Corporate Governance Policy

The Board of Directors and the Management of the Company are committed to the principles of good corporate governance pursuant to the Principles of Good Corporate Governance for Listed Companies 2012 of the SET in order to sustain and maximise long term value of the shareholders.

The Board of Directors has established a corporate governance policy, which sets out the key governing bodies in the Company and process in respect of risk management, strategy, financial reporting and internal control. In addition, the Board of Directors of the Company has established a code of conduct “Corporate Ethics - dtac’s Good Governance”, which applies to its directors, Management, employees and other persons acting on its behalf. The Company’s code of conduct has been in effect since 2006 and has been regularly updated to cover various subjects, such as human rights, labour, occupational health, safety, security, environment, conflicts of interests, use of insider information, internal control, disclosure of information, anti-corruption and etc. in accordance with the international standard.

The corporate governance policy and the code of conduct can be found on the Company’s website at www.dtac.co.th and its intranet for easy access and reference of the directors, executives and employees of the Company. In addition, the Company has taken actions to raise awareness and understanding of the corporate governance policy and the code of conduct on a regular basis, for instance, providing the code of conduct manuals and arranging an orientation program for new employees and additional trainings on such subjects from time to time. The Company has also developed learning media on the code of conduct in cartoon version which explains various important topics in an easy and simplified way, e.g. conflict of interest, anti-corruption, bribery, gifts and business courtesies, personal information and privacy, information security, sponsorship or donation, external communication as well as other important topics employee should be aware of. Furthermore, interactive e-learning programs are executed to increase awareness of employees over Code of Conduct and Anti-Corruption Policy. To monitor the compliance of the corporate governance policy, the Chief Executive Officer will perform an assessment of the implementation of the governing documents, the level of compliance and report the results to the Board of Directors at least once a year.

Fully understanding the crucial importance of the principles of good corporate governance, the principles of good corporate governance of the Company have been adopted from the Principles of Good Corporate Governance for Listed Companies 2012 of the SET, which has been revised to be in line with the ASEAN CG Scorecard. From the assessment on corporate governance practices of Thai listed companies assessed by the Thai Institute of Directors Association (IOD), the Company is one of 80 companies that have been awarded a level of “excellent” (90% to 100% of CG scoring) among 601 listed companies that have been assessed. This is to confirm that the Company commits to the Principles of Good Corporate Governance for sustainability development. Details of the Company’s practice of the good corporate governance are set out in 5 categories as follows:

Section 1 - Rights of Shareholders

The Board of Directors realises and places importance on the fundamental rights of the shareholders, namely the rights to trade and transfer shares, receive the Company’s profit distribution, independently and equally attend and vote at general meetings of shareholders, decide on the Company’s important matters, appoint or remove directors, determine directors ’ remuneration, appoint auditors, determine auditors’ remuneration and receive the Company’s information promptly, completely, and sufficiently through an easy-to access channel. The Company encourages its shareholders to fully exercise their rights through the general meetings of shareholders (The Company has only one type of share that is ordinary share and one share has one voting right) so that the shareholders can participate in any decision-making that affect or relate to their rights and benefits.

The Company has a policy to support and facilitate the shareholders, including institutional investors, to attend the general meetings of shareholders. The Company announced the date of the meeting in advance via channel provided by the Stock Exchange of Thailand on 3 February 2015. The Company fixed the record date on 18 February 2015, and closed its shareholders registrar book to collect the list of shareholders who have the right to attend the meeting on 19 February 2015. In order to facilitate shareholders, the Company selected the meeting venues where the mass transit system are available and sufficient for the shareholders to conveniently commute, as well as, intentionally arranged the meeting in the afternoon in order to have shareholders enough time for preparation to attend the meeting. The Company provides opportunities for the shareholders to submit registration documents for attending the meeting in advance of the meeting date in order to minimise the time for documents verification on the meeting date. The Company also provides registration channels at the meeting venue specifically for individual shareholders, juristic person shareholders, and institutional investors and also arranges for a barcode system for registration and vote counting to expedite the registration and vote computation process. To facilitate the shareholders, the Company also provides stamp duty for the appointment of proxies.

The Company conducts the general meetings of shareholders in a transparent manner with examination mechanisms available. The shareholders are provided with an opportunity to raise questions and express opinions relating to an agenda which then were summarized and recorded in the minutes. The directors, relevant senior Management and the auditor of the Company are encouraged to attend such meetings to provide answers to and acknowledge the opinions of the shareholders.

The Company held the 2016 Annual General Meeting of Shareholders on 30 March 2016 at the Grand Ballroom, 4th Floor, InterContinental Bangkok, Thailand. There were 17 directors and senior Management attending the 2016 Annual General Meeting of Shareholders.

