AAPICO Hitech PLC conducts business with responsibility, integrity, transparency, and fairness. AAPICO’s business principles are defined by its ethical framework and continuously improved in view of changes in social and economic circumstances.

The Company places great importance in good corporate governance. Over the years, the Company has strived to continuously improve the governance standards in the organization to gain and maintain confidence and trust from shareholders in its operations. The Company adheres to good corporate governance principles and acts in compliance with the corporate governance policy described in 5 areas as follows.


The Right of Shareholders

AAPICO Hitech highly respect the rights of shareholders and refrains from any actions that limit shareholders to have access to the company information. Shareholders have the right to freely trade or transfer their shares, the right to receive adequate information in a timely manner, the right to receive dividend, the right to propose in advance the meeting agenda, the right to nominate a person to be a director, the right to attend shareholders’ meeting, the right to express opinion independently, and the right to make decisions on important affairs of the Company e.g. the appointment of directors and auditor, fixing of audit fee, approval of significant transactions influencing the Company’s direction, and amendment of the Company’s Articles of Association or Memorandum of Association, etc.

AAPICO Hitech encourages shareholders, being institutional or individual investors, to attend shareholders’ meeting and involve in the matters affecting their benefits. The Company has made efforts to encourage and facilitate shareholders to exercise their rights and prohibits any actions that would limit or hinder the exercise of shareholders’ rights.

The Company selects the venue of shareholder’s meeting in the areas that can be easily accessible by public transport and fixes date and time with consideration of convenience to shareholders. The Company held the Annual General Meeting of Shareholders for the year 2017 at Arnoma Grand Bangkok Hotel on Thursday, April 20, 2017 at 14:30 Hrs. The hotel is located on Rajdamri Road with access to public transport (e.g. bus, boat, etc.) and within the close reach of skytrain stations. The size of meeting room is sufficient to accommodate the number of shareholders.

Before the meeting, the Company provides essential, clear, and up-to-date information for shareholders on AAPICO’s website and arranges notification via the SET Portal. The Company ensured that notice of shareholders’ meeting contained the correct and complete information, indicating time, date, venue, and agenda of the meeting. Each agenda item was provided with facts, together with the opinion of the Board of Directors, and request approval. A notice of the meeting and attachments concerning the registration, documents and evidences required prior to attending the meeting, voting procedure, proxy procedure and proxy forms are made available in Thai and English and published on AAPICO’s website 30 days prior to the meeting date. Such documents are submitted to shareholders at least 7 days prior to the Meeting, allowing them to have adequate time to study information before attending the Meeting.

For shareholders unable to attend a meeting, the Company provides an opportunity for them to appoint a representative, e.g. an independent director or any other person, to act as proxy using the Proxy Form B attached to the notice of the Meeting. The proxy forms prepared in compliance with the specifications defined by the Department of Business Development, the Ministry of Commerce, allow shareholders to exercise their voting rights as they wish.

The Company also arranged other proxy forms including those required for institutional or foreign investors who authorize custodians in Thailand to be downloaded from AAPICO’s website.

The Company provides opportunity for shareholders to submit questions related to items on the agenda or other information prior to the Meeting. Shareholders can also submit their proposals for director nomination and meeting agenda to the Board of Directors, approximately 1-3 months prior to the meeting. However, there were no proposal from shareholders to be considered for the 2017 AGM.

On the meeting date, the Company used an online tool for registration. The Company’s staffs were available to facilitate registration and verify shareholders’ documents as described in the notice of the meeting to ensure smooth and efficient process. In addition, the Company provided the affixing of stamp duty on proxy forms at the registration counter.

Prior to the Meeting, the Company explained to the Meeting the procedures of voting, counting of votes, and announcing of voting results. The Company provided voting cards for each agenda item. In casting the votes, shareholders or proxies who disapprove or abstain for such agenda item to mark the voting cards with his/her signature affixed and raise their hands to notify the Company’s staffs to collect their cards. Shareholders voted to approve also signed the voting cards to be collected when the meeting adjourned. For shareholders who authorized their proxies to the Company’s Independent Directors, the Company has included their votes of approval, disapproval, or abstention for each agenda item accordingly to their requisition. The results of the votes were announced after the completion of the vote counting of each agenda item. For some agenda item, the counting of votes may take longer. In such cases, the Chairman may proceed to the next agenda item to avoid disrupting the Meeting and informed the results as soon as the voting counting has finished.

Shareholders arriving after the commencement of the meeting were allowed to vote on the agenda item considered, provided that the resolution has yet to be concluded. They constituted part of the quorum, started from the agenda item for which they were in attendance and can exercise their rights. As a consequence, the number of shareholders for each agenda item may vary.

The Board of Directors are advised to join the shareholders’ meeting. For the 2017 AGM, all members of the Board of Directors, including the Chairman of committees, and the Chief Financial Officer attended the shareholders’ meeting. Representatives from the auditor were also present throughout the meeting with the volunteer from Thai Investors Association as the observer to witness the vote counting.

The agenda for the 2017 AGM was proceeded in the same sequence as appeared in the notice of the meeting without any changes in order or consider any agenda other than those specified in the notice of the meeting. Shareholders were allowed to freely express their opinions, give suggestions, and raise questions throughout the meeting. The Chairman also welcomed additional comments and inquiries of their interest before declaring the Meeting adjourned

After the meeting, the Company disclosed the voting results and the resolution for each agenda item at the 2017 AGM to the public on the same day via the SET Portal. The Company prepared the minutes of shareholders’ meeting with details of information of directors and external auditor attending the meeting, key discussions, questions, clarifications, and shareholders’ comments. The Minute of the 2017 Annual General Meeting was prepared and submitted to the Stock Exchange of Thailand within 14 days from the date of the meeting and was made available to the public on the Company’s website.

