At ThaiBev, we adhere to good corporate governance principles, and we conduct our business in compliance with all applicable laws, rules, and regulations, including the SGX Listing Manual ("Listing Manual"), and the principles and guidelines of the Code of Corporate Governance 2012 ("CG Code 2012"). The CG Code 2012 is applicable to ThaiBev in respect of its annual report for the financial year commencing January 1, 2013, and ThaiBev has sought to comply with the CG Code 2012 to the extent possible.
ThaiBev, which is a Thai company listed on the Main Board of Singapore Exchange Securities Trading Limited (“SGX”), has received the Most Transparent Company Award in the Foreign Listings Category from Securities Investors Association (Singapore) (SIAS) in 2009 and 2014 and received Runner-Up awards in 2010, 2012 and 2013.
| A. Board Matters
Principle 1: The Board’s Conduct of Affairs
Our Board of Directors ("Board") oversees the Company’s business and affairs in accordance with the resolutions of shareholders, the applicable laws and the Listing Manual. The Board must exercise good business judgment and act in good faith in the best interests of the Company.
The Board is responsible for the overall business leadership, strategic direction, performance objectives and long-term success of the ThaiBev group of companies, both domestic and overseas ("ThaiBev Group of Companies"). It also seeks to align the interests of the Board and Management with that of shareholders, and balance the interests of all stakeholders.
The Board comprises director, namely:
Matters Requiring Board Approval
Our Board recognizes its utmost duty to administer the Company’s business and oversee the Company’s operations in the best interests of the Company. This includes the administration of the subsidiary companies to be in line with the Company’s core business plans to ensure due compliance with the shareholders’ resolutions, in good faith and due compliance with the law, the Company’s business objectives and Articles of Association ("AOA"). In addition, our Board ensures that the Company and its subsidiary companies comply with the Listing Manual. Our Board is also responsible for the determination of visions and business strategies of the Company, the oversight of Management’s performance of their duties according to the Company’s policies, and the reporting of the financial statements and general information to shareholders and investors with accuracy and sufficiency.
According to the Thai Law, the Board is required to meet in person and not less than four times in each year. In 2014, a total of 4 Board meetings were held in order to consider matters proposed by Management.
All Directors have undergone and passed the Director Accreditation Program (DAP) of the Thai Institute of Directors. Certain Directors have also received accreditation under the Director Certification Program (DCP) of the same institution. We also provide training and information updates to the Directors to encourage and support their understanding of Singapore Law and the Listing Manual which are applicable to our Company. They also receive information updates as well as amendments made to the regulations on a regular basis. All Directors have received a clear explanation of their roles and responsibilities at the time of their proposed appointment to the Board.
In this regard, Directors and Executives of the Companies and its subsidiaries have received the manual comprising of the summary of relevant aspects of current Singapore laws and regulations, e.g., continuing listing obligations, dealing in securities, disclosure of interests, Code of Corporate Governance, in order to act as Board of Directors of the Company and executives appropriately.
Delegation of Authority on Certain Board Matters
Various Board committees, including the Audit Committee, Nomination Committee, Remuneration Committee, and Risk Management Committee, have been constituted to assist the Board in the discharge of its specific responsibilities, and effectively discharge its oversight duties and functions. The Board has also established financial authorisation and approval limits for operating and capital expenditure, and the procurement of goods and services, and in order to optimise operational efficiency, has clearly delegated authority to the relevant Board Committees (including the Executive Committee and the Management Committee) to review and approve transactions which fall within the said limits. In addition to matters that specifically require the Board’s approval, the Board is also responsible for the review and approval of annual budgets, financial plans, financial statements, business strategies and material transactions, such as major acquisitions, divestments, funding and investment proposals, and will also be responsible for reviewing and approving transactions exceeding certain threshold limits.
To address and manage possible conflicts of interest that may arise in relation to Directors’ interests, Directors are required to abstain from voting on any matter in which they are so interested or conflicted.
The Board established the Audit Committee ("AC") and determined qualifications of the members, authority and responsibility of the committee in the Audit Committee Charter. The AC comprises four independent directors, namely: Mr. Prasit Kovilaikool, Prof. Kanung Luchai, Mr. Manu Leopairote, and Mr. Ng Tat Pun. Mr. Prasit Kovilaikool is the Chairman of the AC and Mr. Somsak Sae-Kuay, Vice President of the Office of Internal Audit, is the Secretary to the AC.
The AC is not authorized by the Board to make decisions on the business operation of the Company, subsidiaries, affiliates or juristic persons which may have conflicts of interest. Mr. Ng Tat Pun was appointed by the Board to be the lead Independent Director for interested person transactions undertaken by the ThaiBev Group of Companies.
The AC is primarily responsible for reviewing the financial reporting process of the Company, the internal controls and the internal audit systems, compliance with laws relating to the business of the Company, connected transactions, interested person transactions or transactions which may give rise to conflicts of interest, and considering and selecting the Company’s external auditors, etc. The AC meets at least once quarter or more as circumstances require. Please refer to the Audit Committee Report regarding performance of the duties and responsibilities by the AC in 2014.
The Board established the Nomination Committee ("NC"). The NC consists of Mr. Prasit Kovilaikool, Mr. Manu Leopairote, and Khunying Wanna Sirivadhanabhakdi. The Chairman of the NC is Mr. Prasit Kovilaikool. Mr. Thidi Suwanarat is the Secretary to the Nomination Committee. In this regard, the majority of NC members including the NC Chairman are independent directors.
The NC is primarily responsible for the selection of suitable persons to be appointed as director and/or President and CEO, and setting the procedures and the guidelines for such selection, including reviewing nominations for re-appointment of director, and assisting the Board in the determination of independence of directors. For further details, please refer to Principle 2: Board Composition and Guidance of this report.