The Company engaged Thailand Securities Depository Co., Ltd., its registrar, to send the invitation notice to the meeting, together with the supporting documents, to the shareholders on 8 March 2016 or 22 days prior to the meeting. The invitation notice and supporting documents in both Thai and English version were published on the Company’s website at www.dtac.co.th on 29 February 2016 or 30 days prior to the meeting in order to facilitate the shareholders with an easy and prompt access to the information relating to the meeting. The invitation notice included details of each agenda, which clearly stated type of the agenda, be it for the acknowledgement or approval. The invitation notice meanwhile was completed with the Meeting’s agenda items, supplementary documents, the Board’s opinions on each agenda item. A proxy form, which was stipulated by the Ministry of Commerce, was also included in the invitation notice, while 3 independent directors were provided therein for shareholders to freely choose their proxy.

The Company provided opportunities in advance for the shareholders to submit questions relevant to the meeting agenda, as well as to propose agenda item, and to nominate person to be appointed as the Company’s director at the 2016 Annual General Meeting of Shareholders during 1 October - 31 December 2015 through channel provided by the Stock Exchange of Thailand and published on the Company’s website at www.dtac.co.th on 22 September 2015 However, no question, agenda item, or nonimated person were submitted.

Before the meeting began, the Company explained to all shareholders the criteria and the procedures for vote casting. Shareholders or proxy holders have voting right equal to number of share they held, and such voting rights could not be split (with exception of the C-type proxy), The Company also provided an independent external legal advisor (inspector) to supervise the meeting and the voting process to ensure that they were conducted in accordance with applicable laws and the Articles of Association of the Company. At the meeting, the Chairman of the meeting provided opportunities for the shareholders to express their opinions and to make inquiries relevant to the Company and the meeting agenda.

On the same day after the conclusion of the meeting, the Company informed the SET, in the form of a newsletter, the resolution of each agenda of the 2016 Annual General Meeting of Shareholders by indicating the votes as “approved”, “disapproved” or “abstained from voting”.

Section 2 – Equitable Treatment of Shareholders

The Board of Directors places importance on fair and equitable treatment to all shareholders; as a result, the following actions have been implemented:

The Company has a policy to protect the rights of all shareholders. At the 2016 Annual General Meeting of Shareholders, the Chairman of the meeting conducted the meeting in accordance with the agenda as set forth in the invitation notice to the meeting. No agenda was added without prior notification to the shareholders. All shareholders were entitled to vote based on the amount of shares held by each shareholder whereby one share was equal to one vote.

The shareholders who could not attend the meeting in person were entitled to appoint an independent director of the Company or any other person to attend the meeting and vote on their behalf. The Company prepared proxy forms as prescribed by the Ministry of Commerce, whereby the shareholders may give their proxies voting instruction. The proxy forms were delivered to the shareholders together with the invitation notice to the meeting. Additionally, the shareholders could download the proxy forms from the Company’s website at www.dtac.co.th.

The Company appointed Thailand Securities Depository Co.,Ltd. to proceed with the registration and vote counting and provided the shareholders with voting ballots for each agenda. As for the agenda regarding election of directors, the Company provided the shareholders with an opportunity to elect each director individually. The vote counting in each agenda was conducted openly and transparently and the voting ballots were collected and maintained for further examination.

Section 3 - Roles of Stakeholders

(1) Right of Stakeholders

The Company realises the rights of all groups of stakeholders, whether inside or outside the Company, and has undertaken to ensure that such rights are well protected and treated, in order to create good understanding and co-operation between the Company and its stakeholders, which will be advantageous to the operation of the Company, create confidence and stability for the Company and its stakeholders and increase the ability of the Company to compete in the long term.

Rights of Shareholders

The Company realises and places importance on the rights of the shareholders as the owners of the Company. The Company has ensured equal and fair treatment among all shareholders through its accurate, transparent and timely disclosure of information and safeguarding of its assets. The Company aims to operate its business in a manner which is profitable and maintains sustainable growth, so as to increase the long-term value for the shareholders. Further details on rights of shareholders are demonstrated in Section 1 Rights of Shareholders and Section 2 Equitable Treatment of Shareholders.

Rights of Employees

The Company has always regarded its employees as valuable resources, whose roles are fundamental to the success of the Company. Accordingly, the Company aspires to increase the potential of its employees throughout their career path by improving skills, knowledge and aptitude of its employees, as well as providing every employee with an opportunity to improve its career path on an equitable basis and offering appropriate remuneration to its employees. The Company has studied and reviewed the organisation structure, role, duty and responsibility of each unit, evaluate the performance and work progress of its employees regularly, in order to build internal potential and organisation readiness for development into the best organisation. The Company also gives importance to the employees’ remuneration policy which is needed to align with the Company’s performance both short-term and long-term by providing.

The Company places importance on the welfare and safety of its employees. The Company provides fundamental welfare and benefits as required by law, such as working hours, holidays, annual leaves, and any other types of leave, as well as social security, compensation fund and provident fund, and constantly communicates all benefits to its employees.

