The Board of Directors of AAPICO Hitech Public Company Limited has placed importance on having good corporate governance as a foundation for long term sustainable and profitable growth for Company. Over the years, the Board of Directors has continuously developed the Company’s corporate governance principles and has applied the best practices wherever possible and practical to the Company.

The corporate governance policy provides the guideline in directing the affairs of the Company to conduct its business with transparency, honesty, and ethically. The Company has demonstrated its commitment to adhere to guidelines for listed companies and regulations of the SET and SEC and seek for improvements to its solid foundation in good corporate governance.

Right of Shareholders

The Company operates with consideration to the rights of shareholders and refrain from limiting shareholders to have access to the company information. Shareholders receive their basic rights, which include the right to freely buy, sell, and transfer shares, the right to adequately receive news and information in a timely manner and on regular basis, the right to participate and vote in the shareholders’ meeting to elect or remove board members, appoint external auditor and receive share of profit, and the right to approve the amendments to the company’s articles of association or memorandum of association, etc. The Company encourages shareholders to attend the shareholders’ meeting and exercise their rights, and prohibits any actions that could violate shareholders’ rights.

The Company has the policy to promote and facilitate shareholders’ participation, including institutional investors, at the general meeting of shareholders by selecting the venue, time and date at the convenient of shareholders to attend the meeting. In 2015, the Annual General Meeting of shareholders was held on Monday, April 27, 2015 at 14.30 Hrs. at the Stock Exchange of Thailand. In any cases that shareholders are not able to participate in the shareholders’ meeting, the Company encourages shareholders to appoint independent director or any individual as their proxy. The proxy form, which shareholders can specify their vote on each agenda, is delivered to shareholder together with the notice of the meeting and can be downloaded from the company website.

Before the meeting, the Company prepared and published notice of the meeting to shareholders in a clear and timely manner. The notice of meeting explicitly indicated time, date, venue, and the matters to be tabled at the meeting including the board’s opinion on each agenda. Sufficient information was attached with the notice, which was delivered by post mail to shareholders 7 days prior to the meeting. The same information was also made available on the company’s website, in both Thai and English language, allowing sufficient time for shareholders to review information before the meeting.

For the AGM 2015, the Company provided opportunity to shareholders to propose agenda items or nominate qualified candidates to be appointed as the Company’s director for the board’s consideration during October to December 2014, with detailed criteria and procedure publicly available on the company website under investor relations section. Shareholders were also given opportunity to submit inquiries through the same channel. However, there were no proposal from shareholders for the board’s consideration of any additional agenda items or director nominees.

On the meeting day, the Company used an online registration tool to facilitate the registration process. Shareholders and proxy holders were requested to verify their identity as prescribed in the registration procedure provided with the notice of the meeting. The Company also provided stamp duty for proxy holders at their convenience.

Before the meeting is convened, the Chairman clearly advised the quorum, voting procedures and voting count method to the meeting prior to the discussion of the agenda items. Shareholders are allowed to attend the meeting after it has been convened, however, their votes would be counted as quorum as from time they attend the meeting and would be entitled only for pending agendas that have not yet resolved. Directors are advised to join the shareholders’ meeting. At the AGM 2015, 7 out of 8 directors (87.5%) attended the meeting, which included the Chairman of the Board of Directors, the Chairman of Audit Committee and Nomination and Remuneration Committee and the Chairman of Risk Management Committee. External auditors also attended the meeting and witnessed the vote counting.

The Company discussed the matters in the AGM in sequence as given in the notice of the meeting. Shareholders are encouraged to express their opinions and suggestions, as well as raising questions to the Board of Directors. There were no matters other than those specified in the notice of the meeting. For the election of director, the Company provided that shareholders to elect the Company’s director on individual basis. Voting cards used at the meeting were kept for evidence and verification.

After the meeting day, the Company published the resolution of the meeting for each agenda before 9:00 a.m. of the following working day through SET portal. The minute of the meeting was prepared in accurate detail and was made available to public on the company website within 14 days after the meeting.

Equitable Treatment of Shareholders

The Company has the policy to treat each and every shareholder fairly and equally regardless of the percentage of shareholding, gender, age, race, nationality, religion, beliefs, political opinions or physical abilities. The Company’s shareholders’ meeting is open for all shareholders. Each shareholder has their right according to number of shareholding. One share per one vote. There are no shares of any privileges over other shareholders. Minority shareholders have equal rights to express their opinions, propose meeting agenda and nominate the Company’s directors. The Company has clearly stated timeline, process, and criteria on the company website under the investor relations section. Shareholders can also request for meetings or company visit.

The Company always follows requirements of SEC and SET regarding the dealing of related transactions. The business transactions with related parties must be fair and at arm’s length and bases agreed upon the Company and those related parties. Directors are required to report to the Board of Directors of their conflict of interest in the meeting agenda and shall abstain from participating and voting as they cannot express their opinion freely.