The Board established the Remuneration Committee ("RC"). The RC consists of three independent directors, namely, Mr. Prasit Kovilaikool, Prof. Kanung Luchai, and Mr. Manu Leopairote. The Chairman of the RC is Mr. Prasit Kovilaikool. Mr. Thidi Suwanarat is the Secretary to the RC.
The RC is primarily responsible for setting the policies and the guidelines in the determination of remunerations of any kind including to consider and review the remuneration of the Directors and key executives, for recommending to the Board a framework and criteria of remuneration for the directors and key executives, and for recommending specific remuneration packages for each director and key executive and to perform any other act as delegated by the Board. For further details, please refer to Principle 9: Disclosure of Remuneration of this report.
Risk Management Committee
The Board established the Risk Management Committee ("RMC"), which comprises Directors and top executives. The RMC Chairman is Mr. Narong Srisa-an. Mr. Somsak Sae-Kuay, Vice President of the Office of Internal Audit, is the Secretary to the RMC. Any executive who is appointed as a Senior Vice President is automatically appointed as an RMC member. In 2014, the RMC consists of 15 members, namely,
From January 5, 2015, Dr. Agapol Na Songkhla who was appointed as Senior Vice President – Human Resources has automatically been a RMC member.
- • the following Directors: Mr. Narong Srisa-an, Mr. Puchchong Chandhanakij, Ms. Kanoknart Rangsithienchai, Mr. Thapana Sirivadhanabhakdi, Mr. Ueychai Tantha-Obhas, Mr. Sithichai Chaikriangkrai, and Dr. Pisanu Vichiensanth; and
- • the following executives: Mr. Jean Lebreton, Mr. Vichate Tantiwanich, Mr. Marut Buranasetkul, Mr. Prapakon Thongtheppairot, Ms. Vaewmanee Soponpinij, Mr. Kosit Suksingha, Mr. Mahin Kraivixien, and Mr. Pramote Hassamontr.
According to the RMC Charter approved by the Board, the RMC is responsible for determining the ThaiBev Group risk management policy and levels of acceptable risk before proposing them to the Board for consideration and approval, as well as establishing the risk management framework, the strategy on the organization and resources used for the risk management in line with the risk management policy of ThaiBev Group. The RMC must ensure that the established risk management framework must enable the identification, analysis, evaluation, response and monitoring of all material risks of ThaiBev Group risk management in an effective and efficient manner. In addition, the RMC shall report the material risks, risk management strategy and activities to the Board after each RMC meeting to be held quarterly, and when the RMC deems necessary, in order to fulfill the RMC’s duties and responsibilities.
The Board appointed an Executive Committee, which comprises Directors and top executives. As at January 5, 2015, the Executive Committee had 17 members, namely,
Ms. Vaewmanee Soponpinij is the Secretary to the Executive Committee and Ms. Nantika Ninvoraskul is the Assistant Secretary to the Executive Committee.
To enhance Company business operation, the Board granted them the authority to perform their duties. In this regard, some of the Executive Committee members are assigned to oversee business units under the supervision of the President and CEO. The Executive Committee may appoint other sub-committees to support the Executive Committee and the Board in order to ensure the good corporate governance of the Company.
The Executive Committee’s responsibilities are as follows:
However, the abovementioned approval does not grant power to the Executive Committee or the relevant authorized representative to approve any transaction in which the Executive Committee or said authorized representative, or any related person has an interest or may have any conflict of interest with the Company or its subsidiary companies (as defined in the Notification of the Securities and Exchange Commission). Any such matter must be proposed to the meeting of the Board and/or the meeting of shareholders, as the case may be, for approval, as stipulated in the AOA of the Company or its subsidiary companies, or any applicable laws.
- • Prepare and propose business plans, targets, operational plans, business strategies and annual budgets of the Company and its subsidiary companies to the Board;
- • Determine and propose business plans, budgets and management roles and responsibilities of the Company and its subsidiary companies to the Board for approval;
- • Monitor the operations of the Company and its subsidiary companies to be in line with business policy, targets, operational plans, business strategies, budgets and management roles and responsibilities as approved by the Board for the efficiency of and to facilitate business conditions;
- • Authorized to approve payments for investments or operations, borrowing or requesting for any facility from a financial institution, lending, including being a guarantor with respect to the normal business of the Company and its subsidiary companies as stipulated by the Board;
- • Authorized to approve the annual budget for annual increase or adjustment of salary and annual incentive payment (bonus) for employees of the Company and its subsidiary companies;
- • Authorized to approve payments as determined by Board;
- • Propose the efficient organization and management structure of the Company and its subsidiary companies to the Board;
- • Recruit, employ, terminate employment, promote, impose disciplinary penalty, transfer, adjust salary level, increase salary, adjust salary rate, and determine bonus, welfare and other benefits as well as consider all other remunerations for all levels of employees of the Company. The Executive Committee also has the authority to appoint the President and CEO or any appointee of the Company to be the authorized representative of the Company to sign related employment contracts within the budget approved by the Board;
- • Approve the appointment of the Company’s representatives to the Board of Directors and/or the sub-committee of its subsidiary companies in order to supervise all administrative matters as approved by the Company for the efficiency and best interest;
- • Supervise and approve matters relating to the operation of the Company. It may appoint or authorize any one or more persons to engage in any act on behalf of the Executive Committee as it deems appropriate such as appointment of the sub-committee to consider salary increase and bonus of executive level employees ranking from Vice President to Executive Vice President, appointment of any of the sub-committees that have particular knowledge and expertise to manage and monitor before proposing to the Executive Committee, provided that the Executive Committee is entitled to repeal, change or modify the scope of the authorization; and
- • Perform any other act as delegated by the Board.
