Corporate Governance policy

      The Company discloses all of its important information, both financial and non-financial, via the Company’s website. This includes information about the organization, corporate governance policy, shareholding structure, structure of the Board of Directors and its committees as well as news inside and outside the organization, which is mostly available in both Thai and English. Shareholders and investors are also provided with an easy access to the Company’s website to download the Annual Report, the Annual Registration Statement (Form 56-1) and the financial statements. 

      In addition, the Company sets up an investor relations unit to communicate with shareholders, investors, and securities analysts equally. It is required that no appointments or responses shall be made to answer questions regarding operating results in the near future to analysts and investors during the “Quiet Period” or which is month before financial statements disclosure. In 2017, many activities were arranged for the executives to take part in providing information and meet with investors, contributing to a better understanding of the Company’s management, as follows:

• 3 Road Shows
• 18 Analyst and Investor Meetings;
• 4 Opportunity Days on the Company’s operating results and business direction;

      The Company’s information on the website, both in Thai and English, has constantly been updated for completion and accuracy. The main topics are:

• Nature of the Company’s business
• Financial summary
• Press Release
• Capital structure
• Management structure
• Information on the Board of Directors and the executives
• Data about investors’ relations
• Rules and regulations
• Annual report (downloadable)
• Notification letter to the Annual General Meeting of Shareholders (downloadable)
• Minutes on the Annual General Meetings of Shareholders (downloadable)

      In the past year, the Company has never been requested by the Securities and Exchange Commission of Thailand to amend its financial statements. Besides, our annual and quarterly financial summaries to shareholders and investors were released prior to the due date.

      It is utterly important to the Company to disclose correct, transparent and holistic information to investors. Thus, a team of investors’ relations has been formed to coordinate with the shareholders and investors, keeping in constant communication through email info@pylon.co.th or contact :

1. Thitima Taiwprateep                   Telephone No. 02 615 1259 ext. 108

Email : thitima@pylon.co.th

2. Veeratas Chiradeachwiroj            Telephone No. 02 615 1259  ext. 401

Email : veeratas@pylon.co.th

3. Chaiyaphol Sutthamanuswong     Telephone No. 02 615 1259 ext. 301

Email : chaiyaphol@pylon.co.th

4. Nipawan Rojanabandit                Telephone No. 02 615 1259 ext. 302

Email : nipawan@pylon.co.th

      The Board of Directors is made up of 10 members, consisting of 4 independent directors, 4 executive directors, and 2 non-executive director. The structure of the Board of Directors consists of directors with extensive knowledge and experience in various fields relating to the Company’s business, e.g. law, accounting, financial, banking, economics, corporate governance and engineering. The Company’s Board of Directors set up the qualifications of an independent director which are stricter than the requirements of the SEC and the SET. The Board of Directors directly appoints three committees: the Audit and CG Committee, the Executive and Risk Management Committee, and the Nomination and Remuneration Committee. All these committees have a scope of authority, responsibility and qualifications as specified by the Board of Directors and report directly to the Board of Directors on a quarterly basis. The Executive and Risk Management Committee reports the Company’s operating results to the Board of Directors on a quarterly basis.

5.1    Roles, Duties and Responsibilities of the Board of Directors

Duties of the Board of Directors

      The Board of Directors approves the Company’s vision, mission and income projection of the following year as well as an annual investment budget. The Board of Directors also revises standards of corporate governance, risk management policy and transactions that may cause conflicts of interest (if any), and expresses opinions on the adequacy of the internal control system. Since 2007, the Board of Directors has commenced the performance evaluation in group. Policy and criteria on payment of directors’ remuneration are determined by the Board of Directors and approved by the shareholders. Considerations for remuneration are based on comparison with the industry and the Company’s operating results. The Board of Directors also sets remuneration for committees except for the Executive and Risk Management Committee’s members and the President who are paid as the Company’s employees. The President’s remuneration shall be determined based on performance evaluation by the Nomination and Remuneration Committee (since 2008).

Vision, Mission and Strategy of the Company

      The Board of Directors has set a vision and goals in accordance with the Company’s mission, and taken part in the consideration, review and approval of those visions, goals, strategies and operating direction annually, as well as in monitoring the implementation of its strategies.