In addition to those as prescribed by law, the Company also provides other welfare to its employees, such as health insurance, which covers outpatient and inpatient treatment and dental care, life insurance, personal accident insurance, annual health check-up, and in-house medical and nursing treatment with doctors and nurses standing by at the Company’s office during working hours, as well as providing healthcare measure, such as communication of preventive measures for epidemics and provision of protective masks and alcohol-based hand gel for its employees and visitors. Furthermore, the Company encourages its employees to exercise for good health by providing facilities, sport equipment and other sport activities, such as yoga and aerobics, etc. The Company also promotes good family relationship by providing various areas and activities, such as kids’ room, library, breastfeeding room and activities during school vacation, to support employees who have the necessity to bring their children to the work place. In 2015, the Company has announced a new policy for a 6-month maternity leave for female employees in order to prepare for and recover from the medical aspects of delivery and to facilitate mother-child bonding. During this maternity leave, the Company will pay wages to female employees for 180 days. This new policy will be implemented from 1 January 2016 onward. In addition, the Company also provides financial aid to its employees in various cases, such as wedding, childbirth, ordination, death of close relatives and natural disasters, etc.

The Company promotes and supports its employees to participate in organisation development by holding an election for the “House of Employee Representatives” to represent the employees and be the mediator for cooperation with the Company, in order to solve and relieve problems of its employees in addition to those welfare and benefits already provided by the Company to its employees, as well as to provide advice to and obtain opinion from its employees.

The Company has a safety and environmental management system which is in line and complies with the international standards on safety and environmental management system. The Company has set up a unit to oversee matters relating to occupational health, safety, security and environment (HSSE Unit) to establish a policy and a code of conduct on health, security, safety and environment by specifying and promoting good health and the provision of safe working environment, as well as security and relevant measures to prevent accidents and illnesses from work in accordance with the internationally accepted standards. The Company has also organized workshops on safety and working environment (HSSE Workshop) in order to promote a culture of safe working environment in the organisation through an electronic self-learning program (HSSE Virtual Learning Program) and organize HSSE activities. The Company has also set up an HSSE Committee for 3 groups in several areas, which consists of representatives from its employees and the Management, working together to report and recommend solutions and improvement for safe working environment, and promote and encourage safe working activities.

Furthermore, the Company’s office, i.e. “dtac House” is the only office from Thailand that has been announced as one of the “Top Ten Best Office Spaces in the World in 2015” in “Global Cities: The 2015 Report” made by Knight Frank, a world’s leading residential and commercial property consultancy.

In order to develop and improve the organisation to truly meet the needs of its employees, the Company invites its employees to complete an online questionnaire on employees’ opinions towards the organisation (Employee Engagement Survey) on an annual basis. The questionnaire covers employees’ opinions towards their line managers, working teams and the Company, as well as guidelines and suggestions that would help develop the Company’s potential. For this purpose, employees could freely express their feelings and opinions on the questionnaire; the information obtained from the questionnaire will be kept confidential.

Rights of Community, Society and Environment

The Company realises that it is a part of the society and community and places importance on responsibility towards community, society and environment. To support this policy, the Company focuses on development of activities through an integration of communication technologies to improve the quality of life of various groups of people (Enable), strengthening safety in telecommunications services (Safe) and doing business with care for the environment (Climate Change), for instance, the Company and Ruam Duay Chuay Kan Sam Nuek Rakbankerd Foundation has implemented “Internet Changes Lives” project and “Farmer Info” application, to support and enhance agricultural sector and community enterprise to be able to easily access to internet so that they can have better opportunities to develop their production activities, product qualities and product distribution.

The Company has a policy to protect the environment which will be implemented to promote responsibility towards the environment, and develop and use more environmental friendly technologies. The Company has continuously taken actions to reduce environmental impact and control activities that may have environmental impact, including management of waste from the Company’s operation, such as recycling of used batteries from base stations, campaigning for optimal energy efficiency, particularly the reduction of carbon emissions both from the office building and base stations. The activities included designing the office at Chamchuri Square Building with the aim of energy saving, campaigning for employees to use electricity efficiently and promoting use of communications technology, such as e-conference which will help reduce carbon emissions from energy consumption from travelling.

In addition, the Board of Directors of the Company encourages employee education and training with regard to environmental matters. In this regard, HSSE Unit provides an electronic self-learning program (HSSE Virtual Learning Program). The program covers the Company’s policy on environmental protection, energy consumption and emissions of air pollution, waste handling and recycling, as well as working environment. HSSE Unit has completed the environmental training program for all new employees and plans to implement the training program for all business partners.

Rights of Customers

The Company aspires to enhance its efficiency in providing services, offer products and services which meet customers’ demand and undertake relevant actions to ensure that customers will be confident and satisfied with the services of the Company. The Company has a clear policy that every customer will be equitably and fairly treated with respect and good manner on the principle of “customer centricity” or customer focus, in which understanding of customers’ needs is a priority and shall be adhered to by all employees in performing their work on any matters. In this regard, the Company has arranged for internal activities throughout the year in order to provide all employees the opportunities to learn and exchange opinions which will be used by the Company to improve and encourage cooperation amongst divisions which will be directly or indirectly beneficial to the customers.

Currently, the Company provides service channels to support customers, namely the Service Center and the Call Center. Customers can visit the Company’s Service Centers which are located in prime locations of Bangkok, its vicinities and upcountry, or dial 1687 to the Call Center. The Company also implements digital channels such as website, email and social networks i.e. Facebook, for customer support.

