Friday 4 May 2007

Corporate Governance Report

Investor Relations
Corporate Governance Report
Board Matters
Principle 1: Effective Board to lead and control the Company
The duties and responsibilities of the Board of Directors are set out in the Company's Articles of Association, in the Thai Public Company Limited Act and in the regulations of SGX-ST.
The principal duties and responsibilities of the Board of Directors are to :
Authorize and delegate responsibility for the performance of the Company's business in accordance with the law, the Company's objectives and Articles of Association, and resolutions of shareholders' general meetings.
Establish the Company's vision and strategic directions and supervise management in the implementation of these.
Ensure that the Company has internal control systems including an Office of Internal Audit and Committee of the Board, and covering such matters as related party transactions and reporting to the shareholders and regulators.
Report accurate and sufficient financial and other relevant information to the shareholders and investors generally.
The Board of Directors defines the power and authority of management to approve different types of transaction by way of a Corporate Authority Index reviewed by Audit Committee. This authority is divided into 3 main areas as follow :
1. Set up credit limit and authority for the twelve items as below
1.1 Capital Expenditures 1.2 Expenditures 1.3 Personnel 1.4 Procurement 1.5 Contracting and Power of attorney 1.6 Selling 1.7 Financial transaction 1.8 Accounting 1.9 Disposal and write-off 1.10 Public disclosure 1.11 Customer services 1.12 Computer system authorization
2. Set up credit limit and authority in case over-budget or without budgeting
3. Set up authority to sign on the following documents
3.1 Purchasing order 3.2 Cheque/instruments/documents related to financial transactions 3.3 Tax applications to Revenue Department and Excise Department The Company's Articles of Association also provide guidelines for transactions and matters that require board approval, which are generally those that are other than in the normal course of business or are not specified in the Corporate Authority Index.
The Board of Directors meets as required but at least on a quarterly basis. During the financial year ended 31 December 2005, the Board of Directors held 7 meetings. The directors' attendance at those meetings was as follows :
Directors
Number of Meeting Attended
Board of Directors
Audit Committee
ExecutiveCommittee
Remuneration Committee
Mr. Boonchai Bencharongkul
7
-
3
-
Mr. Chai Nasylvanta1
5
-
1
-
Mr. Arve Johansen
6
-
4
-
Mr. Vichai Bencharongkul2
7
-
3
-
Mr. Christian Storm
7
-
4
-
Mr. Ragnar H. Korsaeth
4
-
2
-
Mr. Pakkaporn Sathienpakiranakorn
6
-
-
-
M.R. Tongnoi Tongyai
7
13
-
2
Mr. Chulchit Bunyaketu
5
12
-
2
Mr. Soonthorn Pokachaiyapat
5
9
-
2
Number of Meetings Held
7
13
5
2
Note: 1. Mr. Chai Nasylvanta resigned as member of the Executive Committee, and resigned as Director of the Board of Directors at the Board of Directors’ Meeting No. 1/2006 held on 8 February 2006.2. Mr. Vichai Bencharongkul resigned as member of the Executive Committee at the Executive Committee’s Meeting held on 24 February 2005, and resigned as Director of the Board of Directors at the Board of Directors’ Meeting No. 1/2006 held on 8 February 2006.
To ensure that incoming directors are familiar with the Company’s business, and governance practices, all relevant information on the Company’s business is made available to new directors when first appointed to the Board and orientation program may be conducted for the new directors upon request.
The Company from time to time informs the directors regarding appropriate available training courses, which would help them to discharge their duties as the member of the Board.
Board Composition and Balance
Principle 2: Strong and independent element on the Board
Currently, the Board consists of ten directors, including three independent directors, and one nominated by CAT. Details of their academic and professional qualifications and other appointments are set out on page [xx] to [xx]. To maintain the number of the member of the Board of Directors at eleven, the nominating working group appointed by the Board is on the nominating procedures for a new qualified director to replace the directors who resigned with effect from 24 June 2005.
