EN TH

To be a leading value-oriented integrated energy company in Asia-Pacific

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The Company's operations adhere to good corporate governance practices for listed companies which cover ethics; transparency; responsibility for society, environment and all stakeholders; and actions against fraud and corruption. Such practices are the key mechanism that will drive the Company towards sustainable development and growth, as well as truly strengthen trust and confidence among shareholders and other stakeholders.

The Board of Directors has formulated the "Corporate Governance Policy for the Group", "Code of Conduct", and "Policies on Specific Stakeholders Group" which serve as the framework and guidelines for its directors, executives, employees and other stakeholders. All are prepared in writing and published on the Company's website under Good Corporate Governance section. The Board of Directors realizes its leading role in assuring understanding about corporate governance principles and its benefits in creating value and enhancing the Company's prosperity, stability, and sustainability in the international level. The Corporate Governance and Social Responsibility Committee was assigned to consider, review, promote, supervise and monitor the execution of corporate governance practice by the Corporate Governance Working Team which appointed by the Chief Executive Officer. The Working Team is assigned to monitor, study, consider, review and improve the corporate governance policy at least once a year to ensure it is updated and corresponds with the current international practices, laws, rules, regulations, recommendations and/or relevant organizations' orders. The Working Team is also responsible for proposing corporate governance practices for the Company and its subsidiaries, setting the framework for corporate governance practices and risk management that is related to and covers anti-corruption practices; promoting consciousness in the principles and anti-corruption practice among employees of the Company and its subsidiaries; making recommendations to the executives on risk assessment; collecting assessment results of fraud risks to support the preparation of corporate risk paper which covers fraud risk profile and fraud risk register; and monitoring, evaluating and reporting the execution of corporate governance policy and risk management plan related to anti-corruption practices to the Board of Directors, the Corporate Governance and Social Responsibility Committee, the Audit Committee, the Management and related committees or organizations. The procedure is designed to ensure the good corporate governance practices are executed systematically and include appropriate development plan, and regular assessment of further efficiency improvement, to match changing business environment and circumstances. In 2018, the Company executed has the corporate governance practices as follows:

1. Rights of Shareholders

 

The Board of Directors formulates and announces the policy on shareholders, requiring continuous review and monitoring of the implementation, to ensure shareholders equally receive the basic rights: including the right to attend shareholders' meetings; the right to propose agenda and/or nominate directors at the meetings; the right to express opinion and ask questions at the meetings; the right to appoint a proxy to attend the meetings and vote on their behalf; the right to receive dividend; the right to elect, terminate and determine remuneration for directors; the right to appoint and determine remuneration for the auditor; the right to vote on any significant activities; the right to register share ownership and transfer; and the right to accurately, sufficiently, timely and equally receive significant information. The Company has promoted the equitable rights of all shareholder groups as follows:

  1. Right to attend meetings :

    The Company encourages shareholders, as business owners, to attend annual meetings, vote on significant agenda, as well as acknowledge and examine the performance of the Board of Directors and the Management The Company held the 2018 Shareholders' Annual General Meeting on Thursday 5 April 2018 as required by law, related rules and regulations, as well as requirements on meeting quality and efficiency development. The Company encouraged shareholders to exercise their basic right to attend shareholders' meetings and facilitated the shareholders in the following areas;

    • Pre-meeting preparation
      • Minority shareholders were given an opportunity to propose issues to be added in the meeting agenda and/or nominate qualified persons for the director election at the 2018 Shareholders' Annual General Meeting. The process was held according to the Board of Directors' criteria and carried out from 1 September 2017 to 31 December 2017, totaling 4 months. The Company announced clear details about criteria, method, and process on SET's disclosure system and the Company's website (on 28 August 2017). At the end of the period, no shareholder proposed agenda or nominated person for a director position.
      • The Company sufficiently and completely informed shareholders of the meeting date, time, venue and agenda together with relevant details and the Board of Directors' opinions on each agenda via the SET's information disclosure system before the morning trading session on 14 February 2018, after the Board of Directors resolved on 13 February 2017 to hold the 2018 Shareholders' Annual General Meeting on Thursday 5 April 2018 at 14.00 hours at World Ballroom, Level 23, the Centara Grand and Bangkok Convention Center, Central World, No. 999/99 Rama 1 Road, Pathumwan, Bangkok. The venue is easily accessible with public transport and sufficiently large to support a large number of meeting attendants.
      • The Company notified shareholders of an amendment to the 2018 Shareholders' Annual General Meeting agenda, relating to the election of persons to replace directors who retired by rotation; and completely and sufficiently prepared the Board of Directors' opinion. The information was published on SET's information disclosure system after the stock market closing on 22 February 2018, in line with the Board of Directors' resolution at the meeting on 22 February 2018.
      • The meeting notice and supporting documents for the 2018 Shareholders' Annual General Meeting was published in Thai and English on the Company's website on 2 March 2018, which was 30 days prior to the meeting date.
      • The Company sent the meeting notice and supporting documents to shareholders on 13 March 2018, 21 days prior to the meeting date, which complies with related laws and good corporate governance guidelines requiring listed companies to send out meeting notice to shareholders at least 7 days and 21 days in advance, respectively. The meeting notice provided details of the date, time, venue, a map of the meeting venue, agenda which is arranged according to their priority, background, reasons and key issue of each agenda item proposed for shareholders' approval or acknowledgement. The Board of Directors' opinion on each agenda item is sufficiently and clearly provided.
      • The Company sent the meeting notice to the Registrar on 13 March 2018, well ahead of the meeting date (no less than 7 days as required by law) and to the auditor on the same day.
      • The Company allowed shareholders to submit additional questions and/or opinions on the items already included in the meeting agenda and/or other recommendation that is beneficial to the Company's operations prior to the meeting date by post or fax to the Company Secretary or email to CS@ratch.co.th in order to enable the Company to clarify or provide more information at the 2018 Shareholders' Annual General Meeting. The Company published the details on the matters on SET's disclosure system, the Company's website and in the meeting notice that was sent to shareholders. At the 2018 Shareholders' Annual General Meeting, no shareholder submitted questions and/or recommendation in advance to the Company.
      • The Company published the meeting announcement in Thai and English newspapers from23 - 25 March 2018 for 3 consecutive days and no less than 3 days prior to the meeting date in compliance with relevant laws and the Company's Articles of Association.
      • The Company informed shareholders on 13 March 2018 about detailed identification document; proxy document; proxy appointment procedure and advice; the list of Independent Directors, Chief Executive Officer and other persons shareholders would appoint as proxy to attend the meeting and vote on their behalf; registration form; and the Company's Articles of Association related to shareholders' meeting to assist shareholders' voting on each agenda item.
    • Procedure on the meeting date
      • The 2018 Shareholders' Annual General Meeting was held at World Ballroom, Level 23, the Centara Grand and Bangkok Convention Center, Central World, No. 999/99 Rama 1 Road, Pathumwan, Bangkok. The meeting venue is easily accessed through public transport system, which provides travel convenience. The venue is big enough to accommodate a large number of participants. The registration was opened at 12.00 hours, (2 hours before the meeting time) and the meeting began at 14.00 hours and adjourned at 16.40 hours, totaling 2.40 hours. The Company allowed shareholders to register for the entire meeting or for a particular agenda item. The Company did not deprive shareholders from voting on the agenda being discussed. Shareholders arriving after the meeting began were allowed to register their attendance until the meeting adjourned.
      • The Company fully provided meeting facilities, including audio-visual equipment to support presentation, computer and barcode system recording individual shareholder's information for their registration and vote counting. This enabled convenient, fast, accurate and transparent and accountable vote counting.
      • Identification documents that shareholder shave to present to attend the meeting were checked by the persons appointed by the Company's Chairman. The checking was done in simple process and in the procedure as informed earlier in the meeting notice.
      • The Chairman acted as the chairman of the meeting according to the Company's Articles of Association. The Chairman announced the quorum, assigned the Company Secretary to record and prepare the meeting minutes, and introduced the directors, executives, auditors and legal advisors who were present at the meeting and could provide additional information and answer questions asked in the meeting. They also played a neutral role in determining the appropriateness and completeness of the meeting procedure.
      • Shareholders were informed about the voting procedure on each agenda item, voting and vote counting method, and the announcement of individual resolutions, to comply with SET's guidelines on annual shareholders meeting and to affirm the clarity. Details were included in the meeting notice.
      • Separate ballot was prepared for each agenda item. All shareholders received such ballot at registration. Voting process was made simple: shareholders disagreeing or wishing to abstain simply raised their hands and the Company's staff members collected their ballots. Computerized and barcode systems were used in vote counting.
      • Neutral legal advisors were invited to check on different areas, including the inspection procedure for shareholders' or their proxies' identification document, the quorum, persons with conflict of interests who could not exercise the voting right, the voting and vote counting method, to ensure that the process complies with the Company's Articles of Association and the rules announced to the meeting. The inspectors also ensured that all ballots were collected from all shareholders especially on the director election and that meeting resolutions and vote counting were correct.
      • The meeting proceeded as announced earlier. The Company did not abruptly inform the meeting of additional significant information or add new agenda for shareholders' approval, or change significant information without prior notice. The matters proposed to the 2018 Shareholders' Annual General Meeting complied with law and the Company's Articles of Association.
      • The meeting process was in the same order as informed in the meeting notice without switching agenda items, as the Board of Directors realized the necessity that shareholders must have sufficient time to study the information before making decision. The Board did not take any action that will infringe or deprive shareholders' right at all shareholders' annual general meetings.
      • The process for each agenda item began with the Chairman providing background, details, full information and recommendation as stated in the meeting notice. The Chairman allocated appropriate time for discussions and questions. The Chairman and the Management jointly clarified for full understanding on related matters, before shareholders were asked to cast their votes.
      • Director election and remuneration approval ware treated as two different agenda items and ware voted separately. Shareholders voted separately for each new director election. All ballots were kept for reference to ensure accuracy and transparency.
      • In each agenda voting, the Company provided ballots for each shareholder. A computerized system was used to facilitate vote counting.
      • After each vote counting, voting results were announced to the meeting by dividing into "approval", "disapproval", "abstention", and "voided ballot" votes.
      • Other agenda items (if any) were allowed in order to provide opportunity for the shareholders to propose additional issues other than those set in the meeting agenda. According to the Company's Articles of Association, the new agenda proposed for the shareholders meeting's consideration must be proposed by the shareholders whose combined shares are at least one third of the Company's tradable shares.

