The Company’s management structure consists of six boards and sub-committees comprising the Board of Directors, the Executive Board, the Audit Committee, the Nomination and Remuneration Committee, the Corporate Governance Committee, and the Risk Management Committee. The details of each committee and their scope, duties and responsibilities are as follows:
The Chairman, who is a different person from the President and Chief Executive Officer, so there is a clear segregation of roles, duties and a balance of power in operations.
The names and positions of the Board of Directors are as follows:
|1. Mr. Bancha Ongkosit (1)||Chairman of the Board of Directors, Chairman of the Executive Board|
|2. Lt. Gen. Dr. Suprija Mokkhavesa||Independent Director, Audit Committee member Chairman of the Nomination & Remuneration Committee|
|3. Mr. Paitoon Taveebhol||Independent Director, Chairman of the Audit Committee|
|4. Mr. Panja Senadisai||Director, Nomination & Remuneration Committee member|
|5. Dr. Chantima Ongkosit||Director, Chairperson of the CG Committee|
|6. Mrs. Voraluksana Ongkosit (1)||Director, Executive Vice Chairperson|
|7. Mrs. Siriphan Suntanaphan||Director|
|8. Mr. Pitharn Ongkosit (1)||Director, Chief Executive Officer Chairman of the Risk Committee|
|9. Mr. Kanchit Bunajinda||Independent Director, Audit Committee member Chairman of the Enterprise Risk Policy Committee|
Remark: (1)Executive Director
The directors with company signatory rights are Mr. Bancha Ongkosit, Mr. Panja Senadisai, Dr. Chantima Ongkosit, Mrs. Voraluksana Ongkosit, Mrs. Siriphan Suntanaphan and Mr. Pitharn Ongkosit. Two directors are empowered to jointly sign on behalf of the Company with the company seal.
Duties and Responsibilities of the Board of Directors:
The Company has defined the role and qualifications of the Independent Directors in compliance with the Securities and Exchange Commission’s and the Stock Exchange of Thailand’s criteria, as follows:
Roles and Duties of the Chairman of the Board
The Chairman functions as the leader of the board. He has the responsibility of setting the board agenda, providing information to directors, and to lead open boardroom discussions, enabling the directors to engage in constructive debate and effective discussionsthat are beneficial to the Company.
The Chairman works to create and maintain a culture of openness and constructive challenge which allows for a diversity of views to be expressed.The Chairman should also be available to shareholders for dialogue on key matters of Company governance, particularly in areas where shareholders have concerns.
Even though the Chairman is not an independent director, the Nomination and Remuneration Committee is of the opinion that this management structure is suitable to the nature of KCE’s business, and that his talents have been instrumental in the success and continued growth of the business. As the Chairman was the first person to bring PCB production technology to Thailand, he therefore has many years of expertise in the PCB business and is capable of performing his duties with an accountability to the benefit of all stakeholders, particularly minor shareholders.
The Chairman of the Board has neither absolute nor superior powers. The Public Company Act describes the additional responsibilities and duties of the Chairman as:
In addition tohis roles and responsibilities as director, the Chairman must strictly comply with the ethics and good corporate governance practices and act as a role model for the directors, and all employees of the Company.
The Board of Directors appoints the Executive Committee, which comprises the directors and senior executive managementas follows:
The names and positions of the members of the Executive Committee are as follows:
|1) Mr. Bancha Ongkosit||Chairman of the Executive Committee|
|2) Mrs. Voraluksana Ongkosit||Executive Vice Chairperson|
|3) Mr. Pitharn Ongkosit||President & CEO|
|4) Mr. Fredrick Gharapet Ohanian||Executive Vice President of Operations|
|5) Mrs. Tanyarat Tessalee||Executive Vice President of Finance & Administration|
Duties and Responsibilities of the Executive Committee:
The Board of Directors appointed the Audit Committee, whose qualifications are fully compliant with the criteria of the Stock Exchange of Thailand, to review business operations, financial reports and internal control systems, to select independent auditors, and to review conflicts of interest. The members of the Audit Committee have the necessary qualifications and experience to ensure the reliability of the financial statements.
