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Corporate Governance

The Board of Directors recognized the value of good corporate governance, in enhancing transparency, the company’s competitiveness, trust from shareholders, investors and other stakeholders, and the long-term business merits. Stakeholders and society’s benefits were taken into account. The company has applied the governance guidelines of the Securities and Exchange Commission and the Stock Exchange of Thailand, which are in line with the OECD Principles of Corporate Governance, in the following elements.

Section 1 Shareholders' rights

The Board of Directors emphasized shareholders’ rights and ensured equitable treatment to all, as prescribed in the company’s rules and regulations and relevant laws. Shareholders hold the rights to attend annual meetings, the rights to appoint their proxy to vote at the meetings, the rights to vote on the appointment or removal of individual directors, the rights to cast votes in significant matters, the rights to dividend, the rights to raise opinions and questions at the meetings, and the rights to sufficient and timely information.

The Board sets the annual shareholder meeting (AGM) once a year, within 4 months after the end of each accounting year. If necessary, an extraordinary shareholder meeting will be called where shareholders can vote on issues which could affect their interests, or legal issues which need shareholders’ approval.

In organizing the AGM, the Board puts forward the shareholders’ rights. Invitation containing agenda in details and the Board’s opinions was dispatched at least 15 days prior to the meeting date, with the proxy form, the list of independent directors and proxy advice. With timely information, shareholders can make decisions prior to the meeting date or could appoint independent directors as their proxy. The AGM was published in daily newspapers for at least 3 consecutive days and at least 3 days ahead of the meeting. The meeting details and agenda were also posted on the company’s website 30 days before the meeting, so that shareholders or investors can submit their questions in advance.

During the meeting, the Board facilitates shareholders’ attendance and voting, and refrains from any actions which will limit their attendance. All shareholders are given full freedom to raise their questions and opinions.

Section 2 Equitable Treatment to Shareholders

The company values equitable shareholder treatment. Shareholders’ rights are covered in the corporate governance policy and all are treated in a fair manner through these measures:

  • The process to organize AGM is transparent and efficient, in line with the company’s rules and regulations and relevant laws. Shareholders are given fair chance to raise opinions and questions, with sufficient time allocation.
  • Shareholders are asked to review and vote on directors on the individual basis, and to approve the directors’ remuneration, auditor’s appointment, auditor fee and other agenda as described in the meeting invitation.
  • Ballots are issued for all agenda.
  • Shareholders-cum-executives are barred from proposing extra agenda without notifying others in advance, so that all shareholders have sufficient time in reviewing details of each agenda.
  • Shareholders who cannot attend the meeting can appoint independent directors or other persons as their proxy, who will cast votes on behalf of them. The company’s proxy form is designed to allow shareholders to state their voting opinions.
  • The meeting is thoroughly recorded. The meeting minutes contain all significant information like the resolutions and votes, questions, explanations and opinions raised.
  • Measures against insider trading among directors and executives are in place. All must report their shareholding, as well as the holdings of spouses and under-aged children. They must report on any change in the shareholdings, after acquisition, disposal or transfer, to the Securities and Exchange Commission under the Securities and Exchange Act BE2535’s Article 59, within 3 days after the acquisition, disposal or transfer.
  • In place are the measures and procedure in approving transactions with possible conflict of interest or connected transactions, with full compliance with the Stock Exchange of Thailand’s regulations on connected transactions, for the equitable benefits of shareholders. Moreover, the Audit Committee also thoroughly screened connected transactions and transactions with possible conflict of interest, before submission to the Board, as required by the SET.
Section 3 Stakeholders' rights

The company realizes the significance of all stakeholders - shareholders, employees, customers, competitors, creditors (suppliers and contractors), relevant government agencies, society and environment. The policies are geared towards fairness to all groups of stakeholdersas follow. (Details are included in “Corporate Social Responsibilities (CSR )”)

Shareholders

The Company will ensure appropriate and fair returns to shareholders and strive to improve the operations for sustainable growth. The Company is concerned about transparency in important information disclosure to all shareholders accurately, completely and timely through channels including the SET’s electronic media, the company’s website, announcement in newspapers, press releases and written notices.

Employees

Employees are a key driving force of the organization. With this realization, the Company is committed to nurture good relationships with employees. The sense of attachment and harmony is promoted through various activities. There is a human resource development policy and a concrete structure on remuneration and welfare management. For fair management, the remuneration committee is in charge of setting remunerations, promotions accordingly to ability and career path. Employee welfare and benefits are clearly specified, to ensure that all are physically and mentally happy and could perform their tasks at their full potential.

Customers

To satisfy customers, the Company puts its focus on the standardized quality of products and services as well as treatments. Customers are guaranteed of quality and standardized services. Promises will be kept while complaints or recommendations will be dealt as soon as possible. Exaggeration on products and services is prohibited. There is a convenient access by which customers can contact the Company or file complaints on product quality.

