Management

  (1) Management Structure

 

Names of Management or Controlling Persons

Board of Directors comprises

1. Mr. Chaovana NaSylvanta Chairman

2. Air Vice Marshal Kamthon Sindhvananda Director

3. Mr. Paron Israsena Director

4. Mr. Snoh Unakul Director

5. Mr. Sivavong Changkasiri Director

6. Mr. Sumet Tantivejkul Director

7. Mr. Yos Euarchukiati Director

8. Mr. Pricha Attavipach Director

9. Mr. Panas Simasathien Director

10. Mr. Arsa Sarasin Director

11. Mr. Boonsithi Chokwattana Director

12. Mr. Chumpol Nalamlieng Director and President

Executives (The Management Committee) :

  1. Mr. Chumpol Nalamlieng President, The Siam Cement Public Company
  Limited

  2. Mr. Kan Trakulhoon Vice President, The Siam Cement Public Company
  Limited

  3. Mr. Somboon Chuchawal President, The Siam Pulp and Paper Public
  Company Limited

  4. Mr. Apiporn Pasawat President, Cementhai Chemicals Co. Ltd.

  5. Mr. Pramote Techasupatkul President, Siam Cement Industry Co., Ltd.

  6. Mr. Kajohndet Sangsuban President, Cementhai Building Products Co.
  Ltd.

  7. Mr. Dusit Nontanakorn President, Cementhai Distribution Co., Ltd.

  8. Mr. Chalaluck Bunnag President, Cementhai Holding Co. Ltd.

  9. Mr. Aviruth Wongbuddhapitak President, Cementhai Property (2001)
  Co. Ltd

  Mr. Worapol Jennapar Secretary to the Board and Corporate Secretary

Scope of Authority of The Board of Directors, The Audit Committee, The
Remuneration Committee, and The Governance and Nomination Committee

Duly Authorized Directors

Two of the five Company directors, namely, Mr. Chaovana NaSylvanta, or
Mr. Snoh Unakul, or Mr. Yos Euarchukiati, or Mr. Panas Simasathien, or
Mr. Chumpol NaLamlieng jointly signed their names, with the corporate
seal affixed (As at December 31, 2003).

Scope of Authority of The Board of Directors of The Company

Board of Directors The number of directors is currently limited to
twelve. The majority are independent directors, while the rest are major
shareholders’ representatives and the Company executive to ensure
effective and efficient performance. The Board holds eight regular
scheduled meetings per year. Board members receive the agenda and all
supporting documents for each meeting well in advance to allow adequate
time for preparation. The Board considers all matters with due regard
for the interests of the shareholders and stakeholders. The chairman
ensures that there is sufficient time for a through discussion of each
agenda item with a full exchange of views.

The Board of Directors essentially has the following authorities:

1.  The Board is responsible for establishing corporate vision, the
    mission statement as well as the policy and strategy to align the
    interests of all stakeholders and create long-term shareholder
    value.

2.  The Board is responsible for reviewing the operating plan and
    ensuring maximum competitiveness in global level.

3.  The Board shall oversee and review the performance of all group
    companies as well as evaluating the performance of the management
    committee.

4.  The Board maintains proactive risk management systems as well as
    overseeing and reviewing corporate governance to ensure compliance
    with internationally accepted practices.

5.  The Board shall devote their time and resources to attending and
    performing their duties in an effective and efficient manner. They
    must avoid having competitive interests and be committed to the
    Company’s best interests.

6.  The Board manages and directs the Company’s operations in compliance
    with all laws, the objectives, the Articles of Association and the
    resolution of shareholders’ meetings in good faith and with care to
    preserve the interests of the Company.

7.  The Board conducts the Company’s business in line with The Siam
    Cement Group Corporate Governance as well as the SET Code of Best
    Practice for Directors of Listed Companies and Guidelines of Office
    of Securities and Exchange Commission in pursuit of business
    excellence.

8.  The Board is responsible for overseeing and monitoring the
    performance of each business unit and for the overall performance of
    SCG. The Board ensures that the Group’s operation reporting conforms
    to an agreed standard while establishing a corporate policy for the
    development of the Company’s operations and personnel development.

9.  The Board promotes awareness of the importance of business ethics
    among employees at all levels. It also promotes internal controls
    and internal auditing to ensure corporate integrity is maintained
    and to prevent any fraudulent or illegal practices, and misuse of
    authority.