The Audit Committee consists of three directors who meet the following the criteria:
The names and positions of the members of the Audit Committee are as follows:
|1) Mr. Paitoon Taveebhol||Chairman|
|2) Lt. Gen. Dr. Suprija Mokkhavesa||Committee member|
|3) Mr. Kanchit Bunajinda||Committee member|
Mrs. Eua-Aree Kankomol was appointed as the Audit Committee's secretary.
Duties and Responsibilities of the Audit Committee:
The Board of Directors is responsible for the appointment of the Nomination and Remuneration Committee, which comprises three directors as follows:
The names and positions of the members of the Nomination and Remuneration Committee are as follows:
|1) Lt. Gen. Dr. Suprija Mokkhavesa||Chairman|
|2) Mr. Panja Senadisai||Member|
|3) Mr. Paitoon Taveebhol||Member|
Duties Related to Nomination Tasks
Duties Related to Remuneration Tasks
The Board of Directors is responsible for the appointment of the Corporate Governance Committee, which comprises 2 directors and 2 senior executive managements as follows:
The names and positions of the members of the Corporate Governance Committee are as follows:
|1) Dr. Chantima Ongkosit||Chairperson|
|2) Mrs. Voraluksana Ongkosit||Member|
|3) Mrs. Tanyarat Tessalee||Member/ Secretary|
|4) Mr. Viboon Sunthornwiwath||Member|
Mr. Paitoon Taveebhol was appointed as the advisor to the Committee
Duties and Responsibilities of the Corporate Governance Committee:
On October 11, 2016, the Board of Directors passed a resolution approving an establishment of the Enterprise Risk Policy Committee and appointing the Company Director and the CEO to be member of the Committee.
The names and positions of the members of the Corporate Governance Committee are as follows:
|1) Mr. Kanchit Bunajinda||Chairman|
|2) Mr. Paitoon Taveebhol||Member|
|3) Mr. Panja Senadisai||Member|
|4) Mr. Pitharn Ongkosit||Member|
|5) Mrs. Siriphan Suntanaphan||Member|
|Mr. Somchai Artruksa||Secretary|
Duties and Responsibilities of the Enterprise Risk Policy Committee:
RISK MANAGEMENT COMMITTEE
The Board of Directors has established a Risk Management Committee and appointed the following members, who come from the senior executive management of operations.
The names and positions of the members of the Risk Management Committee are as follows:
|1) Mr. Pitharn Ongkosit||Chairman|
|2) Mr. Fredrick Gharapet Ohanian||Member|
|3) Mrs. TanyaratTessalee||Member|
|4) Mr. Athasidh Ongkosi||Member|
|5) Mr. Viboon Sunthornwiwath||Member|
|Mr. Somchai Artruksa||Secretary|
Duties and Responsibilities of the Risk Management Committee:
Summary of the appointment of directors to subcommittees
|Directors||Board of Director||Audit Committee||Nomination / Remuneration Committee||Corporate Governance Committee||Enterprise Risk Policy Committee|
|Mr. Bancha Ongkosit||C||-||-||-||-|
|Lt. Gen. Dr. Suprija Mokkhavesa||M||M||C||-||-|
|Mr. Paitoon Taveebhol||M||C||M||-||M|
|Mr. Panja Senadisai||M||-||M||-||M|
|Dr. Chantima Ongkosit||M||-||-||C||-|
|Mrs. Voraluksana Ongkosit||M||-||-||M||-|
|Mrs. Siriphan Suntanaphan||M||-||-||-||M|
|Mr. Pitharn Ongkosit||M||-||-||-||M|
|Mr. Pitharn Ongkosit||M||-||-||-||M|
|Mr. Kanchit Bunajinda||M||M||-||-||C|
C – Chairman/ Chairperson
M – Member
Summary of meeting attendance of the Board of Directors in 2016
|Board of Director||Audit Committee||Nomination & Remuneration Committee||Corporate Governance Committee||Risk Management Committee|