In addition to the business conduction of Thai Beverage, the Board also appoints certain Executive Committee members to hold directorships in both its domestic and overseas subsidiary companies and/or business units, to monitor and control the business administration at maximum efficiency according to the Company’s policy and for the best interest of the Company.
The Executive Committee meets normally once a month to discuss the Company’s business administration, except in case of urgency wherein the meeting will be held as deemed necessary.
The Board established the Management Committee ("MC") and authorized the President and CEO to be in charge of all MC activities. The MC was formed in January 2008 and consists of the top executives of business and support units. The composition of the MC evolves during the year due to the changing appointments and responsibilities of the top executives during the year.
As at January 5, 2015, there was a management restructuring in order to meet the business plan under Vision 2020 of the President and CEO. Therefore, the MC has been reorganized which consists of 11 members, namely, Mr. Thapana Sirivadhanabhakdi, Mr. Ueychai Tantha-Obhas, Mr. Sithichai Chaikriangkrai, Dr. Pisanu Vichiensanth, Mr. Prapakon Thongtheppairot, Mr. Marut Buranasetkul, Mr. Jean Lebreton, Mr. Kosit Suksingha, Mr. Vichate Tantiwanich, Ms. Vaewmanee Soponpinij, and Dr. Agapol Na Songkhla. The Chairman of the MC is Mr. Thapana Sirivadhanabhakdi, the President and CEO and Ms. Nantika Ninvoraskul is the Secretary to the MC. Executives from various business units are also invited to join the MC meeting as circumstances require.
The Company is particularly cautious when considering investments for business expansion. In this regard, the Executive Committee established the Investment Committee ("IC") which consists of seven members from various units. Mr. Narong Srisa-an is the Chairman of the IC and Mr. Thapana Sirivadhanabhakdi is the Vice Chairman of the IC. Ms. Nantika Ninvoraskul is the Secretary to the IC. The IC is responsible for the consideration of and advises the Executive Committee on the acquisition/disposal of businesses, assets, including any merger of businesses, of the ThaiBev Group of Companies.
In 2014, the Company held the Board meetings, the Executive Committee meetings, including the other sub-committee meetings, and the following table shows the details of the attendance of each director and each committee at these meetings:
(1) Mr. Komen Tantiwiwatthanaphan, Vice Chairman and 3rd Executive Vice Chairman, did not attend the Board of Directors Meeting; however, he attended one time of Executive Committee Meeting due to under wellness recovery.
(2) Dr. Pisanu Vichiensanth, Director and Senior Vice President, was promoted to Director and Executive Vice President, Technology and Engineering, since November 17, 2014.
(3) Dr. Agapol Na Songkhla was appointed as Senior Vice President, Human Resources which became effective on January 5, 2015.
(4) Other two management, Mr. Mahin Kraivixien and Mr. Pramote Hassamontr, who are members of RMC also attended all Risk Management Committee Meeting in 2014.
Principle 2: Board Composition and Guidance
Board of Directors
As at December 31, 2014, our Board consists of 20 directors, including 8 independent directors representing more than one-third of the total number of the Board members. All directors have long-term experience in business or attained honorary position.
The size and composition of the Board are reviewed from time to time by the NC, which seeks to ensure that the size of the Board is conducive to effective discussion and decision making, and that the Board has an appropriate number of independent directors. The NC also seeks to maintain diversity of expertise, skills, and attributes among the Directors, including relevant core competencies in areas such as accounting and finance, business and management, industry knowledge, strategic planning, and regional business expertise, as well as taking into account broader diversity considerations, such as gender, age, nationality, in making appointments. When a Board position becomes vacant or additional Directors are required, the NC will select and recommend candidates on the basis of their skills, experience, knowledge and diversity. Any potential conflicts of interest are also taken into consideration.
All directors exercise due diligence and independent judgement and make decisions objectively in the best interests of the Company. The qualifications of the independent director and the determination of the NC adhere to the requirements of Singapore's CG Code 2012. An independent director under the CG Code 2012 is one who has no relationships with the Company, its related corporations, its 10% shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent business judgement with a view to the best interests of the Company, and such director should be independent both in character and judgement.
In addition, the Board notes Guideline 2.4 of CG Code 2012 which recommends that the independence of any director who has served on the Board beyond nine years, from the date of first appointment, be subject to particularly rigorous review.
In this regard, the Board is of the opinion with the concurrence of the NC that all Independent Directors consist of Prof. Kanung Luchai, Mr. Manu Leopairote, Mr. Ng Tat Pun, Mr. Michael Lau Hwai Keong, Prof. Pornchai Matangkasombut, Dr. Sakthip Krairiksh, and Gen. Dr. Choo-Chat Kambhu Na Ayudhya, totalling seven persons should each continue serving as Independent Directors of the Company, notwithstanding their tenures which complete or exceed 9 consecutive years. The Board has considered and found each of them had actively expressed their independent opinions with regard to the Company’s business operations and the recommendations of Management, and continued their ability to discharge their duties with independent business attitude with regard to the best interests of the Company, as well as illustrating their qualifications to be beneficial for the Board as a whole.
Principle 3: Chairman and CEO
Our Chairman encourages constructive relations among the Board, Executive Committee and Management. The Chairman approves the agenda to be considered at the Board meetings and the Executive Committee meetings (as he is the Chairman of the Executive Committee). The President and CEO supervises the disclosure of adequate and appropriate information to Management and to the Board for further consideration and actions at the appropriate time.
The Chairman and the President and CEO are each responsible for their roles in the overseeing the business operation and administration in accordance with the policy of the Board and structure of the organization of the Company.
