9. Management

  9.1 Management Structure

  Board Structure:

  The structure and number of the Board has passed the approval of the
  shareholders and followed the Article of Association (AOA) of the
  company. According to the AOA no. 11, the Board must consist of the
  members not less than 5 persons and not over 13 persons. The selection
  is by proposing the nominees and voting for them by the shareholders.
  Each board member must have the qualifications as specified by the
  company AOA and the specified law concerning the Stock Exchange of
  Thailand and the Securities and Exchange Commission.

  The company Board now consists of 12 members. Three of them are the
  management and nine of them not the management and not the company
  employee. Among these board members, 3 of them are Audit Committee

  Chairman of the Board has different responsibilities from MD. The
  company has clearly specified the duty of the Chairman of the Board
  and MD and managing directors clearly. The board chairman must not be
  the management member and must not be the managing director who is the
  chairman of the Executive Committee.

  Roles and responsibilities of the Board:

  The Board has considered and approved on the important matters
  concerning the company operation. The company has specified the policy
  and regulations of practice, responsibilities and operations of the
  Board, chairman and deputy chairman including those of the Executive
  committee. The duties and responsibilities of the Board and the
  management are separated clearly. The board of Board has the duty to
  specify the importance issue on the operation of the company such as
  the vision, mission, strategies, financial target, risk, plan, and
  budget and the Executive committee has the duty to carry out the
  vision, mission and strategies and provide good management and
  controlling system. The Board then consider and approve so as the
  practice can be performed and achieve the effective results.

  The Board has promoted the policy on the ethical business operation
  and has issued the Code of Conduct in writing. In the year 2007, such
  10 code-of-conduct commandments are announced so as the Board,
  management and the employee understand the standard of the business
  code of ethics.

  Performance of the Board:

  Putting the utmost effort into its many duties, the Board sets a
  meeting schedule on a yearly basis. The Managing Director submits a
  notice with supporting documentation and an agenda not less than one
  week in advance before each board meeting takes place. Information on
  the Company’s operations is presented so that the board can make
  inquiries or express opinions. Every board member is encouraged to
  express their opinion freely.

9.2 Board of Directors, Audit Committee and Executive Committee in 2007

Board of Directors

  Mr. Veraphan Teepsuwan Chairman

  Mr. Paul Heinz Hugentobler Vice Chairman

  Mr. Urs Wolfgang Bieri Director

  Mr. Harald Link Director

  Mr. Chachchon Ratanarak Director

Mr. Prakob Visitkitjakarn Director

  Mr. Chet Raktakanishta Director

  Mr. Thaveepol Kongseri Director (since 14 March 2007)

  Mr. Prabhol Buranasiri Director (since 14 March 2007)

Mr. Vanchai Tosomboon Director

Ms.Chantana Sukumanont Director

  Mr. Marcel Smith Managing Director (since 1March 2007)

 Audit Committee

  Mr. Prakob Visitkitjakarn Chairman

  Mr. Harald Link Member

  Mr. Chet Raktakanishta Member

Executive Committee

  Mr. Marcel Smith Chairman

  Ms.Chantana Sukumanont Deputy Chairman

  Executive Vice President
  (Marketing and Sales)

  Mr. Vanchai Tosomboon Executive Vice President

  (Saraburi Operations)

  Mr. Andreas Leutenegger Senior Vice President

  (Finance and Controlling)

  Mr. Rungrote Soonthorn Senior Vice President

  (Human Resources and
  Management Development)

  Mr. Nopporn Thepsithar Senior Vice President

  (Logistics and Exports)

Please refer to the Attachment 1 for brief background information of the
members of the Board of Directors, Audit Committee, and members of the
Executive Committee.

The information about the Company’s Corporate Secretary is as follows:

Name: Mrs. Phatchada Muenthong

Position: Company Secretary and

Secretary of the Board of Directors

Tel: (66) 0-2797-7041

  Fax: (66) 0-2663-1834

  9.3 Remuneration for the Board and Executives

  The process of giving remuneration for the Board is done in a
  transparency manner and the process has been approved by the
  shareholders annually. The policy of payment is according to the
  operation profit of that particular year.