10. The Board treats all shareholders equally with regard to information
    and protects those right equitably. Shareholders can actively
    exercise their rights and access to corporate information with full
    disclosure and transparency.

11. The Board shall authorize directors, the Board of Executive
    Directors, sub-committees, individuals or juristic persons to
    perform jointly or separately any duty in accordance with the
    objectives and Articles of Association of the Company in return for
    remuneration as determined by the Board. The Board has the right to
    change or revoke the authority given to such persons, or remove such
    persons from duty, and appoint other individuals for replacement, as
    deemed appropriate. The authorized or appointed persons must perform
    their duties in accordance with the regulations, orders and policies
    set by the Board.

    Scope of authority of the Audit Committee

    The Audit Committee of the Company comprises the following members:

    1. Air Vice Marshal Kamthon Sindhvananda Chairman

    2. Mr. Paron Israsena Member

    3. Mr. Sumet Tantivejkul Member

    4. Mr. Sivavong Changkasiri Member

    5. Mr. Pricha Attavipach Member

    The Audit Committee is authorized to fulfill the following duties:

    1. Supervise and review that the Company has appropriate system in
    financial reports in accordance with the legally defined accounting
    principle with transparency and adequacy.

    2. Support the establishment of financial report development in
    compliance with the international accounting standard.

    3. Review and ensure that the Company has appropriate and effective
    internal control and internal audit systems that comply with
    international accepted approaches and standards.

    4. Supervise and ensure that the Company has in place proactive
    operation systems to enhance operating effectiveness and efficiency.

    5. Review corporate risk management.

    6. Review and ensure that the Company is in full compliance with the
    laws on Securities and the Stock Exchange, and other laws relating
    to the Company’s business.

    7. Review the internal audit system on corruption and establish
    preventive measures.

    8. Review the righteousness and effectiveness of the information
    technology system relating to the internal control system, financial
    reports and risk management and suggest an up-to-date improvement
    occasionally.

    9. Review disclosure of corporate data in case there is a connected
    transaction or item that may lead to conflicts of interest to ensure
    accurateness and completeness.

    10. Supervise, review and comment on the operation of the Internal
    Audit Office and also cooperate with the Company’s auditor.

    11. Prepare reports on the supervision of activities of the Audit
    Committee with disclosure in the Company’s annual report which is
    duly signed by the Chairman of the Audit Committee.

    12. Consider, select and propose the appointment and remuneration of
    the Company’s auditor.

    13. Supervise the evaluation of the Internal Audit Office in
    compliance with international standards.

    14. Consider the budgets and manpower of the Internal Audit Office.

    15. Appoint, remove, transfer or terminate the employment of the
    Director of the Internal Audit Office.

    16. Take other actions in compliance with the law or assignments by
    the Board of Directors. In actions thereof, the Audit Committee is
    authorized to summon or order management, unit heads, or employees
    concerned to present opinions, attend meetings or submit the
    necessary documents.

    The Audit Committee performs duties within the authority and
    responsibility under the order of the Board of Directors. The Board
    is responsible for the Company’s operations and is directly
    accountable to shareholders, stakeholders and the public.

    Scope of authority of the Remuneration Committee

    The Remuneration Committee comprises the following members:

    1. Mr. Sivavong Changkasiri Chairman

    2. Mr. Yos Euarchukiati Member

    3. Mr. Boonsithi Chokwatana Member

    Scope of Authority

    1. Propose guidelines and methods of payment of remuneration to the
    Board of Directors, and committees appointed by the Board.

    2. Propose policy on management incentives in line with the
    Company’s operating results, and the performance of each management
    executive, and whenever it deems appropriate, the committee shall
    consider the hiring of consulting firms to advise on project
    implementation.

    3. Consider the annual remuneration for each member of the
    management committee and propose it to the Board for approval.

    4. To consider, before presenting to the Board of Directors, the
    budget for the salary increase, change of wage/remuneration and
    bonus of the senior executives.