Equitable Treatment of Shareholders

The Company is aware of the need to protect the interests of every shareholder, whether major or minor, individual or institutional, or Thai or foreign investors. The Company’s policy is to treat each and every shareholder fairly and equally regardless of gender, age, race, nationality, religion, beliefs, political opinions, or physical abilities. Shareholders have equal right for voting. One share equal to one vote. No shares have extra privileges over other shares, and the number of votes is counted according to number of shares they hold.

Minor shareholders receive equal rights as major shareholders to express their opinion, propose agenda item, or to nominate the Company’s’ directors. The Company has prescribed and published the criteria and procedures for the proposal of AGM agenda and the nomination of directors in advance on the Company’s website and the SET Portal. For the 2018 Annual General Meeting of Shareholders, the Company allowed shareholders to submit their proposal from October 20, 2017 to December 31, 2017. However, after such period has ended, there were no proposal from shareholders to be considered and included in the shareholders’ meeting.

The Company provided disclosures of the Company’s information in Thai and English and made available on the AAPICO’s website, the SET and other relevant channels for shareholders to receive information equally.

The Use of Internal Information

AAPICO Hitech is aware of the possible abuse of internal information and has a policy to protect the confidentiality of financial results and business information that has not been disclosed to the public and information that could have impact on the Company’s share prices. Directors, executives, and related employees must keep internal information strictly confidential and must not disclose to any party not involved in the transactions.

The Company prohibits the use of internal information for personal benefit. The Company has established a guideline governing the use of internal information for concerned persons, namely the Board of Directors, top executives, employees responsible for related functions, as well as their spouses and children who are minors, which can be summarized as follows:

  • Directors, executives, and related employees who have access to financial results and confidential business information that could impact the Company’s share price are prohibited from trading the Company’s shares for a period of 30 days prior to the release of the financial statements or public disclosure of such information and for 24 hours after the release (Blackout Period).
  • Directors and top executives as defined by SEC are required to report their securities holding in the Company under their names and their related persons for the first time to the SEC within 30 days after the date on which they are appointed (Form 59-1).

They are also required to report any changes in securities holding resulting as a result of sale, purchase, transfer, or acceptance of transfer of securities within 3 working days after the transaction date (Form 59-2) except the case that such changes are resulted from the Employee Joint Investment Program (EJIP) or other program which received exemption from the SEC.

The Board of Directors shall monitor to ensure compliance to these measures. Directors and top executives shall report any changes in their holding of the Company’s shares to the Board of Directors. The number of shares held by the directors and top executive at the beginning and at the end of year as well as those traded during the year are also disclosed in the Annual Report.

Failure to comply with this policy is a violation of the Company’s code of conducts. Any violation of this policy and the Company’s code of conducts resulting in derogation or damage to the Company are subjected to penalty measures, i.e. warning, suspension without pay and termination, and possibly legal actions taken by coordinated and relevant regulatory authorities.

Managing the Conflicts of Interests

The Company realizes the importance of managing the conflicts of interests of the Board of Directors, executives, and related employees in a prudent, fair, and transparent manner. Hence, it has established guidelines regarding the conflicts of interests as follows:

  1. Following the regulations and requirements of the SEC and SET, transactions with related parties shall be conducted fairly, at arms’ length business, on normal business terms, or based upon agreements between the Company and related party that will benefit the Company as a group.
  2. The Company discloses its shareholder structure in subsidiaries, associates, joint ventures and other companies as well as authorized directors to ensure that the Company has a clear and transparent structure. There is no crossholding among major shareholders.
  3. Directors, top executives and their related persons are required to report their interests to the management of the Company or a subsidiary when they are appointed and at every year-end.
  4. At the Board of Directors’ meeting, any directors or executives who have vested interests in the agenda must abstain from voting on such agenda item. This is to ensure that the Board and executives make decisions in a fair manner for the utmost benefit of the shareholders.
  5. In case of connected transactions which require the shareholders’ approval, shareholders with vested interest must abstain from voting on such agenda item.

Roles of Stakeholders

AAPICO Hitech adheres to ethical business conduct and carries its businesses to jointly create values with all stakeholders for mutual and sustainable benefits. The Company recognizes the rights, different needs and interests of each stakeholder and therefore has carefully defined the policy to meet the needs of its stakeholders, either by law or by agreement. The Company has classified its stakeholders into 8 groups which are as follows:

Shareholders

AAPICO Hitech realizes the needs of shareholders, who are the business owners, and has set the target to conduct its businesses for sustainable growth, generate appropriate returns and create long-term values for shareholders. The Board of Directors, executives, and employees perform their duties to carrying out business effectively and efficiently, in a transparent and auditable manner, and in line with the principle of good corporate governance.

The Company respects the rights of shareholders and ensure the equitable treatment of all shareholders, including fundamental rights as stipulated by laws and the Articles of Association of the Company. The rights of shareholders are disclosed in Section 1 ‘The Rights of Shareholders’ and Section 2 ‘The Equitable Treatment of Shareholders’.

