Corporate Governance

The Board of Director realizes the importance of fairness and right of all shareholders. The company will not infringe the rights of shareholders and facilitate them to use their rights and ensure that basic rights of shareholders will be protected;

• The company will keep shareholders updated about operating progress by informing them directly or communicating via company’s website or Stock Exchange of Thailand’s channel.
• The company will facilitate all shareholders to attend meeting by scheduling date, time, and venue that are close to sky train or venues which are conveniently accessible . Registration for attending the meeting will be arranged 2 hours in advance
• The company will issue invitation letter and meeting agenda to shareholders 7 days or 14 days in advance according to applicable laws. Materials include opinions of Board of Directors, 3 forms of Proxy as identified by laws, and name of at least one independent director, and advices about authorization in case that shareholders might need to delegate representative to attend meeting.
• Prior to shareholder meeting, Company has identified meeting and voting regulations. The company has allocated sufficient meeting time and allow shareholders to share ideas, suggestions, and address questions based on agenda. Participants including chairman, chief executive officer, , directors, committees appointed for special assignments, internal auditors, legal advisors, and auditors have attended meeting to provide information and to answer questions.
• Each shareholder earns the right to appoint each director individually in replace of the resigned director.
• The company will not add meeting agenda or change important information without informing shareholders in advance.
• After the meeting, significant views and queries including voting tolls were recorded iin the minutes of meeting. The minutes of meeting were disseminated to the shareholders via company’s website www.chukai.co.th and Stock Exchange of Thailand’s channel within 14 days after meeting.

The company had realized to maintain impartial and fair treat to all shareholders as follows:-

• 1. The company proposed at least 1 independent director as option for authorization of the shareholder in making Power of Attorney to exercise his right to attend the Meeting and vote in each agenda on his behalf whereby in the Annual General Meeting of Shareholders 2016, the company proposed Mr. Surin Premamonkit, the Audit Committee.
  2. The Board of Directors proceeded the Meeting according the agendas as notified in the Invitation Letter for the Meeting and did not increase any agendas without advance notice to all shareholders in order to provide sufficient time for the shareholders to study related information in advance.
  3. The company provided voting card for all agendas by using barcode system to record and publicize voting result including also provided facilitators to collect voting card in the Meeting room. The cards were collected both of those agreed and disagreed votes except in case of the election of the board of directors whereby voting cards would be collected in all cases, i.e. agreed, disagreed and suspended votes and after the Meeting, the card collector would collect voting card for all agendas.
  4. The Board of Directors had assigned the company’s secretary to correctly and completely produce and record Minutes of Meeting and publicize thereof to all shareholders via investor relation website and the company also delivered those Minutes to SET after completion of the Meeting not exceeding 14 days.
  5. The company had policy and strictly complied with internal data management by disclosing only to those related persons. Report of publication of internal data was allowed to do only by the authorized person. In this regard, all managements and directors of the company had well realized to their duties and responsibilities toward internal data and did not use thereof for personal benefit nor for security trading. Moreover, the company determined the management to report change of security holding to SEC pursuant to Section 59 of Securities and Exchange Act, B.E. 2535.
  6. To prevent conflict of interest, the Board of Directors had carefully managed upon there was any items which would be conflict of interest by determining the policy and method to prevent the management and related party to use internal data for their private benefits, as follows:-

REPORT ON CONFLICT OF INTEREST

The report would be approved by the Board of Directors subject to Audit Committee was also required to approved those correlated items. In this regard, approval to record correlated items was based on optimal benefit of the company, rules of fairness, reasonability of items and the compliance with market condition and market price. Moreover, the stakeholders or those who had conflict interest in correlated item was unable to involve in such approval of correlated item. This was for fairness and optimal benefit of the company. In case of such correlated item was under the scope of regulation, notification, order, requirement or rule of SEC, the company would comply with SEC by determining price and condition as if it was item made with the outsider and disclosed correlated item that contained details, item value, contractual parties, reason/necessity in annual report and annual data disclosure form.

The Board of Directors then approved in principle according to the guidelines of SEC in compliance with Section 89/12(1) of Securities and Exchange Act (No. 4), B.E. 2551 regarding director, management or related person who would do legal transaction with the company dated 13 August 2010, had resolved that the management could approve such transaction should it contained commercial agreement in the same manner which those wise men would do with their general parties in the same situations based on trading negotiation power that free from any influences from the position of director, executive or related persons. In this regard, the management would prepare report to summarize such transaction to the Board of Directors’ Meeting for acknowledgement of such intention onwards.