Policies and Practices for those Who Become Directors of Other Company’s Board of Directors

      The Board of Directors deems it important that all directors fulfill their duties effectively and dedicate their times fully to the corporate governance. A policy has therefore been formulated to limit the numbers of registered companies, for a maximum of five, in which our directors can become their directors. At present, the numbers do not exceed the rules set.

      Furthermore, the Board of Directors has established a policy regarding the assumption of duty of our Directors and President in other company’s Board of Directors, that is to say our Directors and President are prohibited from doing business, being partner of an ordinary partnership, being partner with unlimited liabilities of a limited partnership, or being Director of a private company or other companies which conduct business of the same nature and directly compete with the Company. These matters are prohibited whether doing for his/her or other person interests unless the Director notifies the shareholders’ meeting prior to the resolution for his/her appointment. Currently, our Directors and President do not doing business, being partner of an ordinary partnership, being partner with unlimited liabilities of a limited partnership, or being Director of a private company or other companies which conduct business of the same nature and directly compete with the Company.

The Term of Office of the Board of Directors

      The Company has adopted the Public Limited Company Act to retire one-third of the Board of Directors, at the Annual General Meeting of Shareholders. The Board of Directors consists of a reasonable amount of knowledgeable and skillful persons suitable to the size of our business. There are currently ten persons in the Board of Directors, four executive directors, two non-executive director, and four independent directors. Each director shall hold office for a term of three years.

Business ethics and best practice in work

      The Company has been operating business with ethics and focusing on the achievement according to the management objectives, based on ethical integrity and honesty which are the core values. It has also been looking after different groups of stakeholders, obeying the law, and avoiding conflicts of interest. The Company has prepared a document relating to business ethics and best practice in work as a manual for working achievement and given training to its directors, executives and employees in business ethics. In 2017, the directors, executives and employees followed business ethics strictly. Relating information can be found on the website of the Company.

Conflict of Interest Policy

      The Board of Directors has set a policy on conflict of interest and guidelines for directors, executives and employees to prevent such incidents in the Company’s code of ethics.  
      Furthermore, it is the policy for all directors to report every case involved in conflict of interest. The Company secretary will submit a copy of the report to the Chairman of the Board of Directors. 

Internal Control System and Risk Management

      The Board of Directors has always recognized the importance of internal control system. At the 5th/2017 Meeting on November 10, 2017, the Board of Directors evaluated the adequacy of the internal control system from the report of the Audit and CG Committee (which was evaluated at the 5th/2017 Meeting on November 10, 2017), from the report of independent internal auditors (which was in full compliance with the evaluation form improved and adopted on August 2013 by the Securities and Exchange Commission of Thailand in accordance with the 2013 framework of internal control practices of COSO. The framework includes five components of internal control system; Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring, extended into 17 principles.), and also from the report and the responses of the executives. It can be concluded that after the evaluation in five components of the internal control system, the Board of Directors considered that there was appropriate and sufficient internal controls in the Company. 

      Moreover, the Board of Directors has proceeded to ensure the efficiency of the Company’s risk management policy and holistic management approach. The Executive and Risk Management Committee is therefore assigned to report on risk management to the Audit and CG Committee for their information and advice every quarter, and to provide effective management system covering the entire enterprise. The Audit and CG Committee must report further to the Board of Directors on any risk and the Company’s method for risk management in order to modify strategies, operating plans and management practices in a timely manner. The Details of risk management are already disclosed in Risk Factors.

5.2    Meetings of the Board of Directors

      The Board will schedule its meetings in advance every year, and will organize at least six meetings a year including special meetings occasionally if need be. Moreover, there will be a meeting, at least once a year, among non-executive members to discuss various management issues without the presence of the executives. At every the Board of Directors meeting, the Board of Directors will set clear agendas, either for information or for consideration, and will circulate a complete set of meeting documents and agendas to the directors at least 7 days prior to the meeting date, providing enough time for the directors to study the information. The Chairman of the Board of director’s meeting will allocate adequate time for each director to discuss and give opinions freely, and will summarize the points and resolutions from the meeting. The Company secretary will report the results of the meeting in writing. After the report is approved by the Board of Directors, it will be kept in a file cabinet in the Company’s file room for important documents, at the headquarters, on the 7th Floor, Ocean Tower 1 Building, so that the directors and relevant people can check it later on. 

