposits 245,035 1,031 1,064 1,031

Cash and cash equivalents 503,148,104 710,304,130 352,466,266 545,610,844



7. RELATED PARTY TRANSACTIONS During the years, the Company and its subsidiaries had business transactions with their related parties, which have been concluded

on commercial terms and bases agreed upon in the ordinary course of businesses between the Company and those companies. Below is a summary of signifi cant transactions.

(Unit : Thousand Baht)


statements statements Pricing policy

2007 2006 2007 2006

Transactions with subsidiary companies

(eliminated from the consolidated fi nancial statements)

Sales of goods - - 1,473,618 1,418,597 Market price

Sales of assets - - 172,957 - Cost plus margin

Purchases of goods - - 191,698 - Market price

Other income (expense) - - 28,280 2,373 Cost plus margin

Interest income - - 113,857 83,238 MLR with reference to

the rate quoted by

fi nancial institutions

Transactions with associated company

Purchases of goods 1,292,448 940,944 1,292,448 940,944 Market price

Transactions with related companies

Sales of goods 3,667,911 3,643,957 3,667,911 3,643,957 Market price

Purchases of goods - 336,690 - 336,690 Market price

Other income (expense) 14,832 73,435 14,832 73,435 Cost plus margin

Service fee expenses 144,817 148,418 144,817 148,418 Negotiated agreement

Selling and administrative expenses 87,596 76,675 85,406 72,584 Cost plus margin

The outstanding balance of the above transactions as at the end of year have been separately shown in the balance sheets.

Directors’ remuneration In 2007 the Company and its subsidiaries paid to their directors the remuneration totaling Baht 15.0 million (2006 : Baht 15.0 million)

and for the separate fi nancial statements totaling Baht 15.0 million (2006: Baht 15.0 million).

8. TRADE ACCOUNTS RECEIVABLES - SUBSIDIARIES AND RELATED COMPANIES As at 31 December 2007 and 2006, the outstanding balance of trade accounts receivable - subsidiaries and related companies is

as follows :

(Unit : Baht)



2007 2006 2007 2006

Siam City Concrete Co., Ltd. - - 305,779,855 254,156,491

Other subsidiaries and related companies 454,815,719 322,782,982 575,960,382 437,284,245

Total 454,815,719 322,782,982 881,740,237 691,440,736

Most of the above trade accounts receivable - subsidiaries and related companies are current.

Management believes that these trade accounts receivable - subsidiaries and related companies are collectible in full. Thus noallowance for doubtful accounts has been provided.




9. TRADE ACCOUNTS RECEIVABLE - OTHER COMPANIESThe outstanding balance of trade accounts receivable - other companies as at 31 December 2007 and 2006 are aged, based on due date, as follows :

(Unit : Baht)



2007 2006 2007 2006

Current to 30 days 2,068,843,261 2,115,065,970 1,354,280,686 1,441,667,488

Over 30 days to 60 days 57,344,882 64,637,019 27,019,055 28,088,069

Over 60 days to 90 days 53,776,305 2,378,267 28,073,811 2,120,632

Over 90 days 435,939,239 264,867,479 212,289,038 184,745,128

Total 2,615,903,687 2,446,948,735 1,621,662,590 1,656,621,317

Less : Allowance for doubtful accounts (323,662,504) (207,563,103) (189,004,513) (172,752,161)

Trade accounts receivable - other companies, net 2,292,241,183 2,239,385,632 1,432,658,077 1,483,869,156

The Company and its subsidiaries provided allowance for doubtful accounts of Baht 324 million and Baht 208 million in the consolidated fi nancial statements, and Baht 189 million and Baht 173 million in the separate fi nancial statements as at 31 December 2007 and 2006, respectively. Management believes that such allowances are adequate to absorb possible losses on doubtful accounts.

10. INVENTORIES

(Unit : Baht)



2007 2006 2007 2006

Finished goods 425,149,449 517,461,856 363,276,234 472,155,308

Work in process 99,129,495 53,607,832 38,798,510 33,975,227

Raw materials 120,557,995 75,309,806 89,219,973 57,631,453

Store supplies 977,705,147 1,045,610,020 934,640,216 1,017,371,153

Goods in transit 18,507,224 17,823,843 18,507,224 17,823,843

Total 1,641,049,310 1,709,813,357 1,444,442,157 1,598,956,984

Less : Allowance for obsolete inventories (62,461,212) (36,932,419) (58,971,966) (34,998,907)

Inventories - net 1,578,588,098 1,672,880,938 1,385,470,191 1,563,958,077

11. INVESTMENTS IN SUBSIDIARY COMPANIES

Separate fi nancial statements

Dividend received

Percentage of Investment value under for the year ended

Type of shareholding cost method 31 December

Company’s name Type of business relation 2007 2006 2007 2006 2007 2006

% % (Baht) (Baht) (Baht) (Baht)

(Restated)

Siam City Concrete Co., Ltd. Ready-mix concrete

and aggregates Direct 99.99 99.99 399,999,400 399,998,800 - -

Eagle Cement Holdings Co., Ltd. Holding Direct 99.99 99.99 699,999,300 699,999,300 - -

Conwood Co., Ltd. Construction Material Direct 99.99 99.99 300,000,000 300,000,000 - -

Khmer Cement Industry Co., Ltd. Cement Trading Direct 75.00 75.00 149,697 149,697 - -

Total investments in subsidiary companies 1,400,148,397 1,400,147,797 - -

Less : Allowance for diminution in value of investments (699,999,300) (699,999,300)

Investments in subsidiary companies - net 700,149,097 700,148,497

According to the joint venture agreement, Khmer Cement Industry Company Limited (herein after called “KCI”) was incorporated under the laws of Cambodia with a registered capital of USD 1.5 million consisting of 1.5 million shares with a par value of USD1 per share. The Company holds a 75 percent interest and so will contribute USD 1.125 million. However, at the time of its incorporation and until 31 December 2007, the registered capital was equivalent to USD 5,300. The capital will be increased fromtime to time when the business of the company requires. KCI commenced its operation on 1 April 2005.



12. INVESTMENTS IN ASSOCIATED COMPANY 12.1 Detail of associated company:



Percentage of Carrying amount

Country of Type of shareholding based on equity method Cost

Company’s name Type of business incorporation relation 2007 2006 2007 2006 2007 2006

% % (Baht) (Baht) (Baht) (Baht)

(Restated)

Lanna Resources

Public Co., Ltd. Coal Mining Thailand Direct 44.99 44.99 927,515,316 830,283,476 483,426,543 483,426,543

(Unit : Baht)

Consolidated fi nancial statements Separate fi nancial statements

Share of income from investments in Dividend received

Company’s name associate during the year during the year

2007 2006 2007 2006

Lanna Resources Public Co., Ltd. 179,105,486 164,683,904 81,873,646 54,792,364

12.2 As at 31 December 2007, the fair value of investment in the above associated company was Baht 2,850 million (2006 : Baht 1,779 million) which was based on the closing price as quoted on the Stock Exchange of Thailand.

12.3 Summarised fi nancial information of associated company:

(Unit: Million Baht)

Total revenues Net income

Paid-up capital as Total assets as at Total liabilities as for the year ended for the year ended

Company’s name at 31 December 31 December at 31 December 31 December 31 December

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

Lanna Resources Public Co., Ltd. 350 350 3,355 3,459 1,089 1,371 6,045 5,495 379 388

13. OTHER INVESTMENT - RELATED COMPANY As at 31 December 2007 and 2006, investment in ordinary shares of a related company, which is accounted for under the cost

method, is as follows :

Consolidated fi nancial statements

Type of Country of Type of Paid up Percentage of

Company’s name business incorporation relation share capital shareholding Cost value Dividend received

2007 2006 2007 2006 2007 2006 2007 2006

Million Taka Million Taka % % Baht Baht Baht Baht

Holcim (Bangladesh)

Co., Ltd. Cement Bangladesh Indirect 120 120 10.42 10.42 368,119,260 368,119,260 - -

14. LONG-TERM LOANS TO SUBSIDIARIES During the year, movements of long-term loans to subsidiaries were as follows :

(Unit : Baht)


Balance as at Balance as at

31 December During the year 31 December

2006 Increase Decrease 2007

Eagle Cement Holdings Co., Ltd. 369,119,260 - - 369,119,260

- The principal of the loan is repayable as a lump - sum

on 28 June 2008. The loan bears interest at the

Minimum Lending Rate (MLR), payable semi-annually

commencing in June 2003.

Siam City Concrete Co., Ltd. 1,045,300,000 576,400,000 - 1,621,700,000

- The principal of loan is repayable semi-annually

installments of varying amounts. The loan bears interest

at Minimum Lending Rate (MLR) minus 1% per annum

payable quarterly commencing in March 2005.