The Company has the policy of protecting personal data of the customers, under which any processing of personal data must be undertaken cautiously and carefully and must be limited to the extent required for the Company to operate, provide relevant services and carry out related commercial activities in accordance with the laws.

Rights of Business Partners

It is the policy of the Company to treat all business partners equitably and fairly. The Company has established written, easily understandable and standardised procedures for procurement so as to assure its business partners’ confidence in the vendor selection process of the Company at all events. The Company has a clear policy on procurement for competitive bidding process. Negotiation of contracts between the Company and its business partners are undertaken based on general commercial terms.

The Company has the policy of requiring its business partners to comply with the supplier code of conduct in relation to various matters, such as labour, health, safety, security, environment and corruption, which shall be of the same standard as the Company, which is in line with the internationally accepted standards. The Company conducts an onsite visit and sends questionnaires to its business partners on a regular basis in order to follow-up on the business partners’ compliance with the supplier code of conduct. This aims to improve the standard of business operation and build sustainable growth of the business partners of the Company.

In addition, the Company also emphasises on respecting intellectual property rights of business partners and other third parties. It is the Company’s policy that directors, executives and employees of the Company and other persons acting on behalf of the Company shall avoid infringement of intellectual property rights of business partners and other third parties. At the same time, the directors, executives and employees of the Company and other persons acting on behalf of the Company shall protect and administer the Company’s intellectual property in the interest of the Company as prescribed in the code of conduct “Corporate Ethics - dtac’s Good Governance”.

Rights of Competitors

The Company encourages and supports fair and transparent competition. The Company will not perform any act which would violate or contradict to any competition law or may cause damages to the reputation of its competitors. The Company competes in the market by offering good products and services at the right price, and will deal with its competitors in an honest and professional manner.

Rights of Creditors

The Company aspires to maintain sustainable relationship with its creditors. The Company has a policy to treat its creditors equitably and fairly by providing correct, transparent and verifiable information to its creditors, and to strictly honour the terms and conditions of the contracts it has with its creditors whether in relation to the repayment of principal, interest and fees, maintenance of financial ratio or other conditions, etc. The Company will immediately inform its creditors in case the Company fails to comply with any condition in order to jointly find solutions. In the past year, the Company had no event of default and guarantee obligation.

(2) International Human Rights Principles

The Company supports internationally declared human rights which include declarations and treaties of the United Nations on human rights. Directors, executives and employees of the Company and other persons acting on behalf of the Company shall respect personal dignity, privacy and individual rights of each person they are in contact with in the course of their duties, and shall not take any action which results in or supports the violation of any human rights as prescribed in the code of conduct “Corporate Ethics - dtac’s Good Governance”.

(3) Anti-corruption and Bribery Policy

The Company issued its first Anti-Corruption Policy in 2006 and has reviewed it from time to time. In 2014, the Company has summarized the principles set forth in such Policy in a more readable form of “dtac Anti-Corruption Handbook”, available to all employees. In 2015, the Company announced the No Gift Manual, stating that dtac personnel shall not receive any gifts from external parties, subject to the prescribed terms and conditions. In 2016, the Company conducted several anti-corruption activities, such as, e-learning, cascading trainings, cartoon series, and publication and seminar sponsorship.

The Company also requires its business partners to implement an anti-corruption policy and allow the Company to make site inspection on such matter. In case where there is any finding on corruption, the Company has the right to terminate the business relationship immediately.

In 2012, the Company declared its intention to join the Thailand’s Private Sector Collective Action Coalition against Corruption (CAC), and in 2016, the Company passed Self-Evaluation Tool for Countering Bribery evaluated by KPMG, and then was accepted by CAC as a certified member.

(4) Measures on Whistleblowing and Protection for Whistleblowers

The Company has set up a communication channel through its website at www.dtac.co.th to provide opportunities for shareholders and interested persons to opine or complain directly to the Board of Directors of the Company in case there is an unfair treatment or a trouble arising from the action of the Company. Furthermore, all employees must report an event or a behaviour which is unlawful or suspected to be unlawful or violates the good governance of the Company or any rules or laws to their supervisors. The Company has also provided a channel for employees to consult or report directly to the Ethics and Compliance Manager Officer upon becoming aware of or suspecting any conduct which is unlawful or violates the code of conduct.

“Corporate Ethics – dtac’s Good Governance” and has or may have impact on employees, other interested persons and the Company. The ethics and compliance team will examine facts, summarise details of such event and report/recommend to relevant executives. The ethics and compliance team has regularly updated to Audit Committee at least once a quarter for consideration and recommendation for any important issue to report to the Internal Audit Department and the Audit Committee for consideration and recommendation and take remedial or legal action towards such offence. The information of the whistleblower and other details received by the ethics and compliance team will be kept confidential for the confidence of the whistleblower. The Company provides the Ethics & Compliance Hotline, a confidential web and phone-based intake system. The intake system is operated by Navex Global, an unaffiliated service provider located within the EU.

