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06.

Corporate Governance

CORPORATE GOVERNANCE POLICY

The Company is committed to achieving high standards of corporate governance and has put in place self-regulatory controls to protect shareholders’ interest and ensure long-term shareholder value. The Board of Directors has implemented best practices incorporate governance based on the Code of Business Conduct.

The Company has also fully complied with the principles of good corporate governance and best practices recommended by the Stock Exchange of Thailand (SET) as follows:

A. RIGHTS OF SHAREHOLDERS

Protection of Rights

The Company recognises the importance of protecting the rights of shareholders’ and promotes the exercising of these rights. The basic legal rights of shareholders include the right to buy, sell or transfer shares, receive dividends, obtain relevant and adequate information in a timely and regular basis, participate in shareholder meetings, propose the meeting agenda, vote for the appointment or removal of Directors and Auditors, determine their remuneration as well as partake in decisions that could have material impact on the Company such as acquisitions and mergers, liquidations of subsidiary companies, dividend payment, amendment to the Memorandum and the Articles of Association or by-laws, capital increase or decrease.
Besides these basic rights, the Company has also implemented best practices to promote and facilitate exercising of rights for shareholders. The Company appointed the Thailand Securities Depository Co., Ltd. (TSD) as the Securities Registrar and to facilitate its shareholders in matters relating to the Company’s share and securities registration.

The Company recognises the importance of accurate, complete and transparent disclosure to its shareholders with regards to financial results and other relevant information through the SET and the Company’s website in both Thai and English to ensure that shareholders have access to information in a timely manner.

Shareholders’ Meeting

The Company holds its Annual General Meeting once a year within four months after the end of its accounting period. Date, time, and venue for the meetings shall be convenient and easily accessible for shareholders. The Company shall not arrange meetings on holiday or commercial bank holiday and non-business days.The Company holds its Annual General Shareholders Meeting at a place which is easily accessible via public transportation systems such as the BTS and the MRT. The Company has implemented the barcode system for registration purposes and the printing of voting slips for each agenda to facilitate the registration process at the meeting.

All In 2016, all relevant information is posted on the Company’s website thirty (30) days before the date of the meeting to ensure that shareholders had adequate time to review the relevant information. In addition, the Company did not add items to the meeting agenda without advance notice to ensure fairness to its shareholders. Shareholders are also informed of the rules of the meeting and voting procedures to allow fair and equal opportunity to ask questions, recommend, as well as give opinions during the meeting.

Board members and management of the Company are in attendance to explain the Company’s operational performance and policy, as well as answer relevant questions at the meeting.

These recommendations and questions are recorded in minutes of the meeting and disclosed on the Company’s website within 30 days after the date of the meeting. The Company has a policy to disclose to the SET relevant resolutions for each agenda item as well as voting results by 9.00 a.m. of the next working day after the shareholders’ meeting at latest.

B. EQUITABLE TREATMENT OF SHAREHOLDERS

The Company ensures equitable treatment of all shareholders. KWG has in place policies to disclose complete and accurate information, including shareholder’s rights to attend the general meeting, and carries out the shareholder meeting procedures as specified by laws and regulations of the SET.

The Company strives to ensure the following:

1) Provide equitable and fair treatment to all shareholders whether they are minority, institutional or foreign investors, and to allow them to exercise their rights accordingly.

2) If shareholders are unable to attend and vote at the meeting, KWG will allow them to send proxies to vote on their behalf. The proxy form and proposed list of independent directors are attached in notice of the meeting. The shareholders and/or proxies are encouraged to use voting ballots for each agenda.

3) To avoid insider trading and conflict of interest, the Company stipulates measures that prevent Directors, Executives, employees and related persons from misusing and/or disclosing sensitive information relating to the Company. There has been no report of insider trading within the organisation to-date.

4) The Company has guidelines in place for Directors and Executives to disclose their stake in the Company and relation to the
Directors, if any. The Company also discloses information of its Directors and Executives shareholding in the Company and subsidiaries in accordance with the requirements from regulators such as the Office of Securities and Exchange Commission (SEC) and the SET.