Mr. Charoen Sirivadhanabhakdi is the Chairman of our Company and the father of Mr. Thapana Sirivadhanabhakdi who is the President and CEO of the Company. In this regard, the Board appointed Mr. Prasit Kovilaikool as the Lead Independent Director. The Lead Independent Director acts as the principal liaison between the Independent Directors and the Chairman on sensitive issues, and also addresses shareholder concerns which could not have been resolved through the normal channels of the Chairman or President and CEO, or for which such contact is inappropriate.
In the year 2014, the Lead Independent Director, Mr. Prasit Kovilaikool, requested to hold the total of 2 meetings for Independent Directors to meet in March and August 2014. The Independent Directors have observed and exchanged contributive suggestions for the further improvement of the Company’s business operation efficiency.
Principle 4: Board Membership
In order to ensure a transparent process for the appointment and re-appointment of the directors to the Board, the NC establishes and reviews the profile required of Board members and makes recommendations to the Board on the appointment, re-appointment and retirement of Directors. The NC also reviews all nominations for appointment of President and CEO, Executive Vice President, and Senior Vice President, and submits its recommendations for approval by the Board. The NC takes into account an appropriate mix of core competencies for the Board and Executives to fulfil its roles and responsibilities.
Directors must ensure that they are able to give sufficient time and attention to the affairs of ThaiBev and, as part of its review process, the NC decides whether or not a Director is able to do so and whether he/she has been adequately carrying out his/her duties as a Director of ThaiBev. Currently, the Company has not yet determined the maximum number of listed company board representations which a director may hold. The Company believes that each director has carefully considered that he/she will be able to devote sufficient time to manage the business of ThaiBev.
A Director must retire from office as per the provision of the AOA of ThaiBev. The following is a summary of the composition, appointment, removal or retirement from our Board of Directors set forth in the AOA of the Company:
1. The Board of Directors of the Company shall consist of at least five persons. Not less than one-half of the total number of directors shall reside within the Kingdom of Thailand. The directors of the Company shall have the qualifications as prescribed by the laws on public limited companies and securities and exchange.
2. The directors shall be elected by majority votes at the shareholders’ meeting in accordance with the criteria and procedures as follows:
(1) Each shareholder shall have one vote for one share.
(2) A shareholder who wishes to exercise the right of election may use all the votes
he/she has under (1) to elect on or several persons as director or directors; however, he
or she may not split unequally between any persons in any number.
(3) The persons who receive the most votes shall be elected as directors, in the number
of directors required or to be elected on the relevant occasion. In the event that votes of
two or more nominees are equal in number, causing the number of directors required or
to be elected on such relevant occasion to be exceeded, the chairman of the meeting
shall have a casting vote.
3. At every annual ordinary shareholders’ meeting, one-third of the directors, or, if the number of directors is not a multiple of three, then the number nearest to one-third shall retire from office.
The directors to retire during the first and second years following the registration of the Company shall be drawn by lots. In subsequent years, the directors who have remained in office for the longest time shall retire. A retiring director may be eligible for re-election.
4. Any director wishing to resign from office shall submit his/her resignation letter to the Company. Such resignation shall become effective on the date of receipt of the said letter of the Company.
5. The shareholders’ meeting may pass a resolution to remove any director from office prior to rotation, by a vote of not less than three-fourth of the number of the shareholders attending the meeting and having the right to vote, whose shares represent a total of not less than one half of the number of shares held by the shareholders attending the meeting and having the right to vote.
In performing their roles, our NC adheres to the laws applicable to our Company and the Listing Manual. The NC also adopted a charter and proposed it to the Board for approval.
Principle 5: Board Performance
In conducting the business of the Company, the Board performs its duties in good faith and due care according to the laws, shareholders’ resolutions and to preserve the interests of the Company. Our Board will do the self-assessment of its performances and responsibilities.
Each year, the NC undertakes a process to access the effectiveness of the Board. They include Directors’ attendance, participation and contribution during Board meetings. Due consideration is also given to the factors set out in the Guidelines to Principle 5 of the CG Code 2012.
Principle 6: Access to Information
We are committed to providing our Board members with adequate, complete, continuous and timely information before the Board meetings and an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities.
The Board members have separate and independent access to the Company Secretary. The Company Secretary, in consultation and cooperation with the Office of Legal Affairs, is responsible for advising the Board on private and public limited company laws including securities laws and relevant regulatory matters. In this respect, we set up a Compliance Unit, having a Compliance Manager responsible for this Unit under supervision of the Office of Corporate Secretariat and also supports the Company Secretary. This is to ensure compliance with the legal and regulatory requirements. The Board approves the appointment and the removal of the Company Secretary. In 2014, the Company Secretary attended all Board and Executive Committee meetings.
The Office of Corporate Secretariat plans a year in advance, a calendar of activities for the Board. For preparation of the meeting, the Office of Corporate Secretariat will deliver the Board papers, financial statements including management reports, agenda items and related materials, background or explanatory information relating to be brought are also dispatched beforehand on a timely basis to Directors, so that Directors have sufficient lead-time to peruse, review and consider the items tabled, and in order for discussions at Board and Board Committee meetings to be even more meaningful and productive. Senior Management is requested to attend the Board of Directors Meetings and other sub-committee meetings in order to provide input and insight into matters being discussed, and to respond to any queries that the Directors may have. The Board members have separate and independent access to management to ensure that Board procedures are followed.
Where it is necessary for the efficacious discharge of their duties, the Directors and Board Committees, either individually or as a group, may seek and obtain independent professional advice at the Company’s expense.
