Good Corporate Governance
The Board of Directors of M.K.Real Estate Development Public Company Limited has implemented the policy to promote the company to be the efficient company for business operations, have the good corporate governance, and have good management by emphasizing on the maximization of benefits to shareholders, stakeholders, committing to the moral principles and business ethics, and disclosing the accurate, complete, and transparent information. The company has identified the good corporate governance policy in order to be the guidelines for the Board of Directors, executives, and employees as follows.
1.The Board of Directors, executives, and employees have committed to apply the good corporate governance principle, namely,
- Shareholders' right and treating shareholders with equality.
- Role of stakeholders and responsibilities of the Board of Directors
- Reliability of information, disclosure of information, and transparency
- Good vision and organizational ethics
into the business operations with the fair management structure among Board of Directors, executives, shareholders, and stakeholders.
2. The Board of Directors has played an important role in identifying the strategy, policy for business operations, and major company's action plans by considering from the risk factors, risk management policies, and setting the efficient management guidelines. The Board of Directors must ensure that the accounting system, financial report and auditing are accurate and reliable.
3. The Board of Directors has performed the duties with care, dedication, and responsibilities. The Board must have leadership, vision, and freedom of decision-making in order to maximize the company's benefits and the overall shareholders, and must implement the system to classify the clear and separate roles, duties, and responsibilities between the Board of Directors and the management, and among Chairman of the Board of Directors, Chairman of Executive Board or Managing Director and the Chairman of the Board of Directors must be mainly considered from independent directors.
4. The Board of Directors has identified the principle regarding the duties and responsibilities, and moral principles, of company's executives and employees and such executives and employees must strictly follow according to the principles. The Board of Directors must pay attention to customers and must view customers as the important persons by delivering the qualified and standardized products and pleasant after-sale services with honesty and fairness.
5. The Board of Directors has considered the appointment of subcommittees as appropriate in order to thoroughly and deliberately screen any works to maximize the company's benefits.
6. The company has disclosed the sufficient and reliable company's financial and non-financial data and information in a timely manner so the company's shareholders and stakeholders equally obtain data and information. The company also has the unit responsible for giving information to investors and people.
7. The company's shareholders must be treated with equality and have the right to access the data and information, and proper channels for communicating with the company. The company must also provide the channels for shareholders to propose the name of directors before the annual ordinary meeting and the channels for shareholders to propose the agenda that shall be considered in the shareholders' meeting.
8. The Board of Directors has clearly identified the period for independent directors' position.
9. The Board of Directors has identified the limitation of the number of companies that each director is able to hold the director's position and identified the clear definition of independent directors' qualifications. Each director is able to hold the director's position in the registered companies for no more than 5 companies.
10. The company has properly identified the procedures for selecting the qualified personnel in order to be in the executive position and has the transparent and fair nominating processes. The company has the policy to develop the company's personnel and continuously arrange the training in order to strengthen more efficient personnel.
11. The Board of Directors must provide the annual performance evaluation in order to be the framework for auditing how the Board of Directors perform their duties.
12. The Company has appointed company secretary who will provide legal advice and any relevant regulation that the broad should aware of, as well as coordinating concerned departments to ensure that the board's resolutions and compliance to relevant regulations
13. The company has determined safety policy that will ensure employee's welfare and benefit which is indicated in resource manual regarding employee's welfare and benefit for example medical expense, benefit and pension for retirement and resignation
Corporate Governance Policies
The Board of Directors has identified the good corporate governance policies since such policies are significant and necessary for the business operations with stable growth. The Board has announced and identified the policies so the executives and personnel realize and clearly perform according to such policies by paying attention to transparency, improving the competitive advantage, and creating the confidence among shareholders and stakeholders.
Rights of Shareholders and Stakeholders, and Shareholders’ Meeting
In 2014, the company arranged one annual ordinary shareholders’ meeting at the company. The company submitted the invitation letter and annual report with the attachment according to the meeting agendas to shareholders 10 working days in advance of the meeting. Each agenda must have the opinions of the Board of Directors and accurate and complete meeting minutes so the shareholders were auditable.