        In the 2018 Shareholders' Annual General Meeting, no other agenda item was proposed for voting. Only some recommendations and questions about the Company's operations were raised as recorded in the meeting minutes.
      • A number of 1,411 shareholders and proxies attended the 2018 Shareholders' Annual General Meeting, holding 935,019,113 shares or 64.48 percent of tradable shares, which made a quorum as required. The Company's Chairman acted as the meeting chairman according to the Company's Articles of Association.
      • The entire Board of Directors and all Sub-Committees attended the meeting, representing 100 percent of the Board/Sub-Committees members.
    • Post-meeting process
      • The resolutions of the 2018 Shareholders' Annual General Meeting were published via SET's disclosure system immediately after the stock market closing on 5 April 2018. The resolutions were clearly presented with details on "approval", "disapproval", "abstention" and "voided ballot" with percentage of each category.
      • The Company Secretary prepared written meeting minutes by clearly and adequately recording essence of each agenda, questions by the shareholders and clarifications by the Board of Directors and the Management, attendants' recommendations, and
  2. Right to appoint proxy to attend meeting and vote on their behalf :
    The Company allows shareholders to appoint persons who have come of age as their proxies to attend the shareholder meeting and vote on their behalf. Proxy appointment document must be in the format designed by the Registrar. The proxy has to present the proxy document to the meeting chairman or the person assigned by the chairman before attending the meeting.
     
  3. Right to receive dividend :
    The Company has a policy to pay dividend at no less than 40 percent of its net profit according to the consolidated financial statements after legal reserve and other reserves, depending on the Company's cash flow. In 2018, the Company set the "Record Date" on 28 February 2018 to gather the list of shareholders allowed to participate in the shareholders meeting and voting and receive dividend, payable on 20 April 2018. The dividend payment was announced in Thai and English newspapers for 3 consecutive days, during 9 - 11 April 2018,as required by law and the Company's Articles of Association.

    The Company annually checked dividend-related information to protect shareholders' rights. The Company found a certain amount of accrued dividend payment that shareholders have not yet received. The Company has contacted the shareholders based on existing contact details in the Registrar's database, by sending a letter to notify the shareholders of their accrued dividend and the procedure to receive the dividend. It facilitated shareholders on cheque reissuing in case of loss or expiration and also assisted the dividend payment to shareholders' heirs in case the shareholders passed away. Shareholders are also dispatched the application form for e-Dividend service, for a convenient, fast and safe means to receive dividends in the next rounds. More shareholders tend to use e-Dividend service.
     
  4. Right to appoint, dismiss and determine remuneration for directors :
    The Company requires the Board of Directors to submit nominations to the annual general meeting so that shareholders consider and appoint directors to replace the ones who retired by rotation. Shareholders also determine remuneration for directors. Details are stated in Management Structure in 2018 Annual Report.
     
  5. Right to appoint auditors and set audit fee :
    The Company requires the Board of Directors to propose to shareholders at the annual general meeting for the appointment of auditors and set the audit fee.
     
  6. Right to share ownership registration or transfer :
    The Company appointed Thailand Securities Depositories Company Limited (TSD) as its registrar responsible for the depositing, collecting and updating shareholders' information and provides services to shareholders, such as issuing, depositing, withdrawing and transferring of share certificates, as well as remitting benefits to the shareholders. Shareholders can contact TSD directly at the TSD Call Center at +66 2009 9999 or apply for internet-based Investor Portal service at http://www.set.or.th/tsd/th/investorportal/investorportal.html
     
  7. Right to receive significant information in accurate, sufficient and timely manner :
    The Company has completely, accurately and timely followed the regulations, criteria, conditions and procedure related to listed companies' information disclosure and other activities.

    In 2018, there was no punishment due to failure to submit reports as required by law or due to delayed submission. No incident or action was deemed violating or depriving shareholders' rights.

2. Equitable Treatment of Shareholders

 

The Company exercised equitable treatment of all shareholders without discrimination of their status as major shareholders, minority shareholders, institutional shareholders, or Thai and other nationalities. Major activities are as follows:

  1. Access to the Company's information :
    To ensure shareholders' equal access to the Company's information, the Company uses SET's disclosure system as the main communication channel. The Chairman of the Board of Directors, directors, Chief Executive Officer and chief officers are the authorized persons responsible for the Company's information disclosure. To ensure equal access to the Company's information, the Company sets up additional communication channels through the Company's website and related units namely the Company Secretary Office, Internal Audit Division, Corporate Relations Division and Investor Relations Department.
  2. Preparation of bilingual documents :
    For equitable treatment of both Thai and foreign investors, the Company prepares and publishes information in Thai and English through the SET's disclosure system and the Company's website.
  3. Encouraging minority shareholders to propose items for the shareholder meetings 'agenda and/or nominate directors :
    The Company invited minority shareholders to through the SET's disclosure system propose meeting agenda and/or nominate qualified persons as directors at the 2018 Shareholders' Annual General Meeting. The proposal period was from 1 September to 31 December 2017, totaling 4 months. Clear details about criteria, method, process and channel of agenda proposing was published on the Company's website on 28 August 2017. At the end of the period, shareholders did not make any proposal or nomination.
  4. Proxy appointment :
    The Company prepared 3 forms of proxy document as designed by the Department of Business Development and delivered it to shareholders to facilitate the shareholders who cannot participate in the shareholders' meeting so that they can appoint other persons to attend the meeting and vote on their behalf. The 3 types of document are:
    • Form A, a general proxy appointment form.
    • Form B, a proxy appointment that lists specific items for proxy appointment.
    • Form C, a proxy appointment that is used only when the shareholder is a foreign investor with a custodian in Thailand.
    Shareholders can also download all three types of proxy document from the Company's website or they can also use other forms of proxy or prepare it themselves as deemed appropriate.