B. Remuneration Matters
Principle 7: Procedure for Developing Remuneration Policies
The main responsibility of the RC is to assist the Board in establishing a formal and transparent process for developing policies on executive remuneration and development. The RC will also review the terms of compensation and employment for executive directors and key management personnel (such as the President and CEO, and top executives) at the time of their respective employment or renewal (where applicable) including considering the Company’s obligations in the event of termination of services.
The RC is authorized by the Board to determine the remuneration of directors and/or executives in consultation with the Chairman to propose for the approval of the shareholders’ meetings. The RC has reviewed and recommended to the Board the remuneration for each director and for the top executives and the recommendations of the RC are submitted for endorsement by the entire Board. All aspects of remuneration are considered by the RC, including director’s fees, salaries, allowances, bonuses, and benefits-in-kind.
If a member of the RC has an interest in a matter under deliberation, he will abstain from participating in the review and approval process for that matter.
The RC may from time to time, and where necessary or required, consider engaging external consultants to assist in framing the remuneration policy and determining the level and mix of remuneration for Directors and Management.
Principle 8: Level and Mix of Remuneration
The determination of level and band of remuneration of the Directors, Executive Directors, and top executives of the Company were based on both corporate performance, duties, responsibilities and individual performance, having regard to due compliance with applicable laws and the recommendations of the CG Code 2012.
In this regard, the Company entered into a long-term employment agreement with Dr. Pisanu Vichiensanth, who is the director and the Managing Director of Beer Thai (1991) Public Company Limited and Managing Director of Cosmos Brewery (Thailand) Co., Ltd., and a Senior Master Brewer.
With the exception of the aforementioned, there are currently no long-term incentive schemes for Directors, Executive Directors, and key management personnel, or employee share schemes.
Principle 9: Disclosure of Remuneration
9.1 Remuneration of Directors
Details of remuneration of the directors (including those who are in an executive capacity) of the Company in the accounting year ended December 31, 2014 (assuming a foreign exchange rate of SGD 1 = Baht 25), together with a percentage breakdown into the following categories (1) director fee; (2) salaries; (3) bonuses as well as funds paid based on the operating results of the Company; (4) other benefits; and (5) compensation in the form of shares and long-term benefits, are set out in the tables below.
In respect of the directors who are in an executive capacity, the Company, having duly considered the highly competitive human resource environment of the industry and the confidential nature of staff remuneration matters, is of the view that full disclosure of their remuneration may be prejudicial to the interests of the Company and may hamper the Company’s efforts to retain and nurture its talent pool. In the alternative, the Company has disclosed their remuneration in bands of SGD 250,000 or equivalent (as described below).
- "A" refers to remuneration below SGD 250,000 or equivalent
- "B" refers to remuneration between SGD 250,000 and SGD 499,999 or equivalent
- "C" refers to remuneration between SGD 500,000 and SGD 749,999 or equivalent
- "D" refers to remuneration between SGD 750,000 and SGD 999,999 or equivalent
- "E" refers to remuneration between SGD 1,000,000 and SGD 1,249,999 or equivalent
- "F" refers to remuneration between SGD 1,250,000 and SGD 1,500,000 or equivalent
|Name of Directors (executive capacity)
||Remuneration on band
|Bonuses as well as funds paid based on the operating results of the Company
|Compensation in a form of shares and long-term benefits
9.2 Remuneration of Top Executives
|Name of Directors (non-executive capacity)
|Bonuses as well as funds paid based on the operating results of the Company
|Compensation in a form of shares and long-term benefits
Details of remuneration of the top six executives (excluding persons who are directors or the CEO) of the Company in the accounting year ended December 31, 2014 (assuming a foreign exchange rate of SGD 1 = Baht 25), together with a percentage breakdown into the following categories: (1) salaries, (2) bonuses as well as funds paid based on the operating results of the Company, (3) other benefits, and (4) compensation in the form of shares and long-term benefits, are set out in the table below. Total remuneration has been disclosed in bands of SGD 250,000 or equivalent (as described above).
The aggregate amount of the total remuneration paid to the top 6 executives (excluding persons who are directors or the CEO) for the accounting year ended December 31, 2014 is SGD 2,075,000.
|Name of Top Executives (1)
||Remuneration on band
|Bonuses as well as funds paid based on the operating results of the Company
|Compensation in a form of shares and long-term benefits
During the financial year ended December 31, 2014, the Company did not compensate any termination, retirement and post-employment benefits to the directors, the CEO, and the top executives (who are not the directors and the top executives or the CEO). Save for Mr. Thapana Sirivadhanabhakdi and Mr. Panote Sirivadhanabhakdi, who are the sons of our directors, Mr. Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi, and directors themselves, there are no other employees who are immediate family members of a director or the CEO and whose remuneration exceeds SGD 50,000 during the year. The remuneration of Mr. Charoen Sirivadhanabhakdi, Khunying Wanna Sirivadhanabhakdi, Mr. Thapana Sirivadhanabhakdi, and Mr. Panote Sirivadhanabhakdi has been disclosed in our 2014 Annual Report.
C. Accountability and Audit
Principle 10: Accountability
The Board is responsible for providing a balanced and understandable assessment of the performance, position and prospects of the ThaiBev Group of Companies, including through quarterly and annual financial reports. The financial statements for the first three quarters are released to shareholders within 45 days of the end of each quarter, and the annual results are released within 60 days of the end of each financial year, in each case primarily via SGXNET in line with the Listing Manual. Material price sensitive information is also disseminated to shareholders via SGXNET in compliance with the Listing Manual, and also through press releases, the Company’s website, and information briefings. In addition to such disclosures, our top executives also participate in quarter results briefings and telephone conferences from time to time, with a view to providing a timely update and clarification to our investors.