In the Board of Directors’ Meeting, should in any agenda which some directors has any conflict of interest , the Chairman would request those directors to comply with policy by suspending vote nor comment in such agenda.

INTERNAL INFORMATION CONTROL

The company determined policy to control the directors and managements not to bring internal information which was still not publicized to the public to use for private benefit. The management and employee of any unit who knew about such internal information were prohibited to purchase or sell company’s security at least 1 month before public announcement and at least 3 days after public announcemen. This prohibition was prescribed in the notification of the company regarding Policy on the Supervision of Business, Business Code of Conduct and Employee Code of Conduct. In this regard, the company also determined disciplinary action in Working Rules and Regulations of the Company as well. Moreover, the Company had informed the management of all departments to understand about their duties in reporting about possession of company’s security of himself/herself, his/her wife/husband and immature children including change of security possession to SEC pursuant to the Securities and Exchange Act, B.E. 2535 and requirements of SET after the company was permitted by SEC to offer for sale its ordinary share for capital increase to general public.

The company emphasized on right of all groups of stakeholders regardless internal stakeholders, i.e. employees and managements of the company or external stakeholders, i.e., partner, competitor and other related organization due to the company had well realized to the support of all stakeholders which promoted the competitive ability to build profit and long term success of the company. For this purpose, the company would take care the stakeholders according to related lawful right but would not conduct any action to infringe against the right of those stakeholders, as summarized as follows:-

For complaint and report of any clue related to legal offense, correctness of financial report, defective internal audit or breach against business ethics of the management and employee, can be made by mail to the Chairman of the Board of Director who is independent director at Chu Kai Public Company Limited address no. 42/62 Moo 14, Bangna-Trad Road Km. 7, Bang Kaew Sub-district, Bangplee District, Samutprakan Province 10540 or at inf@chukai.co.th and all information of the reporter would be kept confidential.

CORPORATE GOVERNANCE

The Board of Directors of the company has concerned on the importance of the Principles of Good Corporate Governance and has thus prescribed as policy to engage good transparency and auditable business by determining clear responsibility. In addition, the company also concerned on the governance and internal audit systems. For risk management, the company tried to closely control and manage risk and concerned on business ethics by maintaining fairness to the partner, shareholder and stakeholder in all groups.

REPORT OF BOARD OF DIRECTOR

The Board of Directors was responsible to operate important business and to control financial statements of the company including also IT system as disclosed to the public in annual declaration form and annual report. Such financial statements were prepared according to the general certified accounting standard by selection to use and regularly complied with suitable accounting standard including sufficient disclosure of important data on notes to the financial statements.

In this regard, the Board of Directors had thus appointed Audit Committee which was consisted of non-management director who has sufficient freedom to take care and responsibilities about quality of such financial report and internal audit system.

RELATIONSHIP OF THE INVESTOR

After the company had been listed in SET, the company had policy to provide investor relation coordinator to be responsible for disclosure of data which was quick, complete, transparent and thoroughly both report of financial data and general data including other important date duly impacted security price of the company by publication IT message of the company to all investors, institutes, shareholders, government officers and general publics via channels of SET. In addition, the company had publicized both Thai and English versions on investor relation website, which having, Ms. Wanida Darachai, Executive Vice President of organizational support to take responsibilities about the investor relation affairs who are contactable at Telephone no. 02-715-000 or www.chukai.co.th

LEADERSHIP AND VISION

The Board of Directors of the company has independent roles subject to good corporate governance standard in the following matters:-

• Determine vision, mission, strategy, goal, business plan and budget of the company.
• Supervise and regularly follow up performance of the management to ensure it is in accordance with work plan to achieve targeted goals.
• Maintain and regularly follow up sufficient internal control.
• Maintain and regularly follow up sufficient risk management for optimal benefit of the company.
• Promote the company directors to attend training course of the Thai Institute of Directors

BUSINESS ETHICS

The company determined procedures about ethics of Board of Directors, management and employee for guidelines of other persons to sincerely, honestly, fairly and responsible to perform their duties and responsible for the stakeholder, shareholder and all related parties.

AUTHORITY BALANCE OF NON-MANAGEMENT DIRECTOR

In 2017, the company had altogether 10 directors as consisted of:-

• Directors who are the management Total 5 persons
• Independent directors Total 5 persons

Therefore the company thus had directors who were outsiders and non-management total 5 person or 50 % of total Board of Directors which was more than one-half of the whole directors. The stakeholders therefore felt confidence that the directors would be able to independently perform their duties as representative of the shareholders, of which, this could balance and repeatedly check management of the directors.