      The Company has a policy regarding the minimum quorum of the Board of Directors before voting, which must be at least two-third of the total membership.

      All directors shall have the duty to attend all Board of Directors’ Meetings, except when otherwise excused. In 2017, the Board of Directors held 6 meetings. The meeting rate of attendance by directors was 96.6%. In addition, a meeting among non-executive directors was held on February 26, 2018, with an attendance rate of 100%. 
Details of the meeting attendance of each director are disclosed in Item 8 “Management”.

5.3    Self-Evaluation of the Board of Directors Committee and President

      The Board of Directors will arrange for its annual collective evaluations once a year composing of 6 topics as follows:

1. Board structure and qualifications
2. Roles, duties and responsibilities of the Board
3. The Board meeting
4. Duties of directors
5. Relationship with management
6. Director’s self improvement and management training

Evaluation Process is as follow:
The Company secretary of the Board of Directors will send out a form to each director to fill in and return for compilation and submission to the Board of Directors’s meeting held regularly on December each year. If the score on any topic is lower than the level “C”, there will be improvement measures. In 2017, the score of Self-Evaluation of the Board of Directors was excellent.

Individual performance evaluation of directors 
      Individual performance evaluation of directors covered the following 3 topics: 
1. Composition and qualifications of the Board of Directors
2. Board of Directors’ meetings
3. Roles, duties, and responsibilities of the Board of Directors

The performance evaluation process is as follows:  
The Company secretary shall submit forms to individual directors for their evaluation and compile the completed forms to provide a summary to the meeting in December of every year.

It could be concluded that the Board of Directors had appropriate composition and the directors possessed required qualifications and performed duties with great accountability according to the desirable practices of directors. As a result, the Board of Directors’ meetings were efficiently conducted.

Collective and individual performance evaluation of committee members
      Collective and individual performance evaluation of committee members of the Company was conducted for the Audit and CG Committee and the Nomination and Remuneration Committee. Self-evaluation forms for such committees were used according to the sample forms provided by the Stock Exchange of Thailand. This was in line with the good corporate governance principles and the roles and responsibilities of each respective committee.

In 2017, collective and individual performance evaluation of committee members covered the following 3 topics: 
1. Composition and qualifications of committees
2. Committees’ meetings
3. Roles, duties, and responsibilities of committees
    
The performance evaluation process is as follows: 
The Company secretary shall submit forms to individual directors for their evaluation and compile the completed forms to provide a summary to the meeting in December of every year.

It could be concluded that the Audit and CG Committee as well as the Nomination and Remuneration Committee had appropriate composition and the respective committee members performed all duties according to the charter stipulated by the Company.

The President’s Performance Evaluation and Remuneration Policy
      It is the Board of Director’s policy to arrange an annual performance evaluation of the President, using goals and evaluation criteria that link to KPI in order to benchmark appropriate remuneration.
Not only that the remuneration policy for the President is based on the result of KPI, but it also depends on personal qualifications and capabilities, as well as the status of the Company and the level of remuneration in the industry. There are remunerations such as bonus and pay raise. 

Remuneration for the Directors and the Executives
Remuneration of Directors
      The Company has issued a clear policy and criteria for remuneration on the basis of transparency, accountability and at appropriate and satisfying level, in order to attract the high-calibre directors and keep them on continuing their good performances. The remuneration rates are compatible to the levels practiced in the business, in accordance with their experiences, positions, accountability and responsibilities, as well as the gains that the Company will retrieve from each director. The remuneration can be divided into three parts, as follow:
1. Monthly remuneration that reflects the responsibilities as the directors;    
2. Meeting allowance that shows the importance and the time devoted to the Company’s meetings;
3. Annual bonus which is a special remuneration given to the directors for their shareholder value added. 
The Nomination and Remuneration Committee shall consider remuneration of directors and propose to the Board of Directors and then at the shareholders’ meeting for approval.

Remuneration of Executives
      The President shall consider appropriate rates of remuneration of executives and adjustments thereto each year. The executives shall receive remuneration in forms of salary and bonus linked to corporate and individual performance using the Key Performance Indicators (KPI) system. 

      Details of the remuneration of directors and executives are disclosed under the topic of “Remuneration of Directors and Executives” in Item 8 “Management”.