|Mr. Bancha Ongkosit||12 / 12||-||-||-||-|
|Lt. Gen. Dr. Suprija Mokkhavesa||11 / 12||4 / 4||2 / 2||-||-|
|Mr. Paitoon Taveebhol||12 / 12||4 / 4||2 / 2||-||2 / 2|
|Mr. Panja Senadisai||12 / 12||-||2 / 2||-||2 / 2|
|Dr. Chantima Ongkosit||12 / 12||-||-||4 / 4||-|
|Mrs. Voraluksana Ongkosit||12 / 12||-||-||4 / 4||-|
|Mrs. Siriphan Suntanaphan||12 / 12||-||-||-||2 / 2|
|Mr. Pitharn Ongkosit||12 / 12||-||-||-||2 / 2|
|Mr. Kanchit Bunajinda *||8 / 12||3 / 4||-||-||2 / 2|
Mr. Kanchit Bunajinda was appointed as a Director since April 28, 2016.
As at December 31, 2016, the names of 9 executive managements are as follows:
|1) Mr. Bancha Ongkosit||Chairman of the Executive Board|
|2) Mrs. Voraluksana Ongkosit||Executive Vice Chairperson/Dir. of the Executive Office|
|3) Mr. Pitharn Ongkosit||President and Chief Executive Officer|
|4) Mr. Fredrick Gharapet Ohanian||Executive Vice President of Operations|
|5) Mrs. Tanyarat Tessalee||Executive Vice President of Finance & Administration|
|6) Mr. Athasidh Ongkosit||Senior Vice President of Information Technology|
|7) Mr. Teeraporn Jaisuedee||Vice President of Maintenance|
|8) Mr. Pairoj Tarawatcharasart||Vice President of Engineering|
|9) Mr. Sunan Sripetch||Vice President of Operations|
The Chief Executive Officer has the authority and duties in respect to the management of the Company as assigned by the Board of Directors and shall manage the Company by strictly complying with the plan and budget as approved by the Board of Directors honestly, faithfully and carefully, and to protect the interests of the Company and shareholders.
The authority and duties of the Chief Executive Officer include the following:
To comply with good governance practice, the Board of Directors appointed Mrs. Tanyarat Tessalee, whom currently is the EVP of Finance and Administration (her educational background and work experience profile is available in the Form 56-1: Attachment No. 1 - Details of Directors, Management, Controlled person and Company Secretary), to be the Company Secretary, assisting the directors in ensuring that the Company has an appropriate, efficient and transparent operation. On behalf of the Company or the Board, the Company Secretary’s responsibilities are as follows;
Biographies of the Company Secretary
Term of Directorship
The term for all Directors is 3 years. There is a restriction to the number of terms of Independent Directors of not more than 9 years, which was effective on January 1, 2014, but is not retroactive for Independent Directors who were appointed as a Director in 2013. In accordance with the Public Company Limited Act and the Company’s articles of association, one-third of the Company’s Directors are required to end their term at each AGM. If the number of Directors cannot be divided evenly into three parts, the number of Directors to end their Directorship must be closest to a ratio of 1/3 as much as possible. The order of retirement is based on the length of time a Director has served in his/her current term, so that Directors who have served the longest on the Board are the most eligible to retire. Nevertheless, a retiring Director is eligible for reelection. The policy of the Board of Directors is that the term of Directorship of the Audit Committee is in line with the term of Directorship of the Company’s Directors.