Total 1,414,419,260 576,400,000 - 1,990,819,260

Less : Allowance for doubtful debt (131,293,827) (27,492,326) - (158,786,153)

Net 1,283,125,433 548,907,674 - 1,832,033,107




15. PROPERTY, PLANT AND EQUIPMENT

(Unit : Baht)


Furniture, fi xtures

Land and mineral Building and Machinery and offi ce Construction

reserve structures and equipment equipment Motor vehicles in process Total

Cost

31 December 2006 1,567,467,197 6,563,892,168 22,777,644,857 983,457,557 1,208,625,159 1,774,530,061 34,875,616,999

Purchases and transfer in 78,158,369 166,348,113 374,479,792 310,936,168 119,997,604 1,763,593,586 2,813,513,632

Disposals and transfer out (7,500,000) (52,042,084) (109,909,316) (47,873,628) (7,107,352) (1,563,130,495) (1,787,562,875)

31 December 2007 1,638,125,566 6,678,198,197 23,042,215,333 1,246,520,097 1,321,515,411 1,974,993,152 35,901,567,756

Accumulated depreciation

31 December 2006 227,547 3,557,580,018 17,187,642,481 841,872,897 1,174,330,254 - 22,761,653,197

Depreciation for the year 10,540,685 177,586,013 465,108,771 81,944,656 12,106,907 - 747,287,032

Disposals and transfer in/out - (12,025,306) (95,332,386) (40,150,672) (4,199,395) - (151,707,759)

31 December 2007 10,768,232 3,723,140,725 17,557,418,866 883,666,881 1,182,237,766 - 23,357,232,470

Allowance for impairment

31 December 2006 - 25,481,053 245,174 - - - 25,726,227

31 December 2007 - 25,481,053 245,174 - - - 25,726,227

Net book value

31 December 2006 1,567,239,650 2,980,831,097 5,589,757,202 141,584,660 34,294,905 1,774,530,061 12,088,237,575

31 December 2007 1,627,357,334 2,929,576,419 5,484,551,293 362,853,216 139,277,645 1,974,993,152 12,518,609,059

Depreciation for the year

2006 (Baht 643 million included in manufacturing cost, and the remaining balance included in selling and administrative expenses) 677,748,561


(Unit : Baht)



Land and mineral Building and Machinery and offi ce Construction

reserve structures and equipment equipment Motor vehicles in process Total

Cost

31 December 2006 1,067,321,656 5,987,957,794 21,353,936,671 876,251,906 1,194,772,444 1,687,282,525 32,167,522,996

Purchases and transfer in 57,068,354 83,392,137 284,736,127 302,765,659 79,533,062 1,535,912,354 2,343,407,693

Disposals and transfer out (7,500,000) (24,557,324) (99,007,928) (38,251,172) (4,755,230) (1,321,914,264) (1,495,985,918)

31 December 2007 1,116,890,010 6,046,792,607 21,539,664,870 1,140,766,393 1,269,550,276 1,901,280,615 33,014,944,771


31 December 2006 - 3,431,532,169 16,661,826,920 765,627,255 1,162,936,059 - 22,021,922,403

Depreciation for the year 252,422 154,363,620 364,685,270 70,542,307 7,183,768 - 597,027,387

Disposals and transfer in/out - (6,978,190) (77,621,983) (37,645,699) (4,130,836) - (126,376,708)

31 December 2007 252,422 3,578,917,599 16,948,890,207 798,523,863 1,165,988,991 - 22,492,573,082

Net book value

31 December 2006 1,067,321,656 2,556,425,625 4,692,109,751 110,624,651 31,836,385 1,687,282,525 10,145,600,593

31 December 2007 1,116,637,588 2,467,875,008 4,590,774,663 342,242,530 103,561,285 1,901,280,615 10,522,371,689




A portion of subsidiary companies’ land, construction thereon and machinery with a total net book value as at 31 December 2007of Baht 272 million is mortgaged as collateral for long-term loans from fi nancial institutions as mentioned in Note 21.

As at 31 December 2007 and 2006, certain plant and equipment items have been fully depreciated but are still in use. The originalcost of those assets amounted to Baht 7,923 million and Baht 7,855 million (Separate fi nancial statements : Baht 7,519 million and Baht 7,486 million), respectively.

On 19 April 2004, there was an explosion and fi re at the Company’s factory at Saraburi. The assessment on damaged fi xed assets and facilities has been completed and the Company has received full compensation from the insurance company. However, a litigation claim for compensation of damage sustained by third party, caused by the accident, is pending.



16. ASSETS NOT USED IN OPERATIONS

(Unit : Baht)



Building and Machinery and offi ce

Land structures and equipment equipment Motor vehicles Total

Cost

31 December 2006 788,571,754 1,024,862,331 56,105,091 33,243,581 507,800 1,903,290,557

Transfer in - - 3,236,560 - - 3,236,560

Disposals and transfer out (141,192,302) (223,031,183) (15,764,565) (17,154,888) - (397,142,938)

31 December 2007 647,379,452 801,831,148 43,577,086 16,088,693 507,800 1,509,384,179


31 December 2006 - 424,307,243 45,680,697 33,243,437 507,800 503,739,177

Depreciation for the year - 29,762,093 977,048 23 - 30,739,164

Disposals and transfer in/out - (91,981,503) (11,829,262) (17,154,869) - (120,965,634)

31 December 2007 - 362,087,833 34,828,483 16,088,591 507,800 413,512,707


31 December 2006 160,448,611 110,447,782 - - - 270,896,393

31 December 2007 160,448,611 110,447,782 - - - 270,896,393

Net book value

31 December 2006 628,123,143 490,107,306 10,424,394 144 - 1,128,654,987

31 December 2007 486,930,841 329,295,533 8,748,603 102 - 824,975,079


2006 (included in selling and administrative expenses) 29,877,162


(Unit : Baht)



Building and Machinery and offi ce

Land structures and equipment equipment Motor vehicles Total

Cost

31 December 2006 751,753,559 1,021,792,382 41,373,512 33,204,354 507,800 1,848,631,607

Disposals and transfer out (141,192,303) (223,031,182) (1,196,108) (17,154,888) - (382,574,481)

31 December 2007 610,561,256 798,761,200 40,177,404 16,049,466 507,800 1,466,057,126


31 December 2006 - 421,245,516 31,098,956 33,204,334 507,800 486,056,606

Depreciation for the year - 29,754,174 972,328 - - 30,726,502

Disposals and transfer out - (91,981,501) (630,470) (17,154,870) - (109,766,841)

31 December 2007 - 359,018,189 31,440,814 16,049,464 507,800 407,016,267


31 December 2006 148,448,611 110,447,782 - - - 258,896,393

31 December 2007 148,448,611 110,447,782 - - - 258,896,393

Net book value

31 December 2006 603,304,948 490,099,084 10,274,556 20 - 1,103,678,608

31 December 2007 462,112,645 329,295,229 8,736,590 2 - 800,144,466




During 2006, the Company and its subsidiary had set up an allowance for impairment of those non operating asset of Baht 30 million (Separate fi nancial statements : Baht 18 million). Such amount has been shown as a part of “Other expenses” in the income statements for the year. Management believes that such assets are salable in the future at prices not less than their carrying value.

As at 31 December 2007 and 2006, certain non operating plant and equipment items have been fully depreciated but are still in use. The original cost of those assets amounted to Baht 50 million and Baht 77 million (Separate fi nancial statements : Baht 43 million and Baht 61 million), respectively.




17. INTANGIBLE ASSETS

(Unit : Baht)


Mining Computer Other

concession software intangible assets Total

Cost

31 December 2006 423,128,276 33,494,463 154,534,857 611,157,596

Additions and transfer in 457,669,502 4,019,876 110,072,094 571,761,472

31 December 2007 880,797,778 37,514,339 264,606,951 1,182,919,068

Accumulated amortisation

31 December 2006 86,994,594 15,709,954 127,622,323 230,326,871

Amortisation during the year 21,543,202 2,570,260 12,657,215 36,770,677

31 December 2007 108,537,796 18,280,214 140,279,538 267,097,548

Net book value

31 December 2006 336,133,682 17,784,509 26,912,534 380,830,725

31 December 2007 772,259,982 19,234,125 124,327,413 915,821,520

Amortisation for the year

2006 16,967,091 6,103,659 8,717,850 31,788,600

2007 21,543,202 2,570,260 12,657,215 36,770,677

(Unit : Baht)


Mining Computer Other

concession software intangible assets Total

Cost

31 December 2006 423,128,276 28,923,677 138,546,265 590,598,218

Additions and transfer in 293,498,502 2,841,692 80,616,016 376,956,210

31 December 2007 716,626,778 31,765,369 219,162,281 967,554,428

Accumulated amortisation

31 December 2006 86,994,594 13,758,974 111,633,731 212,387,299

Amortisation during the year 20,255,278 1,098,263 2,733,393 24,086,934

31 December 2007 107,249,872 14,857,237 114,367,124 236,474,233

Net book value

31 December 2006 336,133,682 15,164,703 26,912,534 378,210,919

31 December 2007 609,376,906 16,908,132 104,795,157 731,080,195

Amortisation for the year

2006 16,967,091 4,586,325 6,381,618 27,935,034

2007 20,255,278 1,098,263 2,733,393 24,086,934

Amortisation for the years ended 31 December 2007 and 2006 amounted to Baht 29 million and Baht 24 million (Separate fi nancial statements : Baht 17 million and Baht 23 million), respectively was included in manufacturing costs and the remaining Baht 8 million and Baht 8 million (Separate fi nancial statements : Baht 7 million and Baht 5 million), respectively was included in selling and administrative expenses.

