Principle 3 :    (Strengthen Board Effectiveness)

Board of Directors realizes that they have importance roles on good governance for highest return to company; understanding and responsibilities are key words. Roles of Board of Director, Audit Committee, Remuneration Committee, Risk Management Committee and Management should be clearly separated as ensure on such activities are legitimate.

In order to practice their duties effectively; Board need to revise their structure by selecting any person with appropriate ability to hold the position of director, consideration on remuneration of director and propose to shareholder meeting for approval. Guidelines for the implementation of operations in subsidiaries as follows

1. Structure of the Board of Directors

The Board of Directors consists of knowledgeable persons Capabilities and experience in many fields such as engineering, business administration, accounting, finance, etc. All directors have passed the director training program from the Thai Institute of Directors Association (IOD). Company policy with senior management Plan short-term and long-term operations Including setting financial policies Risk management And organization overview Has an important role to oversee, inspect and evaluate the company’s operations Including the performance of senior management to be in accordance with the plan independently.

The structure of the company’s board of directors in 2019 consists of 4 committees as follows:

1. Board of Directors
2. Audit Committee
3. The Compensation Committee
4. Executive Committee

The company has clearly specified and separated the power of each committee. By considering important decisions Must pass the approval of each committee Which has specific duties And propose matters to the Board of Directors for consideration or acknowledgment. In order to balance and review for transparency and fairness to all parties involved.

After every general meeting of shareholders, the Board of Directors will hold a meeting to appoint sub-committees in 2019. The Board of Directors Meeting No. 3/2019 held on March 20, 2019, has resolved to appoint 3 sub-committees and assign their duties and responsibilities clearly.

Memorandum of Association has specified Board of Director should not less than 5 people and not more than 15 people also most of these Directors must reside in the Kingdom of Thailand. Year 2018 there are 9 Directors which consists of

	Amount (person)			Percentage
	Male	Female	Toatl
Director and Executives Management	1	2	3	33.33
Diretor	2	1	3	33.33
Independent Director	3	–	3	33.33
Total	6	3	9	100

 

Board of Directors consists of 3 Independent Director of 33.33 % of whole Board which is higher than standard of 1 in 3 or 33.33% follows regulation of Capital Market Commission thus Independent Director has responsible for review process of management, propose and comments to support any beneficial to shareholders and avoid any unfair treatment as affect beneficial to shareholders and all stakeholders; set and disclose policies in term of related transaction to make sure that shareholders have highest return

Year 2019 does not appear that company:

• Any acts that are serious contrary as against regulation from The Stock Exchange of Thailand and Securities and Exchange Commission
• Any acts against corruption or code of conduct
• In case there is resignation of director whom not hold executive position due to issue on corporate governance
• Negative reputation of company due to failure to oversee of Board

Responsibilities of Board of Directors

In accordance to company’s Article of Association; Director has responsibilities to decide, supervise business operation of company and comply with regulation which has specify authority and responsibilities as details on No.8.1 Board of Director and No.9.2 Sub Committee

The Nomination

Details shown in No.9.3 Nomination and appointment of Directors and Chief Executive

Qualifications of Independent Directors

Details shown in No.9.3 Nomination and appointment of Directors and Chief Executive

2.  Appointment and position term of the directors

Rules of the Appointment of the Board of Directors

The director must have qualifications and experience as required by the company but not being under any of the prohibitions under the Public Limited Companies Act 1992, the Securities and Exchange Act 1992 and other related laws. The director must have sufficient time to dedicate their knowledge and ability to perform duties for the company. The company has criteria in selecting persons to be appointed as directors according to the articles of association of the company which is summarized as follows:

1. Directors are appointed, elected and dismissed by the shareholders’ meeting, having a tenure in accordance with the Articles of Association. When the term has ended, they can be re- elected to take the position again except in the case that the position of a director is vacant without being an expiration of the term. The Board of Directors may consider to appoint the suitable persons to fill vacancies in accordance with the Articles of Association of the

2. The nomination of persons for the shareholders’ meeting to be elected as directors in place of those who are due to retire by rotation can be done since the company has not yet officially established the selection In the selection process, the Board of Directors jointly considered the qualifications in various fields by considering the suitability of qualifications, experience, expertise in a variety of professions with a vision, have a clean working background and be able to freely express opinions including past performance as directors, the company proposed the nomination to the meeting of the board of directors to consider mutually agreeing before submitting to the shareholders’ meeting for consideration.