Competitors

The Company follows the competition rule, upholding fair and transparent principles in line with laws. Free competition is promoted. The Company will not enter into any deal which leads to unfair competition or monopoly. All transactions must yield fair returns to both sides. The Company refrains from using dishonest or inappropriate acts in seeking competitors’ trade secrets or using unsubstantiated information to destroy competitors’ reputation.

Creditors

The Company strictly honors the conditions, contracts and obligations set by all financial institutions and debenture holders. The financial status is reported to creditors accurately, timely, responsibly and transparently. No information is withheld, to cause damage to creditors. The Company’s debentures were issued accordingly to the Securities and Exchange Commission’s rules and regulations. The Company has strictly complied with shareholders’ resolutions reached at the annual meeting. If unable to uphold obligations, the Company will immediately disclose the information to seek resolutions and prevent possible damage.

Product distributors

In selecting distributors, the Company clearly announces the selection rules, selection period, and financial information. Equal treatment is promised to all joining the bid. The procurement process is transparent, fair and honest, without intervention. All bids are also kept secret. The Company shall not reveal a bidder’s bid or technical data to another for a short-term gain. The Company stays alert on those fishing for others’ information. The process is completed under the guidelines specified by ISO 9001:2008, governing the selection process, bid evaluation, extra procurement practices and distributor evaluation.

Contractors

The Company will award projects to contractors whose quality of work could meet the Company’s criteria. These contractors should also have a satisfactory track record and financial capacity. The selection process is transparent, fair and just, without any intervention. All contractors must win approval from the Company’s central procurement committee and they will be fairly paid. The contractor selection process is in line with ISO 9001:2008 that sets guidelines in contractor selection, bid hosting, median-price setting and contractor evaluation.

Section 4 Information Disclosure and Transparency

The Board puts emphasis on information disclosure and transparency, with sufficient information released to all stakeholders and measures to ensure the disclosure of accurate, complete and credible information in a timely manner for equal access.

Key financial information is sufficiently disclosed in the financial statements, in line with the regulations. They are disclosed via the SET system and the company’s website. The financial statements are reviewed/audited, with unconditional opinions from the auditor and the Board’s approval before the release to shareholders. The Board also expresses its responsibility for the financial statements in the annual report.

The company discloses significant financial and non-financial information through the SET system and the company’s website, for accurate, complete, equitable, fair, transparent and timely dissemination to the general public. The Investors Relations and Information Technology Unit is in charge of the dissemination and communicate with local and foreign shareholders, investors, stock analysts accurately, equitably and timely. Investors can contact the Investor Relations Unit for the company’s information at Tel: 0-2247-7500, Fax: 0-2247-7399, e-mail: ir@pf.co.th, or www.pf.co.th/ir

The Board discloses its role and scope of responsibility as well as those of sub-committees, as well as the number of meetings each director attended under item “Management”. Remuneration of the directors and top executives are shown in item “Directors’ Remuneration”.

The company has pursued the Stock Exchange of Thailand’s rules and regulations governing connected transactions or acquisition and disposal of assets of listed companies, whichever is the case. Besides the company has set policies and guidelines to prohibit executives and related persons from using inside information for their own interests.

The company has regarded an importance of efficient internal control system for both executives and operational levels. Practices of operational staff and executives are determined and clearly written. The company has set up an internal audit office to exclusively take responsible for efficient operational examination. The internal audit reports the result directly to the Audit Committee.

Section 5 Board of Director’s Responsibility
Board of directors’ structure

The company requires independent directors account for at least one third of all directors, or at least 3. At present, the company’s board of directors consists of 12 experienced, knowledgeable and capable directors as follows:

  • Executive Director 6 persons
  • Non-executive director 1 persons
  • Independent Director 5 persons

The chairman does not serve as the CEO, to segregate their supervisory and executive roles. All directors possess full independence in giving opinions.

Much emphasis is placed on the opinions of the independent directors. In any issue that draws any suggestions or disagreement from independent directors will be reviewed for transparency.

The Board abides by the minimum requirements of the SEC and SET in formulating independent directors criteria.