18. CORPORATE INCOME TAX/DEFERRED INCOME TAX Corporate income tax for the years 2007 and 2006 was summarised below :

(Unit : Baht)



2007 2006 2007 2006


Current income tax 1,439,790,713 1,695,463,653 1,388,726,866 1,630,913,268

Increase in deferred tax assets (80,765,877) (87,719,106) (23,041,822) (59,089,923)

Corporate income tax recognised in income statements 1,359,024,836 1,607,744,547 1,365,685,044 1,571,823,345



Deferred income tax in the balance sheets as at 31 December 2007 and 2006 consisted of the following :

(Unit : Baht)



2007 2006 2007 2006


Deferred income tax calculated on temporary differences :

Balance - beginning of year 597,258,794 509,539,688 535,712,717 476,622,794

Add : Current year temporary difference 82,325,027 94,221,684 24,600,972 65,592,501

Less : Utilised during the year (1,559,150) (6,502,578) (1,559,150) (6,502,578)

Balance - end of year 678,024,671 597,258,794 558,754,539 535,712,717

19. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS

(Unit : Baht)



2007 2006 2007 2006

Short-term loans from banks 1,008,388,487 443,544,467 1,000,000,000 400,000,000

As at 31 December 2007, the Company and its subsidiary had obtained short-term loans of Baht 1,008 million in the consolidated fi nancial statements and Baht 1,000 million in the separate fi nancial statements from a local bank carrying interest at the rate of 4.0 to 5.3 percent per annum. These loans are due for repayment within 2008.

20. TRADE ACCOUNTS PAYABLE- SUBSIDIARIES AND RELATED COMPANIES As at 31 December 2007 and 2006, the balances of trade accounts payable - subsidiaries and related companies are as follows :

(Unit : Baht)



2007 2006 2007 2006

Lanna Resources Public Co., Ltd. 206,324,817 91,507,897 206,324,817 91,507,897

Holcim Group Support Ltd. 52,324,071 84,568,041 52,324,071 84,568,041

Siam City Concrete Co., Ltd. - - 53,163,026 423,169

Holcim Services (Asia) Ltd. 7,788,578 9,283,243 7,405,042 9,283,243

Khmer Cement Industry Co., Ltd. - - 5,658,778 51,785,400

Holcim Trading PTE Ltd. 4,460,843 - 4,460,843 -

Total 270,898,309 185,359,181 329,336,577 237,567,750

21. LONG-TERM LOANS

(Unit : Baht)



2007 2006 2007 2006

Subsidiary Company

Loan from a local bank, repayable in 15 semi-annual

installments of varying amounts, commencing in October 2005,

and carrying interest at MLR. 266,000,000 339,000,000 - -

Less : Portion due within one year (54,000,000) (50,000,000) - -

Net 212,000,000 289,000,000 - -

Long-term loans from financial institutions of certain subsidiary is collateralized by a portion of the subsidiary’ land, construction thereon and machinery as mentioned in Note 15. The loan agreements have certain restrictive covenants pertaining to performance, dividend payments, maintenance of certain fi nancial ratios in the fi nancial statements and the percentage of shares held by the major shareholder.




22. LONG-TERM LIABILITIES FOR CONCESSION

(Unit : Baht)



2007 2006 2007 2006

Long-term liabilities for concession 280,210,086 311,080,458 280,210,086 311,080,458

Less : Portion due within one year (32,876,946) (30,870,372) (32,876,946) (30,870,372)

Net 247,333,140 280,210,086 247,333,140 280,210,086

The Company entered into various agreements to pay for in 2005 renewed mining concession which are payable in 8 equal, annual installments commencing in 2007 and carrying interest at the rate of 6.5 percent per annum, to Department of Primary Industries and Mines, the Ministry of Industry.

23. PROVIDENT FUND The Company, its subsidiaries and their permanent employees have jointly established provident funds and registered a provident

fund scheme under the Provident Fund Act B.E. 2530, whereby the Company and its subsidiaries contribute to the funds as follows :

Fund 1 A contributory, unfunded provident fund for the employees of the Company and a subsidiary company. Employees who have

completed at least 5 years of service are entitled to full benefi ts, while employees leaving before completing 5 years of service do not receive the contributions made by the Company and the subsidiary company. Under the regulations of the fund, members are required to pay, and the Company and such subsidiary company accrue, monthly contributions to the fund at 5% of the members’ basic salaries.

Fund 2 On 1 January 1989, the Company established another contributory, unfunded provident fund for employees who have completed

at least 5 years of service with the Company. The Company accrues amounts matching the employees’ contribution, but the percentage of contribution by each party varies according to the length of service with the Company. The Company had closed this fund in 2007.

Fund 3 The Company, its subsidiaries and their permanent employees have jointly registered a provident fund scheme under Provident

Fund Act B.E. 2530. Such fund is monthly contributed to by both the employees and the Company and its subsidiaries at rates of 3 - 5 percent of the employees’ basic salaries. The fund is managed by Ayudhya Fund Management Company Limited. During the year, the Company and its subsidiaries contributed Baht 59 million (2006 : Baht 39 million) and the Company only contributed Baht 55 million (2006 : Baht 38 million) to the fund.

24. RESERVE FOR EMPLOYEE RETIREMENT BENEFIT PLAN The Company and a subsidiary company have provided a retirement benefi t plan for their employees who have completed

one year or three years of continuous service with the Company and or such subsidiary company. Under the plan, employees are entitled to receive, upon retirement, early retirement benefi ts which were accrued according to the best estimation of the management and measured at the present value of estimated future cash fl ows using a discount rate that is similar to the interest rate on government bonds. A professionally qualifi ed independent actuary values the fund’s liabilities and certain obligations on regular basis. As at 31 December 2007, the amount provided in the accounts of the Company and such subsidiary company amounted to Baht 117 million and Baht 11 million (2006 : Baht 137 million and Baht 11 million), respectively.

25. STATUTORY RESERVE Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a statutory reserve at

least 5 percent of its net income after deducting accumulated defi cit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. The Company’s statutory reserve has reached 10 percent of the registered share capital.



26. TREASURY STOCK



2007 2006 2007 2006

Number of treasury shares (shares) 7,500,000 20,000,000 7,500,000 20,000,000

Average price per share (Baht) 228.09 234.80 228.09 234.80

By the resolution of the meeting of the Company’s Board of Directors held on 11 December 2003, the Company approved to repurchase its shares in order to manage its excess cash, under the share repurchase scheme, with the investment not to exceed Baht 3,200 million or in term of shares repurchased not to exceed 12.5 million shares, equivalent to 5% of the total issued andpaid-up shares of the Company. The period for the repurchase of the shares was from 26 December 2003 to 11 June 2004 and the resale period is from 11 December 2004 to 11 June 2007 (6 months after the completion date of the share repurchase and not later than 3 years from this time). In the event that the Company does not or is unable to dispose of all repurchased shares withinthe set period, when the due date has passed the Company is to reduce its paid-up capital by writing-off the remaining unsold repurchased shares.

On 14 February 2005, the Securities and Exchange Commission of Thailand (SEC) imposed an offi cial requirement for all listed companies to follow the Judicial Council deliberated the issue of treasury share schemes under Section 66/1(2) of the Public Limited Companies Act B.E. 2535, that the cost of treasury shares as acquired by a public limited company should not exceed itsunappropriated retained earnings. The Council also suggested that the relevant authorities should require public limited companies to set aside within appropriated retained earnings a separate reserve account in an amount equal to the cost of the treasury shares. The reserve shall remain outstanding until either the shares are sold or paid-up capital is reduced by cancellationof any remaining unsold shares. The Annual General Meeting of Shareholders held on 28 April 2005 approved the allocation of Baht 2,985.4 million from the unappropriated retained earnings as of 1 January 2005 to reserve for treasury shares according toSEC requirement.

