The Board of Directors fully realizes the importance of good corporate governance and jointly agrees it would increase efficiency and ability to compete and would give valuation to the Company and benefits shareholders in the long run. Corporate governance will be carried out in honesty and with the best interest of the Company and shareholders in mind. On December 19, 2005, the Board of Directors had approved the Corporate Governance Policy which reflects corporate values and outlines to management and staff good corporate governance practices and the right of shareholders according to law.
Moreover, the Company provides pertinent information to shareholders in a timely manner to aid in their decision-making. In addition to disclosing information in accordance to regulations of the Security Exchange of Thailand, the Company disseminates information through Company website and monthly newsletter.
The Company gives equitable treatment to all shareholders. During annual general shareholders’ meeting, shareholders who show up late will be allowed to attend and participate. All shareholders attending the meeting will be given opportunity to comment or address questions to Directors and company top management. The annual general shareholders meeting of 2007 was conducted according to the agenda outlined and issued with the meeting invitation. There was no change or surprised agenda added during the annual general shareholders’meeting.
The Company gives shareholders the opportunity to propose topics to be included in the agenda of forthcoming shareholders meeting and names of qualified persons to be considered as board members as well as questions they would like to raise during the annual general shareholders’ meeting. The Board of Directors has stipulated the rules in submitting the abovementioned matters which includes submission channels and timeline and posted on Company website since January 2008.
In 2007 the Company had posted information regarding the annual general shareholders’ meeting on its website one month prior to the meeting date. The information posted on the web is the same as those mailed to shareholders 14 days before the meeting date. On the meeting invitation, the following information is provided – date, time and venue of meeting, meeting agenda, procedures and documents needed for registration and proxy form which could be signed over to either the Chairman of the Audit Committee or members of the Audit Committee in case shareholder could not attend the meeting. Instruction as to where to send the proxy form is also given.
In addition, the Company supplied adequate information on subject matters that needed to be reviewed and voted by shareholders during the meeting. However, on last year’s meeting invitation, there was no notice on how shareholders could raise questions about the meeting agenda to the Board of Directors prior to the meeting date. This has been corrected on the meeting invitation for the 2008 annual general shareholders’ meeting to be held in April.
In 2007 prior to the start of the annual general shareholders’ meeting, the Company made announcement on rules to be used in conducting the meeting including the voting procedures. In that meeting there were 16 board members and top executives attending including the President, Chairman of the Audit Committee, Chairman of the Remuneration and Board Selection Committee, Chief Operating Officer and Chief Financial Officer. The annual general shareholders’ meeting of 2007 was held at CP Tower on Silom Road, Bangrak District, Bangkok. Snacks and beverages were provided to shareholders at the reception/registration area prior to the start of the meeting. To facilitate the registration procedure, the Company resorted to using bar code system.
As the Chairman and Vice Chairman of the Board of Directors could not attend the meeting, Honorary Chairman/ Independent Director/ Chairman of the Audit Committee was appointed by the floor to chair the meeting. Shareholders were given the opportunity to voice their opinion or ask questions on all issues listed on the meeting agenda. With regard to the voting procedure, ballots were used in cases where shareholders voted against or wished to abstain from voting. Minutes of Meeting was recorded and reported. It comprised of two sections. The first listed names of directors and top executives in attendance, and information such as time meeting started and ended, total voting rights and the voting procedures. The second summarized the meeting agenda by listing each issue with questions raised by shareholders and addressed by the directors and/or top executives. Voting results were shown with total numbers of vote “for,” “against,” and “abstained.” The Minutes of Meeting was submitted to the Security Exchange of Thailand within 14 days after the meeting date as well as being posted on the Company website.
With regard to transactions of Company shares, it is stipulated in the Company’s rules and regulations that directors, top executives and officers of the Company Secretary Office and Investors Relations Office are responsible to report any sales or changes in shares holding to the Securities and Exchange Commission. Presently, the Company is working to incorporate the rules and regulations into the working procedures for internal use.
