3. Nature of the Business

1.  Company History

The Company was incorporated as a company limited 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 on November 5, 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 shares repurchase schemes in 2003
(scheme 1) and 2006 (scheme 2), 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 order to comply with the Ministerial Regulations concerning treasury
stock under which the Company has to dispose all of its repurchased
shares and not being resold within the prescribed period by reduction of
its paid-up capital. Therefore, in 2007, the company reduced its
registered and paid-up capital by disposal of all repurchased shares
under scheme 1, for 12.5 million shares, or equal to capital of Baht 125
million. As its results, registered capital became Baht 2,875 million,
and capital became Baht 2,375 million. In 2010, the company reduced its
registered and paid-up capital by disposal of all repurchased shares
under scheme 2, for 7.5 million shares, or equal to capital of Baht 75
million. As its results, registered capital became Baht 2,800 million,
and capital became Baht 2,300 million in January 2010.

In 2012, there was a change in major shareholding, i.e. on December 21,
2012, Thai Roc-Cem Company Limited and HOLDERFIN B.V. sold their shares
in the amount of 21,390,000 shares in the aggregate, representing 9.3 %
of the issued and outstanding capital shares of SCCC, to Bangkok
Broadcasting and Television Ltd, a company of Ratanarak group. This
transaction caused the proportion of the Ratanarak Group shareholding to
increase to 104,360,272 shares or approximately 45.4% of the 230,000,000
shares of the issued and outstanding capital shares.

Major Developments

Health & Safety

-   Implementation of the Safety Officer for Management Level and
    Supervisory Level across SCCC Group encompassing 580 persons in
    FML/MML/SML/TML levels

-   Co-establishing the application of “CSI Guideline – Driving Safety”
    for SCCC transportation activities along with other cement
    manufacturers

-   Implementation of the OH&S Recognition Program to promote VSL
    (visible safety leadership) and recognize employees who are
    dedicated to safety activities

Marketing & Sales

-   Implementation of Salesforce Chatter, a collaborative cloud
    application that allows employees to share their opinions and
    knowledge

-   Implementation of Web-SALES for SCCO on reporting functions to
    improve sales effectiveness and bring innovation to RMX business

-   Introduction of VAS (value-added services) in the form of industrial
    floor solution which comes in a package consisting of INSEE
    FloorCrete and Floor Applicator

-   Introduction of a new CPM (concrete product manufacturer) product,
    namely, INSEE ThruCrete paving blocks which are pre-cast paving
    blocks that consume less cement and no fine aggregates with high
    water permeability and low heat absorption

-   Development of SCCC Mobile Application to expand support to Android
    devices and to provide permanent online support to sales teams

INSEE Concrete & Aggregates

-   Implementation of Aggregates Peer Review program as a collaborative
    project among all Aggregates function within the Holcim Group to
    further develop aggregates operations

-   Initiated the biodiversity study at INSEE Ayutthaya Aggregates Unit
    with support from Kasetsart University to ensure
    environment-friendly growth of the unit

Conwood

-   Successful introduction of Conwood products to key influencers in
    Indonesia and started construction on a green field factory in that
    country

Logistics

-   Initiated new truck drivers training, concentrating on released
    enlisted soldiers to allow them to enter the job market

-   Initiated road safety campaign in Phitsanuloke Province where SCCC’s
    transportation traffic is heavy and where many accidents occurred

Saraburi Operations

-   Initiated the "Green and Clean Award" to promote better environment
    in the work place by setting up a campaign culminating in the
    monthly evaluation of the workplace conditions. The area receiving
    the highest score were given recognition and award

-   Extended the Integrated Management System to SCP (Siam City Power),
    to ensure the SCP operations are aligned with the quality,
    environment and OHS (Occupational Health & Safety) standards

-   Expanded the accreditation of ISO/IEC17025 to the concrete
    laboratory, to ensure that concrete testing is aligned with the
    standard systems and that the results of the tests would be
    verifiable.

Finance

-   Intensified Investor Relations activities with more than 30 investor
    meetings, seminars and plant visits to provide insight into the
    Company’s capability and development

-   Launch of Sustainable Procurement Policy to choose suppliers by
    giving high priority to procure goods and services from suppliers
    that have been certified “green” and socially responsible

-   Put key Finance Talents through a number of Overseas Leadership
    Training programs in addition to infusion of new talents

-   Implemented Holcim Cost Leadership Journey to generate cost saving
    from procurement activities within the 2012-2014 timeframe

-   Provision for additional customer financing program with BAY to
    provide an alternative lower cost funding to SCCC and SCCO customers

Employees

-   Implementation of Leadership & Management Development Program
    Certification Series for FML, MML and SML

-   Implementation of ALP (Accelerated Leadership Program) for Talent
    Pool, to prepare the readiness of future executives of SCCC group
    companies

-   Implementation of cross-functional KPI alignment and KPI quality
    check for senior management team

-   Implementation of Compensation Improvement to elevate compensation
    level of most SCCC employees to counter rising cost of living in
    recent years

Geocycle

-   Introduction of the Liquid Blending Facility, to be able to receive
    a wider range of waste water

Legal

-   Implementation of Anti-bribery & Corruption Directive to set out
    responsibilities and provide information and guidance on how to
    recognize and deal with bribery and corruption issues

3.2 Nature of business of the subsidiaries and related companies

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3.3 Revenue Structure

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