  1. They must hold no more than 1% of all voting shares in the company, subsidiaries, affiliates, or in the companies which are major shareholders or have controlling power over the company. The shareholding includes that of those related to the particular independent director.
  2. They must not have been or are not involved in the management, or employees, wage earners, or advisors on the payroll, or controlling persons of the company, its subsidiaries, affiliates, or equivalent companies, or juristic persons now and at least 2 years before their appointment as independent directors. Former civil servants for advisors of government agencies which are major shareholders or controlling persons are not included.
  3. They are not related by blood or registration as parents, spouses, siblings, or children, spouses of any of the children to members of the management, major shareholders, those exercising control, or those about to be nominated as members of the management or controlling entities over the company or subsidiaries.
  4. Have absolutely no vested interests in the company, its subsidiaries, affiliates, or major shareholders or controlling entities of the company, which could obstruct their independent judgment. They are not either a significant shareholder or a controlling shareholder who has business relationship with the company, subsidiaries, affiliates now and at least 2 years before their appointment.
  5. They do not serve as the auditor of the company, subsidiaries, affiliates, the parent company, or controlling entities, or a significant shareholder (with over 10 per cent of voting shares including connected persons’) of the company, controlling entities, or a partner of the audit firm of which auditors perform their jobs on the company, subsidiaries, affiliates, the parent companies or controlling entities at least 2 years before their appointment.
  6. They do not serve as a professional service provider, including legal or financial services of which fees more than Bt 2 million per year are levied on the company, subsidiaries, affiliates, the parent company, or controlling entities, or a significant, controlling shareholder or a partner of the professional service provider at least 2 years before their appointment.
  7. They are not appointed to represent the directors of the company, major shareholders, or shareholders who are related to major shareholders.
  8. They do not operate a company with the similar nature to and significant competition with the company, subsidiaries or affiliates, or hold a significant ownership in a partnership or act as a director with management power, employees, wage earners and advisor on payroll, or hold over 1% of voting shares of other companies which operate in the same industry or present significant competition against the company or subsidiaries.
  9. Have no other characteristics that could bar the expression of their free views on the company’s operations.

The company’s management structure consists of the Board of Directors, four sub-committees reporting to the Board of Directors - the Audit Committee, the Nominatiing and Remuneration Committee, the Risk Management Committee and the Executive Committee. (Details of the Board of Directors and the sub-committees, concerning names and responsibilities, are shown in “Management Structure”)

Responsibilities of the Board of Directors

The Board consists of knowledgeable, capable, skilled and experienced persons who realize their roles and responsibilities, which resulted in efficient operations. The Board takes part in formulating the vision, mission, strategies, goals, business plans and resource allocation, to ensure the management’s efficient and effective implementation.

The Board values good corporate governance, to enhance transparency and the company’s competitiveness. To instill trust among shareholders, investors and all stakeholders, there is the written corporate governance policy which is reviewed once a year to fit the environment, business direction and international standards. The Code of Conduct is in place so that employees perform in accordance with the corporate governance policy.

To prevent conflicts of interest or connected transactions, the Board assigned sub-committees with clear segregation of roles. There are policies, code of practices and the procedure to approve transactions which might carry conflict of interest, as guidelines to executives, employees and relevant parties. Such cover the criteria in endorsing connected transactions, the use of inside information and information disclosure. The Board also demands the management to regularly assess business risks and formulate risk preventing and mitigation measures, and report them to the Board. These include the risks that may affect the company’s performance, as specified in item “Risk Factors”.

Board Meetings

The Board holds quarterly meetings, aside from extra meetings as necessary, with clear and prepared agenda, to review the quarterly results as well as monitor progress. The chairman and CEO will jointly review the issues, before bringing them up to the Board’s meetings. Each director is allowed to propose their own agenda.

In each meeting, the chairman allocates sufficient and ample time for discussion. Meeting minutes are written and the minutes, approved by the Board, are stored for inspection by the Board and relevant parties. (The minutes of the board of directors and sub-committees in 2009 are in “Management Structure” and “Sub-committees”).

Board of Directors’ self assessment

Executive directors conduct a quarterly evaluation to assess performance in part of their responsibility and the performance evaluation is presented to the company’s Board of Directors to compare with performance in the past.

Remuneration

The company has appointed the Remuneration and Human Resource Committee to consider remuneration principles and policies for Chief Executive Officer, directors and advisors and determine bonus, salary adjustment annually and during the year, and other benefits to staff in each level. Remuneration determination is based on experience, duty and scope of responsibility and compare with other companies in the same industry.

Directors and Management improvement

The company is concerned about the importance of Directors and Management improvement for management succession in the future.The company is aware of the importance of human resources in management level by organizing training “Real Estate Business Management”, contents of which include real estate knowledge, law, finance, accounting and good corporate governance to prepare the company’s high-level executives for being directors in the future. For the company’s directors, they participated in trainings held by Thai Institute of Directors and aimed to develop and support directors to take practices of good corporate governance in organization.

Supervision on subsidiaries and affiliated companies

The Company is represented in the subsidiaries and affiliated companies’ boards of directors and the management teams, to maintain control on such companies’ business direction. This is carried out under corporate governance practices, highlighting business transparency and good governance.

Control on inside information

The Company’s policy bars directors or executives from directly or indirectly revealing information which is not yet publicly disclosed, for the benefits of their own or others. On top of that is a rule that directors, executives and employees, with access to the Company’s financial information, must not take benefit from the information within a 1-month period before the information is disclosed to the public. The directors, executives and employees are instructed to avoid trading the Company’s shares before the disclosure of financial statements. Directors and executives are also notified of their duties to report their securities holdings and changes to the Office of the Securities and Exchange Commission under the Securities and Exchange Act BE.2535’s Articles 59 and 275.

In the employee manual, the Company has clearly specified disciplinary penalties for employees who violate the company rules and regulations.