The Use of Insider Information

The Board of Directors has established the guideline for the use of insider information to prevent directors and executives from taking advantages of inside information and from dishonest dealing for themselves and their related parties. Insider trading or the use of inside information for personal or others’ gain is strictly prohibited. In addition, the Board of Directors has established the guideline concerning the report of the changes of ownership of the Company’s shares of directors and executives, which can be summarized as follows:

  1. The use of insider information for personal or others’ gain is strictly prohibited.
  2. The inside information both financial and non-financial which has not been disclosed to public and may affect the business or stock price must be kept strictly confidential and must not disclose to any parties not involving in such transactions.
  3. Directors and executives who have access to inside information shall refrain from trading the Company’s securities for a period of one month prior to and within 24 hours after the announcement of the Company’s results of operations to the Stock Exchange of Thailand.
  4. Directors and executives shall inform the company secretary of their trading of the Company’s securities at least one day prior to the transaction date. The Company Secretary has duty to report these changes to the Board of Directors at the next board meeting.
  5. Directors and executives are responsible to report the changes of security holding under their names and their related persons to the Office of the Securities and Exchange Commission as follows:
    1. Acquisition of the Company’s securities for the first time must be reported within 30 days after the closing date of the offering of securities to the public or the date of appointment of the director or executive (Form 59-1).
    2. Changes in securities holding resulting from disposition, transfer or being transferred for securities must be reported within 3 working days after transaction date (Form 59-2 or Form 246-2).

The Company has disclosed this policy to its directors, executives, and employees of the Company and subsidiaries to act in compliance with this policy. Any violation to this policy resulting in derogation or damage to the Company are subjected to penalty measures and possibly legal actions taken by relevant regulatory authorities.

Roles of Stakeholders

The Company recognizes the rights and different needs and interests of each stakeholders and therefore has carefully defined the policy to meet the needs of its stakeholders, either by law or by agreement with the Company. The Company’s stakeholders can be classified into the following groups:

Shareholders

The Company aims to achieve growth in earnings and generate appropriate returns to shareholders in the long run. The Board of Directors and executives shall ensure to conduct the business as effectively and efficiently and in a transparent and auditable manner. The Company shall carry on its operations in consideration to the best interests of shareholders and shall comply with the good corporate governance principles. The reporting and disclosure shall be made on consistent basis, completely and truthfully reflect the status of the company, its operating results, financial position, and other reports. There shall be no disclosure of inside information to individuals which caused damage to shareholders as a whole.

Customers

The Company places the highest value on its customers. The Company focuses on excellent production process according to the SQCDEM principles and has firm commitment to continuously develop and improve the quality of its products and services to meet or exceed customers’ expectations. It ensures the continuation of production and just in time delivery for the effectiveness of the overall automotive supply chain management. The continuing accreditation to the quality management system and awards and achievements from customers over the years has been a guarantee for the Company’s commitment toward excellence.

The Company strictly keeps the confidentiality of information of each customer. It does not share the customer information to its competitors or to the public. In addition, the Company has a policy on the use of intellectual property and copyrights, where it shall operate in compliance with all regulations or contractual requirements governing the use of such property. The use of computer and information technology shall also be conformed to the Computer Related Act and other local intellectual property and copyright laws.

Business Partners and Joint Venture

Integrity is a vital part of AAPICO’s business. The Company considers the equality and honesty as virtues among its core values for long term business relationship. The Company treats its business partners and joint venture with fairness and integrity, and requires both parties to honor the shareholder’s agreement and strictly comply with business ethics, restrictions, applicable rules and laws of the country they operate in. To its best knowledge, the Company ensures that its business partners are reputable and do not risk the Company being associated with corrupted activities.

Suppliers

The selection of suppliers shall also be treated fairly and openly that no parties are having the unfair advantage of separate, prior, closed-door negotiations for the contract. The purchase and hire of material and service is considered for its quality, price, service, and delivery in accordance with the product requirements and shall never be based on the receipt of gift, hospitality or favors of any kind from suppliers or business partners. All employees must conform to the Company’s policy regarding the gift policy and the anti-corruption policy.

In order to conform to the Company’s quality system standards, the Company performs yearly audit on all its OEM suppliers as to ensure that its suppliers are committed to the same level of quality-cost-delivery standard and that the products outsourced to suppliers meet the customer’s requirements.

Competitors

The Company shall operate with open, fairness, and integrity by adhering to honesty and fair competition. It shall operate under no circumstances cause or be part of any breach of general or special competition regulations, such as illegal cooperation in pricing, illegal market sharing or any behavior that is in breach of relevant competition law, intellectual and business laws and code of conducts, and shall not use dishonest method to discredit a competitor.

Creditors

The Company shall operate in compliance with terms and conditions agreed upon with creditors, both trading partners and financial institutions. The Company shall report its financial position as required by creditors and shall notify in advance of any issues that may have resulted in a breach of agreements or financial covenants to resolve issues.

Employees

The Company places importance on the well-being of its employees as they are considered a key foundation for the Company’s long term success and sustainable growth. The Company has been focusing on enhancing employees’ knowledge and well-being according to the Company’s vision and considers the employee satisfaction as the utmost importance. The Company ensures the employees’ compensation and welfare are reasonable and appropriate according to their capabilities and able to maintain their motivation. It encourages employees to continually improve their knowledge and skills by attending various seminars or training courses arranged internally or by other organizations.