On 28 June 2006, the meeting of the Company’s Board of Directors passed a resolution to approve a second repurchase of shares by the Company in order to manage its excess cash, under the share repurchase scheme, with the investment not to exceed Baht 1,800 million or in term of shares repurchased not to exceed 7.5 million shares, equivalent to 3% of the total issuedand paid-up shares of the Company. The period for the repurchase of the shares was from 14 July 2006 to 20 December 2006 and the resale period is from 21 June 2007 to 20 December 2009 (6 months after the completion date of the share repurchase and not later than 3 years from this time). In the event that the Company does not or is unable to dispose of all repurchased shareswithin the set period, when the due date has passed the Company is to reduce its paid-up capital by cancellation of any remainingunsold shares. The Annual General Meeting of Shareholders held on 14 March 2007 approved the additional allocation of Baht 1,710.6 million from the unappropriated retained earnings as of 31 December 2006 to reserve for treasury shares according to SEC requirement.

On 3 May 2007, the meeting of the Company’s Board of Director passed a resolution to approve the reduction in paid-up share capital by cancelling the 12.5 million treasury shares with a par value of Baht 10 each unsold under the fi rst share repurchase scheme, or by Baht 125 million, in order to comply with the Ministerial Regulation concerning treasury stock under which the Company has to dispose all of its repurchased shares within 3 years commencing from the date of share repurchase completion (within 11 June 2007). The Company registered the reduction of its paid-up share capital from Baht 2,500 million (250 million shares with a par value of Baht 10 each) to Baht 2,375 million (237.5 million shares with a par value of Baht 10 each) with theMinistry of Commerce on 26 June 2007. In addition, the Company reversed the reserve for treasury shares of Baht 2,985.4 millionto unappropriated retained earnings.

27. MUTUAL SEPARATION EXPENSES In November 2007, the Company has decided to temporary reduce the cement production capacity effective from 1 January 2008

and internal reorganize the Company and its subsidiary structure. The Company offered an early retirement scheme amounted to Baht 154 million (Separate fi nancial statements : Baht 146 million), in the income statements for the year ended 31 December 2007, which was included in manufacturing costs of Baht 139 million (Separate fi nancial statements : Baht 136 million) and in selling and administrative expenses of Baht 15 million (Separate fi nancial statements : Baht 10 million).

28. EARNINGS PER SHARE Earnings per share as presented in the income statements is the basic earnings per share which is determined by dividing the

net income for the year by the weighted average number of ordinary shares in issue during the year.

No disclosure of diluted earnings per share for the year is required as the Company has no potential ordinary shares.




29. DIVIDENDS The Annual General Meeting of Shareholders held on 30 March 2006 approved to pay a fi nal dividend of Baht 7.5 per share out

of 2005 income, or a total sum of Baht 1,781 million. Thus, including the interim dividend of Baht 6.5 per share, the total dividendpayment out of 2005 income amounted to Baht 14.0 per share.

On 10 August 2006, the Board of Directors approved the payment of an interim dividend from the Company’s income during the period of January to June 2006 of Baht 6.5 per share, or a total sum of Baht 1,514 million. The interim dividend was paid on 10 September 2006.

The Annual General Meeting of Shareholders held on 14 March 2007 approved to pay a fi nal dividend of Baht 7.5 per share out of 2006 income, or a total sum of Baht 1,725 million. Thus, including the interim dividend of Baht 6.5 per share, the total dividendpayment out of 2006 income amounted to Baht 14.0 per share.

On 9 August 2007, the Board of Directors approved the payment of an interim dividend from the Company’s income during the period of January to June 2007 of Baht 6.5 per share, or a total sum of Baht 1,495 million. The interim dividend was paid on 7 September 2007.

30. NUMBER OF EMPLOYEES AND RELATED COSTS



2007 2006 2007 2006

Number of own employees at end of year (Persons) 3,056 2,927 2,254 2,243

Employee costs for the year (Thousand Baht) 1,970,834 1,719,706 1,651,453 1,446,076

31. BANK GUARANTEES As at 31 December 2007, there were outstanding bank guarantees of approximately Baht 61 million (Separate fi nancial statements :

Baht 48 million) issued by banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as requiredin the normal course of their businesses.

32. COMMITMENTS 32.1 As at 31 December 2007, the Company and its subsidiaries have signifi cant outstanding commitments as follows :

32.1.1 The Company extended the general assistance agreement with a related company for another 1 year beginning from 1 January 2007 to 31 December 2007. The Company committed to pay a fee on the basis and at the rate as stipulated in the agreement.

32.1.2 The Company entered into an agreement with a local company in respect of the Company’s computer system for a period of 3 years which is extendable under the terms specifi ed in the agreement. The Company committed to pay the monthly fee of Baht 10.0 million.

32.1.3 The Company and its subsidiaries entered into various agreements with local companies to lease their offi ce premises, other facilities and render service for periods ranging from 3 years to 30 years up to 2024. As at 31 December 2007, the Company and its subsidiaries have outstanding commitments payable in the future as follows :

(Unit : Million Baht)

Consolidated Separate

Payable within fi nancial statements fi nancial statements

2008 234 188

2009 to 2010 189 135

2010 and thereafter 91 23

Total 514 346

32.1.4 The Company and its subsidiaries have commitments in respect of raw materials and fuel purchases, logistic services, lease of equipment, sales contracts as required in the normal course of their businesses.

32.1.5 The Company entered into agreements with third parties to acquire land and raw material resources. Subject to certain conditions, the Company will purchase assets at the price as specifi ed in the agreements.



32.1.6 A subsidiary company entered into a technology license agreement with an overseas company for a period of 10 years, commencing 6 March 2002 to 5 March 2012 after this period the agreement is automatically renewed for a 1 year period. The subsidiary committed to pay licensing fee on the basis and at the rate as stipulated under the agreement.

32.1.7 The Company had outstanding capital expenditure and construction commitments of Baht 646 million (2006 : Baht 365 million).

32.2 As at 31 December 2007, the associated company had the following signifi cant commitments.

32.2.1 The associated company had entered into several lease agreements in respect of the lease of land, offi ce building space, motor vehicles, and other services. Future minimum rentals payable under these leases and services agreements as at 31 December 2007 amount to approximately Baht 22.9 million (2006 : Baht 15.7 million).

33. FINANCIAL INSTRUMENTS 33.1 Financial risk management The Company and its subsidiaries’s fi nancial instruments, as defi ned under Thai Accounting Standard No. 48 “Financial

Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable, loans and short-term and long-term loans. The fi nancial risks associated with these fi nancial instruments and how they are managed is described below.

Interest rate risk The Company and its subsidiaries’s exposure to interest rate risk relates primarily to their cash at banks, short-term loans

and long-term borrowings. However, since most of the Company’s fi nancial assets and liabilities bear fl oating interest rates or fi xed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.

The details of long-term loan to subsidiaries and short-term and long-term loans from fi nancial institutions are set out in Note 14, 19 and 21.

Foreign currency risk The Company has a foreign currency risk in respect of the purchase/ sales transactions. The Company manages its

exposure to foreign currency risk by balancing net position of receipt and payment of the foreign currency transactions in each period. The Company seeks to reduce this risk by entering into forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within one year.

As at 31 December 2007, outstanding balances of the Company and its subsidiaries’s fi nancial assets and liabilities denominated in foreign currencies are as follows :-

(Unit : Million)



Financial Financial Financial Financial Average exchange rate as at

Foreign currency assets liabilities assets liabilities 31 December 2007

(Baht per foreign currency unit)

US dollar 26 3 25 2 33.7673

Swiss franc - 1 - 1 29.6292

Japanease yen - 1 - 1 0.2974

Foreign exchange contracts outstanding at 31 December 2007 are summarized below.

Foreign currency Sold amount Contractual exchange rate sold

(Million) (Baht per 1 foreign currency unit)

US dollar 52.80 33.6900 - 33.7150




Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable.

The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material fi nancial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk since it has a variety of customer base and large number of customers. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts receivables as stated in the balance sheets.

33.2 Fair values of fi nancial instruments Since the majority of the Company and its subsidiaries’s fi nancial assets and liabilities are short-term in nature or bear

fl oating interest rates, their fair value is not expected to be materially different from the amounts presented in the balance sheets.

A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transactions. The fair value is determined by reference to the market price of the fi nancial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

34. FINANCIAL INFORMATION BY SEGMENT


Consolidated fi nancial statements for the years ended 31 December 2007 and 2006

Concrete and

Cement aggregates Others Elimination Total

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

(Restated)

Revenue from external customers 18,849 20,107 3,188 2,810 763 730 - - 22,800 23,647

Inter-segment revenues 1,128 1,045 119 - 1 - (1,248) (1,045) - -

Total revenues 19,977 21,152 3,307 2,810 764 730 (1,248) (1,045) 22,800 23,647

Segment gross profi t 6,000 6,965 150 115 278 297 - - 6,428 7,377

Unallocated income 294 315

Unallocated expenses (2,031) (2,086)

Interest expenses (102) (82)

Corporate income tax (1,359) (1,608)

Minority interest in net income of subsidiary - (2)

Net income 3,230 3,914


Consolidated fi nancial statements as at 31 December 2007 and 2006

Concrete and

Cement aggregates Others Elimination Total

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

(Restated)

Property, plant and equipment - net 10,546 10,148 1,307 1,235 666 705 - - 12,519 12,088

Unallocated assets 8,984 8,746

Total assets 21,503 20,834

35. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS These consolidated fi nancial statements were authorised for issuance by the Company’s Board of Directors on 7 February 2008.



