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, and later
listed on The Stock Exchange of Thailand (“SET”) on April 15, 1977, and
converted to a public company limited in 1993. In 1999, the capital was
increased to Baht 3,000 million authorized capital, divided into 300
million ordinary shares with the par value of Baht 10 per share, and
Baht 2,500 million paid up. Under 2 share repurchase schemes in 2004 and
2006, 20 million shares, equivalent to 8%, of issued shares bought back
are held as treasury stock for the purpose of financial management due
to the Company’s excess liquidity.

In 2007, the meeting of the Company’s Board of Directors passed a
resolution to approve the reduction in paid-up share capital by
canceling the 12.5 million treasury shares with a par value of Baht 10
each unsold under the first share repurchase scheme, or by Baht 12
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. The Company registered the reduction of its
paid-up share capital from 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 the Ministry of Commerce on 26 June
2007.

Regarding the business operation, the Company has 3 plants in Saraburi
Province, with total clinker production capacity of 12.3 million tones
per annum and cement production capacity of 14.5 million tones.

Major Developments in 2007

Managing Director’s Office

1.  More than 16,000 checkdams have been built with Chaipattana
    Foundation and Phamuang Task Force to honor HM the King's 80
    Birthday.

2.  Redecoration of Celebrated Arch on Ratchadamnoen avenue to honor HM
    The King's 80 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 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 fee. 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 Sales

1.  Product portfolio management technique was adopted to ensure
    sustainable development in the company's products and services.

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

Logistics and Exports

1.  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 Development

1.  Volunteer program for employees in check dam construction project to
    honor HM The King 80^(th) Birthday

Finance and Controlling

1.  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 financial reporting to
    enhance governance process for entity and business process level as
    well as infrastructure technology general controls.

Saraburi Operations

1.  Implementation "Geotechnical Risk" assessment program to ensure
    safety in all areas.

2.  Implementation "ProCem⁺" Program to certify process operation
    personnel.

3.  Implementation "CO2 Assurance" Program for future environment and
    sustainable Development.

4.  Implementation "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.

2.2 Nature of business of the subsidiaries and related company

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