3. In the annual general meeting of shareholders, the directors must retire by one-third. If the number of directors cannot be divided into three parts, then to issue by the number nearest to one-

4. In the election of directors, the voting method shall be selected individually and

shareholders have the right to elect the persons nominated to be elected at that time that cannot divide the votes.

5. The persons who receive the most votes in descending order was elected as a director equal to the number of directors to be elected at that time. The directors who is due to retire by rotation may be re-elected.

6. Shareholders have votes equal to one share per one

In 2019, in the election of directors in place of those who are due to retire by rotation at the 2019 Annual General Meeting of Shareholders on April 30, 2019, there were 3 directors who are due to retire by rotation as followings:

1. Theerachai Leenabanchong

2. Prof. Dr. Pisom Udomworarath

3. Miss Laphassarin Kraiwongwanitrung

In this regard, the Annual General Meeting of Shareholders of 2019 has passed a unanimous resolution approving all 3 of them to return to their positions as directors for another term.

Term of position of Directors

1. Board members are appointed from Annual General Meeting of Shareholders by term follow to company regulations (Period Term of 3 years follows Public Company Acts). After the term is due, Board members may be reelected. In addition, Board of Directors will recruit and screen appropriate person to be Directors with knowledge, abilities and The company has disclosed date of holding position of Directors and Independent Directors in Form 56-1 in title of 8.1 Board of Directors

2. The company does not specify the age of directors and / or the maximum number of terms that will continue to hold the By believing that the age or duration of the position is not an obstacle, compared with their knowledge, ability and valuable experience that each person is ready to bring to benefit the company as trusted by the board of directors and shareholder and independent directors (mentioned in the form 56-1 item 8.1, Board of Directors).

3. The company does not specify the terms of the position of independent directors as well, since the meeting of shareholders approved the resolution to elect the directors and independent directors

4. The Board of Directors has information in considering the case of the election of independent directors whose term has expired, with the number of years in consideration for both the invitation letter and the annual

In the year 2019, There are 3Independent Directors as follows :

Name of Independent Directors		Appointed Year	Amount of Year holds position
1. Mr. Worawit	Siriwatwimon	April 24, 2009	10 Years
2. Mr. Wichian	Sopanpanichkul	February 26, 2013	6 Years
3. Assoc. Prof. Dr. Pison	Udomworarat1/	August 13, 2015	4 Years
4. Mr. Aniwut	Pongpaijit	August 6 2019	5 Month

Note :      1/ ( Resigned on May 7, 2019)

               2/ (Appointed on August 6, 2019)

The Nomination

Details shown in No.9.3 Nomination and appointment of Directors and Chief Executive

Qualifications of Independent Directors

Details shown in No.9.3 Nomination and appointment of Directors and Chief Executive

Term of position of Director

Board members are appointed from Annual General Meeting of Shareholders by term follow to company regulations (Period Term of 3 years follows Public Company Acts). After the term is due, Board members may be reelected. In addition, Board of Directors will recruit and screen appropriate person to be Directors with knowledge, abilities and experiences. The company has disclosed date of holding position of Directors and Independent Directors in Form 56-1 in title of 8.1 Board of Directors

3.   Determination of the number of listed companies that directors will serve as directors

• The company requires that each director to be a director of a listed company must not exceed 5 companies so that all directors have the intention and commitment to perform their duties as trusted from Board of Directors and shareholders

• Board of Directors has policies on formulate guideline for director or executive chairman in a group that has knowledge, ability and expertise in that business Also serve as a director subsidiary company

The company has disclosed names and details on holding position of each director in Form 56-1 and Annual Report

• For holding position of director in registered company more than 5 companies

         Year 2019, no director holding position of director in registered company more than 5 companies

• For Independent Director who holds the position of director in registered company not more than 3 companies Year 2019, no independent director holding position of director in registered company more than 3 companies

• For executive who holds the position of director in registered company not more than 2 companies Year 2019, there were Executives holding Director in listed company which is a subsidiary company, details as follows

 

Name-Surname	Position	Company
Mr. Wutichai                            Leenabanchong	Chairman	–     Capital Engineering Network PLC. –     UA Withaya PLC.
Mr. Teerachai Leenabanchong	Director	–     Capital Engineering Network PLC. –     UA Withaya PLC.

 

By this, the company has policies and practices of holding position of Directors and Executives. The company will consider of sending Directors or Executives or Management with knowledge, abilities and skills and specialize in such fields to holds Directors position in subsidiaries by proportion of investment thus to supervise its subsidiaries for comply with company’s policies for highest benefit of company. For example, keep up the bookkeeping to preparation of consolidated financial statements of company which based on accounting period. By this, same accounting periods and critical accounting policies with company, disclosed importance information follows regulation of The Securities and Exchange ACT as announces from Capital Market Commission and The Stock Exchange of Thailand in the same manner as rules of company practices. For example, Related Transaction and acquisition of assets to ensure that appropriate internal control and effectiveness which cover policies of corporate governance.