The company has paid attention to rights of stakeholders from company's employees, executives, customers, counterparties, creditors to government agencies and relevant units since their supports help the company compete and generate profit in order for the success in the long-run.
During the shareholders’ meeting in the year 2014, 12 directors attended the meeting, including audit committee. The Chairman of the meeting opened the opportunity for shareholders to equally audit the company’s business operations, to inquire and express their opinions and recommendations
Internal Control and Internal Audit System
The Board of Directors has paid attention to the internal control system as the important mechanism for mitigating the business risk and protecting the properties so the financial reports are reliable and it can protect the investment of company's shareholders. Therefore, the Board has assigned the Audit Committee to be responsible for providing the effective internal control system and managing the risk at the proper level.
In 2013, the Board of Directors and independent auditors considered and expressed their opinions that the company performed its duties according to the specified procedures and did not find any major mistakes (see details in the topic “internal control”).
Relationship with Investors
The company has disclosed the accurate, complete, and transparent financial information and various information such as shareholding structure, risk factors, related transactions, etc. to shareholders and relevant parties according to the rules of the Stock Exchange. The investor's relations unit within the company coordinates in order to support the company's news and information. Please contact at Tel. 02-216-6600 ext. 245 or Fax 02-6124557, email : firstname.lastname@example.org or website : www.mk.co.th.
Leadership and Vision
The Board of Directors has participated in identifying the company's vision, mission, strategy, goals, and budget and taking care of ensuring that the actions are efficiently in compliance with the specified action plans and expressing the opinions freely regarding any decisions of various issues. In additions, the Board of Directors has monitored the management's performance every quarter.
Conflict of Interest
The Board of Directors has realized the related transactions with persons who may have the conflict of interest and considered the properness deliberately every time. The Board of Directors has also performed the duties according the Stock Exchange's rules by identifying the price and conditions according to the normal business operations like the transactions by outsiders.
To be in line with a good corporate governance policy, especially in relation to responsibilities and ethic of executives and employees, the Board of Directors have formulated practises of responsibilities and ethics which executives and employees of the Company are required to strictly comply with.
Ethical practise policy for executives and employees
To the Company
- The duties of executives officers are to propagate of ethical practises and to ensure that all employees understand them.
- Also executives should follow the ethical rules.
- Take any neccessary actions to support compliance with ethical practises by everyone within the Company
- Executives, Board of Directors and non-executive directors are connected to the business operation of the Company
To owner or shareholders
- The Executives are engaged to such a matter as a non-owner.
- All executives are expected perform their duty with honesty, integrity and to treat fairly both major and minor shareholders for the benefit of all relevant parties as follows:
- - Perform their duty under authority and benefit of the Company
- - Perform their duties as a professional, experienced person would do with full effort and caution
- - Manage the Company’s properties in a manner that avoids their depreciation.
- - Report the Company’s status and operation results regularly, accurately and completely for both positive and negative result based on reasonable and reliable ground with sufficient information.
- - Prevent the Company’s confidential information from being disclosed to the other party especially competitors
- - Provide information and explaination neccessary for Company's Auditor
- Executive are expected to
- - To provide correct and accurate information related to products as per customers requirement
- - To sell the products under the agreed price or provide fair value in case of selling without previously agreed conditions.
- - Not to generate expectation or misleading information in relation to quality, price, quantity or any terms of sell of the products.
- The executives are responsible for determination and maintenance of a certain quality level of products provided to customers
- - Determine the minimum standards of the products quality which is acceptable by customers and ensure to follow such determination
- - Introducing new standard quality which is higher than previous level is another way to generate differential remuneration
- - Provide support in respond to customers' claims in regard to product quality and ensure the customers will be served promptly
- - gaurantee that the products quality are in line with Company's standard
- manage the Company in a direction to reduce costs while maintaing customers' benefit to the highest level especially:
- - The determination to increase the Company's efficiency
- - Create awarness among employees in the limited resources of the Company and suggest them to use it up to the required amount/volume.
- - Operate the business with possible lowest cost while maintaining the product quality within the targeted standard.
- The executives shall take customer’s confidential information as a serious matter and not use it for the their own or any related party's benefit.