Section 4 - Disclosure of Information and Transparency

บThe Company complies with the regulations of the SEC, the Office of SEC and the SET in respect of disclosure of significant information, in particular, disclosure of financial information, the Company’s development, operational information, business performance and other relevant substantial information of the Company through the websites of the SET to ensure transparent and equitable disclosure. In addition, the Company regularly posts updated information, both in Thai and English, regarding its financial information, annual report, policies and CSR activities and registration statement (Form 56-1) on its website at www.dtac.co.th. The Company also holds an analyst briefing in each quarter to announce its quarterly operating results to shareholders, investors, analysts, fund managers, and other interested persons. The analyst briefing is attended by the Management of the Company who will clarify and answer inquiries raised by attending persons.

The Company realises that the Company’s information, whether financial or non-financial information, will influence decision making of its shareholders and other general investors. Therefore, to ensure that significant information is disclosed accurately, promptly and transparently, the Company has established an investor relations department to efficiently and regularly communicate with its shareholders and general investors. Any interested person can obtain the Company’s information from the Investor Relations Department attelephone number +66 2202 8882 or email address IR@dtac.co.th.

The Board of Directors of the Company is responsible for the Company’s financial statements and financial information contained in the annual report. The financial statements have been prepared in accordance with the generally accepted accounting principles in Thailand. The Company has chosen an appropriate accounting policy and has applied the same accounting standard for each accounting period. The Board of Directors has appointed the Audit Committee to be responsible for the quality of the financial statements and internal control system of the Company, as well as sufficient disclosure of significant information in the notes to the financial statements, in order to ensure all accounting records are accurate, complete and adequate for the benefit of the shareholders and general investors. Furthermore, the Board of Directors has prepared the Board of Directors’ report in the annual report, providing information on the results of business operation and other important matters occurred within the year for the shareholders’ acknowledgement. In 2016, there has been no action taken against the Company by the relevant regulators on the basis of any non-disclosure of any material information within the requisite timeframe.

Section 5 – Responsibilities of the Board of Directors

(1) Composition of the Board of Directors

At present, the Board of Directors of the Company consists of 12 directors. 4 directors are independent directors, 2 of whom are female. 1 director (who is female) is a representative from CAT pursuant to the Concession Agreement. There is one executive director (i.e. the Chief Executive Officer). No director or independent director holding more than 5 directorship positions in publicly listed companies. The companies has no policy which allow executive director to hold more than 2 directorship positions in publicly listed companies, excluding subsidiaries, affiliates and joint-venture companies of the Company where supervision is required for the benefit of the Company. More than 1 non-executive directors have work experience in the business of the Company.

The Chairman of the Board of Directors and the Chief Executive Officer have separate functions and responsibilities and are not the same person. The Chairman has been elected by the directors of the Company and acts as the chairman of the meeting. The Chairman has the responsibility to ensure that the meetings of the Board of Directors of the Company proceed in accordance with the agenda, encourage all directors to participate in the meeting (such as asking questions or making observation notes), give advice and recommendation to the Management and support the business operation of the Company. However, the Chairman will not interfere with the work of the Management of the Company. The Chief Executive Officer is responsible for managing the business of the Company and supervising the business operation of the Company to ensure that it complies with the resolutions of the shareholders’ meetings and the Board of Directors’ meetings, policies and business plans of the Company and applicable laws.

The Board of Directors of the Company is composed of directors who possess qualifications, knowledge, expertise and experiences in various areas, including finance and accounting, business administration, law and telecommunications business. The independent directors possess higher qualifications than those required by the SEC and the SET, details of which can be found under Section “Corporate Governance – Independent Directors”.

The Company does not require that the Chairman of the Board of Directors be an independent director, given that the telecommunications business has unique and complex nature and is subject to rigorous regulation. The Company believes that its Chairman and the Board of Directors possess knowledge, capacity and good understanding of the nature of the telecommunications business, which are necessary in the decision-making process in order to bring the utmost benefits to the Company and its shareholders as a whole. Despite the fact that the Chairman is not an independent director, the Board of Directors of the Company is still of the opinion that the Company has good internal control system, including mechanisms which can create confidence for its shareholders and all stakeholders that any decision-making of the Board of Directors was made independently, prudently, and without being influenced or directed in any respect.

(2) Roles, duties and responsibilities of the Board of Directors

The Board of Directors of the Company approves the vision, missions, strategies, business direction and operational policy, business plan and annual budget of the Company, and directs the Management to perform in compliance with the established policies and business plans in accordance with applicable laws, objectives and Articles of Association of the Company, and resolutions of the Board of Directors’ and shareholders’ meetings, taking into account the utmost benefits of the Company and the stakeholders, in order to build sustainable growth of the Company and increase long-term value for the shareholders. The Board of Directors will review and approve the vision, missions, strategies, business direction and operational policy on an annual basis in order to adapt to the changing situation and business conditions. Further details on the power, duties and responsibilities of the Board of Directors can be found under Section “Corporate Governance – Board of Directors”.