    At the 2018 Shareholders' Annual General Meeting, the Company nominated 3 independent directors and the Chief Executive Officer and included the information of each and their vested interest, if any, in the meeting agenda so that shareholders could appoint them as their proxies and vote on their behalf. A number of 150 shareholders appointed the Company's independent directors as their proxies and the Chief Executive Officer was the proxy of 29 shareholders.
  5. Ballots :
    The Company provided ballots for every participant of the annual general meeting. The computerized system was deployed for tallying and the legal advisor, as a neutral party, is assigned as an inspector to review the vote counting accuracy. Concerning director appointment, votes were counted for each director and all the ballots were kept as reference for accuracy and transparency.
  6. Additional agenda item :
    No additional agenda was proposed for the 2018 Shareholders' Annual General Meeting as the Board of Directors realized the significance and necessity that shareholders should have sufficient time in studying information before making a decision. As such, no new agenda other than those informed in the meeting notice was proposed. If shareholders wish to propose additional agenda for consideration if necessary, by following the rules set in Company's Articles of Association.
  7. Prevention of the abuse of inside information :
    The Company followed good corporate governance practice in preventing the abuse of inside information, by formulating the written policy and guidelines in safekeeping inside information from abusive acts. The policy and guidelines are included in the Company's Code of Conduct, regulations, orders and related announcements for the acknowledgement and compliance by directors, executives, employees and stakeholders. Directors, executives and employees signed their acknowledgement on their first day of employment or on the orientation day. The policy is also published in the internal communication channels and the Company's website. The key preventive measures are as follows;
    • All executives and employees must protect the Company's confidential information and are not allowed to use such information for personal benefit or suggest others to do, especially on the trading of the Company's securities.
    • No disclosure/abuse/transfer of inside information and/or confidential information to outsiders or those who are not related to the Company, including family members, cousins, friends, which may decrease the Company's benefit.
    • Sharing or giving confidential information to other persons within the Company can be done if necessary and only to support the other persons' ability to perform their duties.
    • The Company requires directors and executives to report securities holdings and the changes in securities holdings of their own, spouses and minor children to the SEC according to Section 59 of the Securities and Exchange Act B.E. 2535 within 3 days from the date of change and notified the Company Secretary who will keep records and report the securities holdings summary to the Board of Directors. The summary is required to be reported to the Board on a monthly basis. The Company also requires all executives and employees report the change of the securities holdings of their own, spouses and minor children to the Chief Executive Officer within 3 days after the date of change.
    • The Company defined and announced the "Network and Computer Usage Policy" through its internal communication channels and website, which served as guidelines for efficient use of the Company's computer network, maximum benefits and compliance with the Computer Crime Act. The Company also improved the efficiency, security and prevention of network threats. The key guidelines are summarized as follows:
      • Limiting usage by issuing passwords which must be kept confidential.
      • Encouraging employees to use the internet for their work and not to distribute information that is against moral norm, tradition and laws.
      • Using the Company-authorized email, internet and computer device accordingly to safety instructions, only for the Company's benefits.
      • Using only copyrighted programs.
      • The Company checks, searches, monitors, investigates and controls the use of information technology system as appropriate to ensure safety. Throughout 2018, no director or executive was accused of not reporting their securities holdings as required by the Company or wrongfully using inside information for their own or others' benefits.

3. Role of stakeholders

 
  1. Stakeholder policy
    The Company's Board of Directors clearly specifies the policy and guideline on stakeholder groups. The Company's Code of Conduct was reviewed and improved as the framework for directors, executives and employees in treating each stakeholder group including shareholders, employees, customers, creditors, partners, competitors, the government and communities around the Company's premises, to ensure the protection of their legal rights. The policy and guidelines are announced and published through various channels and the Company's website. Here is the summary:

    Treatment of shareholders

    • Operate business to generate growth, profits and good returns for shareholders.
    • Operate business with carefulness, caution, integrity and fairness for all shareholders.
    • Respect the right to receive information; and disclose quality, accurate, complete, sufficient, and equitable information.
    • Monitor and ensure compliance with the policy and Code of Conduct related to shareholders, ensuring the basic rights as well as fair and equitable treatment and quality information. Encourage shareholders to attend the shareholders' meeting to engage in the making of significant decisions, acknowledge the progress of the Company's operations and activities, express their opinions and monitor the Board of Directors and the Management's performance. Efficient measures are in place to prevent directors and executives from using inside information for their own benefits and refrain from taking any action that infringes or lessens shareholders' rights.

    Treatment of employees

    • Promote quality of life by providing good work environment, occupational health and safety.
    • Emphasize continuous and thorough management and enhancement of its personnel's knowledge and capability.
    • Manage and ensure remuneration and welfare is appropriate and comparable to that offered by other leading companies.
    • Transfer, appoint, award and punish employees equitably and fairly. Allow employees to lodge complaint when treated unfairly or without the appropriate process.
    • Monitor and ensure full compliance with work-related laws and regulations.

    Treatment of community, society and environment

    • Promote community engagement and communications.
    • Support community development and enhance community strengths.
    • Promote the conservation and restoration of local tradition and enhance social quality.
    • Support environmental conservation and restoration.
    • Operate business with responsibilities for community, society and environment.

    Treatment of customers

    • Produce and deliver quality products and services with responsibility for the customers.
    • Provide conditional warranty for products and services under an appropriate period of time.
    • Disclose complete and accurate information on products and services.
    • Provide a complaint system and process whereby customers can lodge complaints on products and services and handle complaints as best as possible.
    • All executives and employees must keep customers' information confidential.
    • Do not ask for, accept or pay any illegal benefit to customers while strictly complying with trade conditions.

    Treatment of creditors

    • Strictly respect the conditions with creditors.
    • Do not ask for, accept or pay any illegal benefit to and from creditors.
    • Cooperate well with creditors to solve problems related to requests for, acceptance or payment of illegal benefits.
    • Provide accurate, complete, timely and regular financial reports.
    • Inform creditors in advance if the Company cannot meet conditions to find mutual solutions.

    Treatment of partners/suppliers

    • Consider the Company's best benefits, not personal benefits.
    • Offer partners and suppliers an equitable and equal opportunity.
    • Adopt international standards for assessment process, partner selection and contract.
    • Put in place a good system to monitor that contract and conditions are well and completely respected.
    • Do not ask for, accept or pay any illegal benefit to partners.
    • Inform partners/suppliers in advance in case the Company cannot meet the conditions so as to find a mutual solution.

    Treatment of competitors

    • Respect and adopt internationally-accepted competition guidelines and principles.
    • Do not seek competitor's confidential information through dishonest or inappropriate means.
    • Do not accusing competitors groundlessly.
    • Do not ask for, accept or pay any illegal benefit to trade competitors.
    • Strictly respect trade conditions.

    Treatment of business partners

    • Strictly adhere to the contract and commitment.
    • Provide business assistance that will bring mutual benefits by considering the Company's benefit as priority and fair return for both parties.
    • Provide accurate information and report while any negotiations seeking solution to a problem shall be based on business relations.

    Treatment of the public sector

    • Support the government and follow the policy and criteria set by related regulators.
    • Promote and support collaboration for public organizations' activities.
  2. Respect for human rights
    In line with the International Labor Organization (ILO) Convention, the Company since 2013 has upheld human rights principles under the labor law as the basis for treatment of 3 stakeholder groups which are employees, community and partners. They also serve as the guideline in caring for and protecting employees and employment, including the employment of local workers. Regarding communities, the Company continuously respects their rights to information and safety through the appropriate and efficient use of various types of communications. Regarding partners, the Company focuses on the partners' fair treatment of labor. The Company also sets the basic guideline for human rights practice in the Code of Conduct, and promotes the knowledge and understanding of human rights among employees so that they acknowledge, practice and be aware of the Company's sustainability as risks related to human rights may affect stakeholders' trust as well as the corporate image.
     
  3. Use and protection of intellectual property
    The Company requires all employees to protect the Company's intellectual property and use it only for the Company's benefits. Employees must respect intellectual property rights and avoid infringing the intellectual property rights of the Company's and others'. They must follow the Group's Network and Computer Usage Policy and the basic information technology manual by which the Company assigns user accounts and passwords for its employees accordingly to the Computer Crime Act. Employees' access to information and use of intellectual property will be terminated when their employment ends.
     
  4. Risk management
    The Company's Board of Directors the "Risk Management Committee" to be responsible for risk management. The Company ensures that risk management is planned and implemented with carefulness, and provides preventive and remedial measures for different stakeholder groups. The "Risk Management Policy" was formulated and announced through internal communication channels andthe Company's website with key essence as follows:
     

    Risk management policy

    • Promote risk management culture.
    • Put in place quality, appropriate and sufficient risk management process, guideline and measures.
    • Undertake qualitative and quantitative risk assessment.
    • Set risk appetite and identify event or risk level that serves as a warning sign.
    • Impose written operation guideline.

    Risk management guideline

    The Company identifies risk factors and sets measures to manage risks within the risk appetite to prevent or mitigate impacts on the business operations, the corporate image and stakeholders. The guideline calls for a review and assessment of risk management practice and gives importance to warning signs and irregularities, in order to achieve timely adjustment in strategies, business plans and management methods. The progress is reported to the Audit Committee and then to the Board of Directors on a quarterly basis. (Details are in the Risk Management Committee's Report, Management Structure and Risk Factors in Annual Report 2018.)

  5. Anti-corruption
    The Company is committed to operating business with transparency, fairness and responsibility for society and the environment as well as all stakeholder groups, in line with good corporate governance principles corruption. One of its actions underlining this commitment is the participation in Thailand's Private Sector Collective Action Coalition against Corruption (CAC) since 2016. The membership certification has been extended by the CAC Council's resolution on 4 February 2019 and the certification period is 3 years from the resolution date, affirming the Company's commitment against corruption and its determination to operate business with good governance practices, transparency, accountability and non-involvement with corruption whether directly or indirectly. The policy applies with its interactions with both the public and private sectors. All insiders, from directors to executives and employees, are prohibited from asking for or receiving all bribes or committing any corrupted acts. The Board of Directors formulated the anti-corruption policy and operational framework involving risk management and internal control. It also sets the scope of responsibility, practice guideline and rules for related persons in writing, serving as a clear guideline to prevent fraud and corruption in all business activities. The practice is to ensure the organization is led towards sustainable business operations and progress. The message is communicated with all stakeholders through appropriate communication channels, forcing them to strictly adhering to the policy. The process is under the supervision of the Board of Directors, the Corporate Governance and Social Responsibility Committee, the Audit Committee and the Management as the organization's leaders bound by their role and responsibility to show the organization's anti-corruption stance which will strengthen confidence among employees, business partners and the public towards the Company's operations.
     