To trading partners and creditors
- It is duty of the executives to ensure that there is a good practice in regard to purchasing goods from trading partners of the Company as follows:
- - Against bribery to or from the trading partners, in the event that the employees of the trading partner bribe or indicates his/her intention of bribery to our employees, the issue must be noticed to the trading partners.
- - Terminate trading with the trading partner that bribe our employees.
- - Ensure that there is no bribery between trading partner and the Company.
- The executives shall control to ensure that the terms as well as debt is under trading conditions as follows:
- - Maintain and comply with the terms executed with creditors strictly such as a payment, maintenance of security assets etc. The capital acquired through loan should not be expedited in a way against the purposes agreed with the creditors.
- - Conduct an operation that will not increase risk to the Company's creditors
- - Report financial status of the Company to creditors accurately and completely based on facts.
- - Take into account the benefit of creditors in case the due date of loan repayment is extended.
- - Report to the creditors in advance the failure of comply with the obligation in the agreement, then seek for the solution together with creditors.
To the competitors
- Executive are expected to perform their duty
- - Within fair competition frames
- - Refrain from making false statements or without reasonable ground toward the competitors or its products.
- - Refrain from access competitors' confidential information with bad intention or inappropriate manner.
- Executive are expected to
- - Provide an appropriate structure of remunerations in line staff’s competency, responsibilities and their work performances.
- - Provide training courses to allow staffs in all levels to exercise their knowledge and competency for their own benefit.
- - Provide working environment where safety of employees and their properties are taken into account. Ensure that the tools and equipment are provided appropriately.
- - Encourage employees to participate and to be a part of the team to set the plan and solve problems of the Company.
- - appoint, re-locate, promote and punishment shall be conducted with integrity.
- - Comply with all the rules and regulations relating to labor laws and revelant provision.
- - Disseminate ethical practices to all employees and to ensure employees' understanding their roles and duties.
- - Avoid operation that increases risks to occupation of the employees.
- - Treat to all employees on the basis of human right and pay respect to personal rights.
- The executives are expected to conduct the operation as follows:
- - Take into consideration impacts to nature, environment and public.
- - Avoid saving costs and expenses without considering well being of the whole society.
- - Participate in the projects that improve quality of community environment where the Company operates
Responsibilities of employees
- Perform their duties with responsibility, honesty, loyalty for benefit and stability of the Company and for their own.
- Maintain and create harmony and unity among collegues. Work as a team and willing to solve any problems with full participation.
- Perform duty with devotion and patience as a part to lead Company to efficiency, benefit and to be number one.
- Operate the Company’s properties in a manner that save the cost, maintain the properties to avoid their depreciation or damages.
- Keep confidential information of the customers, trading partners and Company in secret and not disclose information, news and production technology of the Company to any other party.
- Cooporate and assist all colleagues by taking into consideration the highest benefit of the Company. Respect the rights of individuals.
- Pay attention and put best effort to keep safety working environment.
- Distribute and share professional knowledge to all colleagues taking into consideration benefit and target of the Company as a priority.
- Refrain from generating scandal to the Company/executives and colleagues without facts and fairness.
- Inform revelant departments immediately if any misbehave or illegal actions is found.
- Pay respect to all senior colleagues.
- Don't seek advantages by using their position for their own benefit or other person.
- Avoid any action that will cause damages to image and reputation of the Company.
Roles of stakeholders of MK Real Estate Development Public Co., Ltd.
- The board of directors formulates policies and guidelines concerning health and safety in work place, disclose statistic related to accidents, leave or injury caused by work operation with target to achieve "0 accidents scheme".
In 2014 the accident inccurred during work stood at 0 with none of our employees' death or any injury.
- The board of directors formulates policy and guideline regarding compensation and welfare of the employees (the social and environment responsibilities). To support fair treatment to employees, the Company provides appropriate welfare and other benefits such as annual health check-up, 5S Activity, Sport Event, Annual Trip and Annual Party. Furthermore, the long term training and skills development are provided to existing employees.
