Corporate Governance

The company realizes and emphasizes on various basic rights of the shareholders both as securities investors and as the company’s owners e.g. rights to trade, transfer the holding securities, rights to receive profit appropriation from the company, rights to receive sufficient information of the company, rights in the shareholders’ meeting, rights to express opinion, rights to make joint decision for the company’s important issues e.g. appropriation of deividend, director appoint ment or withdrawal, auditor appointment, approval of important transactions influencing directions of business operations, change of memorandum of association and articles of association, etc.

In addition to basic rights as mentioned above, the company has performed other transactions to promote and facilitate the utilization of shareholders’ right as found below:

1. The company will send a notice summoning the meeting together with supplemental documents related to the agenda to the shareholders at least seven days prior to the meeting; or by the methods in compliance with the requirements of Office of Securities and Exchange Commission and Stock Exchange of Thailand, and advertise in the newspapers for at least 3 consecutive days prior to the meeting. Opinion of the directors will be attached to each agenda and such information will be disclosed on the company’s website so that the shareholders can have sufficient time to study the information prior to the meeting.
2. In the event that the shareholder cannot attend the meeting by himself, the company gives an opportunity to the shareholder to authorize the independent directors or any persons to sit in the meeting for him by using any form of letter of attorney that the company attaches to the invitation letter to the meeting. In addition, the shareholder can also download letter of attorney via the company’s website as well.
3. The meeting opens an opportunity to the shareholders to send opinion, recommendation, questions prior to the meeting .
4. The meeting opens an opportunity to the shareholders with the equal rights to express their opinion, recommendation or questions independently before making any resolution to each agenda. However, the shareholders’ meeting consists of related directors and executives to answer questions to the meeting and will take records of significant questions and opinions in minutes of the meeting which can be examined by the shareholders.
5. After the meeting, the company will prepare minutes of the meeting exhibiting accurate and complete information for the shareholders to examine. Minutes of the meeting will be disseminated via the company’s website.

The company sets up policies to build up egalitarium among every and every group of shareholder, especially minority group by providing opportunities to the minority group to propose the name of representation from minority group in the meeting agenda in order to be selected as a director in the annual general shareholders’ meeting. In 2008, the company gave the said opportunity to the shareholders since 17 November 2008 to 15 January 2009 and disseminate criteria and operating procedures via the company’s website and through Stock Exchange of Thailand.

In each meeting the company provides equal opportunity to every shareholder. Before the meeting, Chairman of the meeting will explain voting rights, shareholder votes counting for each agenda. Every participant at the meeting is encouraged to express his/her opinion, recommendations, question for each agenda appropriately and sufficiently. Chairman of the meeting will preside the meeting by order of the agenda and will not add any agenda not informed to the shareholders in advance, especially agenda significant to the shareholders may take time to study before making decisions. In the event that the shareholder cannot attend the meeting, the company allows the shareholder to authorize independent directors or any persons to sit in the meeting for him/her by using any form of letter of attorney that the company attaches to letter of invitation to the meeting.

The company emphasizes on the rights of every stakeholder group, no matter internal stakeholders e.g. executives, employees or external stakeholders e.g. creditors, customers, etc. The company realizes that support and opinion from each stakeholder group will benefit the company’s operations and business development. The company will comply with related laws and requirements so that such stakeholders will be properly treated. In addition, in running the company’s business, the company takes into consideration the rights of each stakeholder by using the following guidelines:

Board of Directors emphasize on disclosing accurate, complete and transparent information, financial report and general information based on S.E.C. and Stock Exchange of Thailand’s criteria. Other significant information affecting the securities price influences decision-making process of the investors and stakeholders. The company has disclosed its information to the shareholders, investors and the public via various channels and media of Stock Exchange of Thailand and the company’s website.

For investor relations function, the company has not yet set up specific unit for this purpose. But the company has assigned Managing Director to communicate with institutional investors, shareholders, analysts and related government bodies.

Board of Directors are responsible for the company’s and its subsidiaries’ consolidated financial statements and financial information as exhibited in annual report. Such financial statements are prepared based on the generally accepted accounting standards in Thailand by selecting appropriate accounting policies and practice them consistently, including sufficient disclosure in the financial statements. In this case, the Audit Committee will review financial report quality, internal control system and sufficient disclosure in notes to financial statements and report to Board of Directors.