    Anti-corruption policy

    • Promote the anti-fraud and corruption culture.
    • Ensure clear principle, process and guideline for business operations.
    • Provide internal control system related to fraud and corruption risks.
    • Formulate appropriate assessment and supervision criteria for the implementation of anti-fraud and corruption policy.
    • Put in place anti-corruption regulations and business risk management in writing.
    • Establish an appropriate channel where fraud and corruption-related complaints and reports can be filed.

    Corruption-related risk management The 5 main corruption prevention measures are as follows:

    1. Corruption-related risk assessment : The Company requires risk identification and assessment of impact, probability and severity; and considers appropriate internal control and measures to reduce the risks.
       
    2. Preparation and improvement of policy, regulations, order and Code of Conduct on a regular basis, ensuring all employees understand and strictly follow the Company's anti-fraud and corruption policy and practices.
       
    3. Communications and training : The Company prepares annual communications and training plans, specifying channels, frequency, content and implementation to ensure effective communications both internally and externally. The objective is to raise awareness on the importance and encourage their participation in the Company's corruption-related risk management, so that they can pass on their understanding to business partners and stakeholders.

      In 2018, a working team represented by all functions implemented communications and training activities, to prepare the annual anti-corruption training plan. The team convened every quarter. The Company's main communications and training activities are as follows:
      1. Organize anti-corruption training having Thai Institute of Directors Association's anti-corruption experts as the speakers. The training involved executives and employees at all levels, to raise their understanding and awareness. The content mainly covered general knowledge on fraud and corruption, corruption problems in Thailand, and the role of organization's leaders and employees in fighting against corruption.
      2. Host an exhibition and issue newsletters on anti-fraud and corruption issues.
      3. Organize a test to assess awareness, understanding and adherence to anti-fraud and corruption practices, requiring all executives and employees to pass the test with a score of at least80 percent.
      4. Announce, publish and officially notify business partners and stakeholders on the anti-fraud and corruption policy, for their acknowledgement and strict compliance.
      5. Host an orientation regarding anti-fraud and corruption for newly-recruited employees.
    4. Review of profile of personnel and business stakeholders prior to employment and the start of contract or transactions : The action shall be taken with consent from the other party and in compliance with related laws. The Company clearly specifies the strict compliance with the Code of Conduct, the anticorruption policy and measures in the employment contract, which must be acknowledged and signed before the start of work.
       
    5. Internal Control : All the Company's units shall have in place clear and written procedure and appropriate internal control with clear separation of responsibilities in all process, and review it at least once a year.

    Once all corruption-related risk management measures are implemented, the Company monitors and evaluates the compliance with the anticorruption policy.

    1. Set a clear corruption and whistleblowing reporting mechanism, with a channel that conceals the identity of the complainants, to protect them from harm or threats. The reporting procedure is specified as disclosed in Section 3.6 Complaint and Whistleblower Reports.
    2. Specify in writing responsible persons to monitor the implementation of each aspect of the anti-corruption policy.
    3. Assign the Corporate Governance Working Team to supervise, collect corruption risk assessment results, monitor the implementation of risk management plan and regularly report to the Management, the Corporate Governance and Social Responsibility Committee, the Audit Committee, the Board of Directors and related organizations.

      The Audit Committee supervises and reviews the completeness of the anti-corruption procedure through the Internal Audit Division, before reporting to the Board of Directors. The process covers the following tasks:
      1. Review the anti-corruption policy and corruption-related risk management process, and assess the sufficiency of internal control to prevent possible corruption and fraudulent acts.
      2. Set internal audit criteria and monitor the integration of anti-corruption policy in the operations, to ensure the policy is appropriately implemented and complies with international standards.
      3. Review anti-corruption practice regarding communications and training policy, to ensure the acknowledgement and compliance of all employees, outsiders and business partners.
      4. Review compliance with the Company's regulations, order and the Code of Conduct related to anti-corruption and fraud, as well as the giving and receiving of gifts and souvenirs, charitable donations, financial supports, reception expenses, and fraudulent risk management, etc.
      5. Set the annual plan to review corruption risk management to ensure compliance with preset criteria and measures.
      In 2018, no fraudulent or unethical action was found and there was no director or executive resigning due to corporate governance issue.
  6. Complaint and whistleblower report Stakeholders
    including outsiders affected or risking to be affected by the Company's operations as a result of executives and employees' illegal, unethical and possible corrupted acts can file their corruption complaints or suspected irregularities through the following channels.

    Process after a complaint is received
    1. Complaint receiver collects fact related to the violation of failure to comply with the Code of Conduct either by himself or by assigning other appropriate person.
    2. Submit the fact to the Chief Executive Officer who will consider forming an investigation committee.
    3. The investigation committee collects related fact through interviews and/or inspection of document.
    4. The investigation committee analyzes the fact and makes a conclusion, to consider the appropriate process for handling this matter.
    5. The investigation committee sets a measure to solve or alleviate damages of the affected and submit a report to the Chief Executive Officer who will subsequently report to the Board of Directors.
    6. The investigation committee reports the investigation result to the complainant if the person reveals his identity.

    Employees are supported by the Company's guideline and complaint report process, which is part of the regulations on Personnel Management under Complaint section. This covers employees who experience unfair treatment; the protection of complainants against employment termination or punishment for presenting information, fact or evidence concerning a complaint; and the protection of those who file reports in honesty though such reports may affect the Company.

    Other communication channels : The Company has provided other communication channels to receive complaints, opinions and recommendations for the Company's improvement from all stakeholder groups. The channels include the Company's website, the Company Secretary, Corporate Relations Division, Internal Control Division and Investor Relations Department. Complainants may use other channels as deemed appropriate.

  7. Reporting of directors and executives' interests
    The Board of Directors required all directors and executives to report interests of their own and their related persons as specified in the "Directors' and Executives' Interests Report Form". The original report shall be submitted to the Company Secretary for record keeping and the copy shall be submitted to the Company's Chairman and the Chairman of the Audit Committee on an annual basis. The report must be updated immediately after a change, to assist the Board of Directors' consideration and decision which person, with vested interests, should not involve in the voting on the Company's transactions or which persons having conflict of interest. The information will help the Board of Directors reach a conclusion that benefits the Company in an appropriate and transparent manner.
  8. Promoting community engagement
    The Board of Directors has set and announced the policy on society and environment as a guideline for the Company's Group, which has emphasized community engagement, communications; the development and strengthening of communities; local tradition conservation and restoration; and environmental conservation and restoration. The emphasis reflects in all activities of the Company, in the operating or under development process. During project development period, the Company studied preliminary technical information in parallel with a study on the community's economic and social conditions, traditions and way of life, in order to prepare, community participation plan and key communication message as well as activities to promote understanding in the project and receive communities' opinions on various issues. The process is conducted within the requirements set by government agencies and related regulators. During the construction period, the Company regularly communicates with communities on its operations and policy towards community. Close and regular communications continue after the project is operational, to welcome recommendations for continued improvement of the Company's activities so that they truly address community needs.

    In addition, Ratchaburi Electricity Generating Company Limited initiated the "Ratchaburi Power Plant Environment Inspector Committee", comprising representatives from communities, community leaders, local and provincial administrative bodies. The committee is responsible for monitoring and ensuring that the power plant operations are in accordance with Ratchaburi Power Plant's environmental impact prevention and mitigation measures stated in the environmental impact assessment report. The committee also acts as the coordinator with power plants and provides information, problems or possible issues and recommendations from communities. It is an important channel that promotes community participation in the systematic and continuous monitoring of the Company's operations.

    In 2018, the Company hosted activities to promote community engagement through its social and environmental operations. Details are described in Corporate Social and Environmental Responsibility of 2018 Annual Report.
     
  9. Transaction that may involve conflict of interest
    The Board of Directors provides a guideline in handling conflict of interest transparently and accountably, which is included in the Company's regulation on the Board of Directors. The guidelines says: "Directors with vested interest in any particular issue shall not have the right to vote on the issue". The Board strictly complies with the regulation. The Board of Directors and the Audit Committee have an important role in formulating measures to handle and prevent conflict of interest and supervising the operations in a reasonable manner. This includes the disclosure of complete information in accordance with related regulations for the overall benefit of the Company. Based on the Audit Committee's screening and approval, the Board of Directors ensures that the connected transactions of the Company and subsidiaries are struck for the benefits of the Company and subsidiaries, based on the same pricing and conditions as in transaction with other business partners. Accurate and complete disclosure of such transactions is required according to related regulations. For flexibility and convenience, the Board of Directors authorized the Chief Executive Officer to approve connected transactions or regular business-supporting transactions in general which contain normal conditions and trade agreements and are valued no more than Baht 30 million each. Such transactions shall be reported to the Board of Directors on a quarterly basis, as demanded by Section 89/12 of the Securities and Exchange Act.
     