The Company has put the health and safety of employees at high priority. It ensures the safe and proper workplace in order to reduce risks related to safety and accidents for its employees. It has implemented the 5S principle throughout the organization and has arranged necessary safety trainings to all employees to create awareness and maintain high standards of safety and discipline in the workplace.

The Company promotes mutual respect among employees and treats each and every employee fairly and equally. The Company upholds human right in all activities and will not act in violation of human right laws or child labor protection both local and international. Over the years, the Company has received a recognition for its intention and commitment on employee well-being such as the Happy Workplace for Sustainability, the White Factory award, etc.

Community

The Company continually supports and contributes to community and society where it operates. The corporate social responsibility has been put on the management’s agenda. Every year the Company has made contributions and donations to community projects as well as providing supports to employees who are involved in improving the quality of life of the community that the Company is present. These charitable contributions shall be legal and ethical under local laws and practices.

The Company adheres and complies with social and environment protection laws and related regulations as required by the Labor and Social Welfare Ministry, the Industrial Ministry, the announcement of the Industrial Estate Authority of Thailand and other relevant agencies. It strongly encourages its subsidiary and associate companies to use resources efficiently and effectively for energy conservation and aim for environmental protection in every parts of its operations. In 2014, the Company has announced the “Green” vision as one of the key mission of the Company, whereby the Company encourages and continuously implements ideas to use the minimum input of the natural resources to achieve the maximum output.

Anti-Corruption and Misconducts

At AAPICO Hitech, the Company intended to do business and operate with integrity, honesty, fairness and transparency. It aims to be a responsible partner and acts with integrity towards employees, customers, business partners, shareholders, as well as the wider community. The Company is firmly opposed to all forms of corruptions. It supports and encourages every employees at all levels to focus with conscious mind to fight against corruption. The Company has formulated the anti-corruption policy, which is used as a tool to govern business decisions and is applied equally to corporate actions throughout organization and to the behavior of individual employees in conducting the Company’s businesses.

The anti-corruption policy sets out the standard practices and responsibilities in preventing corruption in business transactions and provides framework and guidance to employees on how to recognize and deal with bribery and corruption issues to ensure that decision making that could lead to corruption are performed with due care and conscientiousness. The Company takes zero-tolerance approach to bribery and corruption and has provided trainings to all employees especially those operate in areas that are perceived as high risk. It also communicates to all suppliers, customers, contractors, agents, and business partners of the Company’s anti-corruption policy.

The Company has joined the Thailand’s Private Sector Collective Action against Corruption (CAC) since 2014 and reaffirms its commitment to fight against corruption in all business operations. The Company has continually streamlined its processes across organization to assure the certification from CAC.

Whistle Blower Policy

The Company encourages employees and third parties to raise concerns about any issues or suspicion of malpractices at the earliest possible stage. The Company provides a communication channel for employees and all group of stakeholders to raise concerns or report complaints and any misconduct or illegal acts directly to the Company’s executives or to the Chairman of Audit Committee by sending a letter or electronic mail to AC@aapico.com. The Audit Committee, as assigned by the Board, reviews all comments and complaints and delegate to the executive management to investigate further on the reported issues. These issues and the follow up progress are informed to the Board of Directors at the quarterly meeting. In 2015, the Company has received no reports of misconducts or disputes relating to fraud, corruption, any breach of contract or violation against applicable laws and regulations.

The Company aims to encourage openness and will support anyone who raises the genuine concerns in good faith. The Company commits to ensure that no one will suffer from any unfair treatment as a result of refusing to take part in bribery or corruption, or because of reporting their suspicion that an actual or potential bribery or other corruption offense has taken place or may be taken place. It also has a policy to protect confidentiality of whistleblower.

Disclosure and Transparency

The Company ensures the disclosures of the Company’s information is clear and transparent, which reflects true status of the Company’s performance, and is reported in a timely manner so that stakeholders can base their decision. The Company commits to make its best effort to disclose information in all possible channels to allow equal access to all stakeholders. Information is primarily managed through SET portal and the Company’s website and is provided in both Thai and English language.

The Board of Directors ensures that the Company’s financial statements were prepared fairly and accurately according to the general accepted accounting principle and has been audited by external auditor, who were authorized and approved by the shareholders’ meeting. All reports, being the quarterly financial statements, the annual statement (56-1) and annual report (56-2), are provided in a complete and accurate manner and made available on-time as required by the SEC and SET. The report of changes in the holding of the Company’s shares of directors and executives have been disclosed and reported to the SEC in a timely manner. The overview of the Company’s’ shareholding by directors and executives in 2015 is provided in the table below.