- The board of directors formulates policy and practice guideline regarding skills and knowledge development courses for employees. The average hours of training is also fixed to suit each level of employees.
Skill Development Course
Level of employees Hour of attendance
Average hour per person
Objective Executives 6 hour / person To improve knowledge and skill of management Executive / professional officer 14 hour / person To improve knowledge and skill of construction operative officer 8 hour / person To improve work performance
- The board of directors formulates policy and practice guideline regarding excellent customer service (specified in corporate ethic article 3).
Executive to customers
- To provide correct and accurate information related to products as per customers requirement
- The executives are responsible for determination and maintenance of a certain quality level of products provided to customers
- To manage the Company with aim to reduce costs while maintaining customers' benefit to the highest level.
- To take customer’s confidential information as a serious matterand not use it for the their own or any related party's benefit.
- The board of directors formulates policy and practice guideline regarding treatment to competitors (specified in corporate ethic article 5).
Executive to competitors
- To operate business under the fair competition environment and rules
- To refrain from making false statements or without reasonable ground toward the competitors or its products.
- To refrain from access competitors' confidential information with bad intention or inappropriate manner.
- The board of directors formulates policy and practice guideline regarding fair treatment toward competitors (specified in corporate ethic article 4).
The board of directors formulates policy and practice guideline of fair treatment toward business partners, particularly regarding selection of business partners
Procurement and outsourcing
Criteria of subcontracting selection are as follows:
- Technical skill
- Expertise and experience
- Financial status
- Business reputation
- Claim and legal case background
- Risks from having many customers
- The board of directors formulates policy and practice guideline regarding treatment toward creditors as follows:
- To maintain and comply with the terms executed with creditors strictly such as a payment, maintenance of security assets etc. The capital acquired through loan should not be expedited in a way against the purposes agreed with the creditors. (as specified in article 4. (4.2) corporate ethics).
Check and Balance of Non-executive Directors
The company has 12 members of Board of Directors consisting of :
- 6 Executive directors
- 6 Non-executive directors or 6 in 12 of the Board of Directors.
- 5 Independent Directors or 5 in 12 of the Board of Directors
Audit Committee (refer to the sub-topic of management structure)
Qualifications of Independent Directors
The independent directors must have the complete qualifications as follows.
- Hold the shares of no more than 0.5 % of the paid-up capital of the company, subsidiaries, or related companies and shall count the shares held by the related persons.
- • Be the directors who do not participate in the management of the
company, subsidiaries, related companies or the company's major
• Be the directors who are not the employees, officers, or advisors who obtain the permanent salaries from the company, subsidiaries, related companies or the company's major shareholders.
- Be the directors who do not have any benefits, or direct or indirect conflict of interest regarding the financial condition or management of the company, subsidiaries, related companies or the company's major shareholders.
- Be the directors who do not have any benefits, or direct or indirect conflict of interest abovementioned for the past 1 year before being appointed to be the independent director.
- Be the directors who are not the related persons or close relatives of the company's executives or major shareholders.
- Be the directors who are not appointed to be the agent who maintains the benefits of the company's directors, major shareholders, or shareholders who are the persons related to the company's major shareholders.
- Able to perform the duties, express the opinions or report the performance according to the duties assigned by the company's Board of Directors without being controlled by the executives or company's major shareholders, and related persons or close relatives of such persons.
Related persons means persons who have the relationship or are related to company until they are not able to perform the duties with freedom or flexibility such as suppliers, customers, creditors, debtors or persons who have significant business relationship, etc.
The Chairman of the Board of Directors must be the representative of the major shareholders who hold the shares of 26.30% of total shareholders.
Although the Chairman of the Board of Directors and Chairman of the Executive Board is the same person, the structure of the Board consists of the independent directors for one-third of the Board of Directors so the check and balance and auditing occurs. In additions, the role, duties, and responsibilities are clearly separated between the Chairman of the Board of Directors and Chairman of the Executive Board or managing director and person who are the Chairman of the Board of Directors must be mainly considered from the independent directors.