1. Board of Director Structure

Board of Directors consists of skilful and capable persons, holding experiences beneficial to the company, who have important roles in determining corporate policies and overview as well as in monitoring the audit and assessing the company’s operating performance to follow the plans.

Board of Directors structure consists of 1/3 of independent directors so as to balance the voting rights for several issues. The Audit Committee consists of 3 independent directors.

At present, there are 8 members in the Board of Directors, consisting of 7 non-executive Board members and 1 company’s executives i.e. Managing Director and 3 qualified independent directors in compliance with the criteria as specified by S.E.C.

The articles of association require that in the annual general meeting every year, one-thirds of the directors must give up their offices. If the numbers of directors cannot be divided into 3 equal portions, then take the nearest numbers of one-third to leave the post. The directors, who leave the post in the first and the second years after the company registration, use draw a lot method to choose those to leave first. In the following years, the directors who stay longest are the first to leave. Directors who have left the post may be re-elected in the future.

In addition, Board of Directors have appointed the Audit Committee to perform specific duties and present them to the Board of Directors for consideration and acknowledgement. The Audit Committee has rights and responsibilities as determined in Authorization of the Audit Committee.

The company does not clearly segregate duties and responsibilities between Board of Directors and executives. The Board of Directors determine policies and monitor the executives’ operations in the policy level. The executives administer various aspects of the companies’ performance in compliance with the predetermined policies. Therefore, Chairman and Managing Director must be different persons.

However, the company has Corporate Secretary responsible for running Board’s meeting and shareholders’ meeting; preparing minutes of the Board’s meeting, minutes of the shareholders’ meeting , annual report; filing documents as required by law; supporting the Board of Directors’ job regarding legal requirement and related rules and regulations.

2. Board of Directors’ Roles, Duties and Responsibilities

Board of Directors consider and approve significant issues regarding the company’s operations e.g. vision and mission, strategies, risks, plans and budgets and moniture that the management comply with the specified policies and plans effectively and efficiently.

Corporate Governance Policies
The company prepared its own corporate governance policies in writing, which was approved by the Board’s meeting on 22 August 2007. However, the Board of Directors frequently review the policies and compliance to such policies.

Business Ethics
Board of Directors insists in accurate and fair business operations and has specified the following 7 guidelines in writing so that the executives and employees can use as implementation principles:

1) Guidelines for customers
2) Guidelines for trading partners and accounts payable
3) Guidelines for competitors
4) Guidelines for shareholders
5) Guidelines for society
6) Guidelines of the employees
7) Guidelines among employees


The company announces and informs every employee to strictly acknowledge and comply to such guidelines above.
Conflict of interest
Board of Directors determine policies on conflicts of interest with the principles that any decisions on business operations must be for the company’s ultimate benefits only and should avoid any actions which may create conflicts of interest. The policies determine related persons or related transactions that must be considered. The company then must inform Board member’s related transactions and the related Board members must not participate in the decision-making and must not approve such transactions.

Audit Committee will present related transactions and conflicts of interest to the Board of Directors, who will carefully consider the appropriateness and compliance with the criteria as determined by Stock Exchange of Thailand. This information will also be disclosed in the annual report and annual information presentation (Form 56-1) as well.


Internal Control System
The company realizes the importance of risk management and good internal control system, which will enhance the accurate, transparent operations that can be audited and can diminish or prevent probable risks. Consistent development of effective and efficient internal control system in coordination with Internal Audit Department independent from the executives to examine and review the system as well as the evaluation of effective operations in various organizations will ensure that every employee has complied with the internal control system determined by the company. The report should be submitted to the Audit Committee and the Board of Directors for acknowledgement and consider approve any corrective actions. In 2008, assessment results of the company’s internal control system dividing into 5 major parts i.e. organization and environment, risk management, the executives’ operation control, information technology system, communication and follow-up system can be concluded that the company has sufficient and appropriate internal control system as well as operations monitoring system that can protect the company and its subsidiaries’ asset arising from the misuse or unauthorization implementation by the executives.