The Company arranges activities for shareholders to meet the executives and visit the Company’s main facilities located in the industrial estate in Ayutthaya and Chonburi province. Shareholders can sign up at the shareholders’ meeting or call or send email to register their names for this activity. The Company gives equal rights to all shareholders and selects the candidates subject to the seat availability on first come first serve basis. The selected candidates are announced on the Company’s website and informed by phone to confirm their participation.

The Company ensures that shareholders are well informed of the release of financial statements and public disclosures and that the information represents the true and accurate status of the Company. The access to internal information are controlled and regularly monitored to prevent the misconduct which may impact shareholders. In any cases, shareholders can always contact the Investors Relations for issues or inquiries related to the Company and business information.

Customers

AAPICO Hitech focuses and emphasizes on excellent process and delivery of high quality products to its customers in a timely manner and at competitive prices. Being a responsible supplier, the Company ensures the continuity of its production and punctual delivery of its products to support the supply chain of automotive industry. The Company is committed to continuously develop and improve the quality of its products and services to meet or exceed customers’ expectation according to the SQCDEM principles. The consistent recognition for its quality management system, as well as awards and achievements from customers over the years are good confirmation of our commitment to excellence.

The Company attaches significance of its relationships with its customers. The Company works closely with its customers to serve their needs and requirements and has maintained its proven records of good quality, cost, and delivery as a top tier 1 automotive supplier in Thailand. The Company has a policy to keep information of each customer strictly confidential. Employees in related functions are aware not to share any business information with its partners or other parties. The Company follows instructions and complies with guidelines and policies of its customers for good management of corporate governance practices.

AAPICO Hitech gives importance to innovation. It does not violate any regulations or contractual rights regarding the use of intellectual property and copyrights. The use of information technology conformed to the computer related act and other local intellectual property and copyright laws.

Suppliers

AAPICO Hitech adheres to a fair and transparent business framework with its suppliers. The regulations regarding the procurement and operations are clearly established. The Company selects its suppliers in a fair and open manner. No parties have unfair advantage of a separate, prior, closeddoor negotiation for a contract. Purchase of material and hire of service are considered for its quality, price, service, and punctual delivery according to the agreement and product requirements.

The procurement officers shall refrain from demanding and accepting and shall not be influenced by the offer of gifts, favors, or benefits of any kind from suppliers. The Company shall support environmentally friendly procurement and shall avoid purchasing products from suppliers that violate human rights or intellectual property law, as well as dealing business with suppliers that carry out illegal acts. Employees must adhere to the Company’s policy regarding the receipt of gifts and anti-corruption policy to avoid any incidents leading to corruption.

Suppliers shall operate in compliance with good corporate governance. The Company has arranged a range of activities for good relationships with suppliers and to help develop the capabilities and enhance skills and knowledge of its OEM suppliers to improve efficiency in their work. The Company performs annual audit on all its OEM suppliers to ensure that its suppliers are committed to the same level of the quality standard and conform to the Company’s quality system, and that the products outsourced to suppliers meet the customers’ requirements.

Joint Venture Partners

AAPICO Hitech upholds integrity and fairness in operating its business. The Company treats its joint venture partners equally and fairly, respects and honors the agreements between both parties, and complies with business ethics, restrictions, and applicable regulations and laws of the country they operate. The Company collaborates with its partners to promote, support, and strengthen the operation of joint ventures, encourage exchange of opinions and suggestions, determine an appropriate and transparent allocation of interest, formulate business plan, and monitor and drive the operation to achieve the shared goals.

The Company considers integrity and honesty as virtues among its core values for long-term business relationships. The Company carefully evaluates and selects its joint venture partners. To its best knowledge, the Company ensures that its partners are competent and reputable and do not risk the Company being associated with corrupted activities.

Creditors

AAPICO Hitech takes into account equality and honesty in carrying out its business and is committed to conducting business in a way that creates confidence for its creditors. The Company operates in compliance with the terms and conditions agreed upon with creditors, being trade creditors, financial institutions, and debenture holders. The Company maintains sufficient communication and reports its financial positions as required by creditors.

In the event that one of the terms is not fulfilled or there arises any issues that may cause a breach of covenants or a default, the Company must notify the creditors without concealing the facts and to ask for a waiver or to jointly find solutions to resolve such matters. The Company strives to manage and maintain sustainable relations and mutual trust with its creditors.

Employees

AAPICO Hitech places importance of its employees’ wellbeing and improvement of quality of their lives as happy employees is one of core values that drives the Company’s success and sustainable growth.

Remunerations

The Company establishes remuneration policies that offer appropriate compensation and benefits to employees and are competitive with other companies in the same industry. The Company oversees that compensation and benefits that are provided to its employees are based on their knowledge and capabilities, in accordance with laws, and appropriate with the standard cost of living.

Employees are entitled to a fair and equitable compensation based on their performance as well as each position’s requirements and responsibilities. The Company determines employees’ compensation in alignment with its performance and economic circumstances, i.e. consumer price inflation, minimum wages requirement, etc.

The Company provides appropriate benefits to employees, which are regularly reviewed in alignment with the changing economic and social circumstances. The benefits include work-related benefits such as allowances, travel expenses, accommodation, uniform, transportation, medical benefits and annual check-up, sports and New Year activities, and employee assistance benefits such as loans, etc. The Company also establishes the provident fund for employees who are members to deposit monthly contribution to the fund at the rate of 3-7% of their basic salaries, and the Company matches monthly contribution at the same rate.