Report of the Board of Directors
The Board of Directors must be responsible for the company and its subsidiaries' consolidated financial statements, and financial information appeared on the annual report prepared according to the generally accepted accounting standards and must disclose the sufficient information in the notes to financial statements and the authorized directors must sign and affix the company's seal in order to certify the accuracy of such information.
The Company's Board of Directors appoints the committee to help supervise the company's business operations and such committees are from the independent directors with the duties and authorities according to the details on the topic of the management structure. The committees shall report the performance and monitoring to the company's Board of Directors.
- Audit Committee
The shareholders’ meeting had the resolution to appoint the Audit Committee on 28 April 2014
|Name – Surname||Position|
|1. Mr. Kasem Turakrisana||Chairman as independent director who is the accounting expert.|
|2. Mr. Anan Ahandrik||Director as independent director|
|3. Mr. Pree Buranasiri||Director as independent director|
Scope of Work of the Audit Committee
- To review the Company’s financial reporting process to ensure that it is accurate and adequate.
- To review the Company’s internal control system and internal audit system to ensure that they are suitable and efficient, to determine an internal audit unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of an internal audit unit or any other unit in charge of an internal audit.
- To review the Company’s compliance with the law on securities and exchange, the Exchange’s regulations, and the laws relating to the Company’s business.
- To consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-management meeting with an auditor at least once a year.
- To review the Connected Transactions, or the transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and the Exchange’s regulations, and are reasonable and for the highest benefit of the company.
- To prepare, and to disclose in the Company’s annual report, an audit committee’s report
which must be signed by the audit committee’s chairman and consist of at least the following
- an opinion on the accuracy, completeness and creditability of the Company’s financial report,
- an opinion on the adequacy of the Company’s internal control system,
- an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to the Company’s business,
- an opinion on the suitability of an auditor,
- an opinion on the transactions that may lead to conflicts of interests,
- the number of the audit committee meetings, and the attendance of such meetings by each committee member,
- an opinion or overview comment received by the audit committee from its performance of duties in accordance with the charter, and
- other transactions which, according to the audit committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors; and
- To perform any other act as assigned by the Company’s board of directors, with the approval of the audit committee.
|Name – Surname||Position|
|1. Mr. Anan Ahandrik||Chairman as independent director|
|2. Mr. Kasem Turakrisana||Committee Member as independent director|
|3. Ms. Chutima Thangmatitham||Committee Member|
Scope of Duties and Responsibilities of the Remuneration Committee
- Consider the guideline for specifying the directors' remuneration, etc.
- Identify the procedures and criteria for identifying the fair and reasonable directors' remuneration and propose to the shareholders' meeting for approval.
|Name – Surname||Position|
|1. Mr. Sanun Srirungroj||Chairman as independent director|
|2. Dr.Ping Kunawatsatit||Committee Member as independent director|
|3. Ms. Napaporn Kamolsakdawikul||Committee Member|
Scope of Duties and Responsibilities of the Nominating Committee
- Select persons who shall be deserved to be proposed to be the new directors or high-ranking executives.
- Identify the procedures and criteria for recruiting and selecting the company's directors and high-ranking executives.
The Company recognizes the importance of risk management and has risk management committee with the responsibility of determining and evaluating risks of the business. Measures have been adopted to oversee that business operations abide by law and related regulations. A report of risk management is also conducted.
Risk assessment involves the possibility and the impact of the risk, in order to apply measures to prevent and manage risk.
Types of risk.
- Business Risk: to consider source of capital, competitors and customer's needs, etc.
- Operational Risk: to consider brand name/trade mark, customer satisfaction, operating efficiency, human resource, i.e., employees, contractors etc.
- Financial Risk: to consider cash liquidity, credit risk, interest rate risk as well as financial instruments.
- Information Risk:
- Accounting and finance information.
- Planning and the preparation of the annual budget.
- Business plan.
- Analysis and feasibility study of investment in each project.
- Performance appraisal, overall operation.
- To report to the related government sector.
Other risks, which may affect the company, are also taken into consideration and provide preventive measures. The company has determined the risk management policy and structure throughout the organization, as follows :-
Organization-wide Risk Management Policy
- Engage the executives and employees within the departments and units to take care of the risks. They shall participate in development of the risk management within the organization and understand their responsibilities regarding the risk management.