The Company allows all its shareholders to access the Company’s information, as well as provides a variety of channels of clear communications to its staff through the Company’s website, or through other channels such as telephone, fax, post, or email.

Interested parties can directly contact the Company at
King Wai Group (Thailand) Public Company Limited
47th Floor, Empire Tower, No.1 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120
Tel : (662) 129-5999
Fax : (662) 129-5998
or by e-mail: [email protected] or visit the Company’s website: www.kwgthai.com for more information.

C. ROLE OF STAKEHOLDERS

The Company recognises the legal rights and roles of stakeholders including its shareholders, employees, customers, business partners, creditors, competitors, communities and society as a whole. All stakeholders shall be treated fairly in accordance with their legal rights as specified in relevant laws and regulations. These relevant laws and regulations are also published as
manuals and distributed to all staff to ensure strict compliance. The manuals are also distributed to:

Shareholders: The Company is determined to conduct its business with prudence and transparency to ensure sustainable
growth and enhance long-term value for its shareholders.

Employees: The Company recognises that its employees are the core driving force for the organisation. The Company strives to continually enhance staff competency levels by providing opportunities for career advancements and a fair reward system. The Company is committed to training and developing its workforce, as well as providing a safe working environment for everyone.

Customers: The Company is committed to provide quality products and services to all customers, as well as to assist and provide solutions to their needs, while protecting customer confidentiality at the same time, unless stipulated by law or with the customer’s written consent.

Creditors: The Company has policies in place to ensure that creditors are treated with equality and fairness. In case of non-compliance with any one of the conditions laid out in the agreement, the Company will promptly notify the creditor to jointly consider and resolve the issue in a fair manner.

Business Partners: All employees are expected to provide accurate and complete disclosure on their shareholding interest and that of their related kin, so as not to impede decisions of potential buyers or sellers of shares. Employees should also refrain from accepting gifts and/or rewards from buyers or sellers as well as attending private functions hosted by them, so as to avoid any accusation of special assistance rendered at a later occasion.

Competitors: The Company respects competition and does not engage in deals and/or discussion with employees of its competitors on issues and/or information that may impact either party’s business.

Community and Society: The Company is committed to positively impact the community and society in the four focus areas of education, sports, society and the environment, as well as arts and culture.

Others:
1) Purchase of licensed software
The Company purchases computer software which are duly licensed and prohibits illegal use of unlicensed computer software. If the need arises to install any additional software applications, the Information Technology Department will ensure the relevant licenses prior to installation.
2) Medical Benefits
Employees are each provided with a health insurance card from the insurance company, and are entitled to a benefit plan which covers medical costs in the participating hospitals. Employees are also provided a complimentary annual health checkup.
3) Safety
The Company provides training for appointed fire wardens and shares updated fire evacuation plans for employees, within the office building as well as for the projects.

D. DISCLOSURE AND TRANSPARENCY

The Company ensures that all information on its finances or any other issues, which are beneficial to related parties, are disclosed in an accurate, complete, transparent, and timely manner as prescribed in the requirements of the SEC and SET. The Company’s financial statements are also prepared in accordance with the Accounting Standards and generally accepted accounting principles to reflect the real operating performance of the Company.
The Company discloses all information through various communication channels including the SET and the Company’s website in accordance with relevant regulations of related offices in both Thai and English to ensure that shareholders have timely access to information.

Investor Relations
The Company has appointed Ms Marisa Sangvoranit as an investor relations officer to provide timely information and news to shareholders. Interested parties can contact her directly for required information at
King Wai Group (Thailand) Public Company Limited
47th Floor, Empire Tower, No.1 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120
Tel : (662) 129-5913 Fax : (662) 129-5998
or by e-mail: [email protected] or visit the Company’s website, www.kwgthai.com for more information.

E. RESPONSIBILITIES OF THE BOARD

Board Structure
The Board consists of Directors with varied qualifications, skills, experiences and expertise that are beneficial to the Company and in accordance with the requirements of the SET. Directors are appointed in accordance with the principles and procedures of laws and Articles of Association of the Company. In 2016, the Board comprised three (3) executive Directors and six (6) non-executive Directors.