Knowledge and Developments

The Company encourages the continuous development of employees’ skills and knowledge to meet the changing business environment. The Company has streamlined its development program under the management of AAPICO Training Center. Training courses are formulated to develop skills and knowledge of employees in all levels to match the requirements of each job or the organization. Employees can freely choose training courses that serve their development needs. Additionally, specific programs are cultivated for specific needs of employees who have advanced to their next level of responsibility and leadership.

Health and Safety

The Company places great emphasis on employees’ health and safety as its top priority. It has established practices to promote a clean and proper workplace to ensure employees’ safety. The Company implements 5S principles throughout the organization and arranges regular safety trainings to reduce risks of accidents and to create awareness in order to maintain high standards of safety and discipline in the workplace.

Labor and Human Rights

The Company ensures that its employees are treated fairly and equally so that they are happy at work. The Company promotes mutual respect and openness in its corporate culture. The Company upholds human rights in all its activities and will not act in violation of human right laws or child labor protection regulations locally and internationally.

The Company commits to maintaining the well-being of its employees and has been recognized for its effort and commitment in creating a sustainable workplace.

Competitors

AAPICO Hitech operates with openness and integrity by adhering to honest and fair competition. The Company is committed to carrying its business operations in compliance with the law and relevant regulations and with concern for trade ethics and transparency. The Company shall operate under no circumstances that may cause or be part of any violation of general or special competition regulations. It refuses to gain unfair advantage over its competitors through unlawful, unethical, inappropriate activities, such as illegal cooperation in pricing and illegal market sharing, or engage in any action that violates the relevant competition laws, competitors’ intellectual property rights, or destroy competitors’ reputations with untruth statements. In addition, the Company supports and promotes free trade, avoiding any acts that monopolize the market or limit fair competition.

Community

AAPICO Hitech carries out its businesses with concern for social responsibility and communities around its facilities. The Company has always put corporate social responsibility on its management agenda. The Company has supported activities and contributed to many community projects, as well as encouraging and supporting employees to be involved in improving the lives of people in the community.

The Company adheres and complies with social and environmental protection laws and related regulations in compliance with requirements of the Labor and Social Welfare Ministry, the Industrial Ministry, the Industrial Estate Authority of Thailand and other relevant agencies. The Company has a policy for all companies of AAPICO Group to manage and use its resources in the most efficient ways and aims for environmental protection in every part of its operations. With its “Green” vision, the Company promote awareness for energy conservation and continuously implements the concept of using minimum input of natural resources to achieve maximum output.

Additional information on the Company’s corporate social responsibility activities can be found in the Sustainability Report.

Anti-Corruption Policy

AAPICO Hitech conducts its business with honesty, integrity, and transparency towards its stakeholders. The Company firmly opposes to all forms of corruption and take a zero tolerance approach toward bribery and corruption. The Company supports and encourages employees at all levels to fight corruption with a conscious mind. It has established a policy to govern business decisions and corporate actions and behavior of employees in conducting the business.

The anti-corruption policy sets standard in the conduct and responsibilities for preventing fraud. The Company clearly communicates and trains its employees in related functions especially those who operate in areas perceived at high risk, in recognizing and dealing with bribery and corruption with prudence. The Company ensures that the business and its partners, i.e. suppliers, contractors, agents, act in compliance with relevant laws and regulations, and refuse to engage in an act that involve an inappropriate or unlawful deed.

Contacts for Stakeholders

The Company provides channels for employees and external stakeholders to contact, give their comments, suggestions, file complaints, or report violations.

Whistle Blower Policy

The Company encourages employees and stakeholders to give comments, raise concerns about any issues or suspicion of malpractices to the Company at any time for the Company to take immediate necessary actions to resolve such issues or prevent severe damages to its operations or reputation. Employees and stakeholders can file report to designated channels or send email directly to AC@aapico. com if the case might be related to executives. The Audit Committee assigned by the Board of Directors receives complaints, verify the validity, and conduct preliminary investigation together with the management. The cases of rights violation, corruption, non-compliance with laws and ethical practices are reported to the Board of Directors.

The Company encourages the openness and will support anyone who raises genuine concerns in good faith. The Company has put in place the informant protection measures and does not require to reveal the name of the informant or the information source. 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 offenses have taken place or may take place.

Disclosure and Transparency

AAPICO Hitech has defined and administered measures concerning disclosures to investors and stakeholders. The disclosure of information, both financial and non-financial, shall be complete, sufficient, transparent, reliable and upto-date, which reflect true status of the Company. The information is distributed equally and timely.

The Company has defined parties entitled to handle the disclosure of information to public and also established guidelines for the disclosure of various type of information, and designated a period before public disclosure. The Company follows the law, the rules and regulations, the obligations as required by the SEC, the SEC, and other relevant government bodies.

The Company ensures that the financial results which are disclosed, have been reviewed, audited by external auditor and certified by the Audit Committee and the Board of Directors prior to the public release. The quarterly and annual financial statements and Annual Reports (Form 56-1 and Form 56-2) were prepared fairly and accurately according to the general accepted accounting principles in a complete and accurate manner and was made available in the public domain as required.