  Level and elements of the payment made to the management is suitable
  and tempting enough to keep the qualified members in their position
  and is comparatively well to the industrial norm and also to the
  experiences, duties, roles, responsibilities.

  Remuneration in Cash

  Remuneration 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

  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.

4.  Corporate Governance

  During 2007 the Company focused specially on corporate governance
  issues. The Company communicated 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.

  The Company adopts good corporate governance, including those provided
  by the Stock Exchange of Thailand, in supervising and controlling its
  business operations, which can be briefly described as follows:

  9.4.1 Corporate Governance Policy

  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.

  The Company promotes corporate governance at every level of the
  organization from the Board of Directors, the Executive Committee and
  down all the way to the operational level. The Company has the policy
  to improve and promote the good governance practice continually in
  order to achieve the ultimate goal of creating sustainable
  shareholders’ value added while taking into consideration the
  interests of all stakeholders.

  9.4.2 Shareholders’ Rights

  One of the Company’s targets in connection with corporate governance
  is to protect the benefit of the shareholders. The Company recognizes
  the importance of the equality among shareholders in the sense that
  they are entitled to receive fair treatment from the Company,
  including the various procedures related to share registration, share
  transfer, access to information from the Company, equal opportunity
  related to shareholder meetings and voting at the meetings, dividend
  distribution.

  The Company’s treatment to all shareholders equitably and
  transparently. This reflects in the Company’s practice such as the
  disclosure of significant information to the shareholders and
  investors. In 2007, the Company made 11 disclosures via the SET
  electronic publication (www.set.or.th).

  The Company publicizes information on its website which the public may
  access to it at
  http://www.siamcitycement.com/about/investor/yearly_report.aspx?lang=en.

  Apart from the foregoing, the Company publicizes information from time
  to time via press and analysts conference are as follows.

Tel: +66 2 797 7060

  Fax: +66 2 663 1847

  Email: staporn.phettongkam@sccc.co.th

  9.4.3 Other Stakeholders’ Interest

  The Company recognizes the existence and the interest of all
  stakeholders, such as government, employees, community, creditors,
  trading counterparties, government, and communities. The Company’s
  success is attributable to the contribution from those stakeholders,
  e.g. skill and diligence of employees, support from customers,
  cooperation from business partners, infrastructure provided by the
  government.

  The Company always recognizes the interest of the said stakeholders
  and assures that their interests are reasonably protected. The Company
  promotes collaboration with the said stakeholders in order to sustain
  the business success.

  9.4.4 Shareholder Meetings

  One of the Company’s intentions in holding shareholder meetings is to
  promote the cooperation and communication between the BOARD OF
  DIRECTORS and the shareholders. Annual general meetings (“AGM”) are,
  therefore, regarded as an importance regular event of the Company at
  which directors and management are usually present.

  The essence principles for the organization of a shareholder meeting
  are the following:

-   Equality among all shareholders, including minority and foreign
    shareholders, in term of the opportunity to attend the meeting,
    access to the adequate information about the meeting for the purpose
    of their decision-making.

-   The meeting notice and materials are given to all shareholders in
    advance in accordance with the requirement of the Company’s Articles
    of Association.

  At AGM, directors and members of the Audit Committee are present.
  Shareholders are granted with adequate opportunity and time to express
  their opinion and asked their questions according to the meeting
  agenda.

  9.4.5 Leadership and Vision

  In 2007, a new corporate vision has been set that, for the period of
  few years down the road, the Company is “to provide foundations for
  society’s future by providing the best cement, aggregates, and related
  product solutions, achieving above-industry profitability through
  quality, service and innovation.”

  9.4.6 Conflict of Interest

  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

  9.4.7 Business Ethics

  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
  responsibilities. 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.