  10. International standard on environment and occupational health
    The Company has seriously and continuously encouraged the entire group to adopt national-level and internationally-accepted operational standards, such as ISO 14001 environmental management standard, OHSAS 18001 occupational health and safety management standard, and other standards issued by the Department of Industrial Works.
     
  11. Safety, occupational health and work environment
    The Company realizes the importance of safety, occupational health and work environment of its employees, partners and other stakeholders who work with the Company, especially in the Company's premises. It has arranged training to create understanding and awareness of their role and responsibility to perform their tasks with the highest safety level. The Safety, Occupational Health and Working Environment Working Team was appointed to monitor, assess and set preventive and correction measures to ensure safety and efficient/effective use of resources in line with the Company's Code of Conduct that was set by the Board of Directors and published on the internal communication channels and the Company's website. The measures can be summarized as follows:

    Safety, Occupational Health and Work Environment Policy

    • Promote and develop the safety, occupational health and work environment management system to strictly meet with international standard and comply with laws and regulations.
    • Control and prevent loss in various forms as well as maintain safe work environment. All executives and employees are held responsible to report accidents or incidents according to the pre-set procedures.
    • Arrange publicity and communication for concerned stakeholders' acknowledgement and compliance.
    • When finding any unsafe practice which does not comply with regulations, standards or may have impact on safety, occupational health and work environment, the work shall be temporarily halted. Related persons should be informed according to the procedures for immediate solution.
    • Monitor and assess the performance for strict and effective implementation.

      In 2018, the Company monitored and ensured the implementation of safety, occupational health and work environment measures was in line with the plan and legal requirements, under close supervision by the Safety, Occupational Health and Work Environment Committee. The Committee convened 12 meetings and carried out key safety, occupational health and work environment activities as follows:

    1. 2018 Annual fire evacuation drill, hosted in collaboration with disaster prevention and mitigation and related authorities, at the Company's office building on 30 August 2018.
    2. Training courses on safety for employees and relevant individuals, including such as the Safety, Health and Work Environment Training for employees on 10 August 2018 with 23 attendants; the training on fire extinguishing for the beginners on 17 August 2018 with 17 attendants; the course on how to use personal smoke prevention masks during fire during 1-2 October 2018 with 15 attendants who all received personal masks.
    3. RATCH Go Green@Work 2018 Exhibition which drew 116 attendants including the executives and employees of the Company and other business units in the Company's Group. Activities were held to raise understanding among employees and campaign for their realization on safety, occupational health and work environment as well as energy and environmental conservation.

      In 2018, the Company held the statistics of 551,780 continuous work hours without accidents that resulted in the stoppage of work as in early 2018, an employee slipped and reported a knee injury.In this regard, the Company had already instructed the cleaning contractor to strictly operate under the Company's safety procedures by putting up safety sign (Be careful: Slippery floor) before the start of work.

      Due to its commitment to operating under the policy regarding safety, occupational health and work environment, the Company received the outstanding building on safety award (Silver Level).

4. Information disclosure and transparency

 
  1. Types of disclosed information

    The Company discloses both financial and non-financial information in periodic and non-periodic reports. The objective of the reports is to provide accurate, complete, sufficient and timely information that support readers' investment decision. In 2018, the Company's disclosed information is summarized as follows:

    Disclosed information in 2018 Times
    Periodic Reports 32
    Non-Periodic Report 35
        - Analyst meeting 4
        - Company Visit) 48
    Domestic roadshow 2
    International roadshow 1
    Press releases on financial statements and operational performances 2
    Media participation in CSR activities 3
    Press and photo releases for news media 17
    Site visit by shareholders and investors, in Thailand and overseas 2
    Exhibition 6
    Executive interviews 1
    Website visit (monthly average) (From 1 January 2018 to 31 December 2018, totaling 210,117 times) 17,509
  2. Information quality
    Information quality includes accuracy, clarity, completeness, sufficiency, timeliness, transparency and accountability. Significant information disclosed by the Company includes both financial and non-financial information. It is not one-sided as it presented both positive and negative aspects. The disclosure complies with related criteria and regulations, such as immediate disclosure of significant information, comprehensive distribution to the general public, clarification on rumors and news, actions on irregular stock trading which must not unreasonably buoy the irregularity, and stock trading by insiders. The disclosure must not cost the Company excessively or infringe the Company's competitiveness. Other details are presented under the Rights of Shareholders section and Board of Directors' Report on Its Responsibility to the Financial Reports which is published along with the Independent Auditor's Report in the Annual Report and the Audit Committee's opinion on the quality of financial reports as published in its report.

    Disclosing quality information to outsiders not only reflects the Company's transparency but also enhances investors and related persons' confidence and trust. As a result, the Board of Directors closely supervised and monitored to ensure that responsible persons follow the plan which is above legal disclosure requirement and that investors have equal access to such information.
     
  3. Disclosure channels
    The Company primarily discloses information via SET's electronic communications channel and uses other channels as deemed appropriate, like the Company's website, financial results press conferences, analyst meetings, press releases, roadshows in Thailand and overseas, and other activities as detailed in Types of Disclosed Information.

    The Company and the Board of Directors give importance to the disclosure of significant information. The disclosure has been closely monitored to ensure that it meets specified principles and rules, and strictly supervised the implementation of such activity. Authorized and responsible persons are designated while information distribution channels are improved to ensure information disclosure quality as follows:
    • Authorized persons to disclose information :
      The persons assigned by the Company to disclose information are the Company's Chairman, directors, Chief Executive Officer and chief officers. Other units responsible for preparing the information are:
    • Communication channels :
      Based on the commitment to providing complete and equitable access to the Company's significant information, the Company communicates via various channels and covers both one-way and two-way communication. The distributed information is prepared in Thai and English and distributed at the same time via SET's electronic channel as the main information disclosure channel; the Company's website (www.ratch.co.th) for better understanding and greater convenience of shareholders, investors, the interested and the general public. The Company also released information via analyst meetings; domestic and international roadshows; press conferences to announce quarterly and annual performances; distribution of news releases and photo releases of the Company's activities; executive interviews; exhibitions; site visits for shareholders, institutional investors and analysts; and media relations activities.
  4. Investor relations
    The Company assigned the "Investor Relations Department" to be the communication center. It fairly and equitably provides information and news as well as arranges activities to build and strengthen relationship between the Company and its shareholders, institutional investors, individual investors, analysts and concerned government agencies. The Department is also responsible for preparing annual investor relations plan regularly participated by high-level executives. The Chief Executive Officer and high-level executives act as spokespersons who report, provide additional information, clarify and answer questions at the analyst meeting, local and international road shows. The Department can be contacted at: by post under the Company's address; phone number +66 2794 9841 or fax +66 2794 9888 Ext. 9841; the Company's website www.ratch.co.th or email to IR@ratch.co.th
     
  5. Disclosure of directors and executives remuneration policy and payment
    The Board of Directors discloses the director and executive remuneration payment and remuneration of individual director and executive remuneration by categories. Overall employees' remuneration is also included. (Details are explained in Management Structure of 2018 Annual Report.)

5. Board of Directors' responsibility

 
  1. Board of Directors Structure
    • Composition and qualification (Details appeared in Management Structure of 2018 Annual Report.)
    • Independence of Chairman
      The Chairman is a non-executive director. Despite the fact that the Chairman is the representative of EGAT, the major shareholder holding a 45 percent stake in the Company, the Board of Directors also comprises 7 independent directors, representing 53.85 percent or more than half of the total of 13 directors.

      As a result, the directors can independently perform their duties as the shareholders' representative with appropriate checks and balances. The Chairman independently performs his duty and does not influence or convince other directors during discussions. He also encourages all directors to discuss and express opinion openly by giving sufficient time to find mutual resolution on all matters considered at the Board of Directors' meeting.
    • Segregation of the Chairman and Chief Executive Officer positions
      The Chairman is not the same person as the Chief Executive Officer and has no relations with the Management. The segregation of the Chairman and the Chief Executive Officer positions has ensured proper balance and prevented either one of them from excessive power. Their roles and scopes of responsibility are clearly defined. The Chairman is the leader and has significant role in deciding the Company's policy resulted from the joint meeting between the Board of Directors and the Management on business goals. The Chairman leads and conducts the meetings in efficient and effective manner, and encourages all directors to participate in the meeting and openly express their opinion. The Chairman also supports and provides recommendation for the Management operation through the Chief Executive Officer and does not intervene in routine work which is the Management's responsibility. Meanwhile, the Chief Executive Officer is only executive director of the Company and is the Management's top officer whose roles and responsibilities are explained in Management Structure of 2018 Annual Report.
    • Directorship in Other Companies
      None of the Company's directors holds positions in more than three listed companies, which complies with the Company's regulation on the Board of Directors and the SET's recommendation on director's efficiency and time contribution. More information about individual directors is revealed under Profiles of Directors of 2018 Annual Report.