Name Position No. of shares at the book closing on March 30, 2015 Increases / (Decreases) during the year No. of shares at the book closing on March 23, 2016
Mr. Yeap Swee Chuan President and CEO/Executive Director 40,847,873 123,5061 40,971,379
Mrs. Teo Lee Ngo Executive Director 31,811,346 - 31,811,346
Mr. Pipat R. Punya Independent Director - - -
Mr. Kenneth Ng Independent Director - - -
Mr. Wichian Mektrakarn Independent Director - - -
Mr. John Parker Independent Director - - -
Mr. Yoshiki Kishimoto Non-Executive Director - - -
Mr. Hideo Hatada Non-Executive Director - - -
Mr. Veera Buanwongse Director - - -
Ms. Yeap Xin Rhu Director 25,646,760 - 25,646,760
Mr. Roengsuk Viphoonitisilkul General Manager - - -
Mr. Kawee Wasaruchareekul General Manager 18,729 - 18,729
Mr. Sattha Peth-in Assistant General Manager 85 - 85
Remark1 the change in securities holding of Mr. Yeap Swee Chuan was the transfer from NVDR to Foreign Holding account.

The Company has emphasized the role of Investor Relations as a primary contact window for investors, shareholders, analysts, and general public. The IR team is responsible for the publication of the Company’s news and updates of corporate information in an accurate and timely manner according to the SET requirements and regulations, and respond to any questions or concerns from interested parties.

To enhance the accessibility of stakeholders, the Company always participates in meetings or events where possible and appropriate, both local and abroad, to increase interaction with all groups of stakeholders. In 2015, the Company has participated in the Opportunity Day by SET every quarter, the SET Thai Corporate Day, Thailand Focus, as well as conference and roadshows in Hong Kong, Japan and Malaysia. It also arranged analysts’ meeting, a factory visit for shareholders, as well as meetings with journalists and individual investors.

Responsibilities of the Board of Directors

The Board of Directors has its roles and responsibilities in providing guidance and direction to the Company’s management and assuring that the Company’s businesses are operated for the best interest of shareholders in the long run. The Board of Directors is comprised of respected, knowledgeable and competent individuals with various skills and experience in areas that are beneficial to the Company.

Structure of the Board of Directors

The Company has set the Board of Directors an appropriate number of members to the size of business. Each director holds qualifications as defined by the Public Limited Company Act and has no manners indicating a lack of fit to be entrusted with the administration of the company by law or requirements of the Securities and Exchange Commission.

For the year 2015, the Board of Directors consists of eight (8) members, which are the Chairman and executive director, an executive director, two nonexecutive directors, and four independent directors (of which one independent director has been in a position for longer than nine years). In compliance with good corporate governance principle, the Company has plan to adjust its board composition upon the retirement of the directors where appropriate.

Qualification of Director

The Board of Directors has defined the qualification of the Company’s directors as follows:

  1. Possess qualification according to the rules and regulations by the Securities and Exchange Act, the Stock Exchange of Thailand, the Public Company Act B.E.2535 and have no prohibited characteristics or manners indicating a lack of trustworthiness to manage the Company from the view of shareholders by law or by the Company’s Articles of Association.
  2. Not disqualified under Section 68 of the Public Companies Act B.E. 2535.
  3. Have knowledge, skills, or experience in the automotive industry and/or capable to perform directors’ duties with diversified background which are beneficial to the Company’s business.
  4. Able to devote time especially for making key decision and handle duties for the best interest of the Company and able to participate in all the board meetings and shareholders’ meetings unless necessary or emergency.
  5. Do not perform any actions in a way that affect the interest or benefit of the Company or in a way that would be beneficial to particular individual of entity for oneself or other persons’ benefits.

Qualification of Independent Director

Independent director is a director who does not have any related business or work that may affect his or her independent decision. The Board of Directors has defined the qualification of independent director in compliance with the minimum requirement of the Offices of Securities and Exchange Commission and the Stock Exchange of Thailand. The Company’s independent director shall comply with, but not limited to, the following requirements:

  1. Shall not hold shares exceeding one percent of total number of voting shares of the Company, subsidiary, associate, major shareholders, including shares held by related persons of such independent director.
  2. Shall not be or have been an executive director, employee, staff member, advisor who receives salary of the Company, subsidiary, associate, major shareholders, or juristic person with conflict of interest.
  3. Shall not be a person related by blood or legal registration as father, mother, spouse, sibling, or child, including spouse of child, of the Company’s executive or major shareholders.
  4. Shall not be or have been an auditor of the Company, subsidiary, associate, major shareholders, unless foregoing relationship has ended not less than two years prior to the date of becoming an independent director.
  5. Shall not be or have been a provider of any professional services including legal advisor or financial advisor who receives service fees exceeding Baht 2 million per year from the Company, subsidiary, associate, major shareholders, unless the foregoing relationship has ended not less than two years prior to the date of becoming an independent director.
  6. Shall neither have nor ever had a business relationship with the Company, subsidiary, associate, major shareholders, unless the foregoing relationship has ended not less than two years prior to the date of becoming an independent director. The term “business relationship” refers to any normal business transactions in the amount more than Baht 20 million or more than 3% of net tangible assets after deducting the liabilities and equity of minority shareholders, whichever is lower.
  7. Shall not be a director appointed as representative of the Company’s directors or major shareholders.
  8. Shall not operate or be part of business that operates in the same industry or in a direct competition with the Company’s operations.
  9. Shall be capable to perform duties, give opinions, and report results of work performance according to the duties entrusted by the Board independently from the control of management or major shareholders of the Company

Terms of Service for Directors Years of Service in each rotation

The Company’s Articles of Association indicates the number of years served on the Board of Directors in accordance with the Public Limited Company Act, which specifies that one-third of total number of directors must retire from the office at the Annual General Meeting. If it is not possible to divide total number of directors evenly by three, the number closest to one-third is applied. In choosing directors to retire, the directors who have served the longest years are the most eligible to retire. Nevertheless, the retiring directors are eligible for re-election.