The Board of Directors of the Company ensures compliance with the requirements on actions and disclosure of information concerning transactions which may give rise to conflicts of interests pursuant to the regulations of the SEC, the SET and relevant regulators by assigning the Audit Committee to be responsible for considering, approving and giving recommendations in relation to transactions which may give rise to conflicts of interests. In addition, the Company has introduced the General Mandate for Interested Person Transactions, which sets out the types and approval procedures for transactions which may give rise to conflicts of interests, which are undertaken by the Company in its normal course of business. The Management is required to seek the Board of Directors’ approval for entries into transactions which may give rise to conflicts of interests which are of significant size or important nature to the business operation of the Company. The Company proposes the General Mandate for Interested Person Transactions to the Board of Directors for approval and reports the entries into such transactions to the Board of Directors for acknowledgement on an annual basis.

The Board of Directors holds a Board of Directors’ meeting without the presence of the executive director or member of the Management at least once a year. The meeting provides the directors with the opportunity to review the performance of the Board of Directors, the Management and the Company as well as to consider and discuss management issues or other issues which are of the interest of the Board of Directors. The resolutions of the meeting would be notified to the Chief Executive Officer for acknowledgement and consideration for further improvement. In 2016, the Board of Directors held 1 meeting without the presence of the executive director and the Management.

The Board of Directors conducts an evaluation on the performance of the Board of Directors, an individual director self-assessment, and sub-committee self - assessment on an annual basis in order to provide an opportunity for each director to express his or her view on the performance of the Board of Directors and to consider and review the results, problems and obstacles on its performance over the previous year. In 2016, the Board of Directors has conducted the aforementioned evaluations with the results as set out below.

The evaluation on the performance of the Board of Directors

The Company arranges for an evaluation on the performance of the Board of Directors on an annual basis so as to assess the performances of the Board of Directors in accordance with the good corporate governance principles. The evaluation procedure can be summarized as follows.

The Company Secretary prepares and reviews the evaluation form for correction and completeness and in compliance with the criteria required by the regulators. The evaluation form will then be proposed to the Board of Directors to complete. The Company Secretary will summarize the result of the evaluation on the performance of the Board of Directors as well as the strength and improvement areas before proposing to the Nomination Committee for its recommendations for further proposing to the Board of Directors for its consideration. The Board of Directors will review the result of the evaluation in order to improve their performance.

The evaluation form for the evaluation of the performance of the Board of Directors contains six key areas, namely, (1) structures and qualifications of the Board of Directors, (2) roles, duties and responsibilities of the Board of Directors, (3) meetings of the Board of Directors, (4) performance of the Board of Directors, (5) relationship of the Management, and (6) self-improvement of the directors and executives’ development. The results of each key area are calculated in percentage, whereby 85 percent or more = excellent, more than 75 percent = very good, more than 65 percent = good, more than 50 percent = average, and less than 50 percent = need improvement. It can be concluded from the evaluation results that the Board of Directors has performed its duties in accordance with the good corporate governance principles and the code of conduct “Corporate Ethics – dtac’s Good Governance” of the Company with most of the performance in the level of excellent and having an average score of 93.98 percent.

Sub-Committee Self-Assessment

In 2016, the Company has arranged for sub-committee’s self-assessment. The evaluation procedure is the same as the evaluation on the performance of the Board of Directors as mentioned above. The evaluation form for sub-committee’s self-assessment contains 3 key aspects, which are, (1) committee composition, (2) committee responsibilities, and (3) operating practices. After the evaluation, most of the results were in the level of excellent and having an average score of higher than 80 percent for all sub-committees.

Individual director’s self-assessment

The Company also arranges for individual director’s self-assessment on an annual basis. The evaluation procedure is the same as the evaluation on the performance of the Board of Directors as mentioned above. The evaluation form for individual director’s self-assessment contains five key areas, namely, (1) directorship, (2) directors’ ethics, (3) directors’ responsibilities, (4) directors’ meetings, and (5) directors’ overall performance. After the evaluation, the average results were 94.04 percent. The results showed that the Company’s directors are qualified and have performed their duties excellently and properly in accordance with the principles of good practice for directors.

(3) Meetings of the Board of Directors

A meeting of the Board of Directors of the Company is held at least once for every quarter. The Company informs the directors of the dates and time of the meetings in advance every year so that the directors can manage their schedule to attend the meetings accordingly. There are clear agenda for each meeting. The Company sends the meeting invitation, together with the supporting documents, to the directors at least seven days in advance to allow the directors sufficient time to study the information prior to the meeting. Each meeting takes at least three hours. The senior Management of the Company will join the meeting in order to clarify and answer the Board of Directors’ queries. The Chairman will allow every director to express his/her opinion before proceeding with the vote and concluding a resolution of the meeting in each agenda. Directors having interest, whether directly or indirectly, will not be eligible to vote and will have to leave the meeting during the consideration of the relevant agenda.

The Company record the minutes of the meetings in writing and kept the originals with the meeting invitation notices and the relevant supporting documents. Electronic copies of the documents are also maintained to facilitate the directors and relevant persons for the purpose of examination.