Principle 11: Risk Management and Internal Controls
The Board of Directors accepts overall responsibility for the governance of risk. The RMC consisting of the directors and the top executives of each business unit, was appointed by the Board to assist the Board in discharging its responsibility in this regard to ensure that the ThaiBev Group of Companies has implemented an effective risk management framework. The RMC focuses on the identification and management of all material business risks, including but not limited to strategic, financial, operational, reputational, environmental, information technology, and compliance risks that may prevent the business from achieving its objectives.
In connection with its responsibility, the RMC determined the Company’s risk management policy, levels of acceptable risk and proposed them to the Board for approval, as well as determined the risk management framework. The RMC’s further roles are to oversee Management who is responsible for managing risks in accordance with the approved policy and framework, designing, implementing and monitoring the risk management measures.
The RMC meets every quarter, or as often as the RMC members deem necessary, in order to fulfill the RMC’s duties and responsibilities. In 2014, the RMC meetings were held four times. After each meeting, the RMC is required to quarterly report the progress and status of significant risk management to the Board. This enables the Board to provide advice necessary to strengthen the efficiency and effectiveness of risk management.
The Company’s risk management processes can be summarizedas follows:
- • Stipulate the Company policy and framework on risk management and communicate them to the Company executives and employees by emphasizing on the importance of risk management and the practical implementation of such policy to ensure the achievement of the Company objectives.
- • Identify material corporate risks, set risk assessment criteria and risk appetite to manage high level risks.
- • Conduct risk assessment according to risk assessment criteria.
- • Set risk treatment procedures for risks that exceed the Company risk assessment criteria and levels of acceptable risk.
- • Monitor and review major risks and risk treatment procedures to ensure that risks are appropriately managed.
The Board recognizes its responsibility to ensure a sound system of risk management and internal controls to safeguard the shareholders’ investments and the Company’s assets. In this regard, the Board established an Executive Committee, each member of which oversees different departments and business units to ensure the adequacy and effectiveness of financial, operational, compliance and information technology controls, including systematic risk management through determining structure, strategy and risk owner, controlling and monitoring the results of risk management and reporting to the RMC.
In support of compliance with applicable laws and regulations, the Board also assigned the Office of Corporate Secretariat to oversee compliance with the private and public limited laws (including securities laws) which are applicable to the Company.
In addition to the relevant laws and regulations, the Board sets the tone on acceptable Business Ethics and has instructed that all directors, executives and employees comply with the same. As part of the Business Ethics, the Board instituted a policy for proper handling of information in order to prevent mishandling of information either for personal benefit or the benefit of other persons. It is the responsibility of the directors, executives and employees of the Company to prevent any access by unauthorized persons to, and/or disclosure of, non-public information that may affect the market price or value of the Company’s shares and other financial instruments issued by the Company, before it has been received by the SGX, or before the information has been made public through SGXNET.
In addition, the Board of Directors has a policy for the Company, directors and executives on dealing in the Company securities. The Company, directors and executives of the Company are prohibited from dealing in the Company securities from the date commencing two weeks before the announcement of the Company financial statements for each of the first three quarters of the Company’s financial year and one month before the announcement of the Company’s full year financial statements, and from trading at any time on short-term considerations. Under the AOA of the Company and applicable law, the directors must also notify the Company and the SGX of the particulars of his/her shareholding interest in the Company at the time of his/her appointment and, for so long as he/she remains as a director, of any interest in, and all changes to, his/her shareholding in the Company within 2 business days of any such change. The Company Secretary immediately announces such notice through SGXNET and within 7 days provides a copy of the notice received to all other directors.
The AC, with the assistance of the internal and the external auditors, reviews and reports to the Board at least annually on the adequacy and effectiveness of the Company’s internal controls, including financial, operational, compliance and information technology controls, all of which have been established and maintained by the management in order to ensure the Company’s operational achievement towards its goals and objectives, ensure compliance with the applicable laws and regulations and safeguard its significant assets from misconduct or loss. The AC also oversees the accuracy and reliability of financial information and reporting. In assessing the adequacy and effectiveness of the Company’s internal controls, the AC has considered the results of audits by the internal and external auditors in conjunction with the evaluation result based on the “Assessment Form of Adequacy of Internal Control System” which was designed in accordance with the COSO (The Committee of Sponsoring Organizations of the Treadway Commission) Internal Control Framework which was recommended by the Securities and Exchange Commission of Thailand (SEC) for the Stock Exchange of Thailand’s listed companies to use as a guideline to perform self-evaluation or review on the adequacy of their own internal controls. Based on the aforesaid considerations, the AC is of the opinion that in 2014, the Company had in place adequate and effective internal controls including financial, operational, compliance and information technology controls.
Additionally, the Board, with the assistance of the RMC and the AC, annually reviews the adequacy and effectiveness of the Company’s risk management and overall internal controls systems. Based on the internal controls and the risk management processes established and maintained by the Company, the independent audits performed by the internal and external auditors, and the assurance from the President and CEO and the Chief Financial Officer that the financial records have been properly maintained and the consolidated financial statements of the ThaiBev Group of Companies for the financial year ended December 31, 2014 (“FY2014”) give a true and fair view of the operations and finances of the Company and the ThaiBev Group of Companies, and that the ThaiBev Group of Companies has in place adequate and effective internal controls and risk management systems which considers relevant and material to the current ThaiBev Group of Companies’ business and operations, the Board, with the concurrence of the AC, is of the opinion that throughout FY2014 the ThaiBev Group of Companies had in place adequate and effective internal controls addressing financial, operational, compliance and information technology risks and controls and risk management systems which considers relevant and material to the current ThaiBev Group of Companies’ business operations.
The system of internal controls and risk management which was in place throughout FY2014 provides reasonable, but not absolute, assurance that the Company or the ThaiBev Group of Companies will not be adversely affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. In this regard, the Board also notes that no system of internal controls and risk management can provide absolute assurance against the occurrence of material errors, poor judgment on decision making, human error, losses, fraud or other irregularities.