Apart from the aforementioned retirement by rotation, directors may be removed from the office by the following reasons.

  • Death
  • Resignation (with effect from the date the Company receives the resignation letter)
  • Being disqualified or being under any of the prohibition under the Public Company Act and laws governing securities and stock exchange
  • Removal by a resolution of shareholders’ meeting
  • Removal by a court order

Number of Consecutive Terms of Service

The Company’s directors have been approved by shareholders’ meeting and are highly qualified individuals with knowledge and expertise beneficial to the Company’s business. These directors are also respected for their morality and ethics, as well as consistent good performance of duties. If shareholders continue to trust the directors and re-appoint them to the Board, the Company shall respect the right of shareholders. Therefore, the Company does not clearly specified the term of service of each director.

However, the Board of Directors has plan to nominate new directors to replace long-serving independent directors and is committed on the renewable tenure of independent director to no more than nine (9) consecutive years.

Limitation of positions held by Directors in the listed companies

The Board of Directors has set a policy to limit number of holding positions in the board of listed companies, other than its own subsidiaries, for not more than five (5) companies, and shall not sit in the board of the Company that operates in the same industry or in direct competition with the Company’s operations. This policy aims to ensure that directors can devote time to perform their duties effectively. The holding of positions of directors shall also be reported to the Board of Directors for acknowledgement.

Company Secretary

The Board of Directors has assigned the duties and responsibilities of company secretary to organize meetings for the board and its committees, shareholders’ meeting, as well as coordinates activities and trainings for directors. Company secretary is also responsible for preparing notice to the meetings, minute of meetings, annual report, as well as filing of documents as required by law and relevant regulations by the SEC and SET. The Board of Directors has considered the qualification of company secretary to have but not limited to knowledge in law and/or finance and accounting.

Roles and Responsibilities of the Board of Directors

The Board of Directors has its roles and responsibilities separately from the Company’s management as to ensure that businesses are conducted in a lawful and ethical manner and that operations are run efficiently and effectively. The roles and responsibilities of the Board of Directors include but not limited to the following:

  1. Review and approve key business matters such as the Company’s vision and mission, business strategy and financial targets, risks relating to operations and annual operation plan and budget, as well as monitoring that management has followed the business plan effectively and efficiently.
  2. Consider and review the Company’s corporate governance policy and monitor the compliance to the policy at least once a year.
  3. Promote the Company’s code of conducts in writing and make sure that directors, executives and employees at all levels are aware and adhere to the Company’s ethical standards and act in compliance with the code of conducts.
  4. Define a guideline for the consideration of transactions with conflict of interests for the benefits of the Company and shareholders, where persons with vested interest cannot participate in the voting or decision-making process of that issue. Ensure that the Company complies with the regulations and that disclosure of transactions with conflict of interests are correct and complete.
  5. Ensure that internal control system is in place and effective and financial reporting and operations are in compliance with rules and regulations, and assign a responsible person or unit to independently audit and report on the Company’s internal control system to the Board of Directors at least once a year.
  6. Establish the risk management policy for the organization and assign the management to manage the Company’s risks and look for business opportunities that may arise from these risks and report to the Board of Directors on regular basis.
  7. Provide adequate communication channels for shareholders and ensure that disclosure of information is correct, concise, transparent and reliable.
  8. Understand the roles and responsibilities of the Board of Directors and the Company’s nature of business and always express own opinion independently.
  9. Perform duties with honesty and care, taking into account the best interest of the Company and fair treatment of shareholders.
  10. Oversee and monitor business operations by requiring financial report that is accurate and complete and devote sufficient time and effort to the Company.

Board of Directors’ Meetings

The regular Board of Directors’ meetings are scheduled in advance for the entire year. Each director is informed of the meeting schedule and is responsible to manage time to attend meeting accordingly. The Board of Directors holds at least four (4) meetings in a year to consider and approve the Company’s financial statements. Directors are also invited to participate in the management review meeting at least twice a year to approve the business plan and review performance of the Company’s subsidiaries. Each director shall have their meeting attendance of at least 75% of total meetings in a year. In 2015, seven (7) directors have their attendance of at least 75% of total meetings in 2015. The director who did not fulfill this requirement was due to other obligations overseas.