The Company dictates that connected directors and executives have to report their related party transactions at each calendar year end. It is a standing principle that connected directors and executives will not be allowed to participate in the deliberation and decision making of related party transactions.
The Board of Directors closely guards to avoid conflicts of interest which starts with setting up of committees and sub-committees in accordance with good corporate governance. Employees are indoctrinated to work with honesty and fairness and to abide by the law. Internal company information is not to be used for personal gain.
In case of transactions that may cause conflicts of interest between the Company and its subsidiaries, relevant information will be disclosed for transparency purpose. Connected persons will not be permitted to participate in the approval of such transaction.
The Company will deal with all stakeholders including shareholders, suppliers and service providers and customers on the basis of honesty, fairness and transparency. The Company will not seek personal gains at the expense of the stakeholders nor divulge their confidential information.
The Company is committed to continuous development and sustainable business with responsibility towards the community and country under which it operates. Corporate Social Responsibilities include activities which benefit development of the community and the environment and their sanitation and safety. Above all, the Company is a loyal subject of the monarchy and the royal family.
The Board of Directors realizes the importance of operating under the law and rules and regulations of the government agencies. Company’s business ethics do outline the protocol and suggest impartiality on politics. Moreover, the Company encourages employees to participate in political activities that are lawful.
The Company has set up a Safety, Health and Environment (SHE) Committee to be responsible for all activities relating to this issue. Company’s processing plants in Thailand were the first to start SHE activities last year.
To encourage communications between top executive and employees of all levels, CEO Website has been created as a channel to receive comments, suggestions or issues employees wish to bring to the attention of the CEO. Names of employee will be kept confidential. There is also a Call Center number (02-800-8000) to receive comments and complaints. Complaints will be sent to respective department for verification and corrective action.
The Company is in full compliance with the rules and regulations of the Securities and Exchange Commission and of the Stock Exchange of Thailand with regard to disclosure of financial and non-financial information. The disclosure is complete and within the specified timeframe and covers the responsibility of the Board of Directors on financial reporting.
Company website is another channel that the general public can access information, available in both Thai and English, about Company’s various businesses and products, structure of shareholding, good corporate governance, business ethics, annual report, etc. The website is also linked to website of the Stock Exchange of Thailand.
Investors Relations Office has been established since 1999 and is under the direct supervision of the Chief Executive Officer. One of the activities of this unit is to organize meetings with financial analysts and domestic and foreign investors. In the past year, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and other top executives had participated in such meetings. The Investors Relations Office can be contacted through clearly indicated avenues.
As of March 31, 2008, the Board of Directors consists of 14 members. There are four independent directors, six executive directors and four non-executive directors. Chairman of the Board and the President are two separate persons.
The Board of Directors has the authority and duties of supervising and ensuring business is conducted in accordance with the Company objectives. They are to enforce free and fair operations that take into consideration the best interest of shareholders and stakeholders. They are to stay away from routine managerial tasks and activities under the responsibility of the President and of the executive directors.
The four independent directors are not connected to the Company or its management in any way. They do not represent any specific shareholder or group of shareholder and have no financial or personal connection with the Company. Thus, they are able to freely provide equitable treatment and protect the interest of all shareholders. They have all necessary qualifications and comply with the requirement stipulated in the announcement 12/2543 of the Securities and Exchange Commission on owning less than 1% of total common shares and have no business connection with the Company.
Every board member is experienced in his respective field which in composite will be beneficial to the operation of the Company. They possess understanding of business obstacles and abilities to solve problems and create competitive advantage as well as providing insights to managing important risks. All board members meet the criteria set forth by the Securities and Exchange Commission and the law regarding public listed company.
Upon joining the board, each member is provided important information on Company rules and regulations, roles and responsibility of the board members, laws, regulations, and conditions on being board member of a public listed company and a thorough briefing and touring to observe Company’s various businesses and operations.