Criteria to Nominate Directors
The Board institutes a policy, criteria and procedures for nominating Directors by which it assigns the Nomination and Remuneration Committee to search for and select persons it deems qualified to act as a Director. The Committee proposes the appropriate selection criteria to the Board according to the present circumstances of the Company. The Committee allows various channels, such as major shareholders, minor shareholders and current Directors, to nominate potential candidates. It also considers the Director Pool of the Thai Institute of Directors (IOD) as well as other channels as it deems appropriate.
The Nomination and Remuneration Committee is responsible for selecting and screening candidates to hold the position of Director, with qualifications of candidates prescribed in the Company’s regulations. The name of a candidate is proposing to the Board of Directors for consideration and approval before being submitted to the Shareholders’ Meeting for a vote in accordance with the following criteria and procedures:
Nomination of the CEO
The Executive Board primarily considers the selection of qualified persons who are deemed highly knowledgeable and capable and who possess a high degree of experience and understanding of the business. The Executive Board then proposes the candidate to the Nomination and Remuneration Committee to be put forward to the Board for approval.
Nomination of Executive management
The Board of Directors authorizes the Chief Executive Officer to select and appoint candidates with the qualifications, knowledge, skills and experience suitable for each executive position. The recruitment will be processed under the Company’s human resources procedure.
The Nomination and Remuneration Committee has considered the principle and the form of the remuneration of directors and executive management, taking into account the fairness which reflects the extent of their duties and responsibilities and the suitability against the achievements, the Company’s operating performance and other related factors, including a comparison to the remuneration of other similar companies in the same industry. The company also made a reference to the survey of remuneration of directors which was jointly undertaken by the Stock Exchange of Thailand and the Thai Institute of Directors Association (IOD).
Currently, the form of remuneration of the directors comprises of 2 types; the meeting allowance and yearly bonus. The Nomination and Remuneration Committee has reviewed and proposed the remuneration of directors to the Board of Directors for consideration and concurrence in submitting it to the Annual General Meeting each year. The 2015 and 2016 remuneration of directors was approved by AGM No.32/2015 on April 29, 2015 and AGM No.33/2016 on April 28, 2016 respectively.
Board of Directors
|No.||Name||Position||Remuneration (Baht)||Meeting allowance (Baht)|
|ปี 2559||ปี 2558||ปี 2559||ปี 2558|
|1||Mr. Bancha Ongkosit||Chairman||1,600,000||1,600,000||420,000||420,000|
|2||Lt.. Gen. Dr. Suprija Mokkhavesa||Director||800,000||800,000||360,000||360,000|
|3||Mr. Paitoon Taveebhol||Director||800,000||800,000||360,000||360,000|
|*||Mrs. Ubol Chiramongkol||Director||0||800,000||120,000||360,000|
|4||Mr. Panja Senadisai||Director||800,000||800,000||360,000||360,000|
|5||Dr. Chantima Ongkosit||Director||800,000||800,000||360,000||360,000|
|6||Mrs. Voraluksana Ongkosit||Director||800,000||800,000||360,000||360,000|
|7||Mrs. Siriphan Suntanaphan||Director||800,000||800,000||360,000||360,000|
|8||Mr. Pitharn Ongkosit||Director||800,000||800,000||360,000||360,000|
|9||Mr. Kanchit Bunajinda||Director||800,000||0||240,000||0|
|No.||Name||Position||Remuneration (Baht)||Meeting allowance (Baht)|
|1||Mr. Paitoon Taveebhol||Chairman||460,000||600,000||105,000||0|
|2||Lt. Gen. Dr. Suprija Mokkhavesa||Member||380,000||500,000||90,000||0|
|*||Mrs. Ubol Chiramongkol||Member||0||500,000||0||0|
|3||Mr. Kanchit Bunajinda||Member||380,000||0||90,000||0|
The Nomination and Remuneration Committee will consider and review the CEO’s remuneration, in accordance with the Board's principle and policy and propose it to the Board of Directors for consideration and approval. Such remuneration, for long term, will be appropriately based on the remuneration structure of the Company and compared to the surveyed information about remuneration payment by recognized institutes, while for short term, the remuneration in form of monthly salary and annual bonus is based on inflation rate, the Company's operating performance and including his performance and consistency with the duties and responsibilities assigned.