Before each meeting, the Chairman set the agenda of the meeting. The notice of meeting and relevant documents of each agenda will be sent to directors for consideration at least 7 days prior to the meeting date. The Chairman ensures that number of directors attending the meeting satisfy the quorum as specified in the Company’s Articles of Association to convene the meeting. During the meeting, the Chairman allows sufficient time to consider and discuss each agenda carefully and thoroughly. Directors are encouraged and able to express their opinion freely and independently before casting their votes. Each director is counted as one vote. At least two-third of total number of directors shall be present for the voting of each agenda. However, director with vested interest in particular agenda shall be excused or abstained from voting for that agenda.

Board of Directors’ Performance Evaluation

The Board of Directors conducts the assessment of the board performance on annual basis. The selfassessment criteria is based on the good corporate governance guidance from the SET, which considers the board structure and performance in 6 categories, which are:

  1. Structure and characteristics of the Board
  2. Roles and responsibilities of the Board
  3. Board meetings
  4. The Board’s performance of duties
  5. Relationship with management
  6. Self-development of directors and executive development

In 2015, the Board of Directors conducted three sets of self-assessment for the Board of Directors, as a whole and on individual basis, and for the sub-committees. All eight (8) directors have completed the self-assessment questionnaires.

The assessment results of the Board of Directors as a whole has improved year on year in all areas, with an average score of 4.11 (82%) in 2015, as compared to 3.85 (77%) in 2014. Of total 6 categories, the excellent score (above 80%) was given in 4 categories, with the highest score in the relationship with management. The lowest score was still the roles and responsibilities of the Board, despite being the most improvement of the year. The assessment results of Audit Committee, Nomination and Remuneration Committee, and Risk Management Committee were also in good level with the score of 4.05 (81%), 3.89 (78%), and 3.74 (75%) respectively. The assessment result of directors on individual basis was an average of 4.17 (83%). The Board of Directors have discussed recommendations and suggestions to continually improve its performance in coming year.

Remuneration for Board of Directors and Executives

The remuneration of the Board of Directors and its committees has been set according to the policy and recommendation from the Nomination and Remuneration Committee within the framework and limit as approved by the shareholders’ meeting. The remuneration of directors is considered based on the scope of responsibilities and performance of the directors, the comparison of directors’ remuneration of other listed companies engaged in the same business regarding the performance, business size, directors’ accountability, with reference to the report on directors’ remuneration conducted by the Thai Institute of Directors (IOD). Upon the board approval, the proposal is passed to the Annual General Meeting of shareholders for approval.

The remuneration of executives is considered based on their responsibilities and accountabilities, individual performance as well as operational results of the business. The payment is approved by the President and Chief Executive Officer of the Company.

Board of Director’s Trainings and Development

The Board of Directors encourages the directors to continuously develop and improve their skills and knowledge in relation to their duties and responsibilities. Directors are provided with relevant information to perform their duties, which includes an introduction to the Company and its businesses and roles and responsibilities of the Board of Directors and its committees.

The Company encourages directors to attend training courses upon the SEC recommendations. The independent director is required to attend the fundamental courses organized by the Thai Institute of Directors, namely the Director Accreditation Program (DAP) or the Director Certification Program (DCP), as details of the program provide essential information for directors to perform their duties effectively. The Company’s directors who have attended these courses are as follows:

  1. Mr. Yeap Swee Chuan
    attended the Director Certification Program(DCP108/2008)
  2. Mr. Pipat R. Punya
    attended the Director Accreditation Program (DAP11/2004) and Role of Chairman Program (RCP35/2014)
  3. Mr. Kenneth Ng
    attended the Director Certification Program (DCP189/2014)
  4. Mr. Wichian Mektrakarn
    attended the Director Certification Program (DCP107/2008)

There were no attendance of the fundamental training in 2015, due to the timing and availability of training courses did not match their requirements for English course. However, directors and executives are encouraged to attend the seminar organized by SEC, SET and other organization, which relates to the Company’s business in order to perform their duties completely and effectively. The seminars and trainings attended in 2015 include the Breakfast Talk (SEC), Tone at the Top series 1/2015: Ethical Leadership - Creating a sustainable culture (IOD), the CG report evaluation (SET), etc.

Power and Duties of the Board of Directors

The Board of Directors shall ensure that the Company is operating in compliance with laws, the Articles of Association and resolution of shareholders with honesty and care, and acts in accordance with criteria and regulations of the Stock Exchange of Thailand and the Securities and Exchange Commission for the best interests of the Company and shareholders.

In line with the good governance principles, the Board of Directors shall have the authority and responsibility in approval of the following matters.

  1. The quarterly business performance and financial statements of the Company in comparison to the forecast and budget and the consideration of future trends of the year.
  2. Related party transactions among the Company, subsidiary companies, associate companies, and related companies or individuals that do not violate the regulations of the Stock Exchange of Thailand and the Securities and Exchange Commission.
  3. Any transactions that would highly affect the Company’s capital structure, financial status, business operation, strategy and the Company’s’ reputation.
  4. Payment of interim dividends.
  5. Employment of the President and senior executives.
  6. Determination and change of the approval authority of the Company.
  7. Acquisitions and disposals of business and assets and participation in joint venture projects that do not violate any rules of the Stock Exchange of Thailand and have value of transaction which requires the board approval according to the announcement of the Stock Exchange of Thailand relating to the acquisition and disposal of assets and connected transactions.
  8. Contracts that are not related to an ordinary course of business or contracts that are significant in value and materiality to the Company’s business.
  9. The change of policy and operations that have material impact on accounting, risk management, and internal audit.
  10. The appointment and determination of authority of the sub-committees.
  11. The proposal, appointment, and termination of the Company’s directors and secretary status.
  12. Any other actions in accordance with laws, objectives, the Articles of Association, and resolutions of the shareholders’ meetings.

