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To: Shareholders

Dear Sirs,

In the year 2006, the Company has continued our commitment to further strengthen the business and strategy to create sustainable growth. Most importantly, the Company has prudently proceeded to manage its business according to strict financial management policies. It can be seen that total restructured principal debts declined consistently from approximately Baht 50,000 million at the year ended 1999 to Baht 10,129 million at the year ended 2006 (not including disputed debt repurchased at a discount rate, which is pending consideration by the Supreme Court). In August 2006, the Company utilized the proceeds from equity fund raising of Baht 12,175.60 million for the repayment of schemed debt under the MRA in the amount of Baht 11,500 million. The remaining portion (Baht 675.60 million) was reserved as working capital of the Company.

At the end of 2006, the debt to equity ratio was 0.21, which is considered relatively low compared to others in the industry. With TPI Polene’s capital structure today, which has been significantly strengthening, TRIS upgraded credit rating of the Company from “BBB-” (Triple B Minus) with rating outlook “stable” to “BBB” (Triple B Straight) with rating outlook “stable”. This rating is adversely affected by the fact that the Company continues under the strict financial conditions of its debt restructuring program, particularly the condition that the Company must repay all outstanding debt under the MRA within 2007.

The Company is in the process of refinancing the outstanding debt of Baht 10,129 million. Under the new refinancing package, financial flexibility is expected to improve as debt servicing obligations will be structured to match internal cash generation of the Company. Upon refinancing, cost of capital tends to decline. It is anticipated that credit rating of the
Company will then improve accordingly. With the Company’s strengthened financial position, it could pay interim dividends for the first six-month (ended June 30, 2006) at the rate of Baht 0.25 per share, totaling Baht 504.75 million. TPI Polene is the only company under debt restructuring proceedings that can pay a dividend to its shareholders with the scheme creditors’ official approval. The Company has a policy of returning profit to its shareholders for the full support they have always given to TPI Polene in achieving equity fund raising goals.

In the year 2007, the Company strongly believes that it will be able to make strategic investments supporting the core business and further strengthening the Company to increase competitive advantages and to create sustainable growth together with the improvement of environment by reducing the green house effects in line with power cost reduction and
to enhance production efficiency at the maximum level as well as any other operations. This will ensure that we fully benefit from the continued demand, driven by emerging infrastructure development and construction projects from the public and private sectors.

TPI Polene, today, strongly pledges our commitment to use our very best efforts to enhance our excellent performance, and create economic value-added to the business, while meeting the principles of good corporate governance. The Company continues to apply this policy throughout our entire business operations: emphasizing transparency, appropriate auditing
processes, and efficient internal controls. In addition, we are committed to participate in activities for public well-being and for the improvement of society, the environment and the country’s economy, while being a Thai Corporation as a member of society with high integrity.

Last but not least, the Company‘s Plan Administrator would like to take this opportunity to thank all shareholders, customers, advisors, financial institutions and all other parties involved for the full support they have always given to TPI Polene. The Company would especially like to express its appreciation to the group’s management and employees for their full dedication, knowledge, skills, talent and competencies in working cooperatively to create sustainable growth for the organization. The Plan Administrator steps forward with confidence to further develop the organization with a strong determination to enhance our excellent performance and to maintain our position as the one of the top cement players in Thailand, with the clear potential to be competitive in the global market.


Mr. Visith Noiphan
Chairman of the Board

Mr. Prachai Leopairatana
Chief Executive Officer