The Chairman of the Board is the leader and controls the Board meetings to be independent. In which all directors are able to express their opinions or suggestions fully and support the management.

The chairman of the board is not an independent director but he is firmly believed that he has performed their duties independently with all directors and being independent in managing the organization. The company believes that the chairman of the board always gives importance and

 

understands the principles of good corporate governance. In consideration of important issues, it must be approved by each committee involved in order to create a balance and review, encouraging to strictly implement.

In 2019, the company has executive directors, with the executive chairman as a leader in the operation planning management in accordance with the policy set by the Board of Directors. The executive committee participates in establishing corporate policies and business goals with the Board of Directors

4.   Sub-Committee

There are 3 sub-committees as consists of:

Sub-Committees	Amount	IndependentDirectors	Directors asNon- Executive	Directors as Executives
1. Audit Committee	3	3	–	–
2. Remuneration Committee	3	2	–	1
3. Executive Committee	8	–	2	6

Remark : –Term of position for Audit committee equals to 3 years

– Term of position for Executive Board, Remuneration committee and Executive Directors equals to 1 year

All members in sub-committee are qualified, understanding on their roles in Directors and Sub-Committee thus perform their duties with responsibilities, honestly, carefully and independently. In addition, believe that every directors will understand, practice strictly in order to make confidently on shareholders

All members in sub-committee are qualified, understanding on their roles in Directors and Sub-Committee thus perform their duties with responsibilities, honestly, carefully and independently. In addition, believe that every directors will understand, practice strictly in order to make confidently on shareholders

Apart from this, company has reviews process of Board of Directors and Sub-Committee

yearly

By this, Directors and Top Management of company has not hold position as employee or shareholders of External Audit Company during the past 2 year

Apart from this, year 2019 Board of Directors allows director or non-executives can be discuss among themselves as appropriate by no management attendees and propose to Board of Directors for acknowledgement,

    •  Audit Committee

The Audit Committee consists of three board members who are qualified as independent in accordance with The Stock Exchange of Thailand announcement and the Company’s definition. All members are knowledgeable and have understanding and experience in accounting, finance and

management. The Audit Committee authorities, duties and works are in accordance with the Audit Committee charter. The Audit Committee is an independent entity to support the board of directors in successfully eliminating conflicts of interest, verifying financial information presented to shareholders and related parties, auditing the specified internal control system, and communicating with the Company’s auditor the duration of this position equals to three years.

    • Remuneration committee

Presently, the remuneration committee consists of 4 directors who three independent directors and one executive director is the remuneration committee is to consider of every board of directors committee and executive management. The remuneration is compared with that in the similar industries and business growth is taken into consideration. The duration of this position equals to one year which will be assigned by each Annual Meeting of Board of Directors after Annual General Shareholders’ Meeting held.

    • Executive Committee

The Executive Committee consists of 5 directors who are knowledgeable and have various experiences and understanding of responsibilities and the company’s business.

The Executive Committee is responsible for the company’s business operation in committee format. The investing management committee members are appointed and approved by the Board of Directors in accordance with the company’s regulations. The duration of this position equals to one year which will be assigned by each Annual Meeting of Board of Directors after Annual General Shareholders’ Meeting held.

    • Risk Management Committee

At present, the company has not yet established an official risk committee. However, in the selection process, the Board of Directors has considered various aspects of qualifications bylooking at the suitability, qualifications, experience, expertise in a variety of professions with a vision, clean working background, be able to freely express opinions including past performance as directors. The nomination can be proposed to the meeting of the board of directors to consider mutually agreeing before submitting to the shareholders’ meeting. Except in the case that the position of a director is vacant which is not an expiration of the term, the board of directors may consider the appointment of a committee member to fill the vacant position in accordance with the regulations of the company.

  • Nominating Committee

Currently, the company has not yet officially established the nomination committee. However, in the said selection process, the Board of Directors has considered various aspects of qualifications. By looking at the suitability, qualifications, experience, expertise in a variety of professions with a vision, clean working background, be able to freely express opinions including past performance as directors. The nomination can be proposed to the meeting of the board of directors to consider mutually agreeing before submitting to the shareholders’ meeting. Except in the case that the position of a director is vacant which is not an expiration of the term, the board of directors may consider the

appointment of a committee member to fill the vacant position in accordance with the regulations of the company.