      Mr. Kijja Sripatthangkura, Chief Executive Officer, does not hold directorship in other company aside from the Company's subsidiaries and joint ventures. For other directors and executives, the Board of Directors has approved their directorship and executive position in subsidiaries and joint ventures depending on their knowledge, skills and responsibility. The Board of Directors has formulated the Company's regulation on Subsidiaries, Affiliates and Joint Ventures Supervision, covering clear criteria for the appointment and responsibilities of the Company's representatives assigned to hold directorship or hold stakes in the companies in which the Company invests. This allows the representatives to convey the Board's policies and report performances of those businesses back to the Board. (Details on the Company's representatives assigned to be director and shareholders in subsidiaries, affiliates and joint ventures appear in the Information about Positions of Directors and Executives in the Company's Group of 2018 Annual Report.)
    • Recruitment and nomination of directors (Details appeared in Management Structure of 2018 Annual Report)
    • Secretary to the Board of Directors and Company Secretary (Details appeared in Management Structure of 2018 Annual Report)
  2. Sub-committees

    The Board of Directors has appointed 5 subcommittees namely the Audit Committee, the Human Resources and Remuneration Committee, the Risk Management Committee, the Investment Committee and the Corporate Governance and Social Responsibility Committee. The appointment is to assist it in studying information, screening work and making recommendation, which enables the Board to perform its duty more efficiently. (Details appeared in Management Structure of 2018 Annual Report)

  3. Roles, Duties and Responsibilities of the Board of Directors

    The Board of Directors realizes its roles, duties and responsibilities, being committed to independent decision making for the best benefits of the Company and its shareholders. All directors give importance and realize the responsibility towards the shareholders who own the business and appoint directors to supervise the operations for shareholders' maximum benefits.

    The Fiduciary Duty covers four major responsibilities namely Duty of Care (perform with care), Duty of Loyalty (being loyal), Duty of Obedience (compliance with laws, goals, regulations and shareholders' resolutions), and Duty of Disclosure (disclosure of accurate, complete, transparent and timely information).

    The Board of Directors' roles, duties and responsibility are summarized as follows:

    • Formulate and review the Company's strategy, business plan, policy, budget, business direction and supervision with participation of the Management on a yearly basis.
    • Consider and approve human resource management strategy, executive development plan, organization structure, remuneration structure, and remuneration plan.
    • Consider criteria, method and process for the recruitment, removal and termination of directors and high level executives.
    • Supervise the evaluation process of high level executives to ensure effectiveness, benchmarking the performance against the mutually agreed goals.
    • Communicate the Company's vision, goals and operating results to directors, executives and employees to ensure acknowledgement and understanding throughout the entire organization.
    • Monitor the progress, efficiency and success of the strategic plan, benchmarking against short and long term goals and competitors' operational efficiency and effectiveness; disclose the implementation result and the governance under good corporate governance principles in the annual report; and require the Management to present regular reports to the Board of Directors as follows:
      • Monthly reports covering monthly operational performance analysis; short and long term investment summary; cash flow; and electricity peak, installed capacity of EGAT and Thailand; securities holdings and/or change in holdings of directors, executives and spouses and minor children; and share prices of energy stocks.
      • Quarterly reports covering quarterly financial results, risk management and progress on investment projects.
      • Annual reports covering annual financial statements, annual performance evaluation against the targets and the sub-committees' meeting

      In 2018, the Board of Directors reviewed the strategic plan and business strategies and approved vision, mission, goals, business strategies and performance evaluation criteria for the implementation in 2019. The task is to support the long-term plan within 2023. It also fits the changing conditions in today's world and supports the Company's strategy to diversify its businesses and strengthen its core business for long term growth. In case that the operational performance does not meet the targets due to controllable factors, the cause of the problems will be analyzed and then corrected. In case that such problem arises from uncontrollable factors, the plan has to be reviewed and new and/or alternative target shall be set as deemed appropriate.

      To promote good understanding between directors and among directors, the Management and employees, in 2018, the Company arranged informal meetings of directors, the Management and employees, including the Company's activities such as corporate social and environmental responsibility activities, annual recreational activity of directors and internal knowledge development activity.

    • Ensuring completeness of significant issues namely the right mix of independent directors to balance the power of the Management and/or major shareholders; reviewing and approving vision, strategy, mission and Code of Conduct, and communicate with employees at all levels for acknowledgement and implementation; auditing and approving annual financial reports to strengthen shareholders' confidence; supervising internal audit procedure, internal control and risk management system, prevention of conflict of interest, connected transaction, protection of corporate reputation, optimal resources exploitation efficiency and effectiveness; and ensuring full compliance with related laws, rules, regulations, Articles of Association, Code of Conduct as well as good corporate governance principles.
    • Establishing and approving role and responsibility of the Company's sub-committees as appropriate and necessary.
    • Setting criteria and evaluating the performance of the Board of Directors and sub-committees for both the entire Board/sub-committee and individual members, on a yearly basis and disclose the results in the annual report.
    • Setting up Board of Directors' meeting schedules and voting.
      • Holding the Board of Directors' meeting at least once a month and holding at least one meeting for non-executive directors per year to offer the directors a chance to review the performance of the Board of Directors, the Management and the Company, and to discuss significant management issues without presence of the Management. The Chief Executive Officer will be informed of the meeting resolutions and subsequently improve efficiency.
      • Assign one vote to each director. Directors with vested interests in specific agenda item shall not have the right to vote. In case the number of votes is equal, the chairman of the meeting shall have the casting vote.
  4. Management and prevention of conflict of interest (Details appeared in Role of stakeholders, item 3.9)
     
  5. Risk management (Details appeared in Role of stakeholders, item 3.4)
     
  6. Board of Directors' Meeting
    • Board of Directors' meeting principle and guideline : For maximum benefits of the Company and its shareholders, the Company highly emphasizes directors' independence. Directors must perform their duty with loyalty, integrity and care for the Company's and the shareholders' benefits, always holding in mind that they represent shareholders. They must take a leading role, observe the operations, give advice, closely assist and support the Management.
    • Meeting schedule, meeting agenda and document preparation : In 2018, the Board of Directors set the meeting schedules for the Board and subcommittees for the entire year in advance and notified each director of the schedules. The Board's meeting was scheduled at 15.00 hours of the third Monday of each month.

      The Chairman and the CEO jointly considered the matters to be included in meeting agenda to ensure that all significant matters are submitted to the meeting. Directors were informed of the agenda in advance and the meeting notice was distributed at the appropriate time according to the Company's regulation. However, directors were free to propose other matters by submitting the proposal 10 days prior to the meeting date. In case of urgent matters which may directly or indirectly affect the Company, directors were free to propose such matters for consideration or acknowledgement during the meeting. (Method for deciding matters to be included in the agenda and the method for directors to propose other matters are stated in the Company's regulation on the Board of Directors and published on the Company's website.)

      Meeting agenda was grouped for easy consideration and the meeting was run in the pre-set sequence namely matters to be informed by the chairman, matters arising from the previous meeting, matters proposed for consideration, matters proposed for acknowledgement, and others (if any). Regular matters to be proposed to the Board of Directors at the specific period, such as monthly, quarterly and annual agenda are set in advance. Schedule of monthly performance analysis report and progress of projects that the Company invests in are also reported to the Board of Directors meeting every month.

      The Company sends meeting notice, agenda and related documents to each director approximately one week prior to the meeting date, providing them with sufficient time to study the information. Directors may ask for more information from the Chief Executive Officer and the Company Secretary Office. Members of the sub-committees can ask for more information related to their tasks from the Chief Executive Officer and through the secretary of each sub-committee.