The Board of Directors may authorize directors or sub-committee to perform any acts on their behalf, except the following subjects, which can be done only upon the approval from shareholders’ meeting.

  1. The subject which the law requires of the approval from shareholders’ meeting.
  2. Transactions which the directors have interests therein and that the law or regulations of the Stock Exchange of Thailand requires the resolution of shareholders’ meeting. The director who has vested interest in the issues or have conflict of interest with the Company or affiliated company shall be excused or abstained from voting right.

The following cases must be approved by the Board of Directors and the shareholders’ meeting with a vote of not less than 3/4 of total votes of the shareholders attending and entitled to vote for:

  1. Any sale or transfer of the entire or significant part of the Company’s business.
  2. Any purchase or taking over of other firms by the Company.
  3. Any making, amendment or termination of contracts with respect to the granting of a lease of the whole or significant part of the business of the Company, the assignment of the management of the business of the Company to any other person or the amalgamation of the business with other persons with the purpose of profit and loss sharing.
  4. The amendment to the Memorandum of Association and Article of Association.
  5. The increase and decrease of capital, the issuance of debentures, the amalgamation or dissolution of the Company.

The Sub-Committees

The Board of Directors has delegated some of its duties and responsibilities to its committees to assist the Board in reviewing and providing their independent opinions on particular matters. These committees are Audit Committee, Nomination and Remuneration Committee and Risk Management Committee.

The sub-committees are comprised of directors who are experts in particular areas. In 2015, due to the retirement by rotation of Mr. Supasak Chirasavinuprapand, the Board of Directors has appointed Mr. Wichian Mektrakarn to be the member of the Audit Committee and the member of Nomination and Remuneration Committee with effective as from May 14, 2015. On the same date, the Board of Directors has appointed Mr. Mikihisa Takayama in the position of director and the member of Risk Management Committee, replacing Mr. Yoshiki Kishimoto who resigned from his position.

Audit Committee

The Audit Committee comprises of three (3) independent directors, as follows:

  1. Mr. Pipat R. Punya Chairman
  2. Mr. Kenneth Ng Member
  3. Mr. Wichian Mektrakarn Member

Where Mr. Kenneth Ng, with his background and experience in finance and accounting, has the sufficient knowledge to review the reliability of financial statements.

Power and Duties of the Audit Committee

The Audit Committee’s duties and responsibilities can be described as follows:

  1. Ensure that the Company maintains accurate and sufficient financial statements in accordance with the general accepted accounting standards and relevant laws.
  2. Ensure that the Company’s internal control and internal audit is sufficient and efficient, and operations have been carried out in compliance with rules, policies and relevant guidelines. Evaluate the independence of internal audit function by reviewing performance report and the organization structure of internal audit. Approve the appointment and termination of internal auditor as well as evaluate their performance.
  3. Consider and propose the appointment of external auditor and audit fee to the Board of Directors, by taking into account the performance and independence of auditor. Arrange meeting with auditor without the management presence at least once a year in order to seek the objectivity of auditor’s opinion.
  4. Ensure that the Company’s operations are carried out in accordance with laws and regulations of the SEC and SET, as well as laws concerning the business of the Company.
  5. Define the Company’s corporate governance policy to be in line with good governance guidelines from the SET. Review the policy and operations at least once a year.
  6. Review disclosure of information, particularly matters that may constitute related transaction or transactions that have conflict of interest, to be complete and accurate.
  7. Review complaints and concerns from stakeholders and report to the Board of Directors.
  8. Perform any other matters as assigned by the Board of Directors.
  9. Report the Audit Committee’s performance to the Board of Directors every quarter.
  10. Consider and review duties and responsibilities of the Audit Committee and evaluate the performance of the committee on annual basis, as well as prepare the report of Audit Committee and disclose in the Company’s annual report.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of three (3) independent directors, which are the same group as the Audit Committee. The scope of duties and responsibilities delegated by the Board of Directors are as follows.

Power and Duties of the Nomination and Remuneration Committee

  1. Establish the policy, criteria and procedures for the nomination of director and top executives of the Company and determine criteria and type of remunerations and other benefits for the Board of Directors and its committees and propose for approval to the Board of Directors and to the shareholders’ meeting respectively.
  2. Select and nominate qualified individuals to be the Company’s directors and top executives.
  3. Ensure that size and elements of the Board of Directors is suitable to the Company’s business and that adjustments are appropriate in response to the changing environment.
  4. Define the self-assessment criteria of the Board of Directors and their annual remuneration by considering the duties, responsibilities and risks involved.
  5. Review succession plan for management in key positions and re-confirm the list of qualified candidates.
  6. Perform any other matters as assigned by the Board of Directors.