5.     Boards Meeting

1. Board of Director has set the meeting not less than 1 time per quarter which has been schedule in advance for whole year by not less than one time per quarter as specify each committee meeting in advance with clear

2. The corporate secretary has send the documents related to the meeting 7 days in advance in order to provide board members adequate time to study documents before meeting, each meeting will take approximately 2 hours and in meetings there are openly and freely for

3. Other consideration, Chairman (as represented as) Chairman of the meeting shall have an opportunity to express their opinions freely, Voting shall be by majority vote by each director has one vote and any stakeholders as Director has to abstain or no comment or no attend on those agenda if there are equal vote then chairman entitled to one vote as casting

          Year 2018, voting for each agenda need to have 2 in 3 directors of total director

4. Board of Directors has pay attention on management issues relating to conflicts of interest of all parties to carefully and fairly by fully disclose of information in case there is stakeholder as Directors then he/she has no right to comments of those

5. If there are any suspect or need more information from related person then Chief Executive Officer will request executives to clarified and in case directors need some information then could contact corporate secretary

6. Board of Directors have given chance to director (not executive) can have a meeting as among themselves as appropriate and acknowledge Board of Directors

7. Board of Directors has set 4 times for Board of Directors meeting which pursuant to Directors, the Company will advance. In case there is urgent cases then could call the meeting as appropriate

End of the meeting, corporate secretary is responsible for recording and storing minutes of meetings and approved by chairman and corporate secretary. By this, Directors may comments; amend in the minute of meeting for the corrections.

Minute of Board meeting and sub-committee will storage in folder at the head office as convenience for Directors and related person to be referred

Year 2019, the meetings are as follows:

• Total number of meeting for Board of Directors equal to 7 times as number of time held meeting are reasonable and sufficient for the duties of the Board of Directors asthe nature of the business and every directors who attend the meeting shall attend more than 80% of meeting

• Audit Committee and Internal Audit has schedule meeting with company’s auditor quarterly together with inviting representatives from executives to attend the meeting. Year 2018, total number of meeting for Audit Committee equals to 6 times

• Audit Committee has a meeting with executive independently; decision and Suggestion arise from the meeting will acknowledge Board of Directors

• The company has policies for non-executive to called meeting and there is no meeting in year 2019

6.   Remuneration of Directors and Executives

The Board of Directors had appointed remuneration committee to consider certain amount of financial proposes to Board of Directors and shareholders every year. However, the Board of Directors cautiously determines the remunerations by comparing with that of similar industries and taking business growth into consideration and proposed to shareholders meeting for approval every year.

By this, 2019 Annual General Meeting of Shareholders which held on April 30, 2019 has approved remuneration fees not exceeding 1.95 Million Baht. The remuneration shall be paid on a regular basis and the Board of Directors has assigned the Remuneration Committee to consider the remuneration of directors and sub-committee to propose to the Board of Directors for consideration and request for approval at the shareholders’ meeting every year.

Remuneration Committee has set the structure/ element of proper compensation to responsibilities and benefits of each committee

Remuneration of senior executive of company, we have no policies to receive other fees except remuneration in term of director or employee, no share given, debenture or other securities to executives. The company has disclose details on remuneration fees individually in Form 56-1 No.8.4 Remuneration for Directors and Executives

Remuneration of executives is in accordance to rules and policies which will considers performance based on the roles, duties and responsibilities of each person

In year 2019, there is 2 times of remuneration committee meeting by set remuneration for Directors in year 2019 and proposed compensation to get approval from Board of Directors and Shareholders meeting respectively. The company has disclosed compensation of each person in Form 56-1 No.8.4 Remuneration for Directors and Executives

7.   Leadership and Vision

• Leadership

Board of Directors consists of person who possesses the knowledge, ability, several experiences and understanding on roles, responsibilities which make practical tasks more efficiently. Moreover, schedule roles, target and business strategy as well as follows and corporate performance of management by used corporate governance as a tool for value added and reach company

objective for highest returns to company and shareholders. In addition, roles and responsibilities of Board of Directors, Executives and Employees and related person

Boards has target indicators (KPI) on financial and any plans starting from beginning of year by follows business operation as monthly and quarterly to get status of the operation if the target is under Analysis to set the guidelines.