Independence from the Management
The Board acts independently from the management. There is a clear segregation of duties and responsibilities between the Board and management. The Board formulates policies, provides strategic business direction, as well as oversees and ensures that operations are carried out according to the highest levels of transparency and disclosure, and in accordance with the respective policies.

To ensure an appropriate balance of authority, increased accountability and a greater capacity of the Board for independent decision-making, the Company has a clear division of responsibilities at the top level, with the Chairman of the Board and the Chief Executive Officer of the Company having clearly separated roles.

Appropriateness of the Board
The number of Directors on the Board is in accordance with Clause 16 of the Articles of Association which stipulates that “there shall be no less than five Directors and no less than half of the total number of Directors who must reside in the Kingdom of Thailand”. Clause 22 has prescribes that one-third of the Directors must retire at each Annual General Meeting. Should the number not be divisible by three, the number must be closest to one-third. A retiring Director is eligible for re-election.

Effectiveness of the Board
The Board has in place adequate internal control systems to ensure that the Company’s operations are carried out responsibly, with integrity and in accordance with the regulations of the SEC and SET. Together with the Audit Committee (AC), the Board safeguards the resources of the Company and ensures that procedures and policies are adhered to in the management of the Company.

– The Board is responsible for the Company’s internal control system. It ensures that appropriate policies are in place for effective functioning of the Company’s business operations. The Company has engaged the audit team from Mazars Limited to audit the Company at least once a year. The Internal Audit team then reports its findings to the Board of Directors and the
AC.

– The Board and the AC will then review all items to ensure compliance with relevant laws and regulations, as well as with internal policies with respect to the conduct of business. The AC will review the quarterly financial statements and report to the external auditors as well as Internal Audit team before seeking approval from the Board.

– It is the Company’s policy to appoint a Company Secretary in compliance with the applicable Securities and Stock Exchange Act (No.4) BE 2551 (2008) and principles of good corporate governance. The Company Secretary is further encouraged to attend appropriate training courses to enhance his or her skills.

– The Board convenes on a quarterly basis and will call for additional meetings when required. The following reports and procedures are provided to the Board to allow them to better anticipate risks and key drivers ahead of events so that timely decisions can be made.

The reports and procedures include:

Whistle-Blower Protection Policy
The purpose of this policy is to encourage reporting in good faith of suspected reportable conduct by establishing clearly defined processes through which such reports may be made with confidence that employees and other reporting parties will be treated fairly and protected from reprisal. This policy is one channel through which the Company receives information on
suspected reportable conduct and addresses them in an appropriate and timely manner.
“Reportable Conduct” refers to any act or omission by an employee or contract worker appointed by the Company, which occurred in the course of work, whether or not the said act is within the scope of their employment. It includes:
(1) Dishonesty including, but not limited to, theft or misuse of Company’s resources;
(2) Fraud;
(3) Corruption;
(4) Illegal activities;
(5) Other serious improper conduct;
(6) Unsafe work practices or ;
(7) Any other conduct which may cause losses, financial or otherwise, to KWG or be seen as being detrimental to KWG’s reputation.

Staffs and/or shareholders may report their complaints directly to the following persons:
Receiving Officer
Mr Yupeng Huang : Office : 0 2129-5999
Director, CEO : E-mail : [email protected]
King Wai Group (Thailand) PCL. : Office Address : 47th Floor, Empire Tower, No.1 South Sathorn Road, annawa, Sathorn, Bangkok 10120

Audit Committee Chairman
Mrs Jiraporn Pimpoorash : Office : 0 2129-5999
: E-mail : [email protected]
: Office Address : 47th Floor, Empire Tower, No.1 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120

Reporting procedure

– A Protected Report may be made orally or in writing. However, such reports should preferably be in writing so as to ensure a clear understanding of the matters raised. Oral reporting should be documented by the supervisor, Receiving Officer or AC Chairman, depending on who receives the report first. All communications relating to the allegations made in a Protected
Report should also be in writing.

– The Receiving Officer will retain all documents related to Protected Reports in a safe, secure and proper manner.

