2. Nature of Business

1.  Company History

  The Company was incorporated as a closely held company on May 16,
  1969, with the initial registered capital of Baht 100 million. By
  approval of the Ministry of Finance, it offered share to the public
  for the first time and had it shares listed on The Stock Exchange of
  Thailand (“SET”) on April 15, 1977. In 1993, it was converted to a
  public company limited. The capital of the Company had been increased
  four times. At the fourth time, taking place on June 15, 1999, the
  capital was increased from Baht 475 million to Baht 3,000 million. The
  par value of its ordinary share was changed from Baht 5 apiece to Baht
  10 apiece. Of the Baht 3,000 million authorized capital, Baht 2,500
  million is paid up. In 2004, the Company bought back 12.5 million
  shares, equivalent to 5% of the total issued shares of 300 million for
  the purpose of financial management due to the Company’s excess
  liquidity. The 12.5 million shares bought back are held as treasury
  stock. Thus, the number of Company’s present issued and outstanding
  shares is 237.5 million.

Regarding the business operation, the Company’s first manufacturing
plant, located in Kaengkhoi, Saraburi Province, started its production
in 1972, with one line of production with production capacity of 0.6
million tonnes per annum. At present the Company has 3 plants with total
six production lines and total capacity of clinker of 12.3 million
tonnes per annum.

Significant Changes and Development

In 2000, after the financial crisis, the Company repaid all of its
long-term debt. In 2002, the Company redeemed all of the bonds issued in
1999 to raise Baht 5,000 million fund for use in paying off the
long-term debt, resulting in that the total liabilities of the Company
stood at Baht 3,855 million at the end of 2002, a decrease from Baht
8,495 million total liabilities in 2001 by Baht 4,640 million and the
debt to equity ratio was only 0.23 : 1

In 2002, the Company diversified to manufacture a wood substitute
product under the trademark of ConWOOD.

In 2004, the Company entered into a joint venture agreement with a
Cambodian company to set up cement trading company in Cambodia.

On December 30, 2004, the Company sold off most of its shares of capital
stock of Royal Porcelain Public Company Limited (“RPC”), resulting in a
reduction of its equity interest in RPC from 53.43% to 1.7%. This
divestiture was in line with the main policy of the Company to focus in
its core business, i.e. cement manufacturing and distribution.

The Company’s operating results have been improving continuously since
2000. In the years of 2001, 2002 and 2003, the Company paid dividend to
the shareholders at the rates per share of Baht 7, Baht 8, and Baht 9,
respectively. In 2004, the Company paid an interim dividend at the rate
of Baht 6 per share. A Baht 7 per share dividend will be proposed to the
2005 Annual General Meeting of Shareholders. If approved, the total
dividend for 2004 will be Baht 13.

With respect to the management, the following changes took place:

-   In 1998, “Holderbank” Financier Glaris Ltd. (presently Holcim Ltd.),
    one of the major cement manufacturer of the world joined the Company
    as a major shareholder.

-   At present Holcim is one of major shareholders of the Company,having
    equal stake as that of the Ratanarak family, the founding party of
    the Company.

-   Holcim has played an important role in the Company’s management
    especially in production, administration, sales, export, and
    financial stability.

-   Holcim caused the direction of the Company business to focus on the
    core activity, i.e. production and sale of cement.

  The joint management between Holcim and Ratanarak render the highest
  benefit to the Company as follows:

-   Over-thirty-year experience of Ratanarak group in term of knowledge
    and expertise in the domestic business network.

-   Additional channel of cement through the network of Holcim Group
    contributed to an increase in the capacity utilization.

-   Transfer of technology from Holcim to the Company that help raise
    the production process up to the Holcim standard and create the
    highest efficiency of production.

-   Cost reduction through Holcim procurement system.

-   Transfer of experience in cement business management from Holcim to
    the Company particularly its experience in the economic crisis in
    Latin America.

-   Personnel training in Holcim production plant overseas.

    1.  Businesses of Subsidiary and Associated Companies

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        Remark: * Regarding Khmer Cement Industry Company Limited,
        according to the joint venture agreement, its registered capital
        is fixed 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 from time to time when
        the business of the company requires.

        2.3 Revenue Structure*