The Company also compiles and submits the reports related to directors and executives as required by law. The Company has a policy for directors and executives to report their interests relating to the management of the Company or subsidiaries and reports the changes in the holding of the Company’s shares under own name or their spouse or minors to the SEC in a timely manner as required. Information of directors, their duties and responsibilities, their attendance to meeting, trainings, and directors’ remunerations are disclosed in the public domain and on the AAPICO website.

The Changes in the holding of the Company’s securities by directors and executives in 2017

Name Position At the book closing on March 16, 2017 Increases (Decreases) in2017 At the book closing on March 14, 2018
Mr. Yeap Swee Chuan President and CEO 40,971,379 3,151,394 44,122,773
Mrs. Teo Lee Ngo Executive Director 31,811,246 - 31,811,365
Mr. Pipat R. Punya Independent Director - - -
Mr. Kenneth Ng Independent Director - - -
Mr. Wichian Mektrakarn Independent Director - - -
Mr. John Parker Independent Director - - -
Mrs. Vachira Na Ranong Independent Director - - -
Mr. Kaikhushru (Kai) Taraporevala Independent Director - - -
Mr. Veera Buanwongse Director - - -
Ms. Yeap Xin Rhu Director 25,646,760 - 25,646,760
Mr. Kawee Wasaruchareekul General Manager 18,729 (18,729) -
Mr. Sattha Petch-in Asst. Gen. Manager 85 - 85


Information on the operations and investment structure of subsidiaries, associates, joint ventures, and other companies are disclosed in the Annual Report and on the AAPICO website. The Company ensures to keep shareholders, investors, stakeholders, and the public well-informed accurately and sufficiently of significant investment projects and developments in the Company’s operations as required by the SET through the SET portal.

The Company discloses information in multiple channels in Thai and English for equal access of information. In addition to the public news release via the SET Portal and the AAPICO website, other communication channels include:

  • The Opportunity Day conference on a quarterly basis to announce operating results,
  • Activities to meet local and international investors and other stakeholders, e.g. broker conference, roadshow,/li>
  • Company visit, factory tour for shareholders, investors, and analysts on annual basis and upon request,
  • Forums or speakingopportunities to share knowledge,
  • Email communication, intranet, internal bulletin board, and activities for communications with employees,
  • The Company’s website at www.aapico.com and email address at aapicohitech@aapico.com.

The Investor Relations (IR) Department is assigned to take responsibility for communications with shareholders, retail and institutional investors, analysts, the SEC, the SET and other relevant authorities. The IR department is responsible for disclosures of the Company’s news and updated corporate information to the public in compliance with the SET regulations, and arranges activities with investors and stakeholders. The IR department also arranges executives’ schedule to attend seminars, meetings, and conference events both domestic and overseas to increase accessibility and interaction with stakeholders. Activities in 2017 include:

  • The Opportunity Day at SET after the public release of quarterly and annual financial statements,
  • Domestic and overseas roadshows and conferences for the President and CEO or Finance Director to meet with institutional investors. A total 5 events were held,namely the SET Thai Corporate Day, the SET Thailand Focus, Phatra’s Day with our Executive Management, Thai Corporate Day in Malaysia, and Thai SMIDs Corporate Access in Singapore,
  • The Annual Analysts’ meeting which washeld in May,
  • The Annual Factory visit for shareholders and site visits in the AAPICO’s operations for an overview of the products and production process,
  • Company visits, including one-on-one meetings and conference calls to allow investors to inquire about the business and operations, or clarifications of financials.

Responsibilities of Directors

The Board of Directors plays an important role in overseeing and advising the business to ensure that the operation is run for the best benefit of shareholders in the long run. The Board of Directors comprises of respected, knowledgeable, and competent persons with skills and experience in areas that are relevant and beneficial to the Company.

Structure of the Board of Directors

The Company sets the size of its Board of Directors to be appropriate to the size of its business. The Board of Directors comprises of eight members, of which two are female members. The Board of Directors comprises of two executive directors including the Chairman of the Board and six independent directors. The Company provides its directors’ composition to have skills and prior experience in different areas of the Company’s business. The Company ensures that the number of independent directors constitute more than half of the total number of directors. Each director holds the qualification as required by law and does not in any way indicate a lack of fit to be entrusted with the administration of the Company.

Qualification of Directors

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, and 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 decisions and handle duties for the best interest of the Company and able to participate in all board meetings and shareholders’ meetings.
  5. Do not perform any actions in ways that affect the interest or benefit of the Company.

Qualification of Independent Directors

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 defines qualification of independent director in compliance with the minimum requirement of the SEC and SET. 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 an independent director.
  2. Shall not be or have been an executive director, employee, staff member, advisor who receives salary from 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 the relationship has ceased 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 relationship has ceased 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 relationship has ceased 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 a business that operates in the same industry or in 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 onethird 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 resolutionof a shareholders’ meeting.
  • Removal by a court order.

Number of Consecutive Terms of Service

The Board of 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. The Company respects the right of shareholders for their decisions to reappointing directors to the Board. Therefore, the Company does not indicate the number of consecutive term of service for directors. The Company however commits to good corporate governance practices and encourages terms of service of directors in line with the SET guideline for not more than nine consecutive years.

Limits on Directors’ Positions in the Listed Companies

The Board of Directors sets a policy to limit the number of position held in the board of listed companies other than the Company’s own subsidiaries to not more than five companies. Directors shall not sit in the board of the Company that operates in the same industry or is in direct competition with the Company’s operations. The holding of positions as directors in other companies shall also be reported to the Board of Directors for acknowledgement.