Since the Company has a number of directors who do not reside in Thailand, the Company has arranged facilities for these directors to attend the Board of Directors’ meetings via video or teleconference so the directors could provide opinions or recommendations which are beneficial to the Management and the business operation of the Company. Such attendance does not count as quorum, and those who attend the meetings via video- or tele-conference do not have the right to vote.

In 2016, the Company held 8 Board of Directors’ meetings with the rate of attendance of the directors of 79.44 percent. The attendance of each director is as follows:

Name – Surname Position Date of First Appointment Date of Last Appointment Attendance
Mr. Boonchai Bencharongkul Chairman 29 October 1990 26 March 2015 8/8
Mr. Morten Karlsen Soerby (1) Vice Chairman 28 August 2015 28 August 2015 1/8(1)
Mr. Chulchit Bunyaketu Independent Director 6 March 2000 26 March 2014 8/8
Mr. Stephen Woodruff Fordham Independent Director 17 November 2006 26 March 2015 7/8
Mrs. Chananyarak Phetcharat Independent Director 5 September 2011 26 March 2015 7/8
Mrs. Kamonwan Wipulakorn Independent Director 8 December 2014 26 March 2015 7/8
Mr. Lars-Aake Valdemar Norling (2) Director 10 February 2015 30 March 2016 8/8
Mr. Haakon Bruaset Kjoel Director 5 September 2011 30 March 2016 7/8
Ms. Tanwadee Wongterarit Director 8 February 2013 26 March 2014 5/8
Mr. Tore Johnsen Director 19 August 2008 30 March 2016 8/8
Mrs. Tone Ripel (2) Director 30 March 2016 30 March 2016 7/7
Mr. Christopher Adam Laska (3) Director 8 December 2016 8 December 2016 1/1

Remark:

  • (1) Mr. Morten Karlsen Soerby attended the Board of Directors’ meetings in person 1 time and via video-conference 5 times.
  • (2) Mrs. Tone Ripel has been appointed as a new director in replacement of Mr. Richard Olav Aa (who retired by rotation from his directorship at the 2016 Annual General Meeting) pursuant to the resolution of the Board of Directors’ Meeting No. 1/2016 held on 3 February 2016.
  • (3) Mr. Christopher Adam Laska has been appointed as a new director in replacement of Mr. Martin Jacob Furuseth (who resigned from his directorship on 8 December 2016) pursuant to the resolution of the Board of Directors’ Meeting No. 8/2016 held on 8 December 2016.

The attendance of the directors who resigned during 2016 is as follows:

Name – Surname Position Date of First Appointment Date of Last Appointment Attendance
Mr. Henrik Clausen Director 16 September 2014 16 September 2014 1/1
Mr. Richard Olav Aa Director 29 March 2013 29 March 2013 0/1
Mr. Martin Jacob Furuseth Director 30 March 2016 30 March 2016 4/6

(4) Subcommittees

In 2016, the subcommittees have performed its duties as follows:

Audit Committee

The Audit Committee consists of 3 independent directors. A meeting of the Audit Committee is held approximately once a month. In 2016, the Company held 12 Audit Committee meetings, the attendance of which was as follows:

Name list No. of attendance /No. of meetings in 2016
Mr. Chulchit Bunyaketu 12/12
Mr. Stephen Woodruff Fordham 12/12
Mrs. Kamonwan Wipulakorn 11/12

In 2016, the Audit Committee was responsible for reviewing the financial reporting process of the Company, the internal control system and internal audit system, compliance with laws relating to the business of the Company, considering and selecting (including proposing to terminate) the Company’s auditors and reviewing connected transactions, transactions of interested persons or transactions which may give rise to conflicts of interest, etc.

In carrying out its duty on the selection (including proposal to terminate) of the auditors of the Company, the Audit Committee will consider the selection of auditors pursuant to the Company’s assessment criteria, which consist of the auditors’ experience, performance, understanding of the telecommunications business and expertise on auditing telecommunications companies, as well as their independence in performing their works during the past year, in order to propose the appointment of the auditors to the Board of Directors and the shareholders’ meeting for consideration.

At the 2016 Annual General Meeting of Shareholders, which was held on 30 March 2016, Mrs. Gingkarn Atsawarangsalit Certified Public Accountant No. 4496, Ms. Sirirat Sricharoensup Certified Public Accountant No. 5419, Mr. Sophon Permsirivallop, certified public accountant No. 3182, and Ms. Pimjai Manitkajohnkit, certified public accountant No. 4521, all from EY Office Limited were appointed as the auditors of the Company. Mrs. Gingkarn Atsawarangsalit was the auditor in charge of auditing the Company, and had expressed opinions on the financial statements of the Company for the year ended 31 December 2016. She was not the auditor in charge of auditing the Company and did not expressed opinions on the financial statements of the Company for the year ended 31 December 2014 and 2015.

In performing its duty on the audit of the internal control and audit system, the Audit Committee will meet with the auditors of the Company at least once a year without the presence of the Management of the Company. Furthermore, where the Audit Committee deems necessary and appropriate, the Audit Committee may request clarifications and opinion from the internal audit department and the auditors of the Company on information relating to financial and accounting matters to support the performance of its duties.