Risk Management Committee

The Risk Management Committee, reporting to the Audit Committee, comprises of three (3) directors, of which the Chairman is an independent director and two members are non-executive directors as follows.

  1. Mr. John Parker Chairman
  2. Mr. Hideo Hatada Member
  3. Mr. Mikihisa Takayama Member

Power and Duties of the Risk Management Committee

  1. Establish the Company’s risk management policy and determine the risk appetite. Consider the risk management plan for the organization as a whole and ensure that control measures are adequate and appropriate.
  2. Consider and recommend to the Board of Directors regarding the strategy, direction and resources used in the Company’s risk management process, as well as the risk tolerance level for approval.
  3. Conduct risk assessment and review corporate risks at least once a year and ensure that the organization has implemented the risk management actions according to plan.
  4. Review and recommend to the Board of Directors on overall risk management and standard practices in order to improve the risk management processes of the organization.

The Nomination of the Board of Directors and Top Executives

The Appointment of Directors

According to the Company’s Articles of Association, the Board of Directors shall comprise of at least five (5) directors and not less than half of whom shall have residence in Thailand. The Nomination and Remuneration Committee is responsible for selecting qualified candidates to be the Company’s directors, replacing the directors who are retiring on rotation at the end of their terms, or whatever the case may be, and proposing a list of candidates to the Board of Directors for approval and subsequently for resolution at the shareholder’s meeting. The Nomination and Remuneration Committee selects candidates based on their knowledge, experience, expertise, a proven record of ethics and integrity, and the ability to share their opinion independently and devote sufficient time to the Company. The Company also gives the right to shareholders to nominate qualified individuals to be the Company’s director.

The number of nominated directors generally is equal to the number of retiring directors or resigned directors, whatever the case may be. The appointment of the Company’s directors must receive more than half of the voting rights of shareholders who attend the meeting in person or by proxy. The directors shall be elected at the shareholders’ meeting in accordance with the following rules and procedures:

  1. Each shareholder shall have a voting right equal to one share per one vote.
  2. Each shareholder may exercise all the votes he/she has under 1) to elect one or several persons as director or directors but cannot split share voting.
  3. The candidates shall be ranked in descending order, from the highest to the lowest number of votes, and shall be appointed in that order until all the director positions are filled. Where there is an equality of votes cast for candidates causing the number of directors to be exceeded, the Chairman of the meeting shall have a casting vote.

In case that director leaves their position for the reasons other than retirement by rotation, the Board of Directors may appoint qualified individuals to replace the resigned director at the next Board of Directors’ meeting, given that remaining terms of service must be longer than 2 months. The appointment of replacing directors must receive more than 3/4 of the votes of the remaining directors, and the replacing directors are eligible to stay in the board up to the remaining terms of service of the resigned directors.

The Appointment of Executives

The appointment of executive is considered by the Company’s management, who takes the lead in nominating and selecting with the qualified candidates with knowledge, skills, and experiences that are suitable to the Company’s operations, and having good understanding of the nature and business cycle of the industry to be able to drive the business growth and achieve the Company’s objective.

The Governance of Subsidiary and Associate Company

The Company controls and manages the operations of its subsidiary and associate companies through its representative in the management team, whereby the number of directors appointed by the Company as representative may vary according to the Company’s shareholding or the agreement between the Company and other shareholders.

The management of the company has duties and responsibilities to carry out operations according to the policy and drive overall performance to achieve the target, such as sales growth, cost reduction, and investments to be in line with the business plan. They are also responsible to manage human resources and resolve problems or conflicts that may impact the operations, and ensure effective communication throughout the organization.

For subsidiaries that the Company exercises its control, the scope of authority of executive directors is defined within the scope of the SEC notification. The management of subsidiary companies shall ensure that transactions between related parties are handled correctly and completely, and that the same disclosure policy as the parent company is applied. The financial reporting of subsidiary must also be auditable and provided on time for the Company for consolidation purpose.

Auditor and Auditors’ remuneration

For the year 2015, the Board of Directors, with the shareholders’ approval, has appointed EY Office Limited to be the auditor to audit the Company’s financial statements for the fiscal year ended as of December 31, 2015, given their past performance records and level of professional and independency.

Audit fee

The Company paid the audit fee in 2015 for the audit of the financial statements of the Company and its major subsidiaries at the total amount of Baht 8,640,000, of which the audit fee for the Company only is amounted to Baht 1,800,000.

However, the subsidiaries of the Company are not all using the auditing service from EY Office Limited as some of the businesses are not complicated and the contribution to the group is not significant. Therefore the Company decides to use local auditing firm where costs are more appropriate.

Non-Audit fee

In addition to audit fee, the Company and some of its subsidiary companies have engaged non-audit service from EY Office Limited, which is the compliance audit to the conditions stipulated in the investment promotion certificate (BOI audit). The total amount for this nonaudit service in 2015 was a total of Baht 500,000, of which include the non-audit fee for the Company only of Baht 100,000.