Company Secretary

The Board of Directors assigns duties and responsibilities of the company secretary to organize meetings for the board, committees, shareholders, and to coordinate activities and trainings for directors. The company secretary is responsible for preparing notice of meeting, minute of meeting, annual report, as well as filing of documents as required by law and relevant regulations by SEC and SET. The Board of Directors has determined the qualification of the 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 roles and responsibilities clearly separated from the Company’s management to ensure that business is conducted in a lawful and ethical manner and operations are run efficiently and effectively. The Board of Directors’ roles and responsibilities include but not limited to the following:

  1. Consider, advise, and approve key business matters e.g. the Company’s vision and mission, business strategy, financial targets, business risks, annual operation plan, and budget, as well as to monitor and to ensure that the management operates in an effective and efficient manner.
  2. Consider and review the Company’s corporate governance policy and monitors the compliance to the policy at least once a year.
  3. Provide the Company’s code of conduct in writing for directors, executives, and employees. Ensure they are aware of the Company’s ethical standards and that they act in compliance with the code of conducts.
  4. Define guidelines for related transactions with conflict of interests for the benefit 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 an internal control system is in place and in effect, financial reporting and operations are in compliance with rules and regulations, and assign a 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 a team to manage the Company’s risks and to look for business opportunities that may arise from these risks and report to the Board of Directors on a 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 expresses 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 reports that are accurate and complete and devotes sufficient time and effort to the Company.

Board of Directors’ Meeting

The Company plans the schedule of board meetings for the year in advance. The Board of Directors schedule to meet at least six times per year, four of which are general meetings to consider and approve financial statements and two performance review meetings to review the business operations and business plans. In case there are matters requiring the board approval, special meetings may be arranged on ad hoc basis. Directors are kept informed of the meeting schedule for their availability.

Directors are encouraged to attend the board meetings, the performance review meetings, as well as shareholders’ meeting. The attendance of directors for meetings in 2017 is disclosed in the Management section in the Annual Report.

Directors are encouraged to propose relevant agenda to the Chairman to consider and conclude in the notice of meeting. The Company sends the notice of meeting and supporting documents or information to directors at least seven days prior to the meeting day. At the meeting, the Chairman counts the number of attending directors to form a quorum as specified in the Articles of Association to convene the meeting. The Chairman considers the meeting’s agenda in order as stated in the notice of meeting.

The Chairman allocates sufficient time to discuss each agenda carefully and thoroughly. Directors are encouraged to give comments and express their opinion freely and openly before casting their votes. Each director has one vote. The meeting requires at least two-third of total number of directors present for voting of each agenda. Director who has vested interest in a particular agenda is excused or shall abstained from voting for that agenda.

Performance Evaluation

The Board of Directors conducts self-assessment of its own performance on an annual basis. The Company applies the same assessment criteria in compliance with the guideline of SET. The Board of Directors is assessed in 6 areas, which are as follows: 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, and 6) Self-development of directors.

The assessment has three sets to evaluate the performance of director as a collective body and as an individual, and the assessment of the committees. For the year 2017, all directors have completed the assessment questionnaires except two newly appointed independent directors who are excluded from the assessment. The assessment results for 2017 have improved to very good level.

The self-assessment of directors’ performance for the year 2017 were conducted with full participation of directors. The assessment results of the Board of Directors as a collective body improved from 85% in 2016 to 88%. Every categories showed improvements. The self-assessment as an individual improved from an average of 85% in 2016 to 90% for 2017. The assessment of committees’ performance has improved from an average of 82% in 2016 to 87% for 2017, and the assessment of CEO performance and the score has improved from 85% in 2016 to 88% for 2017.

The Board of Directors also reviewed comments from directors to improve its effectiveness. In 2017, the Company has taken action to improve the composition of the board for various skills and experience and increase the number of female members to the Board of Directors.

Remuneration for Directors and Executives

The Board of Directors approved the remuneration of the Board of Directors and its committees according to the principles and policies set by the Nomination and Remuneration Committee which is within the framework and limits as approved by shareholders’ meeting.

Directors’ remuneration is considered based mainly on the scope of duties and responsibilities, directors’ performance, the comparison with other listed companies engaged in the same business regarding the performance, business size, directors’ accountability, and with reference to directors’ remuneration report which was prepared in collaboration with the Stock Exchange of Thailand. The directors’ remuneration is proposed to the Board of Directors for approval before passing for approval at the Annual General Meeting of Shareholders.

The Board of Directors assigns responsibility to the CEO to approve executives’ remuneration, which is considered based on their duties and responsibilities, individual performance, and the performance of business under their supervision.

Training and Development

The Company encourages directors to continuously develop and enhance their skills and knowledge in relation to their duties and responsibilities. Directors are provided with useful information which are relevant to the Company’s business as well as details of duties and responsibilities of the Board of Directors and committees. The Company Secretary sends information about trainings, conference, and seminars that are relevant to the Company’s business or directors’ duties and responsibilities to directors.