Remuneration Committee

The Remuneration Committee of the Company consists of 5 directors, more than half are independent directors (3 persons) and 2 non-executive directors. Chairman of the Remuneration Committee is an independent director.

A meeting of the Remuneration Committee is held at least once a year. In 2016, the Company held 3 Remuneration Committee meetings, the attendance of which was as follows:

Name list No. of attendance /No. of meetings in 2016
Mr. Stephen Woodruff Fordham 3/3
Mr. Chulchit Bunyaketu 3/3
Mrs. Kamonwan Wipulakorn 3/3
Mr. Tore Johnsen 3/3
Mr. Hakon Bruaset Kjol 3/3

In 2016, the Remuneration Committee was responsible for considering and giving recommendation on remuneration of the Chairman and other directors, reviewing and recommending the remuneration packages and bonus scheme for the Chief Executive Officer and reviewing the local engagement contract of the Chief Executive Officer, promoting and encouraging the Company to develop a Company’s remuneration philosophy and policy to be in line with the Company’s direction and talent development plan and etc.

At the 2016 Annual General Meeting of Shareholders, the meeting approved the remuneration of the Board of Directors and the subcommittees for 2016 in the amount not exceeding THB 11,500,000, an increase from 2015 at THB 11,000,000. The remuneration consisted of monthly allowance and meeting allowance as follows:

  Directors’ Remuneration Structure (THB)
  Monthly Allowance Meeting Allowance
Chairman 278,400 -
Independent director 69,600 50,000
Director (CAT’s representative) - 25,600
Chairman of the Audit Committee - 50,000
Member of the Audit Committee - 28,800
Chairman of the Remuneration Committee /
Chairman of the Nomination Committee /
Chairman of the Corporate Governance Committee
- 18,000
Member of the Remuneration Committee /
Member of the Nomination Committee /
Member of the Corporate Governance Committee
- 14,400

Remark: (1)Directors except Chairman and Independent Directors, not to receive the above remuneration.

In determining the remuneration of the Chief Executive Officer, the Remuneration Committee will consider the performance of the Chief Executive Officer during the previous year pursuant to the specified key performance indicators (KPIs), each of which has different weighted scores.

Nomination Committee

The Nomination Committee of the Company consists of 5 directors, being 3 independent directors and 2 non-executive directors. Chairman of the Nomination Committee is an independent director .A meeting of the Nomination Committee is held at least once a year. In 2016, the Company held 3 Nomination Committee meetings, the attendance of which was as follow:

Name list No. of attendance /No. of meetings in 2016
Mr. Stephen Woodruff Fordham 3/3
Mr. Chulchit Bunyaketu 3/3
Mrs. Kamonwan Wipulakorn 3/3
Mr. Tore Johnsen 3/3
Mr. Hakoon Bruaset Kjoel 3/3

In 2016, the Nomination Committee was responsible for selection of qualified candidates to be nominated for election as directors and executive management of the Company and its subsidiaries. Additionally, the Nomination Committee has considered and made recommendation on the Board of Directors’ self-assessment results, and acknowledged the organization restructure and top executives’ succession plan, etc.

Corporate Governance Committee

The Corporate Governance Committee consists of 4 directors, being 3 independent directors and 1 non-executive director. Chairman of Corporate Governance Committee is an independent director. A meeting of Corporate Governance Committee is held at least once a year. In 2016, the Company held one Corporate Governance Committee meeting and all members of Corporate Governance Committee were present at the meeting.

In 2016, the Corporate Governance Committee was responsible for developing and promoting a good corporate governance so as to be in compliance with the international standard and acceptable to shareholders, investors, regulators, and other stakeholders.

(5) Development of Directors and Management

When appointing a new director, the Company will prepare material information with respect to business operation and the corporate governance policy of the Company as well as arrange for a meeting with the Management, so that the new director can familiarize himself/herself with the business and the corporate governance of the Company. The Company also encourages its directors to attend the trainings relating to duties of directors, which are organized by Thai Institute of Directors Association and other institutes. The Company will inform its directors of relevant trainings which would be useful for the directors in carrying out their duty as the directors of the Company. At present, there are 8 directors of the Company who have attended the courses organised by the Thai Institute of Directors Association. Details of the directors training can be found under Section “Profile of Directors”.

The Company regularly reviews the performance and skill sets of its management, and based upon this review, individual development plans have been made and executed. The Company has prepared both internal and external training courses for the development of its executives. Further details on human resources development policy can be found under Section “Management Structure – Human Resources Development Policy”.

(6) Succession Plan for Senior Executives

The Board of Directors of the Company have appointed People Group to be responsible for setting up the succession plan for the Chief Executive Officer position. People Group will consider persons who have suitable qualifications, knowledge and ability for managing the Company’s business. The Management has proposed top executives’ succession plan to the Nomination Committee and the Board of Directors for consideration and recommendations on the appropriateness of such plan.