  9.4.8 Balance of Power for Non-Executive Directors

  Members of Board of Directors are appointed by shareholder meeting,
  comprising executive and non-executive directors. At present there are
  12 Board of Directors members, 3 of which are executive directors. The
  rest of 9 are non-executive. This is regarded as a suitable
  composition of the Board of Directors in term of the fairness between
  various interested parties in the Company.

  Three non-executive directors are also members of the Audit Committee,
  being responsible for the management and regulation of the Company’s
  internal audit, assessment of the efficiency and effectiveness of the
  audit work, the accuracy, completeness and reliability of the
  financial and operational information. The Audit Committee presently
  comprises three members whose qualifications meet the requirements set
  by the SET.

  9.4.9 Aggregation versus Segregation of Positions

  To prevent unlimited power of any party, the Company has a clear
  policy on the segregation of responsibilities of the Chairman of the
  Board of Directors, the Managing Director, Board of Directors and
  Executive Committee.

  Main duties of the Chairman and Managing Director are as follows:

  Chairman:

-   Handling all activities responsible by Board of Directors, setting
    meeting agenda, providing information about the Board of Directors,
    proceeding the meetings at which opportunity is granted for
    discussion and expression of opinion. (At present, the
    responsibility of organization meetings is entrusted to the
    Secretary to the Board of Directors);

-   In making decision, the Chairman has a deciding vote in the event of
    tie votes;

  Managing Director:

-   Managing Director, appointed by Board of Directors, holds the
    position for a specified term, and may be rotated. Managing Director
    chairs the Executive Committee;

-   Managing Director is responsible for management of the Company in
    general.

  9.4.10 Compensation to Management

  Please see Point 9.3 hereof.

  9.4.11 Board of Directors Meetings

  The time schedule of Board of Directors meetings in each year is set
  in advance. In the past, Board of Directors met regularly on a
  quarterly basis. The purpose of the Board of Directors meetings is to
  consider the Company’s business operation and the operating results.
  The Secretary to the Board of Directors is responsible for arranging
  Board of Directors meeting, giving meeting notices to members of the
  Board of Directors before the meetings. Normally, all directors are
  present at every meeting unless they have unavoidable necessity. At
  all meeting, the Chairman always encourages participation of all
  members of the Board of Directors to ensure that all matter in
  question are deliberately considered. The executive directors are
  granted with opportunity to give their explanation to the questions
  related to the Company’s management. Occasionally, executive officers
  may be invited to give their explanation in the matters they are
  involved.

  Board of Directors is responsible for the following:

-   establishment of good and effective internal control system with an
    aim to attain the good corporate governance;

-   Making decision in the event of: 1) conflict of interest between the
    parties concerned, including shareholders and directors; 2)
    acquisition or disposition of the Company’s property; 3) any
    investment, borrowing, delegation of power, financial policy, risk
    management policy, human resource management, etc.

  9.4.12 Committees

  Board of Directors has delegate its power to committees to help
  supervise the Company’s operation in the areas of financial
  management, the performance of the auditors, both internal and
  external. At present, there two committees namely Audit Committee and
  Executive Committee whose composition and responsibilities are as
  follows:

Audit Committee

  Audit Committee comprises 3 independent directors, appointed by Board
  of Directors. Audit Committee meets on a regular basis, at least once
  every quarter before Board of Directors meeting. Audit Committee’s
  responsibility is as described in Item 10 below.

  Audit Committee reports its findings and giving its suggestions to the
  Board of Directors. Chairman of the Audit Committee may sometimes call
  a special meeting of the Audit Committee or invite any management of
  the Company to join and consider in certain particular financial
  matters or other matters.

Executive Committee

  Executive Committee meets on a monthly basis. It may meet as an
  extraordinary session as the Company’s business requires. The business
  considered at Executive Committee meetings are those related to the
  production, business administration, financial and accounting
  management, risk management, important financial transactions,
  Company’s plans, Company’s budgets, property acquisition, investment
  activities, etc. In general, Executive Committee has to report and
  propose to Board of Directors in relation to important matters.