The Company supports directors to attend basic trainings for directors as required by the SEC. Such training provides an overview for directors to understand their roles and responsibilities, the corporate governance concept, applicable laws, financial reporting, risk management, strategy and effectiveness of the board. The Company’s directors who have passed these fundamental courses organized by Thai Institute of Director (IOD) and other similar courses are as follows:

  1. Mr. Yeap Swee Chuan attended
    Director Certification Program (DCP108/2008).
  2. Mr.Pipat R.Punya attended
    Director Accreditation Program (DAP11/2004) and Role of Chairman Program (RCP35/2014).
  3. Mr.Kenneth Ngattended
    Director Certification Program (DCP189/2014).
  4. Mr. Wichian Mektrakarnattended
    Director Certification Program (DCP107/2008) and Board that Makes a Difference (BMD3/2016) and Role of Chairman Program (RCP40/2017)
  5. Mrs. Vachira Na Ranongattended
    Director Accreditation Program (DAP61/2007) and Role of Compensation Committee (RCC2/2007) and Director Certification Program (DCP124/2009)
  6. Mr.Kaikhushru (Kai) Taraporevala attended
    Listed Company Director Program from Singapore Institute of Directors, and Master Class for Directors, Institute of Directors (IOD) India.

Other than the IOD trainings, directors and executives have attended seminars and conferences throughout the year In addition, executives also attended seminars organized by customers such as Ford Asia Top Supplier Meeting, Nissan Annual Supplier Meeting, etc.

Power and Duties of the Board of Directors

The Board of Directors is responsible to oversee and govern the Company to operate in compliance with laws, objectives, the Articles of Association, and resolution of shareholders’ meeting, and acts in accordance with criteria and regulations of the SET and SEC with honesty and care for the best interests of the Company and shareholders. In line with good governance principles, the Board of Directors shall have the authority and responsibility to approve the following matters.

คณะกรรมการบริษัทกำหนดให้เรื่องดังต่อไปนี้ เป็นอำนาจหน้าที่และความรับผิดชอบของคณะกรรมการบริษัทที่จะเป็นผู้พิจารณาอนุมัติและให้ความเห็นชอบ

  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, subsidiaries, associates, and related companies or individuals so that they do not violate the regulations of the SET and SEC.
  3. Any transactions that would materially affect the Company’s capital structure, financial position, business operation, strategy, and 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 including investment in joint venture that have value of transaction which requires the board’s approval according to SET announcement. These transactions shall not violate any rules of the SET 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 material 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.
  12. Any other actions in accordance with laws, objectives, Articles of Association, and resolutions of shareholders’ meetings.

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

  1. Subject which the law requires of the approval from shareholders’ meeting.
  2. Transactions which directors have interests therein and that the law or regulations of the SET requires resolution of shareholders’ meeting. Director who has vested interest in the issues or have conflict of interest with the Company or affiliated company shall be excused from voting.

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 who are entitled to vote:

  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 Article of Association and the Memorandum of Association.
  5. The increase and decrease of capital, the issuance of debentures, the amalgamation or dissolution of the Company.

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 opinion on particular matters. These committees are the Audit Committee, the Nomination and Remuneration Committee and the Risk Management Committee.

Audit Committee

The Audit Committee comprises of 4 members as follows:

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

In 2017, the Board of Directors appointed Mr. Kaikhushru (Kai) Taraporevala to be a member of Audit Committee. With their extensive knowledge, background, and experience in finance and accounting, Mr. Kaikhushru Taraporevala and Mr. Kenneth Ng are qualified for reviewing the reliability of financial statements.

Power and Duties of Audit Committee

  1. Review the Company’s financial statements every quarter and on an annual basis to ensure that its financial position is true, correct, and in accordance with general accepted accounting standards and relevant laws.
  2. Review and ensure the appropriateness and effectiveness of internal control system and internal audit, so that the operations have been carried out in compliance with rules, policies, and relevant guidelines. Evaluate the independence of the internal auditor by reviewing its performance and report including reporting structure, and approve the appointment, transfer, and termination of the internal auditor.
  3. Review the performance of the external auditor. Consider, propose, and appoint external auditor by considering their independence and set audit fee to propose to Board of Directors. Arrange meetings with the external auditor without management presence at least once a year.
  4. Review and support compliance with the Securities and Exchange Act and the SET regulations, as well as relevant laws and regulations concerning the business of the Company.
  5. Establish and review the corporate governance policy in compliance with the good governance principles of SET at least once a year.
  6. Review disclosure of information, particularly related transaction or transactions that may have conflict of interest, to be transparent, correct, and complete and in accordance with relevant SET regulations.
  7. Review complaints and concerns from stakeholders and report to the Board of Directors.
  8. Report the Audit Committee’s performance to the Board of Directors every quarter. Prepare the report of Audit Committee and disclosure in the Annual Report.
  9. Consider and review duties and responsibilities, and evaluate performance of the Audit Committee on an annual basis.
  10. Perform any other matters as assigned by the Board of Directors.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of 3 members as follows:

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

Power and Duties of Nomination and Remuneration Committee

  1. Considers criteria and procedures for the nomination of qualified directors according to the Company’s requirements and in consideration to the Company’s strategy.
  2. Consider criteria, type of remunerations, and other benefits provided to the Board of Directors and its committees, and propose for approval to the Board of Directors and shareholders’ meeting respectively.
  3. Selects and nominates qualified individuals and proposes to the Board of Directors to be appointed as the Company’s directors and top executives.
  4. Review proportion and size of Board of Directors and experience of individual directors whether suitable for the Company’s business and that adjustments are appropriate in response to the changing environment.
  5. Establishes guidelines for evaluating performance of directors and adjustment of directors’ remuneration, taking into account the duties, responsibilities, and risks involved.
  6. Considers succession plan for CEO and executives in key management positions and reviews the list of qualified candidates.
  7. Performs any other matters as assigned by the Board of Directors.