Management Discussion and Analysis

The Analysis of Financial Performance

Unit : Million THB

January – December

2007 2006 +/-

Net Sales- Group 22,800 23,647 -4%

Net sales – Cement business 19,977 21,152 -6%

Net sales – Concrete and aggregates business 3,307 2,810 18%

Sale of others business 764 730 5%

Elimination (Inter company’s sales) -1,248 -1,045 -19%

Net profi t 3,230 3,914 -17%

Operating EBITDA 5,211 6,059 -14%

Operating EBITDA margin [%] 23% 26%

Operating profi t 4,396 5,320 -17%

Net salesGroup:Past year’s net sales for the group declined by THB 847 million, or 4 percent to THB 22,800 million. The cement business marked lower net sales of THB 1,175 million, or 6 percent to THB 19,977 million. The concrete and aggregates business showed a positive net salesdevelopment of THB 497 million, or 18 percent to THB 3,307 million. Net sales generated from other business amounted to THB 764million, an increase of THB 34 million from 2006, or 5 percent.

Cement business: The company’s cement sales volume in year 2007 was 14 million tons, 4 percent higher than in 2006. Higher market competition resulted in lower average prices and, as a result, net sales dropped to THB 19,977 million in 2007.

The domestic sales volume in 2007 declined by 4 percent mainly due to the construction slowdown, especially in the public sector. In terms of domestic sales price, there was intense price competition during the third quarter of 2007. However, a successful price increase at end of November pushed the price level up close to the beginning of the year 2007.

Of the total cement sales volume in 2007, export cement and clinker volume grew 17 percent compared to 2006. Export sales volume, including sales to bordering countries, reached 6 million tons in 2007. Vietnam remains the company’s biggest export market for clinker, followed by Bangladesh and the Middle East. Singapore is the largest destination of cement. Export sales price in 2007 was lower than in 2006 mainly due to the impact of the Baht appreciation.

Concrete and aggregates business: In year 2007, the company sold 2.1 million cubic meters of ready-mix concrete. This was an increase over the 1.98 million cubic meters sold in the previous year, but not as expected mainly due to lower volume from mega projects. Prices were lower mainly due to ahighly competitive market with intense price competition which started in the second quarter of 2007 and continued throughout the rest of the year.

Aggregates business commenced its limestone and sand operations in 2007. The company volume sold reached 1.2 million tons in itsfi rst year of operation.

Other business: In 2007, the company achieved 5 percent growth with net sales of THB 764 million for prime quality wood replacement constructionmaterials. The past year 2007 also saw the company’s successful market expansion into Vietnam.

Net Profi tEffects of sales price pressure and increased prices of solid fuels, which pushed up production and distribution cost, left its mark in the operational results in the cement and ready-mix concrete business. The net profi t of the company and its subsidiaries declined THB 684 million, or 18 percent to THB 3,230 million in year 2007.

Despite an environment with higher energy and transportation cost, the company improved its internal effi ciency and input factor cost. As a result, costs and expenses for year 2007 amounted to THB 18,403 million, a slight rise of THB 47 million, or 0.2 percent from THB 18,356 million in 2006.

Total cost of sales of THB 16,373 million for year 2007 showed a rise of THB 103 million from THB 16,270 million in 2006, mainly due to higher raw material cost. In November 2007, the Company decided to temporarily reduce its clinker production capacity effectiveJanuary 1, 2008, and eventually, realign the company and its subsidiary structure. In this regard, the company offered an earlyretirement scheme of which THB 139 million were included in manufacturing cost.



Selling and administrative expenses were reported at THB 2,031 million, an improvement of THB 25 million, or 1 percent, from THB 2,056 million in the previous year, and was mainly achieved through an effective cost control. The ratio of selling and administrativeexpenses to net sales for year 2007 was 8.9 percent, slightly higher than the 8.7 percent in year 2006.

Interest expenses for year 2007 amounted to THB 102 million, an increase of THB 20 million from THB 82 million in 2006, or 24 percent,which was mainly due to the Company’s drawdown of additional short-term loans.

Other income of total THB 115 million for year 2007 were THB 35 million, or 23 percent lower than the THB 150 million in 2006, resulting from a decline in interest income of THB 50 million. Thanks to the Baht appreciation, the company recorded a foreign exchangegain on USD accounts payables amounting to THB 29 million.

In year 2007, operating EBITDA amounted to THB 5,211 million, a decline of THB 848 million from THB 6,059 million in 2006, or 14 percent, due to aforementioned reasons.

While the Company and its subsidiaries had recorded a loss on impairment of assets not used in operation of THB 30 million in year 2006, no additional impairment was required for year 2007.

The Analysis of Cash Flows

Unit : Million THB

January – December

2007 2006 +/-

Cash fl ow from operating activities 4,000 4,328 -8%

Capital expenditure on property, plant and equipment to maintain productive capacity

and to secure competitiveness -818 -528 -55%

Free cash fl ow 3,182 3,800 -16%

Expansion investments -454 -650 30%

Other investing activities -176 -9 Neg

Dividend paid -3,220 -3,295 2%

Financing requirement -668 -154 Neg

Movements of treasury shares net - -1,711 100%

Increase in fi nancing liabilities 461 348 32%

Decrease in cash and cash equivalents -207 -1,517 86%

Cash fl ow from operating activitiesConsolidated cash fl ow from operating activities for year 2007 was THB 4,000 million, a decline of THB 328 million from THB 4,328 million in 2006, or 8 percent. Lower net sales negatively impacted this cash fl ow. However, thanks to improvements in net working capital, mainly in inventory and accounts payable balances, a positive contribution of THB 218 million were achieved. Cash fl ow margin declined to 17.5 percent compared to 18.3 percent in year 2006.

Cash fl ow used for investing activitiesConsolidated cash fl ow used for investment activities for year 2007 was THB 1,448 million, an additional THB 261 million from THB 1,187 million in year 2006, or 22 percent, mainly for investments in the new preparation platform for alternative fuels and raw materials, a new mortar production plant and additional aggregates and resources.

Cash fl ow from fi nancing activitiesThe Annual General Meeting of Shareholders approved to pay a fi nal dividend of THB 7.50 for year 2006 and the Board of Directors approved an interim dividend of THB 6.50 for year 2007. Therefore, the company used THB 3,220 million of its free cash fl ow for dividend payments and, as a balance, eventually drew down additional short-term loans of THB 461 million.

In order to manage its excess cash, the company repurchased in year 2006 7.5 million shares, or THB 1,711 million, of its outstandingshares under a second share repurchase scheme.



Management Discussion and Analysis

The Analysis of Financial Position

Unit : Million THB

As of December 31

2007 2006 +/-

Total Assets 21,503 100% 20,835 100% 3%

Current assets 4,976 23% 5,255 25% -5%

Investment in associated company 928 4% 830 4% 12%

Property, plant and equipment - net 12,519 58% 12,088 58% 4%

Assets not used in operations - net 825 4% 1,129 5% -27%

Other non-current assets 2,255 11% 1,533 8% 47%

Total Liabilities 5,613 26% 4,955 24% 13%

Current liabilities 4,511 21% 3,766 18% 20%

Long-term liabilities-net of current portion 459 2% 569 3% -19%

Other non-current liabilities 643 3% 620 3% 4%

Total Shareholders’ Equity 15,890 74% 15,880 76% 0%

Total AssetsConsolidated total assets as of December 31, 2007, were THB 21,503 million, an increase of THB 668 million from THB 20,835 millionin 2006, or 3 percent. Current assets were THB 4,976 million, a decline of THB 279 million from THB 5,255 million in 2006, or 5 percent. Accounts receivable accounted for the highest proportion of current assets, representing 55 percent and 49 percent of current assets,or equal to an average collection period of 40 days and 33 days at year ended 2007 and 2006, respectively. Inventory represented32 percent of current assets in both fi nancial years.

Consolidated other non-current assets as of December 31, 2007, were THB 2,255 million, a rise of THB 722 million from THB 1,533 million in 2006, or 47 percent, mainly from THB 535 million higher intangible assets from THB 381 million in 2006, a balance of THB 916 million as of December 31, 2007. This was a result of newly acquired aggregates mining rights and concessions.

Total LiabilitiesAs at December 31, 2007, the Company and its subsidiaries reported total liabilities of THB 5,613 million, a growth of THB 658 millionfrom THB 4,955 million in 2006, or 13 percent, mainly from the additional draw down of short-term loans from fi nancial institutions in the amount of THB 565 million.