Risk management
Board of Directors emphasize on risk management in the overall corporate image, assess risks and manage corporate risks in order to maintain them in acceptable levels. The company prepares control self assessment both at management level and operating level in order to jointly assess risks/obstacles, uncertainty affecting operations to meet the company’s objectives, events resulting in business opportunities loss, probable internal and external risks. The criteria specify that should there be any risk which may obstruct the business operations from reaching the planned targets, the company will have measures on risk management, support and stimulate everyone to build the cultures that realize the importance of risks, understand causes of risks and perform corrective actions e.g. appropriate improvement of operating procedures and resource utilization to meet the objectives of protection and probable loss. On the other hand, the above systematic operations will result in ultimate new business opportunities to the company, which will further create values to the organization.

In 2008, the company assessed its risk and sufficiency of the existing internal control system in order to find guidelines for operation improvement so as to have more efficiency. The topics cover administration, management, marketing, sales, inventories, logistics and human resources. However, the company assigns and follows up with the responsible executives in each division, implements the specified improvement guidelines and related persons as operating guidelines in order to have more effective operating performance.

Report of the Board of Directors
Board of Directors are responsible for the company’s and its subsidiaries’ consolidated financial statements, including financial information technology (report of Board of Directors’ responsibilities for the financial report) as appeared in the annual report. Such financial statements are prepared in accordance with the accounting standards accepted and audited by the external auditor. Significant disclosure on information technology including financial and non-financial information is based on the complete and consistent fact. Board of Directors appointed the Audit Committee responsible for reviewing the financial report from the joint meeting between the accounting department and the auditor before presenting the financial report to the Board of Directors every quarter.

3. Board Meeting

Members of the Board must hold a Board Meeting once every three months and may hold extraordinary meeting as found necessary. Agenda must be clearly identified. Related documents must be submitted in advance so that the Board of Directors have enough time to study prior to the meeting, except for the urgent case. Minutes of the meeting will be taken and certified minutes will be filed for further reference and audit. In addition, the company prepares operating performance reports to the Board of Directors every month so that the Board of Directors can monitor the management’s performance consistently and in time.

In the meeting, Chairman and Managing Director jointly determine the agenda and related issues. The Board’s meeting will give opportunities to each director to present any issues which may be considered as meeting agenda.

Upon the consideration, Chairman acting as Chairman of the Meeting will give opportunities to the directors to share their opinion independently. In certain agenda, the top executives, as the related persons, may participate in the meeting in order to provide additional detailed information beneficial to the meeting. The meeting will directly acknowledge the policies so as to implement them effectively. However, a resolution from the Board Meeting must constitute of a majority of the votes cast by the remaining member of the Board. One director has one vote. Director having stakes in the transaction will not attend the meeting and/or will not exercise his/her voting rights on certain issue. In the case of an equality of votes, Chairman of the Meeting shall have an additional vote as a casting vote. In each meeting, the company will send supplemental documents of the meeting agenda in advance so that the directors can have enough time to study the details.

In each Board’s meeting, corporate secretary will also attend and take minutes of the meeting before sending to Chairman for certifying the accuracy before presenting to the next meeting for approval. Corporate secretary will also file information and documents related to the meetings for future search and reference. Normally, all members of the Board of Directors will attend the meeting, except for special case, they will inform to the meeting in advance. Moreover, Board of Directors set up policies for the directors who are not executives to have joint meetings among themselves as found necessary in order to discuss any problems relating to any management topics of interest without any participation from the management before informing Managing Director results of the meeting. However, participation of each Board member has been disclosed in 2.1.1 Board of Directors page 19.

4. Remuneration

Determinaton of directors and executives remuneration is not approved by Remuneration Committee since the company has not yet appointed such committee. However, the company has policies to pay remuneration to the directors and executives at the appropriate level considering the company’s operating performance in comparison with the same industry as reference as well as appropriateness to each director’s and executive’s responsibilities. Remuneration is in the form of pension, meeting allowance, salaries and bonus. Details of remuneration expense for each director and executive in 2008 are exhibited on page 24.

5. Development of Director and Executive

Board of Directors set up policies promoting and facilitating training courses and knowledge to the directors and related persons regarding the company’s corporate governance system e.g. directors, members of the Audit Committee, executives, corporate secretary, etc. in order to consistently improve the operations. In the event of changing directors or having new directors, the management will prepare documents and information beneficial to the new directors’ duties, including provide recommendation of business type and business operation guidelines to the new directors as well.