Risk Management Committee

The Risk Management Committee comprises of 2 members as follows:

  1. Mr. John Parker Chairman
  2. Ms. Vachira Na Ranong Member

Power and Duties of Risk Management Committee

  1. Establishes the Company’s risk management policy and determines risk appetite. Gives advice on the risk management plan for the organization and ensures that control measures are adequate and appropriate.
  2. Considers and recommends the Board of Directors regarding the management, strategy, direction and resources used in risk management process, as well as risk tolerance level for approval.
  3. Conducts risk assessment and review corporate risks at least once a year and follows up on the risk management plan.
  4. Reviews and recommends to the Board of Directors on overall risk management and standard practices in order to improve risk management processes of the organization.

Nomination of Directors and Executives

Appointment of Directors

The Company’s Articles of Association stipulates that the Board of Directors shall comprise of at least five 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 appointed as the Company’s directors, taking into account their knowledge, education, expertise, ethics, integrity, and availability to perform directors’ duties. The Company provides opportunity for shareholders to nominate persons to the Board of Directors and shareholders’ meeting.

The nomination of directors shall replace the retiring directors on rotation at the end of their terms, or whatever the case may be. The appointment of directors must receive more than half of votes of shareholders attending the meeting in person and by proxy in accordance with the following rules and procedures which are as follows:

  1. Each shareholder shall have voting right equal to one share per one vote.
  2. Each shareholder may exercise all the votes he/she has under a) 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 received and shall be appointed in that order until all the director positions are filled. Where there is an equal number of votes casted for candidates causing the number of directors to exceed the allowed number, the Chairman of the meeting shall have a deciding vote.

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

Appointment of Executives

The appointment of executive is considered by executive directors and the Company’s management. The Company’s executives are professional who perform their duties independently from the major shareholders and other shareholders. Top executives are appointed based on their knowledge, skills, and experience suitable and beneficial to the Company’s operations. Their good understanding of business and cycle of automotive industry are key factors to driving business growth and achieve the Company’s target.

The Governance of Subsidiaries and Associates

AAPICO Hitech has put in place effective and efficient corporate governance, risk management, and internal controls that conform to the international standards and regulations of the respective authorities. The Company’s subsidiaries and associates are align with the same principles. The Company has established mechanism and process to overseeing and monitoring the management and operations of the subsidiaries and associates. To that effect, the Board of Directors has empowered the President/CEO to perform such duties as selecting representatives to be executives of that entities and reporting to the Board. The number of representatives in each entity is determined by the percentage holding of the Company in that entity.

The management of the Company is responsible to carry out operations to achieve target and drive business growth, control costs, reduce expenses, and monitor capital investments in line with business plan. Their responsibilities cover the human resource management, resolve problems or conflicts affecting the organization, and maintain effective communication throughout the organization. Significant issues requiring the board resolution are proposed to the Board for approval before taking any action.

The Company has a process and mechanism to oversee the operations and management of subsidiaries and associates. The head of each business unit shall report on the operating results of subsidiaries and associates to the management at the corporate review meeting on monthly basis, and present their budget and the progress of their operating plan to the Board of Directors at the performance review meeting on semiannual basis.

The scope of duties and responsibilities of the management of subsidiaries shall be in compliance with the Company’s policies. The management of subsidiaries shall ensure that it provides guidelines and procedures in compliance with rules and procedures of the SET regulations regarding connected transactions between subsidiaries and related parties, acquisition and disposal of assets, financial transaction and approval of credit facilities from financial institutions, guarantee, or any related transactions, so that these transactions are handled in an appropriate and complete manner. Subsidiaries shall apply the same regulations as the Company regarding the disclosure of information, filing of documents, the accounting records, and shall prepare its financial statements to the Company for consolidation on timely manner.

For the effective and efficient management of subsidiaries and associates, the Company has the agreement on mutual understanding concerning issues such as the scope of authority, the separation of duty in management, fair distribution of profit for all concerned parties. The Company has simple philosophy in dealing with business partners and respect their rights with all due fairness and cooperates fully with its partners to ensure successful operations of the joint ventures.

The Company and its subsidiaries and associates act in compliance with good corporate governance principles of listed companies and the guideline of SET regulations, such as the attendance of directors in the Board of Directors’ meeting and its committee’s meeting. More information is provided in the organization and management section.

Auditors and Auditors’ Remuneration

The Board of Directors, with approval of shareholders’ meeting, appointed EY Office Limited as its external auditor to audit the Company’s financial statements for fiscal year 2017 ended as of December 31, 2017. The remuneration of auditor can be described in details as follows:

Audit Fee

The Company and subsidiaries paid audit fee to EY Office Limited in the year 2017 at an amount of Baht 9,000,000, of which Baht 2,000,000 is audit fee for the Company including the review of annual report.

Not all subsidiaries of the Company are using the auditing service from EY Office Limited as some of its businesses are not complicated and the contribution to the group is not significant. In such cases, the Company decided to use local audit firms where costs are more appropriate.

Non-Audit Fee

In addition to audit fee, the Company and some of its subsidiaries have engaged non-audit services from EY Office Limited for compliance audit related to the conditions stipulated in the investment promotion certificate (BOI audit). Total payment for BOI audit service in 2017 was a total of Baht 650,000, of which the BOI audit fee for the Company amounted to Baht 130,000.