– Protected Reports (whether oral or written) should be factual rather than speculative, but need not be conclusive evidence of the alleged Reportable Conduct. The report should include the nature of the alleged Reportable Conduct, the name(s) of the person(s) alleged to be involved, the date and description of the alleged wrongdoing(s) and other pertinent information.
The information disclosed should be as precise as possible so as to allow for proper assessment of the nature, extent and urgency of preliminary investigative procedures to be undertaken.

– Whistle-Blowers must provide their names, phone numbers and addresses so that the Receiving Officer or AC Chairman may contact them for more information if need be.

Confidentiality

– Confidentiality of the identity of Whistle-Blowers and persons who participate (or who intend to participate) in investigations initiated under this policy will, to the extent possible, be maintained. Such persons should nevertheless be cautioned that their identity may become known for reasons outside of the control of all those involved in receiving the Protected Report
and/or investigating the matters raised therein.

– The identity of the Investigation Subject(s) will similarly be maintained in confidence to the extent possible.

Enterprise Risk Management
Enterprise Risk Management is a process designed to identify potential events that may impact the Company caused by changing economic, financial, social and legal situations, and to specify sufficient protection and suitable resolution measures to prevent and mitigate such risks, including analysis of circumstances as well as the probability of risky events occurring. KWG’s
enterprise risk management process is implemented on a quarterly basis.

Internal Audit Report
An internal audit is conducted annually to review the adequacy and effectiveness of key controls, procedures and processes of the Company and its subsidiaries. A report is then generated to address three key areas, including the adequacy and effectiveness of existing internal controls and operational procedures, compliance with established policies and procedures, as well as the weaknesses and recommendations for improvement in the areas reviewed.

Vision and Mission/ Core Value
The Company’s Vision and Mission/Core Value can be found on the Company’s website. Such strategic will be reviewed annually years.

Code of Conduct
The Company has a Code of Conducts in place which is circulated to related parties, Directors, Executives and all employees.
The policy addresses standards with regards to safety discrimination and workplace harassment, internal and external corruption or bribery, gifts as well as donations and contributions.

BOARD COMMITTEES

The Board currently comprises three committees, namely, the Board of Directors, the Executive Committee (EC) and the AC.

BOARD OF DIRECTORS

The Board of Directors assumes full authority over the management of the Company and ensures that the Company’s operations meet its set objectives and complies with Articles of Association and shareholders’ resolutions.

Name Position Appointment Date
Mr King Wai Chan Chairman 18 May 2016
Mr Antonio Hang Tat Chan Vice Chair Man 18 May 2016
Mr Yupeng Huang Director 18 May 2016
Mr Boonyong Yongcharoenrat Director 19 May 2016
Mr Hang Lee Chan Director 20 Jun 2016
Mr Shaosan Zheng Director 20 Jun 2016
Mrs Jiraporn Pimpoorash Independent Director and Audit Committee Member 27 May 2004
Prof Chukiat Pramoolpol Independent Director and Audit Committee Member 21 Dec 2004
Mr Somprasong Makkasaman Independent Director and Audit Committee Member 27 May 2004

Roles, Duties and Responsibilities of the Board of the Directors

The principal functions of the Board are as follows:
1) Review and approve the Company’s corporate policy and the authorisation matrix.
2) Provide full and timely information disclosure to shareholders.
3) Be accountable to all shareholders by adopting best practices to enhance value for shareholders.
4) Manage the Company in accordance with relevant laws, objectives and Articles of Association of the Company including shareholders’ resolutions.
5) Review, and where required, approve key strategies, objectives and plans of the Company and appropriate financial and operational matters.
6) Advise management on significant issues that may impact the Company.
7) Evaluate the adequacy of internal controls, risk management, financial reporting and compliance.
8) Nominate Directors and ensure that the structure and practices of the Board provide for sound corporate governance.
9) Supervise and appropriately remunerate senior management.

The Company’s Board of Directors as at 31 December 2016 includes:

EXECUTIVE COMMITTEE

EXECUTIVE COMMITTEE

The Executive Committee (EC) consists of two non-Executive Directors and one Executive Director with the competencies and expertise to oversee the business, assets, affairs and performance of the Company. The EC focuses its activities regularly on the key requirements and policies of the Company.