    • Roles of the Chairman, directors, Management and meeting atmosphere
      • Chairman leads the meeting, sufficiently and adequately allocates time for directors to equally discuss and express opinions, encourages directors to participate in the discussion and freely express opinions, and summarizes the meeting's resolutions.
      • Directors share opinions based on the study of the information provided by the Management and other necessary and relevant information. They discuss constructively, taking into account the benefits and impact as well as risks for the Company and all stakeholders in order to obtain the meeting resolution. Directors shall contribute time, knowledge and experience to their role as a director of a listed company.
      • The Management is responsible for providing accurate, sufficient, complete and timely information that is relevant and necessary to support the Board of Directors' decision, as well as present the information in advance in order to allow sufficient time to study the information. The Management shall propose options to the Board of Directors, and provide information and clarify additional information when asked in the meeting. The Board of Directors requires high level executives from all functions to attend
      • Meeting atmosphere and expression of opinions : The Company provides appropriate and sufficient meeting equipment and facilities. The meeting atmosphere is open and encourages all directors to participate in the discussion and openly and positively express opinions based on mutual benefit and impact on all stakeholders. Each meeting lasted 1.5 hours to 2 hours on average.
      • Meeting process : In the consideration and discussion of general issues, the Management presents the background, rationale, necessity, clarifications and related information to support the Management's decision making process and the Management's proposal. The Chairman allows sufficient time for all directors to discuss all issues and encourages directors to express opinions and ask questions on important matters for the Management to clarify. Afterward, all will make a meeting resolution.
      • Directors with vested interests in a specific matter cannot vote on the matter (vested interests are based on the reports of the interests of each director and executive and their related persons' interests which were submitted to the Company Secretary.) This has been strictly implemented at all Board of Directors meetings.
      • Consideration of connected transaction and items that may involve conflict of interest is done by taking benefits of the Company and shareholders into consideration. Necessity and reasons for each matter is compared with transactions of similar nature. Correct and complete process and the disclosure of accurate and complete information as required by laws are highly weighted.
      • Company Secretary provides initial recommendation to the Management and the Board of Directors to ensure that they perform in line with laws and related regulations, such as the disclosure of asset acquisition or disposal, connected transaction and compliance with good corporate governance principles.
    • Meeting minutes preparation and storage
      • Company Secretary Office is assigned by the Board of Directors to record, prepare and keep the minutes of the Board of Directors' meeting and shareholders' meetings.
      • Meeting minutes are prepared in writing and cover all important details, including date and time, the start and the end, meeting venue, list of attending directors and executives, list of absent directors, summary of the matters presented in the meeting, summary of the discussed matters, opinions and observation of the directors, the meeting resolution, and the signatures of the minutes taker and the meeting chairman. Meeting minutes are completed within approximately three days after the meeting and delivered to all directors for consideration. If no revision is made within seven days, the minutes are considered approved and then delivered to be signed by the meeting's Chairman. A copy of the signed meeting minutes is then delivered to each director for reference. In addition, the certified meeting minutes will be added as an agenda for acknowledgement in the next meeting.
      • Dissemination of meeting resolutions : The Company Secretary distributes the Board of Directors' written resolution to related units for their acknowledgement and/or implementation. The implementation will be monitored and reported to the Board of Directors.
    • Board of Directors and sub-committee's meetings (Details appeared in Management Structure of 2018 Annual Report)
  7. Performance assessment
    • Self-assessment of Board of Directors and sub-committees

      The Board of Directors conducts self-assessment with the objective to use the result, observation and recommendations for further improvement of the Board and sub-committees as well as the improvement of individual directors in line with good corporate governance principles. The assessment covers many important areas according to the good corporate governance principles for listed companies, including 1) the Board of Directors' readiness (that covers structure, components, independence, responsibilities and development), 2) strategy formulation and business supervision, 3) risk management and internal control, 4) conflict of interest prevention, 5) the monitoring of financial and operating performance reports, 6) the Board of Directors' meetings, 7) nomination, remuneration and the evaluation of directors and high level executives as well as the succession plan for high level executives. The self-assessment of all sub-committees covers the overall performance of each sub-committee in terms of their readiness, completeness of duty as assigned by the Board of Directors, and meeting arrangement whether they be pre-meeting (provision of meeting document prior to the meeting date to provide sufficient time for committee members to study the information), during the meeting (the presentation of information and significant agenda,discussion, question answering and voting); or post-meeting (preparation, submission and storing the meeting minutes). Five assessment levels are assigned for the assessment of the Board of Directors and sub-committees, for both entirely and individually, according to average scoring of the individual assessment as follows:

      Excellent > 90 per cent

      Very good > 80-90 per cent

      Good > 70-80 per cent

      Fair > 50-70 per cent

      Should improve < 50 per cent

      In 2018, the assessment result is as follows:

        2018 2017
      Entirely Individually Entirely Individually
      Score/Full score Level Score/Full score Level Score/Full score Level Score/Full score Level
      Board of Directors 95.53/100.00 Excellent 95.07/100.00 Excellent 97.14/100.00 Excellent 96.19/100.00 Excellent
      Sub-committees comprising : Score/Full score Level Score/Full score Level Score/Full score Level Score/Full score Level
      1. Human Resources and Remuneration Committee 87.58/100.00 Very Good 88.89/100.00 Very Good 97.39/100.00 Excellent 97.39/100.00 Excellent
      2. Audit Committee 29.00/30.00 Excellent 29.00/30.00 Excellent 29.00/30.00 Excellent 29.00/30.00 Excellent
      3. Corporate Governance and Social Responsibility Committee 27.00/30.00 Very Good 27.67/30.00 Excellent 28.33/30.00 Excellent 28.83/30.00 Excellent
      4. Investment Committee 27.75/30.00 Excellent 27.75/30.00 Excellent 29.50/30.00 Excellent 29.00/30.00 Excellent
      5. Risk Management Committee 25.33/30.00 Very Good 24.67/30.00 Very Good 27.25/30.00 Excellent 27.25/30.00 Excellent

      The Company will use the performance appraisal result of the Board of Directors and sub-committees for further improvement of operational efficiency for both Board of Directors and sub-committees and to improve performance of individual directors in accordance with the management policy under the good corporate governance principles.

    • High-level executives' performance assessment

      With the screening from the Human Resources and Remuneration Committee, the Board of Directors conducted an annual assessment of high level executives' performance, based on the criteria that were mutually agreed upon early of the year. In 2018, the criteria comprised 5 areas namely business development, assets management, planning and supervision of affiliated companies, financial management, and organizational management. Each area has different weight. The Company also appraised high level executives in terms of capability and management skills, including leadership, strategy formulation and implementation, financial planning and performance, networking, business knowledge and understanding and personal qualifications for the Chief Executive Officer and high level executives. The Company uses the assessment result to determine the remuneration for high level executives and to arrange knowledge and skill development plan in line with the Company's operational and performance contexts as well as the succession plan.

    • Directors and high level executives' remuneration (Details appeared in Management Structure in 2018 Annual Report).
  8. New director orientation and the development of directors and executives Newly-appointed directors

    will be given orientation and briefing by the Chief Executive Officer regarding the nature of the business, the Board of Directors' and the sub-committees roles and responsibilities, investment structure, organization structure, financial operating results, progress of investment projects and the Company's good corporate governance principle. Supporting documents on the aforementioned subjects are provided together with Memorandum of Association, objectives, Affidavit, Articles of Association, rules and regulations, policy, Code of Conduct, remuneration and benefits for directors, annual report and sustainability report, as well as the guideline for directors of a listed company and compliance database. The orientation is held according to the Board of Director's policy to prepare directors to be ready to perform their duties.

    Director development : To enhance understanding of roles, duties and responsibilitiesas well as necessary skills for the directors to do their best job as directors of a listed company, the Company financially supports directors' participation in training and seminars arranged by related organizations, such as Thai Institute of Directors Association (IOD), Stock Exchange of Thailand and Thailand Energy Academy.

    Directors' Attendance in Training Courses in 2018

    No. Director Course Organizer
    1. Mr. Sutat Patmasiriwat - -
    2. Mr. Chartchai Rojanaratanangkule Advanced Audit Committee Program (AACP 31/2018) Thai Institute of Directors Association
    3. Mr. Samack Chouvaparnante - -
    4. Mrs. Siriporn Luangnual - Advanced Audit Committee Program (AACP 31/2018)
    - Financial Statements for Directors (FSD 35/2018)
    - Thai Institute of Directors Association
    - Thai Institute of Directors Association
    5. Mr. Somboon Nhookeaw Director Accreditation Program (DAP 154/2018) Thai Institute of Directors Association
    6. Mr. Veerasak Pungrassamee - -
    7. Mrs. Premrutai Vinaiphat - -
    8. Mr. Ratanachai Namwong - -
    9. Mr. Chuan Sirinunporn - -
    10. Mr. Suchalee Sumamal Director Certification Program (DCP 225/2018) Thai Institute of Directors Association
    11. Mr. Boonyanit Wongrukmit Corporate Governance for Directors and Senior Executives of State Enterprises and Public Organizations (2018) King Prajadhipok's Institute
    12. Mr. Seubphong Buranasirin - -
    13. Mr. Kijja Sripatthangkura - -

    Note. Other training attendance in previous years are reported in individual directors' profiles

    The Management regularly prepared a summary report of the rules, regulations and memorandum, both newly issued and amended, by the SEC and the SET then presented to the Board of Directors to use as guideline so that their practice strictly complies with the law and the regulators' regulations. The Company also sent executives and relevant operators to attend company secretary, corporate governance, internal audit, anti-corruption and risk management courses as well as other related courses organized by various institutes and organizations. This enables them to better understand their responsibilities, which supports the works of the Board of Directors and sub-committees.