Principle 12: Audit Committee
The Board appointed the AC, which in 2014 consisted of four independent directors: three Thais and one Singaporean. The AC responsibilities are clearly set forth in the Audit Committee Charter, for instance, reviewing the financial statements preparation process and information disclosures of the Company and its subsidiaries to ensure accuracy and reliability, overseeing the adequacy and effectiveness of the internal controls and the internal audits of the Company and its subsidiaries, reviewing the Company and its subsidiaries compliance with business related laws, reviewing interested persons transactions to prevent any occurrence of conflicts of interest, and considering and selecting the auditors of the Company and its subsidiaries.
In carrying out the duty on the selection of the external auditors of the Company and its subsidiaries, the AC considers their competency, professional proficiency, recognized past performance and independence in providing audit services before proposing its opinions on the appointment of the external auditors of the Company and its subsidiaries and their remuneration to the Board of Directors in order to propose to the Shareholders’ Meeting for approval. At the 2014 Annual General Meeting of Shareholders held on April 25, 2014, the Shareholders appointed Mr. Nirand Lilamethwat (Certified Public Accountant No. 2316) or Ms. Orawan Sirirattanawong (Certified Public Accountant No. 3757) of KPMG Phoomchai Audit Ltd. to be in charge of the audit of the Company’s financial statements for the year ended December 31, 2014. This appointment is also in compliance with Rules 712 and 713(1) of the Listing Manual.
ThaiBev and its subsidiaries have appointed KPMG Phoomchai Audit Ltd. (“KPMG Thailand”) and companies in the group of KPMG Thailand in various countries to provide audit services. The Company’s significant subsidiaries, International Beverage Holdings Limited and InterBev Investment Limited, have appointed KPMG China to be their auditor. Although, in 2014, four overseas subsidiaries, namely, International Beverage Holdings Limited, USA Inc.; Best Spirits Co., Ltd.; InterBev Malaysia Sdn Bhd.; and InterBev (Cambodia) Co., Ltd. appointed different auditors from the Company, the AC and Board of Directors have considered and been satisfied that such appointment would not compromise the standard and effectiveness of the audit of the Company, in compliance with Rule 716 of the Listing Manual. The Company’s significant associates, Fraser and Neave, Limited and Frasers Centrepoint Limited, listed on the SGX, have appointed Ernst & Young LLP to be their auditor.
According to the financial statements for the year ended December 31, 2014, ThaiBev Group of Companies consisting of ThaiBev and all subsidiaries paid the audit fees to KPMG Thailand and other auditors at the amount of approximately Baht 57.25 million and Baht 11.70 million, respectively. In addition, there was a payment for the non-audit fee to the KPMG Thailand and other auditors at the amount of approximately Baht 0.20 million, and Baht 0.45 million, respectively.
In performing the duties on the review of financial information reporting, the internal control and internal audit systems, compliance with business related laws and connected transactions or transactions may give rise to conflicts of interest, the AC will meet on a quarterly basis or when deemed necessary by the AC, with the auditors, the personnel of the Office of Internal Audit and Management according to the relevant topics. In 2014, apart from the ordinary meetings, the AC held 2 meetings with the internal and the external auditors, without the presence of Management.
The Company’s external auditors KPMG Thailand regularly briefs AC members at AC meetings on relevant changes to accounting standards and issues which have a direct impact on the Company’s financial statements.
Though the Company has not yet instituted a formal whistleblowing policy, there are certain channels which enable employees to lodge complaints to the Management.
Principle 13: Internal Audit
The Company established the Office of Internal Audit as an independent unit to assist the Board of Directors through the AC by assessing and improving effectiveness of risk management, internal controls and governance processes. In this regard, the AC appointed the Vice President of the Office of Internal Audit as the Secretary to the AC. The Office of Internal Audit reports directly to the AC and administratively to the President and CEO. With this organizational structure and reporting relationships, it enables the Office of Internal Audit to objectively and independently discharge the duties and responsibilities specified in its Internal Audit Charter approved by the AC. The Office of Internal Audit adopts a risk-based audit methodology to develop its audit plans to ensure that audit activities are aligned with key risks of ThaiBev Group of Companies. Based on risk assessments performed, greater focus and appropriate review intervals are set for high risk activities and material internal controls, including compliance with the Company’s policies, procedures and regulatory responsibilities. During the year, the Office of Internal Audit Office conducted its audits as detailed in the internal audit plan submitted to and approved by the AC. Findings and internal auditors’ recommendations on areas of improvement were reported for management’s implementation. Each quarter, the Office of Internal Audit Office submitted to the AC a report on the status of the audit plan and on audit findings and actions taken by Management. Key findings are highlighted at the AC meetings for discussion and follow-up action. The AC monitors the timely and proper implementation of required corrective, preventive or improvement measures undertaken by Management. The AC is satisfied that the Office of Internal Audit has adequate resources and appropriate standing within the Company to perform its function effectively.
D. Shareholders Rights and Responsibilities
Principle 14: Shareholder Rights
The Company acknowledges and gives importance to the rights of the shareholders, who are the owners of the Company. The Company has ensured equal and fair treatment towards every shareholder through its accurate, transparent and timely disclosure of information via SGXNET. The Company pays great attention to the sufficiency of information disclosure so that the shareholders are able to make a well-informed decision at the shareholders’ meeting, including casting their votes and expressing their opinions on significant changes and the election of Directors, based on information which is accurate, complete, transparent, and equally shared.