At year end 2007 and 2006, consolidated trade accounts payable amounted to THB 1,516 million and THB 1,328 million, respectively. This is equal to an average payment period of 32 days and 29 days, respectively.

Total Shareholders’ EquityAs at December 31, 2007, and December 31, 2006, total shareholders’ equity was THB 15,890 million (based on 237.5 million paid-upshares) and THB 15,880 million (based on 250 million paid-up shares), respectively.

On May 3, 2007, the meeting of the Company’s Board of Director passed a resolution to approve the reduction in paid-up share capitalby cancellation of 12.5 million treasury shares with a par value of THB 10 each unsold under the fi rst share repurchase scheme, or by THB 125 million, in order to comply with the Ministerial Regulation concerning treasury stock under which the Company has to dispose all of its repurchased shares within 3 years commencing from the date of share repurchase completion (within June 11, 2007).The Company registered the reduction of its paid-up share capital from THB 2,500 million (250 million shares with a par value ofTHB 10 each) to THB 2,375 million (237.5 million shares with a par value of THB 10 each) with the Ministry of Commerce on June 26,2007. In addition, the Company reversed the reserve for treasury shares of THB 2,985 million to unappropriated retained earnings.

On June 28, 2006, the meeting of the Company’s Board of Directors passed a resolution to approve a second repurchase of shares bythe Company in order to manage its excess cash, under the share repurchase scheme, with the investment not to exceed THB 1,800 million or in term of shares repurchased not to exceed 7.5 million shares, equivalent to 3 percent of the total issued and paid-up shares of the Company. The Annual General Meeting of Shareholders held on March 14, 2007 approved the additional allocation of THB 1,711 millionfrom the unappropriated retained earnings as of December 31, 2006 to reserve for treasury shares according to the Securities andExchange Commission (SEC) requirement.



Related parties comprise enterprises and individuals that control, or are controlled by the Company, whether directly or indirectly, or which are under common control with the Company. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them signifi cant infl uence over the Company, and key management personnel, directors and offi cers with authority in the planning and direction of the Company’s operations.

During the years, the Company and its subsidiaries had business transactions with their related parties, which have been concludedon commercial terms and bases agreed upon in the ordinary course of businesses between the Company and those companies. Information on related party transactions is specifi ed in Note 7 of the Notes to Consolidated Financial Statements for the years ended December 31, 2007 and 2006.

Criteria for having related party transactionsWhere it is necessary for the Company to have a transactions with a related party, the Company will consider business necessity and arm’s length as main criteria for decision-making. For example, product selling and purchasing is based on market price. A mark-upis included in the cost of a service fee for services rendered. All of these is to ensure benefi ts to the Company.

Sound approval mechanism and procedureThe Company has complied with the rules of the Stock Exchange of Thailand regarding information disclosure and practices for listedcompanies in connected transactions. The Audit Committee also reviewed the connected transactions of the Company.

Related Party Transactions



The Board of Directors aims at optimizing wealth of its shareholders, both through dividend payments and share value, without compromising on internal growth and commitment to sustainable development.

The Company has announced dividend payment 14 baht per share for each of the years 2005 to 2007. The Company’s reserve has reached 10 per-cent of its registered capital. The Board of Directors always ensures that there are enough profi ts to make interim payments and fi nal dividend allocations.

During 2005-2007, Siam City Cement allocated dividends as follows:

For fi scal year 2007, total dividend is 14 baht per share (Subject to shareholders’ approval at the Annual Shareholders’ Meeting on April 10, 2008)- The Board of Directors approved payment of interim dividend on August 9, 2007 of baht 6.5 per share.- The Shareholders are proposed to approve payment of dividend for the second half of 2007 on April 10, 2008 of baht 7.5 per share.

For fi scal year 2006, total dividend was 14 baht per share- The Board of Directors approved payment of interim dividend on August 10, 2006 of baht 6.5 per share.- The Shareholders approved payment of dividend for the second half of 2006 on March 14, 2007 of baht 7.5 per share.

For fi scal year 2005, total dividend was 14 baht per share- The Board of Directors approved payment of interim dividend on September 1, 2005 of baht 6.5 per share.- The Shareholders approved payment of dividend for the second half of 2005 on March 30, 2006 of baht 7.5 per share.

Dividend Allocation over the past three years



1. General Information 1.1 Siam City Cement Public Company Limited, Registration No. 0107536001346 (Formerly Registration No. was Bor Mor Jor 208) Type of business: Cement manufacturing and distribution Head offi ce: Column Tower, 7th - 12th Fl.,

199 Ratchadapisek Road, Klongtoey, Bangkok 10110, Thailand Factory: 99, Moo 9 (Plant 1 & 3), and 219, Moo 5 (Plant 2), Mitraparp Road

Km. 129 - 131 Tabkwang Subdistrict Kaengkhoi District, Saraburi 18260, Thailand Telephone: +66 2 797 7000 Fax: +66 2 797 7001 to 2 Website: www.siamcitycement.com Issued and paid-up shares: 237,500,000 ordinary shares with the par value of 10 baht per share

1.2 The companies where 10% or more of the issued and outstanding shares of their capital stock are held by the Company, as of December 31, 2007

Name Location of Type of Business / Registered Number of % Direct

Head Offi ce Product Capital issued Shareholding

(million baht) Shares

1 Siam City Concrete Bangkok Industrial Operation / 400 4,000,000 99.99

Company Limited Ready-mix Concrete

and Aggregates

2 Conwood Company Limited Bangkok Industrial Operation / 300 3,000,000 99.99

Construction Material

3 Eagle Cement Holdings Bangkok Share Holding Company 700 7,000,000 99.99

Company Limited

4 Lanna Resources Bangkok Industrial Operation / 350 35,000,000 44.99

Public Company Limited Coal Mining and

Decorative Stones

5 Khmer Cement Industry Phnom Penh Cement Trading appx 0.2 500 75.00

Company Limited* Cambodia (20 million riel)

Remark: *Regarding Khmer Cement Industry Company Limited, according to the joint venture agreement, its registered capital is fi xed at USD 1.5 million.

However, at the time of its incorporation, the registered capital was at the equivalent of USD 5,300. The capital will be increased form time

to time as the business of the company requires.

1.3 Other references: Share Registrar Thailand Securities Depository Co., Ltd.

The Stock Exchange of Thailand Building62 Rachadapisek Road, Klongtoey, Bangkok 10110

Auditors Mr. Narong Puntawong, Certifi ed Public Accountant (Thailand) No.3315 Mrs. Saifon Inkaew, Certifi ed Public Accountant (Thailand) No.4434Mrs. Ratana Jala, Certifi ed Public Accountant (Thailand) No.3734Ernst & Young Offi ce Limited

Supplemental Information



2. The Company’s Businesses 2.1 The Company manufactures and sells cement primarily to the domestic market catering to market demand. The Company

may export its product to overseas in the event of oversupply.Subsidiaries ’s Businesses. See Notes to the Consolidated Financial Statements, Notes 2 and 11

2.2 Business segments that generate over 10 % of the consolidated revenue. See Notes to the Consolidated Financial Statements, Note 34

2.3 Change/Important developments in business operations and management during the year 2007See Notes to Consolidated Financial Statements, Note 2 and the Report of the Executive Committee, page 16 to 17

3. Shareholding and Management Structures 3.1 The top 10 major shareholders as of August 24, 2007 are the following:

No. Shareholders Number of Shares Held Percentage (%)

1. Sunrise Equity Company Limited 80,065,840 33.71

2. Thai Roc-Cem Company Limited 77,628,433 32.69

3. Clear Stream Nominees LTD. 8,350,200 3.52

4. Parkmix Limited-JPMSAPL client A/C 7,051,100 2.97

5. Nortrust Nominees LTD. 5,230,200 2.20

6. Ayudhaya Insurance Public Company Limited 4,047,800 1.70

7. HSBC (Singapore) Nominees PTE LTD. 4,015,577 1.69

8. Vayupak Mutual Fund I by MFC Asset Management Public Company Limited 2,254,000 0.95

9. Vayupak Mutual Fund I by Krungthai Asset Management Public Company Limited 2,254,000 0.95

10. Mrs. Sasithorn Ratanarak 2,085,040 0.88




3.2 Members of the Board of Directors as of December 31, 2007 and their recent experience are as follows:

Name / Position Age Education % of Working Experience

Shareholding1

Period Position Name / Type of

Business

Mr. Veraphan Teepsuwan 66 Bachelor Degree 0.002 1) Listed Company

Chairman of the Board of Directors2 (Economic), Boston Present Chairman of the Siam City Cement