    The Scope of authority of the Governance and Nomination Committee

    The Governance and Nomination Committee comprises the following
    members:

    1. Mr. Paron Israsena Chairman

    2. Mr. Snoh Unakul Member

    3. Mr. Sumet Tantivejkul Member

    4. Mr. Panas Simasathien Member

    5. Mr. Arsa Sarasin Member

    Scope of Authority

    1. To make recommendations to the Board of Directors regarding the
    best practices in corporate governance.

    2. To review the Company's corporate governance affairs and compare
    them with those of the leading international companies. The
    Committee also recommends plans for further improvement of the
    Company's corporate governance.

    3. To oversee and monitor the effectiveness of the Company's Board
    and Management with reference to The Siam Cement Group Corporate
    Governance. The Committee also gives advice to the Board on
    corporate governance practices.

    4. To develop a succession plan and establish a process for
    proposing nominees to the Board to replace directors who have
    reached the end of their terms.

    5. To propose new nominees to the Board to fill positions made
    vacant by directors who complete their terms. The Committee then
    makes recommendations to the Board for ultimate shareholder
    approval.

    6. To recommend a plan to the Board for the succession of the
    Company's President and senior management.

    7. To implement a process for assessing the effectiveness of other
    committees and the Board of Directors and follow up the results.

    8. To assess the independence of the Board in fulfilling its
    responsibilities and to recommend a plan for improvement.

    Management

    In addition to the President, the Siam Cement Group Management
    Committee is comprises eight other executives which include: Vice
    President and Presidents responsible for each business unit, namely,
    paper and packaging, petrochemicals, cement, building products,
    distribution, property, and the holding company. These nine
    executives report directly to the President. The Management
    Committee is authorized to manage and direct the Group’s operations
    in accordance with policies set by the Board; to take responsibility
    for the Group’s operating results; to control expenses and capital
    expenditure limits as approved by the Board and as stated in the
    Annual Operating Plan; to manage personnel in line with the Group’s
    policy; to resolve problems or conflicts that may affect the Group;
    and to maintain effective communication with the stakeholders.

    (2) Election of Executives and Directors

    The Governance and Nomination Committee is responsible for
    nominating candidates as replacements for the Directors who retire
    from office or are unable to complete their terms. The Committee
    then makes recommendations to the Board for ultimate shareholder
    approval. Candidates are from a diversity of background and
    experience. Personal qualities sought include leadership,
    forward-looking vision, ethical integrity, and independence of
    opinions.

    Rules and procedures for the election of Directors are as follows:

    1. The Board of Directors as well as any shareholders can nominate
    candidates for the director’s position when his term is completed.
    The shareholders’ meeting has the authority to elect the directors.

    2. In case the number of candidates nominated for Directors does not
    exceed the number of Directors required for that election, the
    meeting shall elect all of them as Directors.

    3. In case the number of candidates nominated for Directors exceeds
    the number of Directors required for that election, it shall be
    decided by votes of the shareholder meeting. The shareholder may
    elect the candidates nominated for Directors, but not exceeding the
    number of Directors required for that election and the Directors
    shall be individually elected. Each shareholder or proxy shall have
    one vote for each share he holds or represents for the election of
    each Director. The candidates shall be ranked in order descending
    from the highest number of votes received to the lowest, and shall
    be appointed as Directors in that order until all of the Director
    positions are filled. Where the votes cast for candidates in
    descending order are tied, which would otherwise cause the number of
    Directors to be exceeded; the remaining appointment shall be made by
    the chairman of the meeting who shall have a casting vote.

    Majority of The Directors are independent.

    (3) Remuneration of the Board of Directors and Executives

1. Financial Remuneration

a)  Remuneration paid to 12 directors for company’s directorship and
    director’s fee for 2003 totaled 77,956,000 Baht, with details as
    follows:

+------------------------+------------------------+----------+--------+
| Directors              | Position               | Remuner  | Bonus  |
|                        |                        | ation(Ba | for    |
|                        |                        | ht/year) | 2003   |
|                        |                        |          | (Baht) |
+========================+========================+==========+========+
| 1. H.E. Dr. Chaovana   | Chairman               | 1        | 7,9    |
| NaSylvanta             |                        | ,296,000 | 20,000 |
+------------------------+------------------------+----------+--------+
| 2. Air Vice Marshal    | Director               | 864,000  | 5,2    |
| Kamthon Sindhvananda   |                        |          | 80,000 |
|                        | Chairman of The Audit  | 264,000  |        |
|                        | Committee              |          |        |
+------------------------+------------------------+----------+--------+
| 3. Mr. Paron Israsena  | Director               | 864,000  | 5,2    |
|                        |                        |          | 80,000 |
|                        | Member of The Audit    | 176,000  |        |
|                        | Committee              |          |        |
|                        |                        | 162,000  |        |
|                        | Chairman of The        |          |        |
|                        | Governance and         |          |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 4. Mr. Snoh Unakul     | Director               | 864,000  | 5,2    |
|                        |                        |          | 80,000 |
|                        | Member of The          | 96,000   |        |
|                        | Governance and         |          |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 5. Mr. Sivavong        | Director               | 864,000  | 5,2    |
| Changkasiri            |                        |          | 80,000 |
|                        | Member of The Audit    | 176,000  |        |
|                        | Committee              |          |        |
|                        |                        | 162,000  |        |
|                        | Chairman of The        |          |        |
|                        | Remuneration Committee |          |        |
+------------------------+------------------------+----------+--------+
| 6. Mr. Sumet           | Director               | 864,000  | 5,2    |
| Tantivejkul            |                        |          | 80,000 |
|                        | Member of The Audit    | 160,000  |        |
|                        | Committee              |          |        |
|                        |                        | 108,000  |        |
|                        | Member of The          |          |        |
|                        | Governance and         |          |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 7. Mr. Yos             | Director               | 864,000  | 5,2    |
| Euarchukiati           |                        |          | 80,000 |
|                        | Member of The          | 108,000  |        |
|                        | Remuneration Committee |          |        |
+------------------------+------------------------+----------+--------+
| 8. Mr. Pricha          | Director               | 864,000  | 5,2    |
| Attavipach             |                        |          | 80,000 |
|                        | Member of The Audit    | 176,000  |        |
|                        | Committee              |          |        |
+------------------------+------------------------+----------+--------+
| 9. Mr. Panas           | Director               | 864,000  | 5,2    |
| Simasathien            |                        |          | 80,000 |
|                        | Member of The          | 108,000  |        |
|                        | Governance and         |          |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 10. Mr. Arsa Sarasin   | Director               | 864,000  | 5,2    |
|                        |                        |          | 80,000 |
|                        | Member of The          | 84,000   |        |
|                        | Governance and         |          |        |
|                        | Nomination Committee   |          |        |
+------------------------+------------------------+----------+--------+
| 11. Mr. Boonsithi      | Director               | 864,000  | 4,5    |
| Chokwatana             |                        |          | 60,000 |
|                        | Member of The          | 96,000   |        |
|                        | Remuneration Committee |          |        |
+------------------------+------------------------+----------+--------+
| 12. Mr. Chumpol        | President and Director | 864,000  | 5,2    |
| NaLamlieng             |                        |          | 80,000 |
+------------------------+------------------------+----------+--------+
| Total                  |                        | 12       | 65,2   |
|                        |                        | ,676,000 | 80,000 |
+------------------------+------------------------+----------+--------+

  Remark: No.1 with a company car

  b) Remuneration for executives (The Management Committee) in the form
  of salaries and cash benefits paid to 10 executives (1 executive
  resigned during the year) in 2003, totaled 130,669,000 Baht.

2. Remuneration in kind

  Company’s contribution to the provident fund for directors or the
  management executives (The Management Committee) as being Company’s
  employees totaled 7,241,400 Baht. The company cars have been provided
  for the management committee.

  The Attendance of the Board of Directors in Relevant Committee
  Meetings in 2003

Unit : Time

  ----------------------- ------------ ------------ ------------ --------------
  Name                    Board of     Audit        Governance   Remuneration
                          Directors    Committee    and          Committee
                                                    Nomination   
                                                    Committee    

                          Total 9      Total 7      Total 5      Total 5
                          times/year   times/year   times/year   times/year

  1. Chaovana NaSylvanta  9                                      

  2. Kamthon Sindhvananda 9            7                         

  3. Paron Israsena       8            7            5            

  4. Snoh Unakul          9                         4            

  5. Sivavong Changkasiri 8            7                         5

  6. Sumet Tantivejkul    9            6            5            

  7. Yos Euarchukiati     9                                      5

  8. Pricha Attavipach    9            7                         

  9. Panas Simasathien    9                         5            

  10. Arsa Sarasin        7                         3            

  11. Boonsithi           7                                      4
  Chokwatana                                                     

  12. Chumpol NaLamlieng  9                                      
  ----------------------- ------------ ------------ ------------ --------------