Principle 15: Communication with Shareholders
Communication with shareholders is done not only through announcements via SGXNET but also through our Investor Relations Unit (currently is under supervision of the Office of Corporate Communication) who works closely with our top executives to ensure active communicate with shareholders through announcements made via SGXNET in a timely manner. The unit arranges quarterly briefings following the disclosure of interim and full year results, so that investors may query Management about financial, marketing or strategic issues. In the interim, the Investor Relations Unit also regularly meets with investors to communicate the policies and strategies of the Company so that investors have a good understanding of the Company operation. The Investor Relations Unit also provides timely detailed information via the corporate website.
The unit also reports to Management in relation to investors’ comments and concerns. Contact information for the Investor Relations Unit is set out in section on Investor Information of this annual report and is also available in the investor relations section of our corporate website http://www.thaibev.com/ir.html.
Principle 16: Conduct of Shareholder Meetings
Shareholders’ meetings are held in accordance with the agenda mentioned in the relevant invitation to the shareholders’ meeting. The Company sends a complete invitation to shareholders’ meeting, including attachments, with sufficient information relevant to the meeting to the shareholders. Moreover, the Company posts all information which is relevant to the meeting on SGXNET so that the shareholders will have sufficient time to carefully study this information. In addition, at least fourteen days’ notice of a shareholders’ meeting will be given by advertisement in a daily press in Singapore (for one day), as well as at least three days’ notice of shareholders’ meeting will be given by the advertisement in the daily press in Thailand (for at least three consecutive days) in order to allow shareholders to have sufficient time to prepare for attending the shareholders’ meeting as required by the related laws and regulations and the Listing Manual.
The Chairman of the Board, the Chairman of the Audit, Remuneration, and Nomination Committees, and Directors who are par of the management team are usually present and are available to address shareholders' queries at these meetings.
Our external auditors from KPMG Thailand are also present to address shareholders’ queries about the conduct of audit and the preparation and content of the auditor’s report. Before the commencement of each meeting, the Chairman will give instructions on the voting and the counting methods as clearly prescribed. During the meeting, the Chairman allows the shareholders, equally, to make inquiries and express their opinions as well as to make recommendations.
The Chairman of the Meeting also answers questions and provides complete information as requested by the shareholders. After the meeting and before the commencement of the pre-opening session on the market day following the general meeting, the Company will immediately announce the resolutions of the shareholders’ meeting on SGXNET. The Minutes of the shareholders’ meeting must be accurately and completely recorded in a timely manner as required by law. Minutes of shareholders’ meeting are also available to shareholders for their inspection upon their request.
The Company encourages the shareholders to use ballots for voting on each agenda item. The ballots shall be kept in the meeting room for vote counting prior to the announcement of the voting results of the shareholders. For the purpose of transparency, the Company makes an announcement of the detailed results showing the number of votes cast for, against, and abstain from voting on each resolution and the respective percentages as well as keeps all ballots (bearing signatures of the shareholders or their proxy) for future reference.
For listing rules of the Listing Manual of SGX regarding the requirement of holding of general meetings in Singapore, namely, Rule 730A and Practice Note 7.5. Rule 730A(1) and Practice Note 7.5 require (unless exempted by the SGX) an issuer with a primary listing on the SGX to hold its general meetings in Singapore unless there are legal constraints preventing it from doing so, and such issuer should provide alternative modes of engagement such as webcast and information meetings so that public shareholders have access to the board and senior management.
In this connection, as announced on February 20, 2014, ThaiBev consulted with SGX on this matter, and the SGX advised that Rule 730A(1) of the Listing Manual is not applicable to ThaiBev. Consequently, ThaiBev will continue to hold its general meeting in Thailand but not Singapore. For the purpose of paragraph 2.4 of Practice Note 7.5, SGX advised that it has no objection to ThaiBev not providing video conference and webcast facility to enable Singapore-based shareholders to follow the proceedings during its shareholder meetings.
We would like to provide the key reasons to hold general meetings in Thailand as follows:
Notwithstanding the legal restrictions described above, in order to provide a forum for interaction with Depositors in Singapore, the Investor Relations Unit of the Company plans to hold an annual information meeting in Singapore soon after its annual general meeting is held in Thailand, to enable as even a level of access to information as possible at the time of such meeting. Attendees will be given the opportunity to share their views and to ask our Directors and top executives relevant questions relating to the Company and its business, operations and performance.
- • Pursuant to Thai law, in respect of persons whose accounts with The Central Depository (Pte) Limited (“CDP”) have been credited with ThaiBev shares, CDP is the only holder on record of such shares and therefore the only recognised shareholder of ThaiBev to attend and to vote at ThaiBev’s general meetings. Depositors in Singapore whose shares are held through CDP (the “Depositors”) are not permitted by Thai law to attend and to vote in person at ThaiBev’s general meetings, even if such shareholder meetings are held in Singapore.
- • ThaiBev has also been advised by our legal advisor that the Public Limited Companies Act (the “PLCA”) and the AOA of the Company do not address the issue of whether non-shareholders are permitted to watch a shareholders’ meeting from a place outside the meeting room. In addition, the power of the chairman of a general meeting of a Thai company to grant non-shareholders permission to watch a shareholders’ meeting from a place outside the meeting room is also limited by the PLCA and the AOA of the Company.
It should also be noted that to be in line with our current practice, Depositors (and Depository Agents) with shares standing to the credit of their securities accounts with CDP, may direct CDP to exercise the voting rights in respect of the number of shares credited to their CDP securities accounts by completing the Voting Instruction Form(s). The Voting Instruction Form(s) will be dispatched to them by CDP and they may return complete forms to CDP on the specific date. The said Voting Instruction Form(s) will set out the resolutions to be considered at the shareholders meeting same as appeared in the invitation to the shareholders meeting.
As of date 31 december 2014