INTEGRATED OR SEPARATED POSITION DIRECTOR

The company determined the Chairman of the Board of Directors and Chief Executive Officer was not the same person by clearly prescribing scope of authority and duties of Chairman and Chief Executive Officer. Chairman and Chief Executive Officer were thus had no absolute authority. This was to balance the important resolution which required approval from the Board of Directors or Shareholders’ Meeting. Moreover, authority and power vested to the Managing Director or Board of Directors was unable to approve any item which they or other stakeholder had benefit thereon or may had conflict of interest in any other manner with the company or affiliated companies.

The company determined to hold Board of Directors’ Meeting at least once every 3 months and additional special Meeting as deemed necessary by producing Invitation Letter including Meeting agendas and other supporting documents 7 days before the Meeting day to enable all directors sufficient and reasonable time to study all related data before attending the Meeting.

In each Board of Directors’ Meeting, the Chairman had sufficiently allocated time for the Directors to carefully summarize important problem. In addition, Chairman and Board of Directors had invited the auditor to attend the Board of Directors Meeting in order to provide additional information and record Minutes of Meeting in written, to compile the Minutes duly approved by the Board for verification of other related parties.

The Board of Director determined the management to prepare operating result report on monthly basis to propose to the up coming Meeting to enable the Board of Director to follow up the progressiveness of business operation of the company.

In 2017, the Board of Directors had held altogether 9 Meetings, each at approx. 3 hours. In each Meeting, other related persons were invited to provide additional information. The Audit Committee had held 8 Meetings, being normal agenda 4 Meetings and Meeting between Audit Committee and Auditor 4 Meetings details of attendance in Board of Directors’ Meeting in 2017 are as follows:-

Details of attendance in Board of Directors’ Meeting in 2017

SUB-COMMITTEE

The Extraordinary Meeting of Shareholders No. 2/2549, dated 25 August 2006; the Board of Directors’ Meeting No. 19/2549 dated 8 December 2006; The Board of Directors’ Meeting, No. 3/2551 dated 27 March 2551 and the Board of Directors’ Meeting, No. 5/2552 dated 26 June 2009, had appointed 4 Audit Committees, each of them were retained in position for 3 years per rotation to supervise the company’s affairs whereby the authorities and powers of the Audit Committee was in accordance with details in clause 8 of management structure. The Audit Committee would hold their Meeting at least one every quarter and may be specially held in emergency agenda.

The Executive Board duly consisted of 6 Executives Board of Directors whereby the authorities and powers of the Executives Board of Directors was in accordance with details in clause 8 of management structure. The Executives Board of Directors would hold their Meeting in jointly with the managements regularly at least once a month and may be specially held in emergency agenda.

REMUNERATION FOR DIRECTOR AND MANAGEMENT

Remuneration for director : The Company considered remuneration for the director and management by considering the suitability and responsibility of the director, management, environment, economic situation and comparison with other companies in the same industrial business including comparison with other company who earned similar or nearly income and net profit. Remuneration of Board of Directors and Sub-Committee was already approved by the Annual General Meeting of Shareholders.

Remuneration for the management was in accordance with principles and policies determined by the Board of Directors based on result of business operating of the company and performance of each management.

In 2017, the company had paid remuneration to the directors and managements total Baht 18.50 Million

INTERNAL CONTROL AND INTERNAL AUDIT

1. Internal control and internal audit. The Company had emphasized on the internal control both in management and operation levels. To enhance its efficiency, the company thus determined duties, authorities of the management in written with control the use of company’s property for greatest benefit and divided duties among the operator, the follower and to control and separately assess to make balance and suitably audit each other. In addition, the company provided internal control about financial aspect as the company provided financial report system to propose to the responsible management. Moreover, PV Audit Co., Ltd., who was the company’s auditor had also assessed and reviewed internal control system of the company in examining annual account and there was no any weakness nor significant failure were reported in the comment toward financial statement and issued unconditional auditor’s report.

   In addition, the company had Internal Audit Department to audit to ensure that major operation and significant financial activities of the company was in line with the prescribed guidelines and effective including the audition and compliance with law and all controls. To provide freedom for internal control unit, the Board of Directors defined that result of audit was directly reported to the Audit Committee and also assessed by the Audit Committee.

2. Risk assessment. The company had assessed both internal and external risk factors which would impact business operation of the company including to analyze and follow up all situations which was the cause of risk factor to determine appropriate measure to regularly manage risk and follow up result thereto.