Given the specific nature of these nominating procedures, they vary in some aspects from those suggested in the Code of Corporate Governance specifically with regards to the number of independent directors making up at least one-third of the board.
As at 31 December 2005, the members of the Board of Directors were:
Directors
Position
Age
Date of Initial appointment
Last Appointed Date
1.
Mr. Boonchai Bencharongkul
Chairman
52
29 October 1990
30 April 2004
2.
Mr. Arve Johansen
Vice Chairman
57
29 September 2000
29 April 2003
3.
Mr. Sigve Brekke1
Director and CEO
47
8 February 2006
8 February 2006
4.
Mr. Knut Borgen2
Director
46
8 February 2006
8 February 2006
5.
Mr. Ragnar H. Korsaeth
Director
40
25 February 2005
25 February 2005
6.
Mr. Christian Storm
Director
50
12 November 2004
12 November 2004
7.
Mr. Pakkaporn Sathienpakiranakorn
Director
59
22 June 2001
29 April 2003
8.
M.R.Tongnoi Tongyai
Director
71
11 December 1998
30 April 2002
9.
Mr. Chulchit Bunyaketu
Director
63
6 March 2000
30 April 2002
10.
Mr. Soonthorn Pokachaiyapat
Director
69
6 March 2000
30 April 2002
Note: 1. Mr. Sigve Brekke was appointed as Co-Chief Executive Officer with effect from 18 November 2002, and was appointed as Director replacing Mr. Vichai Bencharongkul at the Board of Directors’ Meeting No. 1/2006 held on 8 February 2006.2. Mr. Knut Borgen was appointed as Director replacing Mr. Chai Nasylvanta at the Board of Directors’ Meeting No. 1/2006 held on 8 February 2006.
All independent directors are non-executive and carry out the functions independently of the executive directors and management of the Company. They are:
1. M.R. Tongnoi Tongyai2. Mr. Chulchit Bunyaketu3. Mr. Soonthorn Pokachaiyapat
Currently, the Company is in the process of seeking one more independent director, who is resident in Singapore, to replace the resigned director. As a result, the number of the independent directors will exceed one-third of the Board in accordance with the SGX-ST’s Corporate Governance Code.
Chairman and Executive Officer
Principle 3: Clear division of responsibilities at the top of the Company
The Chairman of the Board is responsible for scheduling meetings and setting meeting agendas, exercising control over quality, quantity and timeliness of the flow of information between the management and the Board, and ensuring compliance with the Company’s guidelines on corporate governance. The Chairman is also the Chairman of Board meetings, and in the case of a tied vote, the Chairman of the meeting has an additional casting vote. Each director has one vote, and a decision at the meeting is made by a majority vote. A director who has any interest in any matter is not entitled to vote on such matter.
Board Membership / Board Performance
Principle 4: Formal and transparent process for appointment of new directors
Principle 5: Formal assessment of the effectiveness of the Board and contribution of each director
Appointments to, and withdrawal and retirement from, the Board of Directors are governed by the Company’s Articles of Association that requires:
1. The Board of Directors must have at least 5 members and at least half of the directors appointed must have permanent residence in Thailand. 2. Shareholders appoint the members of the Board: a) Voting is in proportion to the number of shares held; b) Votes can be for one or a group of nominees but votes cannot be split between a number of nominees; c) Nominees with the highest number of votes are appointed. Where there is a tie, the chairman of the meeting has the casting vote.3. A board member wishing to resign from his position must submit a letter of resignation to the company. A resignation takes effect when the Company receives it.4. Shareholder’ meeting may resolve to remove any director before the expiration of his/her term out of office by having votes of not less than three-fourths of the number of shareholders attending the meeting and having the rights to vote with no less than one-half of the shares held by all the shareholders attending the meeting and having the right to vote.
At every Annual General Meeting (AGM) one-third of the directors must retire determined on the basis of the longest serving. A retiring director is eligible for re-election.
Currently, a Nominating Committee for the appointment of new directors and a formal assessment of the Board’s performance has not been set up.

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