Development of the Directors and the Executives and Succession Plan for the Executives

Development of Directors
      It is the policy of the Company’s Board of Directors to encourage our Directors to develop their knowledge on a regular basis through trainings and education on relevant subject matters to increase their capability and constantly improve their performance. For example, Directors will be encouraged to attend training courses or seminars to enhance their potential, knowledge and experiences.
      The Board of Director encourages at least a director to attend courses or seminars for enhancing their working performances in the past year.
      In 2017, one of the Company’s directors attended the training course “Corporate disclosures: what are investors looking for beyond financial measures?” hosted by the Thai Institute of Directors Association (IOD) which was very useful for the directors’ operations.  
      In the case of new Directors, the Company has prepared and arranged for an orientation to equip them with knowledge and understanding on the Company’s business and the relevant rules and regulations. It also provides an opportunity for the new Directors to meet with other executives to inquire about in-depth business information and to encourage them to attend IOD’s training courses.
      In 2017, a new director attended the orientation training with the President as speaker. Training covered the nature of business, structure and composition of the Board of Directors and other committees, code of conduct, good corporate governance, etc.

Development and Succession Plan for the Executives
      The Board of Directors has entrusted the Executive and Risk Management Committee to create a succession plan, from CEO level down to Vice President, to ensure the continuity of suitable executives with ample knowledge and ability to run the Company. This succession plan also includes the Executives’ Capability Development Plan and the specification of required education, capability and experiences of each position as a preparation in case any of the executives is unable to perform their duties.

Committees
      The Board of Directors has set up various committees comprising knowledgeable and skillful members to enhance the Board of Directors ability to study and carefully verify information on important issues, as well as to increase effective corporate governance. Those committees include the Audit and CG Committee, the Nomination and Remuneration Committee, and the Executive and Risk Management Committee. 
      Details of the structure and responsibility of three committees are disclosed under the topic in Item 8 “Management”. 

      Besides, at the No.2/2016 Board of Directors’ meeting on March 23, 2016, it was agreed that a CG Committee and Risk Management Committee be established, and that changes be made including:
1. An arrangement for the Audit Committee to also function as the CG Committee, and to change its name to ‘the Audit and CG Committee’;
2. An arrangement for the Executive Committee to also function as the Risk Management Committee, and to change its name to ‘the Executive and Risk Management Committee.’

Supervision of Usage of Inside Information
     
      The Company has a strict policy prohibiting its directors, executives, and employees who know the inside information from using that information for his/her own or other persons interests. The Company’s guidelines on this policy are as follows.
1. The Company informs the directors and executives about usage of inside information and obligations to report their trading of Company’s and its subsidiaries’ stock including the trading executed by their spouses and minor child. They are also informed about the relevant penalties thereof according to the Securities and Exchange Act B.E.2535 and its amendment as well as the regulations of the Stock Exchange of Thailand. 
2. It is an obligation of directors and executives to prepare the report of their ownerships of the company’s shares, including those shares owned by their spouses or minor child , and submit to the Securities and Exchange Commission. The report should be as follows.

• Report the first submission of securities holding (Form 59-1) within 30 days after closing date of offering or being appointed as director/ management. 
• Report the changes in securities holding (Form 59-2) from buying, selling, or transferring of shares within 3 days after buying, selling, or transferring of those shares. On the day that they submit the report to the Securities and Exchange Commission, a copy must be sent to the Company. 

3. Directors, executives, and employees who know the significant inside information which may affects the changes in share prices shall be acknowledged by the Company that they must stop buying or selling of the Company’s shares one month prior to the disclosure of Company’s operating results (the Company will declare its operating results within 45 days after the end of quarter and within 60 days after the end of accounting year) or prior to the day those inside information were disclosed to general public. 
4. The Company prepared the Code of Ethics and best practices in work handbook with details prohibiting directors, executives and staffs to use inside information for buying or selling the Company’s shares or to give any inside information to other persons for buying or selling the Company’s shares.
If the Company finds that any director, executive or employee who knows the significant inside information violates the Company’s Code of Ethics and best practices in work relating to usage of inside information and causes damage to the Company or its image, the Company will undertake the proper actions including but not limited to cooperate with relevant supervisory agencies to undertake necessary legal actions.