The CEO will consider the suitability of determining remunerations and adjusting yearly wages of the management, with consideration of his performance and his attainment to the pre-defined goals, including the Company operating results (Plant KPIs) .
The Company contributes remuneration in form of salary, annual bonus and contribution to provident fund.
|Type of remuneration||2016||2015|
|Number||Amount (Baht)||Number||Amount (Baht)|
|Bonus/ Contribution to Provident fund||7||5,451,349||8||5,097,514|
On April 28, 2011, The meeting of Shareholders approved the issuance and offering of the warrants to purchase ordinary shares of the Company (ESOP-W4), in the amount of not exceeding 10,000,000 units, to directors, managements and employees of the Company and/or its subsidiaries. As of December 31, 2014, there is no outstanding warrant.
On April 29, 2014, The meeting of Shareholders approved the issuance and offering of the warrants to purchase ordinary shares of the Company (ESOP-W5), in the amount of not exceeding 10,000,000 units, to directors, managements and employees of the Company and/or its subsidiaries. As of December 31, 2016, the outstanding warrant is amounted to 337,000 units.
Good corporate governance means establishing a management structure and mechanism within the organization to create relations between the Company’s Board of Directors, the management, staffs and shareholders, taking into account the interests of all stakeholders.
Good corporate governance will enhance the company’s competitive edge both in short term and long term, which will lead to adding values to the shareholders, as well as create benefits for all concerned parties. KCE stipulates corporate governance policy for use as practical guideline for the directors, management and all employees, in order to support KCE’s efficient operation, the best corporate governance and administration, and to conduct business with fairness, transparency and accountable.
The mentioned management structure reflects key principles of good corporate governance as follows:
The Board of Directors of KCE Electronics Public Company firmly believes in the importance of good corporate governance, that it will promote the Company’s competitive potential both in short term and long term. Additionally, it is the crucial factor in supplementing values, supporting best return to the shareholders and creates a fair benefit among all stakeholders in long term. The Board of Directors has stipulated the corporate governance policy, which adheres to the Principles of Good Corporate Governance of the Stock Exchange of Thailand’s guidelines. The Directors, Management and all employees are to observe and routinely apply the Company’s corporate governance principles to all areas of business management, which covers 5 categories as follows:
1. Rights of Shareholders
The Company protects the rights and the interests of the shareholders, both as investors and owners of the company, whether it’s majority, minority, foreign or institutional shareholders. The Company facilitates the needs of its shareholders and ensures equitable and fair treatment, complying with applicable laws and guidelines protecting shareholders’ basic rights, as follows:.
2. Shareholders’ meeting
Shareholders have an ample opportunity to attend and vote in shareholders’ meetings. The company will provide fair treatment to all shareholders and will in no way restrict the rights of access to its information system or the participation in the shareholders’ meeting. The company will perform duties relevant to the shareholders’ meeting as follows:
Prior to the Meeting
The Company recognizes the importance of all shareholders and adheres to corporate governance practice to ensure the equitable treatment of all shareholders. There is no discrimination of shareholders whether major or minor, foreign or institutional. The shareholders are protected from abusive action by, or in the interest of controlling shareholders acting directly or indirectly. The Company’s guideline to foster equitable treatment of shareholders includes the following.
1. Designation of proxies to the Annual General Meeting of Shareholders
To ensure equitable treatment, in the event that the shareholders cannot present in the Meeting in person, shareholders have the right to assign proxy and may also delegate their votes to any of the Company independent directors. Conditions to assigning proxies are provided in the AGM invitation notice. All documents sent to foreign shareholders were translated into English.