  Remark : -The five Audit Committee members are number 2, 3, 5, 6, and
  8

  -The five Governance and Nomination Committee members are number 3, 4,
  6, 9, and 10

-The three Remuneration Committee members are 5, 7, and 11

(4) Supervision

The Board of Directors pledged its commitment to operate in tune with
the Code of Best Practices as prescribed by the Stock Exchange of
Thailand. Moreover, the Company has embraced the international best
practice by establishing a Governance and Nomination Committee
responsible for overseeing and reviewing the Company’s corporate
governance affairs and carrying out nominations for the selection of
Directors in replacement for the directors who complete their terms.

The Management Team are authorized to oversee and monitor the Company’s
operations and performances at company, strategic business unit, and
Group levels. The Management meet and prepare a report according to the
specified format on a monthly basis. They are under consistent
supervision of the Board of Directors to ensure the Company’s operations
are followed up closely and proper corrective actions are taken to
improve the Company’s performance.

The Group has continuously conducted within the Good Corporate
Governance supervised by the Board for a long period of time and
believes in its transparency, disclosure, and fairness to all
stakeholders. This will lead to the organization’s prosperity and the
country’s strength in the long run. In addition, the Group supports and
promotes Thai organization to understand the concept and foresee benefit
from the good corporate governance practice. The concept is summarized
below:

 4.1. Policy on Corporate Governance

The Board of Directors gives great importance to the proper management and operation under the principle of good corporate governance and Code of Best Practices for listed company set by the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission of Thailand (SEC). These include fair treatment in business dealings; a clear delineation of the structure, elements, roles, responsibilities, transparency in the board structure, accountability, independence, operations, information disclosure and risk management

The Siam Cement Group (SCG) has published a booklet called “The Siam Cement Group Corporate Governance” describing the Group’s principles of good corporate governance for distribution to investors, business associates, other stakeholders, and general interested public. 

In addition, the annual report regularly includes detailed information about good corporate governance as practiced in the Group. The ideals and moral values embodied in good corporate governance are followed in all areas of Siam Cement’s operations. SCG seeks to set an example of good corporate governance to inspire other companies in Thailand.

 4.2. Shareholders: Rights and Equitable Treatment

Shareholders have the right of access to corporate information. They also have the right to protect their interests by attending shareholders’ meetings where they can express their opinions, offer suggestions, vote on resolutions, and take part in making important changes and electing members of the Board.

 4.3. Various Groups of Stakeholders 

SCG strictly follows the principle of mutually beneficial relationships with business associates by ensuring fairness through a management system established by the Board and by providing employees with guidance through a published code of ethics. 

The Group also plays an important role in contributing to the improvement of the quality of life of Thais and the progress of Thai society by promoting and supporting social programs and projects over many years in the communities surrounding the Group’s facilities with a major emphasis on education, sports, and community infrastructure projects. Moreover, SCG has invested heavily over a long period in the preservation of the environment by developing clearly defined environmental plans, and by requiring regular monitoring and evaluation reports. The Group has undertaken many other environmental projects, including issuing an annual sustainability report since 2001, which can be downloaded from www.siamcement.com.

 4.4. Shareholders’ Meetings

The Board convenes the ordinary general meeting of shareholders within three months after the end of the financial year. Notices of the meeting with an agenda that includes Board’s opinion are sent to all domestic and international shareholders well in advance of the meeting. At the meeting, all shareholders have an opportunity to express their view and ask questions regarding performance and operation of SCG. In addition, they can request an extraordinary general meeting in writing with sufficient justification. If warranted, the extraordinary general meeting must take place within one month after the request is received.

 4.5. Leadership and Vision

The Board has an important role in setting the Group’s mission and in developing operational plans for the Group, short-term and long-term, with senior management; in setting financial policies and risk management planning. In addition, the Board is responsible for establishing proper oversight, for auditing, and for assessing the performance of the Group as a whole and of senior management to ensure it conforms to plan and yields the maximum value to shareholders. 