University, USA Board of Directors Public Company

Limited

MBA, Chairman of the Bank of Ayudhya

Northeastern Board of Directors Public Company

University, USA Limited /

Commercial Bank

Chairman of the Ayudhya Insurance

Board of Directors Public Company

Limited / Insurance

Chairman of the Ayudhya Alliaz

Board of Directors C.P. Life Public

Company Limited /

Insurance

Vice Chairman Eastern Star

of the Board of Real Estate

Directors Public Company

Limited / Real

Estate

2) Non Listed Company

Present Director Bangkok

Broadcasting &

Television Company

Limited / Television

Broadcasting

Training Experience First Nation City Bank (Presently Citigroup): Credit-Department

Scholarship Master’s Degree: USAID

Total attendance at Board Meetings in 2007: 5/5




Shareholding1


Business

Mr. Paul Heinz Hugentobler 59 Lic.oec.HSG, 0.023 1) Listed Company

Vice Chairman of the Board of Directors2 University of St. Gallen, 2001 - Present Vice Chairman of the Siam City Cement

Switzerland Board of Directors Public Company

Limited

1999 - 2000 Managing Director Siam City Cement

Public Company

Limited

2002 - Present Member of the Holcim Ltd. /

Executive Committee Cement


-None-


Mr. Urs Wolfgang Bieri 65 Lic.oec.HSG, - 1) Listed Company

Director2 University of St. Gallen, 1998 - Present Director Siam City Cement

Switzerland Public Company

Limited

2002 - Deputy Chairman of the Holcim Ltd. /

December 2004 Executive Committee Cement


-None-






Shareholding1


Business

Mr. Harald Link 53 Lic.oec.HSG, - 1) Listed Company

Directors2, Member of University of St. Gallen, 1998 - Present Director, Member of Siam City Cement

the Audit Committee Switzerland the Audit Committee Public Company

Limited

2000 - Present Director True Corporation

Public Company

Limited /

Telecommunication


1987 - Present Managing Partner B.Grimm & Co.,

Registered

Ordinary

Partnership /

Investment

Advisory Services

Training Experience Course on Good Corporate Governance at St.Gallen, Switzerland


Mr. Chachchon Ratanarak 35 BSC Economics (Honors), 0.449 1) Listed Company

Director2 Royal Holloway College, November 2006 - Director Siam City Cement

University of London, Present Public Company

England Limited


June 2005 - Director PrimaVest Asset

Present Management

Company Limited /

Asset Management

April 2006 - Chairman & CEO Tonson Property

Present Company Limited /

Real Property

Development


Mr. Prakob Visitkitjakarn 68 Bachelor Degree, - 1) Listed Company

Director2, Chairman in Finance (Honors), 1999 - Present Director, Chairman Siam City Cement

of the Audit Committee Indiana University, USA of the Audit Committee Public Company

Limited

Master of Business 1986 - 1995 Executive Vice President Bank of Ayudhya

Administration (Finance), Public Company

Indiana University, USA Limited /

Commercial Bank


-None-

Training Experience The Role of Chairman Program (RCP), by Thai Institute of Directors Association

Director Certifi cation Program (DCP), by Thai Institute of Directors Association





Shareholding1


Business

Mr. Chet Raktakanishta 67 B.Sc. (Management) - 1) Listed Company

Director2, Member of Brigham Young 1999 - Present Director, Member Siam City Cement

the Audit Committee University, USA of the Audit Committee Public Company

Limited

April 2007 - Director Bank of Ayudhya

Present Public Company

Limited /

Commercial Bank

2003 - Present Director, Member of Media of Medias

Audit Committee Public Company

Limited /

Media & Publishing

1994 - Present Director Ayudhya Insurance

Public Company

Limited / Insurance


2001 - Present Chairman Krungsriayudhya

Card Company

Limited / Service

Training Experience Audit Committee Program (ACP), by Thai Institute of Directors Association in 2005

Director Certifi cation Program (DCP), by Thai Institute of Directors Association in 2003

Finance for Non-Finance Director (FN),by Thai Institute of Directors Association in 2003

Director Financial, by Thai Institute of Directors Association in 2005

DCP Refresher Course, by Thai Institute of Directors Association, 3 / 2006


Mr. Thaveepol Kongseri 66 Bachelor degree 0.007 1) Listed Company

Director2 in Mechanical Engineering, March 2007 - Director Siam City Cement

(Since March 14, 2007) Shizuoka University, Japan Present Public Company

Limited

1994 - 2003 Director Ayudhya Allianz

C.P. Life Public

Company Limited


1979 - Present Managing Super Asset

Director Company Limited /

Real Property

Training Experience Director Accreditation Program (DAP), by Thai Institute of Directors Association in 2005






Shareholding1


Business

Mr. Prabhol Buranasiri 67 BSC Engineering EE, - 1) Listed Company

Director2 Worcester Polytechnic March 2007 - Director Siam City Cement

(Since March 14, 2007) Institute, Mass., USA Present Public Company

Limited

2002 - Present Management Advisor Thai-German

Ceramic

Industry Plc. /

Property &

Construction

1996 - 2001 General Manager, Thai-German

Managing Director- Ceramic

Marketing Industry Plc. /

Property &

Construction


-None-

Training Experience Director Accreditation Program (DAP), by Thai Institute of Directors Association


Mr. Vanchai Tosomboon 59 Bachelor of Law, 0.009 1) Listed Company

Director3 Thammasat University June 2004 - Director, Executive Siam City Cement

Present Vice President Public Company

Master in Business (Saraburi Operations) Limited

Management (MBM) 1999 - June 2004 Executive Vice President Siam City Cement

Asian Institute of (Subsidiaries) Public Company

Management Limited


-None-

Training Experience Director Certifi cation Program (DCP), by Thai Institute of Directors Association in 2001

Director Certifi cation Program (DCP), by Thai Institute of Directors Association in 2004





Shareholding1


Business

Ms. Chantana Sukumanont 58 Diploma in Business - 1) Listed Company

Director3 Studies, The Center for November 2006 - Deputy Chairman of the Siam City Cement

Economic and Political Present Executive Committee Public Company

Studies, UK Limited

June 2004 - Director, Siam City Cement

Advanced Management Present Executive Vice Public Company

Program, Harvard Business President Limited

School, USA (Marketing and Sales)

1998 - June 2004 Senior Vice President Siam City Cement

(Marketing and Sales) Public Company

Limited


1995 - 1997 Managing Director Jalaprathan

Cement Public

Company Limited /

Cement



Mr. Marcel Smit 51 Construction Engineers, - 1) Listed Company

Managing Director3 HTS, The Netherlands March 2007 - Managing Director, Siam City Cement

(Since March 1, 2007) Present Chairman of the Public Company

Postacademic “MBA“ Executive Committee Limited

Program, Technical 1995 - 2006 Senior Vice President Sika AG,

University Delft, and Regional Manager Switzerland /

The Netherlands Asia Pacifi c Specialty

Chemicals

Top Management 2) Non Listed Company

Programs at INSEAD, 1987 - 1994 Managing Director Sika B.V.,

France and IMD, The Netherlands /

Switzerland Specialty

Chemicals

Advanced Management

Program, Harvard Business

School, USA


Remark 1. The equity interest of the members of the Board of Directors are the information as of August 24, 2007, which are inclusive of the equity

interest of their respective spouses and minor children (if any) and show in percentage of the total issued and outstanding shares amounting

230 million shares.

2. Non-executive director

3. Executive director, who is also an employee of the Company




3.3 Executive Committee Members of the Executive Committee are nominated by the Board of Directors. Its duties are to organize, carry out and supervise

the business operations so as to achieve the target set by the Board of Directors. The following are information about the membersof the Executive Committee as of December 31, 2007:


Shareholding1


Business

Mr. Marcel Smit 51 Construction Engineers, - 1) Listed Company

Chairman of the HTS, The Netherlands March 2007 - Managing Director, Siam City Cement

Commitee Present Chairman of the Public Company

(Since March 1, 2007) Postacademic “MBA“ Executive Commitee Limited

Program, Technical 1995 - 2006 Senior Vice President Sika AG,

University Delft, and Regional Manager Switzerland /

The Netherlands Asia Pacifi c Specialty

Chemicals

Top Management 2) Non Listed Company

Programs at INSEAD, 1987 - 1994 Managing Director Sika B.V.,

France and IMD, The Netherlands /

Switzerland Specialty

Chemicals

Advanced Management

Program, Harvard Business

School, USA

Total attendance at ExCo Meetings in 2007: 17/21




Shareholding1


Business

Ms. Chantana Sukumanont 58 Diploma in Business - 1) Listed Company

Deputy Chairman of the Studies, The Center for November 2006 - Deputy Chairman of the Siam City Cement

Executive Committee Economic and Political Present Executive Committee Public Company

(Marketing and Sales) Studies, UK Limited

June 2004 - Director, Siam City Cement

Advanced Management Present Executive Vice President Public Company

Program, Harvard Business (Marketing and Sales) Limited

School, USA 1998 - June 2004 Senior Vice President Siam City Cement

(Marketing and Sales) Public Company

Limited


1995 - 1997 Managing Director Jalaprathan

Cement Public

Company Limited /

Cement



Mr. Vanchai Tosomboon 59 Bachelor of Law 0.009 1) Listed Company

Executive Vice President Thammasat University June 2004 - Director, Siam City Cement