  9. Succession plan for high level executives

    The succession plan for the Chief Executive Officer follows the policy of EGAT, the Company's major shareholder. EGAT will pick its executive who has appropriate qualifications, knowledge and capability to perform the task and brings greater benefits to the Company and nominate the person to the Board of Directors for consideration and appointment through the Human Resources and Remuneration Committee.

    The Board of Directors assigned the Human Resources and Remuneration Committee to prepare the career path plan for high level executives. Regarding the succession plans for other executive positions, the Company hired a consulting firm with expertise to help developing career path of individual position. This covers the competency model which has been developed in systematic manner, covering analysis of competency and expected qualifications of different positions. The guideline will support human resource development and nomination of qualified persons to be promoted, demoted, retired, and transferred and to prepare the Company's personnel for current and future business expansion. In 2018, the Company appointed capable executives and talents qualified for vacant positions, in line with the preparation process and the succession plan and corresponding with the Company executives' retirement.

  10. Directors and officers liability insurance

    The Board of Directors required the Management to propose the Directors and Officers Liability Insurance (D&O) together with its conditions, limitation and premium for the Board's consideration every year, to cope with the Company's business diversification. The Company has engaged more with new business transactions that require directors and executives' approval, opinion provision, authorization and signing on important documents. Some of such activities may have high risks of claims from outsiders, shareholders and stakeholders on directors and executives responsibility arising from performing their duty. The insurance will provide protection over liabilities or claims against directors and officers who perform their duty in accordance with their position in good faith. In case of fraud, the Company is not liable for the loss and can requests the corrupted person to pay for the fees arising from the lawsuit against the corrupted directors or officials.

6. Code of Conduct

 

The Company has been operating its business by adhering to the good corporate governance principles. The Company is strongly committed to fighting against corruption in all forms, to prevent and mitigate negative impacts on the country, stakeholders and the organization. The organization will be led towardssuccess, to support vision, mission, policy, business goals, and sustainable development amid fast-changing global contexts. Becoming a certified member in Thailand's Private Sector Collective Action Coalition against Corruption (CAC) since 22 April 2016 is a key factor to prevent and fight against frauds and corruption. In 2018, the Company considered, reviewed and improved regulations, rules and Code of Conduct to keep them updated and cover the entire work process according to the CAC's anti-corruption framework and in line with the new Code of Conduct which has been used as a policy and the desired behaviors as well as good corporate governance principles implementation guideline for the directors, executives, employee and all groups of stakeholders of the Company's Group. This will raise the corporate governance practices to that of the international standard and build confidence of the investors and stakeholders in the Company's operations. The Company has a process to raise awareness, build conscience, as well as regularly follow up and evaluate the employees' performance.

Newly-recruited employees must attend orientation and sign their acknowledgement. The Board of Directors annually reviews the Code of Conduct in response to changes in business conditions. The interested persons can find the details of the Code of Conduct on the Company's website.

7. Communications and monitoring of performance to ensure full compliance with the corporate governance policy and business ethics

 

New Director's orientation is disclosed in section 5.8. For new employee's orientation, human resources officer will give every new employee a briefing on the Company's overall business operations, investment structure, organization structure, operating result, good corporate governance and corporate social and environmental responsibility principles, rules, regulations, policy, business ethics, remuneration, benefits and welfare. Supporting documents such as the Code of Conduct and other documents that can be used as guideline and reference when performing duties are given at the orientation and the new employee have to sign their acknowledgement.

Corporate governance policy is communicated throughout the Company from the Board of Directors and high level executives to all level of employees.

The Company also provides communication channels to listen to and collect employees' problems, concerns and recommendations for consideration, further action planning and execution as well as ensures the practice and the performance are in line with the good corporate governance principle. The Intranet, email system that employees have easy access and internal meetings, are channels provided to effectively communicate, raise awareness and commitment to implementation of Code of Conduct. The implementation result is reported to sub-committees and the Board of Directors for acknowledgement respectively. Aside from regularly discussing with other divisions, the "Internal Audit Division" has also been assigned to be responsible for monitoring and following up with the implementation of annual audit plan and a quarterly report the audit results as well as making recommendation on solution and prevention of possible damages to the Audit Committee and the Board of Directors respectively. The "Compliance Database" was prepared, and distributed to the Board of Directors and published on the Company's internal database, which is easily accessible for use by all employees. The database and operations of the Company as a listed company, such as the disclosure of information, connected transaction, the acquisition or disposition of assets. The information is regularly updated. The Board of Directors prepared the "Directors' and Executives' Interests Report Form" and instructed the Directors and executives to report their interests and related persons' to the Company Secretary for reference and record. The Company Secretary shall make a copy and submit the report to the Company's Chairman and the Chairman of the Audit Committee, according to the Securities and Exchange Act. The report will be used when considering those who shall not vote at the Board of Directors' and shareholders' meetings.

In addition, the Corporate Governance Working Team was assigned to communicate and follow up the implementation of corporate governance practices in accordance with the Corporate Governance Policy and Code of Conduct. The Working Team also reports the implementation results of corporate governance and anti-corruption related risk management plans to the Board of Directors, the Corporate Governance and Social Responsibility Committee, the Audit Committee, the Management and other committees or related units in accordance with the pre-set procedure.

The Board of Directors reviewed the appropriateness of good corporate governance principles in 2018 against the Company's business contexts, as well as the necessity and current practices for the issues which have not yet met the criteria including:

Unfulfilled criteria
Current practices and necessity
The Board of Directors seeks a professional search firm's help or uses the Director Pool in nominating new directors. The Human Resources and Remuneration Committee selects and nominates qualified persons as new directors. Experts in particular areas are invited to participate in the selection process as necessary, before the nomination is submitted for the Board of Directors' approval.
The Company defines the minimum quorum at the Board of Directors' meetings. At least two thirds of members must be present to make a quorum. Despite the absence of a written policy, the Chairman of the Board of Directors has ensured that two thirds of members are present to vote on any issue.
The Company's Chairman is an independent director. The Company's Chairman is not the same person as the Chief Executive Officer who is the top executive and the Chairman has no relations with the Management though representing the Company's major shareholder. The Chairman's independence in performing his duty is assured as the Board of Directors consists of 7 independent directors from a total of 13 members (53.85 percent) (an increase from 2017 when there were 6 independent directors or half of 12 members). As more than half of directors are independent directors, appropriate checks and balances are in place. Meanwhile, during meetings, the Chairman encourages and allows all directors to express their opinions and engage in open discussions before resolutions are made. The Chairman does not guide or influence directors during the discussions.
Independent directors should represent a majority of the Human Resources and Remuneration Committee's members (more than 50 percent). The sub-committee's chairman should also be an independent director. Though independent directors do not represent a majority of the Human Resources and Remuneration Committee's members and the chairman is not an independent director, all the directors are knowledgeable and realize the role, duty and responsibility of company directors. They perform their duty and make decisions with full independence, to achieve the optimal goal which is the maximum benefits of the Company and shareholders. All directors give importance and realize their duty to shareholders who are the business owners and who appoint directors to supervise the business for shareholders' maximum benefits (Fiduciary Duty) which covers 4 aspects: Duty of Care (perform with care), Duty of Loyalty (being loyal), Duty of Obedience (compliance with laws, goals, regulations and shareholders' resolutions), and Duty of Disclosure. (disclosure of accurate, complete, transparent and timely information).

Throughout 2018, the Company complied with good corporate governance practices and guidelines that corresponded with relevant criteria, taking into account all stakeholders and the economic, social, environmental and governance dimensions. The Company witnessed no incident or practice that contradicted the Company's good corporate governance policy and Code of Conduct. The Company received the following awards due to its commitment to continuously improve good corporate governance:

  • Assessment of Corporate Governance Report of Thai Listed Companies in 2018, the Company was deemed "Excellent" with the average score of 94 percent, higher than the average score of all listed companies of 84 percent.
     
  • Annual General Shareholders' Meeting Assessment in 2018, the Company received the score of 98, against the average score of 92.42, from the assessment conducted by Thai Institute of Directors Association.
     
  • Sustainability Report Award 2018 - "Excellence" bestowed for 6 consecutive years (2013-2018) by Thai Listed Companies Association's CSR Club with support from the Office of the Securities and Exchange Commission and Thaipat Institute.
     
  • Thailand SustainabilityInvestment2018, bestowed by the Stock Exchange of Thailand for 4 consecutive years.
     
  • Outstanding Booth Award for its presentation and services to the visitors of SET in the City Bangkok 2018.
     
  • Green Office Award 2018 - "Excellent" (Gold Level) from the Department of Environmental Quality Promotion, Ministry of
    Natural Resources and Environment. The Company has won the award for 4 consecutive years (2015-2018).