SCG encourages board members to attend seminars that enhance their capabilities (Details are available in board member biographies in this report) and promote the exchange of ideas among directors and senior management from other organizations to foster continuing development of the Group.

 4.6. Conflict of interests

SCG follows the regulations of the SET and the SEC strictly, with the Board paying careful attention to potential conflict of interests with full disclosure and transparency in a timely manner to protect the interests of the Group.

With regard to insider information, the Company forbids by policy and by regulation the disclosure of privileged information to outsiders or the use of such information for personal gain.

A clear and complete breakdown of the shareholding structure of the Company and the holdings of Board members in both common shares and debentures of the company and subsidiaries are included in the annual report.

 4.7. Business Ethics

The Board believes that the Company’s principles, which have been in force since its founding, are of great significance and must be adhered to by employees at all levels, at all times, and in all ways. A booklet setting forth these principles was published in 1987 to provide guidance in the conduct of business and senior management is entrusted with setting an example. Good ethics have made a major contribution to the progress and success of the Company, while providing stability and earning public trust.

 4.8. Balance of Power for Non-Executive Directors

At present, the Company has 12 directors of which seven are independent directors with only one executive director, the president. This composition assures independent and efficient decision-making free of influence.

The Company selects directors with outstanding credentials: expertise in different fields; leadership qualities; a broad vision; fair and ethical; unblemished work histories; and the ability to express opinions freely. Each director has clearly assigned responsibilities to ensure efficient operation.

 4.9. The Respective Roles of the Chairman and the President

The Chairman is the leader in setting corporate policies and vision, as well as evaluating senior management performance. The president provides leadership to management and ensures operations follow established policies. These two positions are separated to provide a healthy balance between the two kinds of authority.

 4.10. Remuneration for Directors and Management

The Company remunerates directors and management at competitive rates with the leading companies within the same industry and discloses details in the annual report.

The Board’s remuneration is based on the responsibilities held and on the performance of the company with the approval of shareholders. Remuneration of management is set by the Board, based on responsibilities held, individual performance, and the operating results of the company, the business units, and the Group as a whole, both short-term and long-term.

 4.11. Board of Directors’ Meetings

The Board holds at least eight meetings per year. Board members receive the agenda and all relevant documents for each meeting well in advance to allow adequate preparation time. Protecting interest of shareholders and stakeholders is of major concern of the Board. The Chairman attends all Board meetings and ensures sufficient time for a thorough discussion of each item in the agenda and a full exchange of view. Each director’s number of attendance is shown in the annual report.

In addition, specific committees meet as frequently as needed to complete their tasks.

Management Committee members usually attend Board meetings to report on matters under their purview, and keep current on Board policies and decisions so that they can proceed promptly with implementation. Management Committee members are excused from Board meetings when their performance is under review.

 4.12. Committees

The Board established committees to oversee specific aspects of the Board’s responsibilities – the Audit Committee, the Governance and Nomination Committee, and the Remuneration Committee. The Board can establish additional committees as needed. All committees submit regular reports covering their decisions and actions.

 4.13. Controlling System and Internal Audit

The Group has a system of internal controls set forth in a handbook that covers all aspects of business operations. The internal audit is to ensure that the system is efficient, effective, and implementable as expected.

The Group’s internal control system remains flexible, undergoing constant development to stay in tune with international standards. The primary emphasis is on prevention to achieve maximum efficiency for optimum results with staff themselves controlling and directing the process, as well as assessing and evaluating. In addition, the information and communications technology system undergoes constant review and upgrading to ensure it keeps pace with business developments.

To ensure the results achieved are consistent with policies, the audit system undergoes evaluation on a regular basis with participation by staff in all parts of the Group who make suggestions and recommendations for improvements.

 4.14. Relations with Investors

The Group’s management gives great importance to investor relations with an office dedicated to providing a wide range of accurate, complete, and timely information and news via a website and to responding to emailed requests promptly.

Senior management meets with institutional investors and stock analysts regularly either at Company offices or outside, domestically and internationally, to exchange ideas and receive suggestions on enhancing the data provided. Meetings are held with analysts quarterly and recordings of these sessions are available on the website.

Results of a survey in 2003 by the American publication Institutional Investor in association with Reuters resulted in the Company being recognized as Thailand’s most outstanding company for investor relations and for governance.