(Saraburi Operations) Present Executive Vice President Public Company

Master in Business (Saraburi Operations) Limited

Management (MBM) 1999 - June Executive Vice President Siam City Cement

Asian Institute of 2004 (Subsidiaries) Public Company

Management Limited


-None-

Training Experience Director Certifi cation Program (DCP), by Thai Institute of Directors Association in 2001

Director Accreditation Program (DAP), by Thai Institute of Directors Association in 2004






Shareholding1


Business

Mr. Andreas Leutenegger 40 Lic.oec.HSG - 1) Listed Company

Senior Vice President University of St.Gallen, September Senior Vice President Siam City Cement

(Finance and Controlling) Switzerland 2004 - Present (Finance and Controlling) Public Company

Limited

Swiss Certifi ed January 1999 - Assistant Vice President Holcim Ltd. /

Public Accountant August 2004 Corporate reporting Cement


Advanced Management November 1994 - Auditor KPMG / Audit and

Program, Harvard Business December 1998 Advisory Service

School, USA

Training Experience Responsible for corporate governance report for Holcim Ltd.Annual Report 2002

Seminar on Corporate Governance, by Stock Exchange of Switzerland

Seminar on Corporate Governance, by Swiss Institute of Chartered Accountants


Mr. Rungrote Soonthorn 47 Master of Comparative Law - 1) Listed Company

Senior Vice President (M.C.L) University of September Senior Vice President Siam City Cement

(Human Resources and Miami, USA 2003 - Present (Human Resources Public Company

Management Development) and Management Limited

Development)


1996 - August 2003 General Manager Auto Alliance

Human Resources (Thailand) Co., Ltd. /

Automobile Industry

Training Experience Directors’ duties, liabilities & roles in corporate governance, August 2007

By-Asia Business Form (Thailand) Co., Ltd.





Shareholding1


Business

Mr. Nopporn Thepsithar 54 Bachelor’s Degree in - 1) Listed Company

Senior Vice President Electrical Engineering January 2004 - Senior Vice President Siam City Cement

(Logistics and Exports) Chulalongkorn University Present (Logistics and Exports) Public Company

Limited

2002 - December 2003 Logistics Manager Siam City Cement

Public Company


2000 - 2001 Executive Director TCC Holding

Co., Ltd. /

Holdings Company

1999 - 2000 Operations SCT Co., Ltd. /

Division Manager Import - Export

Company

Training Experience Audit Committee Program (ACP), by Thai Institute of Directors Association

Director Certifi cation Program (DCP), by Thai Institute of Directors Association

Director Accreditation Program (DAP), by Thai Institute of Directors Association

Good Governance,Mini MBA Course for INSEE Logistics


Remark 1. The equity interest of the members of the Executive Committee are the inormation as of August 24, 2007, which are inclusive of the equity

interest of their respective spouses and minor children (if any) and shown in percentage of the total issued and outstanding shares amounting

230 million shares.

3.4 Directors of Subsidiary Company as of December 31, 2007

Siam City Concrete Company Limited is the only subsidiary that generates over 10% of the Company’s consolidated revenue, as of December 31, 2007.

Director Siam City Concrete Company Limited

Mr. Marcel Smit Chairman

Mr. Paul Heinz Hugentobler Director

Ms.Chantana Sukumanont Director

Mr. Siva Mahasandana Managing Director

4. Remuneration of the Board of Directors and Executives paid in 2007

4.1 Remuneration in CashRemuneration in Cash for 16 Board members was 15.095 million baht, included meeting per diem and bonus paid in 2007 (During this year, 3 directors resigned and 3 directors newly elected).

Remuneration for 6 members of the Company’s Executive Committee was 85.98 million baht, included salary and bonus paid in 2007.

4.2 Other Remunerations Contribution to Provident Fund for its executives was 1.61 million baht. Company cars are provided to the members of the

Executive Committee.

5. Auditor’s Fee In 2007 Ernst & Young Offi ce Limited received from the Company and its subsidiaries audit fees of 4.1 million baht and no fee for non-audit services.




Customer Service CenterCustomer Service Center is the sub-division of Group CRM Department, Siam City Cement Co., Ltd launched on September 2001 with an objective to be the one-stop Center that provides the superior service to customers. With the integration of Customer Sales Supportand Customer Care units, we ensure that customers of the highest effi ciency of services.

In order to enhance the superior service standard and response to customer’s demands at the highest level, we have cooperated withSiam City Concrete since October 2007 in providing a one stop customer service Center.

The Customer Service Center handles the customers’ ordering and responds to customers’ requests, inquiries and complaints. The Center offers 24 hours and 7 days a week to guarantee customer’s satisfaction. All of the services we provide to customers will be recorded in CRM (Customer Relationship Management) system for follow up and to ensure all customers’ requests are handled punctually. As we are now in a dynamic business environment, we also analyze the data from the CRM database to continuously improve our service standard.

Location: Head Offi ceColumn Tower, 7th Fl., 199 Ratchadapisek Road, Klongtoey, Bangkok 10110, Thailand

Saraburi Plant Customer Service Building 99 Moo 9, Mitraparp Road, Km.129 - 131, Tabkwang Subdistrict, Kaengkhoi District, Saraburi 18260, Thailand

Contact: Tel: 1-800-77-5555 (Free) or +66 2 797 7777

Fax: 1-800-33-5555 (Free) or +66 2 797 7788 Email: [email protected]

Distribution Centers Siam City Cement distributes cement from Saraburi Plants to its customer nationwide by two methods:

1. Delivery from Saraburi Plants directly to dealers or their requested destinations

2. Delivery to four regional distribution Centers 1. Lampang Warehouse Address: 208 Moo 2, Lampang - Chiangmai Road, Pong Yang Kok Subdistrict,

Hang Chat District, Lampang 52190, Thailand Description: Warehouse and distribution Center of bulk cement for northern customers

2. Udon Thani Warehouse Address: 1 Railway Station Road, Mark Kaeng Subdistrict, Muang District, Udon Thani 41000, Thailand Description: Warehouse and distribution Center of bagged cement for upper northeastern customers

3. Ubon Ratchathani Warehouse Address: 23 Kong Tang Road, Varinchamrap Subdistrict, Varinchamrap District, Ubon Ratchathani 34190, Thailand Description: Warehouse and distribution Center of bagged cement for lower northeastern customers

4. Surat Thani Terminal Address: 13/29 Surat Thani - Pak Nam Road, Bang Kung Subdistrict, Muang District, Surat Thani 84000, Thailand Description: Warehouse and distribution Center of bulk and bagged cement, including Bag packing facility.

Customer Service Center and Distribution Centers



Compared in accordance with Form of Annual Report for a security- issuing company (Form 56-2) issued under SEC notifi cation Ref. Kor Jor 40/2540 regarding principles, conditions and methods in presentation of fi nancial data and operation results of a company which issues securities

Required Items in Guideline for 56-2 Item in this Annual Report Page

1. General Information Supplemental Information 73 1.1 Company information and outstanding shares 1.2 Investment in other company for more than 10%

of that company’ s equity 1.3 Other reference

2. Financial Summary Key Figures 10Key data from fi nancial statements during the most recent 3 years

3. Nature of Business 3.1 Nature of business operation of company and subsidiaries, Supplemental Information 73

and distribution policy 3.2 Income structure Notes to Consolidated Financial Statements No. 34 67 3.3 Major development in last year, and trend of industrial Report of the Executive Committee, 16-17

and competition situation Industrial Outlook and 36-37 Summary of Major Developments and Recognitions in 2007 32-33

4. Risk Factors Risk and Risk Management 38

5. Shareholding and Management Structure 5.1 Shareholders Supplemental Information 73 5.2 Management 5.2.1 Management structure Management Structure, 9 Our Corporate Governance Update 34-35 and Supplemental Information 73 5.2.2 Nomination of Directors and Executives Our Corporate Governance Update 34-35 5.2.3 Remuneration to Directors and Executives Supplemental information 84 5.2.4 Compliance of SET’s CG Principles Our Corporate Governance Update 34-35 5.2.5 Rules on Insider Information Our Corporate Governance Update 34-35 5.2.6 Internal control opinion of Audit Committee Our Corporate Governance Update 34-35

and Report of the Audit Committee 41 5.3 Dividend Policy Dividend Allocation Over Past Three Years 72

6. Related Party Transactions Related Party Transactions 71

7. Management Discussion and Analysis Management Discussion and Analysis 68-70

8. Financial Statements 8.1 Audited consolidated fi nancial statements Report of Certifi ed Public Accountant 43 8.2 Auditors’ fee Supplemental Information 84

Summary of Specifi ed Item Per Form 56-2



:: Annual Report 2007 ::

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