2. Facilitation for the shareholders to attend AGM
The Company ensures the equitable treatment of all shareholders, including minority and foreign shareholders. All shareholders have the right to fair practice without discrimination. All shareholders have the right to attend AGM from the meeting commences until the end.
Adequate time is allocated for Meeting and is sufficient for each agenda. Equal opportunity is provided for shareholders to express their opinion, ask questions and exercise their right to elect individual directors.
3. Monitoring of inside information
The Company stipulate a policy to monitor the use of inside information and the company’s stock transactions on the basis of equality and fairness of all shareholders and for the prevention of relevant directors and executives from undertaking dishonest stock transactions for their own benefit or the benefit of others. To prevent conflicts of interest, the directors and executives are prohibited from buying, selling, transferring or accepting transfer of the company’s stocks one month before the disclosure of the financial statements to the public and 3 days after the announcement. The Directors and Executives are responsible for disclosing shareholding and the changes in shareholding to the company secretary and report to the Board regularly. In the event that the directors or executives violate the corporate governance principles on the use of inside information, they will be considered guilty of the company’s rules and may be punished by law.
4. Monitoring of conflicts of interest
The Company’s policy does not allow any directors, executives and employees to take advantages from its directorship or being executives or employees of the company for their own benefits. The company forbids its directors, executives, and employees to compete with the company, avoid making connected transactions relating to them or people/entities that may cause conflicts of interest with the company. The board ensures that the company strictly performs duties according to criteria, method, and disclosure of connected transactions as specified by law or the monitoring agency.
If it is necessary to undertake connected transactions, they must be in line with general business conditions as specified and approved by the board, base on transparency and fairness, as if the transactions were undertaken with other parties, taking into account the company’s maximum benefit. If the connected transactions are not in line with general business conditions as specified and approved by the board and may cause conflicts of interest, the transaction must be submitted to the Audit Committee for opinions before submitting to the board or shareholders for approval.
The Company is aware of the responsibilities to all stakeholders. The company conducts business with fairness and adheres to the joint benefit between the company and its stakeholders. The Company sets a clear policy on fair treatment for each and every stakeholder and prohibits any actions that can be considered in violation of stakeholders’ right.
3.1 Roles to stakeholders
3.2 Human Rights
The Company recognizes the human rights of people, irrespective of difference. The Company respects all the rights of the employees in any form, as stated by law or constitution, and will not create any obstruction or prevent the employees achieving their rights. The company has a clear policy in supporting the rights of people and will not support any violation to the human rights.
3.3 Policy on Intellectual Property
The Company acknowledges the importance of intellectual property created from an individual’s knowledge and ability. The Company, therefore, always makes sure that the information used in the Company will not violate the intellectual property of others. The Company does not permit nor encourage its employees to use illegal software for any Company business. Employees who use the company’s computers must strictly follow the rules and conditions of the manufacturer and only with the permission of the Company.
The company must provide channels and procedures for suggestions and complaints relating to the company’s business operation with speed, fairness, and transparency.
1. Disclosure of information
2. Responsible persons for disclosure of information
3. Auditor and financial statements
The financial statements of the company and the subsidiary companies are audited by an independent auditor with knowledge, skill, and qualifications as specified to ensure the board and the shareholders that such financial statements reflect its actual financial status and operation. It is the company’s policy to change its auditors every five years to ensure complete independence.
The Board values and takes responsibility for the financial statements of the company and the subsidiary companies in line with general standards and practices. The company devises a policy of proper accounting based on caution, correctness, and completeness to reflect its performance. The board ensures that performance is reported and material information is transparently and sufficiently disclosed by regularly reporting to relevant agencies, such as the Securities and Exchange Commission and the Stock Exchange of Thailand, for the benefit of shareholders and investors. Moreover, the board appoints the Audit Committee to be responsible for checking the reliability and accuracy of the financial statements as well as the internal control system in a sufficient and proper manner to ensure the reliability of the company’s financial statements.