- Provide the efficient risk management processes in every operation procedure according to the good corporate governance principle, in order to reduce uncertainty and increase the success in the company’s performance.
- Manage and support the risk management to ensure a success throughout the organization by utilizing the existing resources efficiently for the evaluation and identification of proper risk management measures.
- Promote and reinforce the risk management as the organizational culture so that everyone would realize the importance of risk management.
The structure Risk management
The organization-wide risk management structure involves directors, executives and all departments. The Risk Management Committee has been appointed by the board of directors to monitor and supervise the risk management system in the organization, understand the risks that may have an impact and apply the appropriate actions to manage those risks. There is a central agency to coordinate and support the management for the effective implementation of the risk management process.
The executives and all employees must know and understand Risk management policy in detail, including the steps to follow in order to avoid the risk arising during the actual operation. Criteria of which can be analyzed as follows.
- Strategic Risks. Strategic plans have been defined for business operation, e.g., purchasing new land plots for future projects, product type, target market. etc.
- Operation Risks involves the process of business operations or operators, e.g., construction methods, fluctuations in the price of materials. etc.
- Upon analysis of the risks in accordance with the stipulated criteria, it may take the analysis such as Mind mapping to bring executives and employees to participate and brainstorm about a topic of the risks arising from the actual operation of each section.
- When each department risks have been identified, they will be summarized by analyzing the potential risks and severity of the impact. Because the risk of some types are less likely to happen, but when it occurs its affects are intense. Scopes of acceptability of each type of risk are to be determined.
- Prioritize, find a way or preventive measures to manage risks, e.g., produce an operation manual which is to be updated regularly to ensure good quality of work.
- Set the policy and regulations for the organization.
In 2014, the company arranged 5 directors’ meetings and in each meeting and the Chairman of Board of Directors acted as the Chairman of the meeting. The Chairman of Board of Directors separately performed the duties from the Chairman of Executive Board or company’s managing director. The audit committee arranged the meeting for 6 times.
The Board regularly identifies the meeting and arranges the special meeting deemed as necessary by identifying the clear meeting agenda in advance. The meeting agenda regarding the monitoring of business performance is regularly included. The company submits the invitation letter, meeting agenda, previous meeting minutes and attachments to the Board 7 days in advance so the directors have sufficient time to study the information before the meeting. In each meeting, the Chairman allocates enough time for discussion of each agenda and the relevant executives must attend the meeting in order to explain the information to the Board of Directors in case that the Board requires the additional details. The company prepares the meeting minutes in writing and store the meeting minutes certified by the Board so the Board and relevant parties are able to audit such minutes.
Self-evaluation of the Board
By using the self-evaluation form of the company's Board of Directors. Such form is the form prepared by Thailand Institute of Directors and the company adjusts the form in order to be in compliance with the company's situation, especially regarding the roles and duties of directors that should be in accordance with those specified in the company's corporate governance policy. The evaluation helps each director and the Board review the problems and threats during the past year and it is the tools for auditing and analyzing in order to recognize whether the Board works efficiently and perform the duties completely according to their duties or not.
Directors’ and Executives’ Remuneration
The Board of Directors appointed the Nominating and Remuneration Committee in order to consider the directors' and executives' remuneration before proposing the company's Board of Directors for decision-making. The Nominating and Remuneration Committee shall compare the remuneration of the company's directors with the remuneration standard of other companies in the same business. Regarding the remuneration of the company's executives which is in terms of salaries and bonus, it depends on the company's business performance and the performance of each executive. For the directors' remuneration, it is the meeting allowances and annual pension only. The identification of such directors' remuneration must be approved by the shareholders' meeting (as mentioned on the topic regarding the executives' remuneration) which is in compliance with the principle and policy approved by the shareholders' meeting.
Development of Directors and Executives
In order for the Board to better realize the company's business, the company arranges the business visit to various company's projects at least once a year and the company also conducts training for directors and executives. Most of the directors attend the training conducted by Thailand Institute of Directors such as Director Accreditation Curriculum, Director Certification Curriculum, etc.