The first term of board directorship is three years. The retiring director can be re-elected to the board with the approval of shareholders. In case of electing a new director, the Board of Directors must select qualified person to fill the position. Should the Board deemed appropriate to re-elect the retiring director, the board must present reasoning to the shareholders for their approval.
In case a director, for whatever reason, left the Board before the term expires (with more than two months left in the term), the Board of Directors can elect a qualified person who meets all the criteria required by law to fill the void. However, this person must receive majority vote of no less than three quarter of the remaining directors. The newly elected director can only be on the Board until the term of the director he is replacing expires.
The Board of Directors is responsible to ensure management is operating under the strategy and plan set for the greatest benefits of all stakeholders. The President and other top executives are responsible for managing routine tasks and appointing various committees and sub-committees to supervise specific areas of operation.
Functions and duties of the Chairman of the Board and that of the President do not overlap. The President reports to the Board of Directors and is responsible to delegate works and responsibility to other executives further down the chain of command.
The Company Secretary Office is set up by the Board of Directors to assist and advise board members on issues relating to corporate governance and to coordinate and ensure equitable treatment of all shareholders.
Monthly board meeting is held and it is a mandate that all board members must attend. In case that certain board member could not attend, details and minutes of the meeting will be briefed to that particular member.
Chairman of the Board has assigned the President to be in charge of the meeting agenda in conjunction with Chief Financial Officer and Company Secretary.
Company Secretary will prepare and submit relevant information needed for the board meeting along with meeting notice to board members no less than seven calendar days before date of meeting for their review and consideration. Management executive(s) responsible for issues to be raised in the board meeting will be invited to present for board’s approval. Every board member is free to question or give opinions on the subject matter. Additional information may be requested or advice from independent consultant may be needed depending on the situation.
In case where certain board member has conflict of interest on the issue up for consideration, that board member will make the fact known to the Board and will not participate in the decision making of that issue.
The Board of Directors has appointed sub-committees to be responsible for specific matters. The sub-committees will be evaluated every year on their performance. Each sub-committee has clearly defined scope of responsibility and authority in decision making. Chairman of each sub-committee has to report and update progress to the Board.
The Board of Directors is responsible to set the framework of risk management and internal controls for effective and efficient operation. It is the responsibility of the Board to ensure credibility of the financial information and compliance with related laws and regulations and to monitor that risk management and internal controls are effective and achieve expected results.
In setting the framework of risk management, the Board of Directors has to consider probability of the particular risk versus the costs involved in managing that risk. This is to ensure an appropriate system of internal controls.
The Board of Directors has approved Company’s Code of Conduct which outlines the working principles for directors and all employees. It also stipulates the corporate values, ethics and responsibilities towards all stakeholders. For the benefit of setting a standard on conducting business with honesty and fairness, the Company has publicized this Code of Conduct to employees of all levels and has set it as part of the Company’s rules and regulations.
The Board of Directors has rules with regard to transaction of Company shares by directors, management and all officers and staff of the Company Secretary Office and Investors Relations Office. This is to create transparency and prevent personal gains by directors, management and staff from using privileged information not disclosed to the public. It is also to prevent criticism on insiders trading.
The Board of Directors is fully aware of the importance of all employees, treats them with respect and offers career advancement. To build morale and reinforce efficient personnel, the Company has a clear human resources management policy. Employees are informed of the health and insurance program as well as retirement and other fringe benefits.
The Board of Directors has assigned the duty of conducting business to the Executive Board and top management under appropriate internal control system. One aspect of the internal control system is to evaluate its effectiveness. This has to be a systematic and on-going process. Manager of the Internal Audit has to make a progress report to the Board of Directors every six months and the Board will annually evaluate if the internal control system is appropriate and sufficient.
The Company is involved only with routine litigation arising from normal business practices. The Company is not party of legal cases, which the Company is a defendant in lawsuits amounting to more than 5% of shareholders’ equity as of December 31, 2007, which affect business operations of the Company but the amount of the loss cannot reasonable be determined, and that not arising from normal business practices of the Company.