Moreover, Internal Audit Committees are responsible for Internal Audit directly which includes make sure that internal control system are enough and appropriate risk management to keep company beneficial by used corporate governance as a tool for value added and reach company objective for highest returns to company and shareholders. Moreover, require Directors and Executives report to company on their stakeholders or any person who related to equity as related to management of company or subsidiaries follows regulations, conditions and methods which announced from Capital Market Commission.

      • Vision

 

Board of Directors has aware of importance on business operation by set vision and mission of company in order for Directors, Executives and employees intend to operate in the same direction also has policies to reviews annually.

In year 2018, the company has set vision in accordance with business operation and responsibilities to social and environment.

8.     Roles and Responsibilities of the Board

The Board of Directors has appointed from shareholders to represent of shareholders which has importance roles on setting management policies by join with executives to set policies, operating goals, operating plans and annual budget by executives and employees should go on to the same directions. By this, including supervision and monitoring of operation in accordance with business plans and budget set by effectively and efficiently.

The company has disclosed duties and responsibilities of Directors (details shown in Form 56-1 No.8 Directors)

In year 2019, The Board of Directors has officiate on supervision of business operation in accordance to law and regulations therefore there are not any irregularities.

Corporate Secretary

Follows Securities and Exchange ACT (No.4) BE.2551 has assigned to Board of Directors to appointed Corporate Secretary whom will be responsible for coordinate legal issues on behalf of company or Board of Directors. Corporate Secretary also has an important role in coordinate effectively in both internal and external. Board of Directors has appointed Miss Nongnuch Kumchaithep as corporate secretary as follows resolution from Board of Directors meeting No 3/2019 held on March 20, 2019 as passed Company Secretary.

9.     Development of Directors and Executives

Board of Directors has giving importance to development of directors by encourage directors to attend the seminar or any course that useful in performing duties by focusing on the benefits of education, training that will develop directors in order to gain knowledge that is up to date in the competitive business situation all times also have policies to develop potential of personnel who are executives by providing training both inside and outside organization. In the past, company’s directors have attend training program from Thai Institute of Director (IOD) as Securities and Exchange Commission (SEC) requires directors of listed companies must past at least 1 training course such as Director Accreditation Program (DAP) and Director Certification Program (DCP) apart from mentioned courses directors are also give importance to enter into other courses provided by IOD such as Roles of Compensation Committee Program (RCC), Company Secretary; by objective of to enhance professional leadership, have knowledge and understanding truly, prototype on driving organization for good corporate governance. However, every directors have past basic training course of directors; Director Accreditation Program

      • Existing Directors and Executives

The Company has play importance roles on supporting knowledge to existing Directors which has training course related to task of Directors which this training held by IOD thus 9 members of directors has passed this training or equivalent to 100 percent including any related course on roles of director, related to business and encourage executives to have any knowledge in term of laws or any rules relating to Executives including training/ seminar which benefit to company and trainees.

      • Related person on Corporate Governance

Corporate Secretary, Secretary of Audit Committee and Compliance and Investor Relation unit including any related person, the company has support and encourage to train/seminar any related courses by SEC/Stock Exchange of Thailand/Thai Listed Companies Association/ IOD and other institution regularly.

10.  Evaluation on Performance of Board

Board has not evaluated on performance of Board yet but Board has considered on performance and makes improvement in order to be more productive in term of performance.

Annual evaluation of the audit committee

Audit Committee has evaluated the performance by evaluating the group to use as a framework for checking the performance of the audit committee and the implementation of the corporate governance policies. They have been approved and / or in accordance with good practice in order to improve the operations of the audit committee. To review problems and obstacles that occurred during the past year by dividing the assessment into 3 areas which are

1. Structure and qualifications of the audit committee

2. Meeting of the Audit Committee

3. Roles, duties and responsibilities of the audit committee For evaluation criteria With the following grade ratings

Rating range	Assessment criteria
More than 80 percent	very good
More than 70-80 percent	good
More than 60-70 percent	fair
Less than or equal to 60 percent	substandard

 

The self-assessment of the audit committee is as follows

 

No.	Appropriate topics	Assessment result (percent)	Level
1.	Structure and properties Of the audit committee	100.00	Very good
2.	Audit Committee Meeting	100.00	Very good
3.	Roles, duties, and responsibilities of Audit Committee	100.00	Very good
Average overview		100.00	Very good

 

11.  Bring good corporate governance of listed companies to be use

According to Securities and Exchange Commission (SEC) has issue Corporate Governance Code: CG Code) which will be used instead of regulatory principles for listed companies year 2012 of Stock Exchange of Thailand to apply or explain with appropriate practices as beneficial to company and in accordance to announcement from Securities and Exchange Commission