Roles, Duties and Responsibilities of the Executive Committee

1) To operate the daily business of the Company in line with the Company’s policy and budgets, set the directions, targets, organisation and business operations of the Company, at the same time, monitor the Company’s performance in achieving its targets.
2) To assess transactions of the Company and its subsidiaries which may have conflicts of interest with the Company. The EC would then have to propose the meeting of the AC and the Board before the transaction is approved.
3) To perform operations as assigned by the Board and to approve other business operations of the Company as delegated by the
Board.
4) To approve credit and write-off debts within the authorised limits.
5) To approve the hiring of consultants and procurement of materials in accordance with procedures.
The Company’s EC as at 31 December 2016 includes:
Mr King Wai Chan Chairman
Mr Antonio Hang Tat Chan Member
Mr Yupeng Huang Member

CHIEF EXECUTIVE OFFICER (CEO)

CHIEF EXECUTIVE OFFICER (CEO)

Mr Yupeng Huang, Chief Executive Officer, has the responsibility to manage and lead daily business operations of the Company.
Role, Duties and Responsibilities of the Chief Executive Officer
1) Responsible for daily business operations and management of the Company.
2) To assure that the operations are in accordance with the policies, work plans, and within budget as approved by the EC and/or the Board.
3) Be the authorised person to manage the Company’s operation to be in line with the Company’s objectives, regulations, policies, standards, requirements, instructions and the resolution of the Board meeting and/or the shareholders’ meeting.
4) Manage and lead business operations, and at the same time, evaluate Company’s performance on regular basis so that proper action will be taken to prevent or minimise risks associated with external and internal factors.
5) To oversee any binding agreements with regards to the Company’s business, as well as evaluate opportunities which may be beneficial to the Company. This is includes overseeing the drafting of contracts to be further submitted to the EC and/or the Board.
6) Allocate sufficient funds for awards, and compensations to employees as previously approved by the Board.
7) To authorise employment, including transfer and rotation across departments/lines/sections, or termination of employment.
8) Determine rate of salary, compensation, bonus, and fringe benefits of employees.
9 To authorise and regulate issuance of announcements, and memorandums to ensure that the Company’s policies are followed, to safeguard the Company’s benefits, and to cultivate work discipline within the organisation.
10) To perform other duties as assigned by the Board.
Actions of the Chief Executive Officer concerning the assignment of duties, responsibilities and authorisation should not be in conflict with the interests of the Company and its subsidiaries. Such activities which may cause a conflict of interest have to be presented at the Board meeting or shareholders’ meeting for consideration and approval in accordance with regulations of the
Company, its subsidiaries, or applicable laws. However, there is an exception when such activities are part of regular business operations with a predetermined scope.

AUDIT COMMITTEE

The AC is appointed by the Board in accordance with the requirements of the SET. The AC convenes at least four times a year to review the Company’s business operations.

Roles, Duties and Responsibilities of the Audit Committee

The AC is guided by the following terms of reference:
1) Review financial statements to ensure adequacy, accuracy and proper disclosure as required by accounting standards and relevant laws.
2) Review the efficiency of the internal audit system set by management.
Review business operations in accordance with the requirements of the Securities and Exchanges Act, Rules and Principle Standards of the SET or any other laws related to the Company’s business.
3) Consider, select and nominate an independent person as the Company’s auditor, and to propose the aforementioned person’s remuneration, as well as to attend the meeting separately with external auditors to discuss any matters without the presence of management at least once a year.
4) Review relevant transactions for any conflicts of interest, adherence to related laws and regulations of compliance and to ensure that such transactions are transparent.
5) Ensure transparency and accuracy in the Company’s disclosure of relevant transactions, conflicts of interest or any other operation which may cause significant impact on the Company.
6) Report on activities of the AC in the Company’s annual reports which must be signed by the Chairman of the AC.
7) Perform any other act as assigned by the Board of Directors with the agreement of the AC.

The Company’s Audit Committee as at 31 December 2016 includes:
Mrs Jiraporn Pimpoorash Chairman
Prof Chukiat Pramoolpol Audit Committee
Mr Somprasong Makkasaman Audit Committee
Mrs Jiraporn Pimpoorash, with her extensive experience in the relevant industry for 28 years, is qualified to carry out the audits for KWG.