  9.4.13 Internal Control and Audit Systems

  Please see Points 10 hereof.

  9.4.14 Board of Directors’ Reports

  It is an aim of the Company to establish the clarity and balance in
  the financial position of the Company. Board of Directors supervises
  the accounting work to ensure that the accuracy of the Company’s
  accounts which represent the financial position of the company and its
  subsidiaries. Financial reports are published on a quarterly basis.
  Financial reporting for the full year is made within 60 days after the
  end of each fiscal year.

  For the benefit of general investors and the public, the Company’s
  quarterly and annual financial reportings are considered by Board of
  Directors. Those financial reports are shown on the Company’s and
  SET’s websites.

  The essence of annual financial reports is the auditor’s report to
  shareholders expressing the auditor’s opinion on the information
  contained in the financial statements based on her/his audit. The
  Company as a SET listed company, is required to report its financial
  and operational information to the SET.

  9.4.15 Investor Relation

  To ensure that important information is communicated to shareholders,
  investors and all stakeholders accurately, timely and transparently,
  the Company has established a business relation to represent the
  Company in communicating the information about the Company to
  investors, securities analysts, financial institutions, and concerning
  governmental agencies. The contact information for this business
  relation unit is as follows:

  Name: Corporate Communications (investor relation affairs)

  Tel: +66 2 797 7060

  Fax: +66 2 663 1847

  Website: www.siamcitycement.com (Investor Relation)

  E-mail: pr@sccc.co.th

  9.5 Supervision of inside information use

  To put the good governance into practice, in connection with
  prevention on Insider Trading and abusive self-dealing, the board and
  the management realize the importance and strictly follow the code of
  conduct of the Company in the part concerning the internal information
  which may affect the benefit such as the share price or the Company’s
  securities. The Board and management members send in the reports of
  their shareholding at every Board Meeting

Code of Conduct No. 5: Use and Protection of Assets and Information

-   Each of us, entrusted with property belonging to or controlled by
    the Group, is responsible for the careful use, protection,
    expenditure and administration of such assets.

-   We use and protect confidential proprietary information, except to
    the extent we are required to disclose such information in the
    proper course of our duties.

-   We pay particular attention to IT aspects such as data protection
    and data security.

  9.6 Personnel

Number of employees at the end of 2007 and employee costs:

  --------------------- -------------- ----------- ------------ -----------
                        Consolidated               Separate     
                        financial                  financial    
                        statements                 statements   

                        2007           2006        2007         2006

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

  Employee costs for    1,970,834      1,719,706   1,651,453    1,446,076
  the year 2007                                                 
  (Thousand Baht)                                               
  --------------------- -------------- ----------- ------------ -----------

  Employee Development

  To enable the company to achieve its business as targeted and to be
  satisfied by all stakeholders, the development of employee is the most
  critical SCCC policy, which has been conducting continuously since
  many years ago and up till the present, and its importance will be
  increased in the future.

  The company believes that the quality of our employee is the important
  tool and mechanism in leading the company to sustainable development.
  The company has arranged the various learning activities as well as
  training programs, which help to develop competency for employees of
  all levels.

  Furthermore, we also highly give an importance to the competency
  development of leader and management of all levels. There is an
  assessment of core leadership competency, a draft of individual
  development plan, a seriously and continuously follow up and
  assessment of their development, as well as, a training and support
  the supervisor’s role in developing employees by being a coach for
  their subordinates.

  In addition, company has sent its employees, specialists, and
  management: to attend the conferences, training programs and seminars;
  to have a site visit in oversea; and to exchange knowledge and
  experiences among Holcim Group Companies. These to ensure that our
  employee competency and management of every line function will have a
  management standard as high as the international one; and have updated
  knowledge and skills in managing tasks and related people to cooperate
  in leading the company to a sustainable achievement as targeted.