(5) Controlling the usage of internal data

  The Company has defined as a Code of Ethics of the Siam Cement Group
  that “no employees shall exploit any company’s information for the
  interest of self or others despite the fact that the Siam Cement Group
  may lose no benefits.” The penalties for executives or employees
  exploiting the Company’s internal data for their own interests or
  disclosing information to the public are clearly stated in the
  Company’s approval authority.

  The Company has designated that only the directly involved persons can
  access to specific information. Moreover, the Company has restricted
  on-line access to information which is classified as confidential or
  which may affect the Company’s operations, with a system of access
  control rights and passwords.

(6) Human Resource 

Human resource is a critical factor in organizational success. To
accomplish the corporate objective, high calibre staff must be involved
in operation, result assessment, and strategic move development. The
Siam Cement Group has given human resources management a high priority
since its founding more than 90 years ago, as reflected in one of the
business philosophy: “Belief in the value of the individual”. The
continued progress of the subsidiaries under the corporate over the
years has earned recognition for the Group as a national leader in
efficient human resources management.

The Group’s quality in human resources management begins with
highly-selective new hiring. “Cementhai Career Choice” is a proactive
program that seeks to attract bachelor’s degree-level graduates of
Thailand’s leading universities. To persuade MBA graduates from the top
10 universities in the United States and Europe, the Group has a program
called the “Top Ten University Recruitment”.

Because personnel development is viewed as a long-term investment that
helps ensure success and adds value to the organization, the Group
undertakes a wide range of human resource development activities
consistent with its growth strategy. Examples include the promulgation
of Best Practices for various disciplines among Group companies through
ongoing, year-round activities; the establishment of a Knowledge
Management database system; constantly update training programs to keep
abreast of changes in methods and practices; etc.

To encourage continued learning, the Group also provides scholarships
for personnel to earn master’s degrees, work observation visits, and
staff rotation. The Group operates a Competency-Based Management system
that provides clear and continuous human resource management. Another
program that enhance the competence of the workforce is the Group’s
ongoing networking with various internationally-recognized educational
and research institutions that help keep Group personnel at the leading
edge, both domestically and regionally.

To ensure that staff at all levels set performance targets align with
the organizational strategy, the Group communicates clearly the
corporate direction and goals to personnel at all levels. Individual
evaluations are based on performance, as well as on integrity,
leadership, and managerial characteristics. This system helps ensure the
continuing development of quality staff to assume management
responsibilities.

A compensation system based on performance is another method the Group
uses to encourage excellence and dedication, using the results of
surveys of other leading companies to ensure competitive compensation
packages. The Group’s Variable Pay system determines bonus levels, based
on the performance of each company and of each individual.

Because the Group sees information technology as an important means of
boosting staff management efficiency, the “Cementhai e-HR” personnel
management software has been implemented to increase the speed and
accuracy of data, to reduce paperwork significantly, and to provide more
convenience to staff, who can manage their own information directly.

A commitment to ongoing improvement of our personnel management system
has had a significant impact on human resource development and earned
continuing recognition, as well as certification, with Siam Cement being
the first company in Thailand to receive ISO 9001:2000 quality system
certification for human resource management. These are not as important
as having high-quality human resources with knowledge, capabilities, and
integrity. They are a force for change and builders of a new corporate
culture that can compete successfully in satisfying consumer needs on a
global basis. They ensure the Group will continue to evolve and grow,
while adding shareholder value and strengthening Thailand.

As at December 31, 2003, The Siam Cement Public Company had 304
employees with a compensation of Baht 379 million. Total employees of
the Group were 18,276 with a compensation of Baht 4,188 million.
(Compensation includes salary, bonuses, and provident fund)

Number of Employees in Each Business of The Siam Cement Group

As at December 31, 2003 and 2002

  ---------------------------------- ------------------ ------------------
  Company/Business Unit              Number of          
                                     Employees          

                                     2003               2002

  The Siam Cement Public Company     304                284
  Limited                                               

  Cement Business                    4,341              4,388

  Petrochemical Business             1,044              990

  Paper and Packaging Business       5,633              5,291

  Building Products Business         5,025              4,137

  Distribution Business              1,031              959

  Others                             898                864

  Total                              18,276             16,913
  ---------------------------------- ------------------ ------------------