SELECTION OF DIRECTORS AND EXECUTIVE OFFICER

DIRECTORS AND EXECUTIVE OFFICER

The Board is responsible for the operations of the Company and has the duty to select qualified and accountable persons capable of maintaining good relations with the Board for Executive positions. To appoint the Directors and Management, the Company shall consider and propose qualified persons in accordance with the laws and the relevant regulations, including the Articles of Association of the Company. The Board and AC will recommend such persons.

In appointing a member, the Board shall refer to the following for guidance:

Scenario 1: In the event of expiration of a Director’s term, the Board shall recommend suitable candidates for election at the Annual
General Meeting.
Scenario 2: In the event that an existing Director leaves before the expiration of his or her term, the Boards shall appoint a qualified person in his or her place with voting of no less than three-fourths and shall hold the office until the expiration of the term. The person appointed as new Board member shall serve the remainder of that term.

INDEPENDENT DIRECTOR

The person who shall be qualified to be Independent Director must be in full compliance with the qualifications and independent criteria as prescribed by Capital Market Supervisory Board.

Qualifications of Independent Directors

1) Holding shares not exceeding 0.5% of the total number of shares with voting rights of the Company, parent company, subsidiary company, associate company, major shareholder or controlling person, including shares held by related persons of such
Independent Director;

2) Neither being nor ever was an Executive Director, employee, staff, advisor who receives salary, or controlling person of the Company, parent company, subsidiary company, associate company, same-level subsidiary company, major shareholder or controlling person;

3) Not being a person related by blood or legal registration as father, mother, spouse, sibling, and child, including spouse of child, executive, major shareholder, controlling person, or person to be nominated as executive or controlling person of the Company or subsidiary company;

4) Neither having nor ever had a business relationship with the Company, parent company, subsidiary company, associate company, major shareholder or controlling person, in the manner which may interfere with his independent judgement, and neither being nor used to be a significant shareholder or controlling person of any person having a business relationship with the Company, parent company, subsidiary company, associate company, major shareholder or controlling person;

The term ‘business relationship’ shall include any normal business transaction, rental or lease of immovable property, transaction relating to assets or services or granting or receipt of financial assistance through receiving or extending loans, guarantee, providing assets as collateral, and any other similar actions, which result in the Company or his counterparty being subject to debt payable to the other party in the amount of 3% or more of the net tangible assets of the Company or Baht 20 million or more, whichever is lower. The amount of such debt shall be calculated according to the method for calculation of value of connected transactions under the Notification of the Capital Market Supervisory Board governing rules on connected transactions mutatis mutandis. The consideration of such debt shall include debt incurred during the period of one year prior to the date on which the business relationship with the person commences;

5) Neither being nor ever was an auditor of the Company, parent company, subsidiary company, associate company, major shareholder or controlling person, and not being a significant shareholder, controlling person, or partner of an audit firm which employs auditors of the Company, parent company, subsidiary company, associate company, major shareholder or controlling person unless the foregoing relationship has ended no less than two years prior to the date of appointment;

6) Neither being nor ever was a provider of any professional services including those as legal advisor or financial advisor who receives service fees exceeding two million baht per year from the Company, parent company, subsidiary company, associate company, major shareholder or controlling person, and not being a significant shareholder, controlling person or partner of the provider of professional services unless the foregoing relationship has ended no less than two years prior to the date of appointment;

7) Not being an appointed Director or representative of Directors of the Company, major shareholder or shareholder who is related to major shareholder;

8) Not being a Director assigned by the Board to take part in the business decision of the Company, its parent company, subsidiary, affiliate, same-level subsidiary, major shareholder or controlling person of the Company;

9) Not undertaking any business in the same nature and in competition to the business of the Company or subsidiary company or not being a significant partner in a partnership or being an Executive Director, employee, staff or advisor who receives salary or holding shares exceeding one percent of the total number of shares with voting rights of other company which undertakes business in the same nature and in competition to the business of the Company or subsidiary company;

10) Not having any other characteristics which cause the inability to express independent opinions with regard to the Company’s business operation.