1. The Board structure
5. Duties and Responsibilities
6. Appointment of Sub-committee
The board of directors appoints subcommittees to assist in the monitoring and screening of key work and requires that the performance should be regularly reported back to the board. The subcommittees consist of the following:
7. Board meetings
8. The Company Secretary
To support and manage the activities of the directors in an efficient and effective manner, the company secretary has the following responsibilities:
9. The Board of director’s Performance Evaluation
The Board has established a self-assessment for the overall performance of the Board of Directors. It serves as a tool to reflect the operational efficiency of the Board in accordance with Good Corporate Governance principles and to facilitate a regular review of the performance of the Board. The performance assessment is conducted on an annual basis and led by the Chairman of the Board. The assessment result is reviewed and considered for improvement.
10. Directors’ Remuneration
The board explicitly sets the forms and criteria of remuneration and other benefits for the directors and submits them to the shareholders for approval. The Nomination and Remuneration Committee screens yearly remuneration figures transparently and fairly as fit the authorities, responsibilities as well as relevant factors and benefit derived from each director, and comparable to the rate in the same industry.
11. Professional development for Directors
Newly appointed directors receive information on the company, rules, regulations, business information critical to the work of directors, minutes of the directors’ meetings, and minutes of past meetings of the Audit Committee, and introduction to directors and executives. Moreover, directors are encouraged to undergo training and participate in trainings and seminars to improve their knowledge necessary for the work of directors.
12. Succession plan
Directors set a succession plan for the CEO and top executives to maintain the confidence of investors, the company, and employees on its continuous operation. They also prepare the annual review of the succession plan.
13. Anti-corruption Policy
The Company launched the “Anti-corruption” Policy to be accounted for as a clear practice guideline in business operation, which will led to a sustainable organization. The directors, executives and employees are prohibited to proceed or accept any form of corruption, directly or indirectly, concerning all business operation, in all countries and all related business sections. Review on the compliance to the policy is regularly performed, including revising the practice guideline and the code of conduct, in accordance to the changes in the business, regulations and the law.
The directors, executives, and employees must strictly respect the company’s code of conduct and corporate governance principles with understanding, commitment, and acceptance as part of their working discipline, while ensuring that they and their colleagues observe the code of business conduct and corporate governance principles. Monitoring of compliance with corporate governance is as follows:
Directors and Executives
Corporate Governance Committee
The code of business conduct and corporate governance principles are considered part of the discipline that all employees must adhere to and implement as follows:
If the act violates the above criteria, it must be stopped.
The Company manages risk with a view that it is an important and deeply connected consideration for all business processes. The Board of Directors has appointed the Risk Management Committee to oversee this issue for the organization. The prime responsibility of the Risk Management Committee is to set policies and parameters for risk management that are aligned with the Company's mission and vision, including enhancing procedures to cover all internal and external risk factors that could affect the Company's operation and business growth opportunities. A comprehensive risk assessment has identified the following key risk factors:
The manufactureof electronic equipment requires certain engineering processes and complicated production techniques. Furthermore, the technology used in the industry is constantly evolving. As a result, the company must keep learning new technologies and adjusting its production processes to meet the demands for new production methods and in response to customers’changing requirements. To deal with this, the Company has an engineering team that does R&D and works closely with the product development teams of customers. This has resulted in knowledge sharing, technology transfer and continued development of the technologies used at KCE. Furthermore, the Company regularly acquires new and modern machinery to replace older equipment and increase production efficiency.
Labor shortage Risk
The Company faces a risk related to the sourcing of production line personnel who have specific and necessary skills. A knowledgeable and skilled labor force is crucial to the Company’s success. Labor shortages or any labor-related problems would directly result in lower productivity and hurt product quality. Continuous technical training and proper education are provided to ensure the effectiveness and skill development of KCE’s workers. The Company has shown a strong commitment to its workforce and provides appropriate incentives and benefits to employees to ensure a long-term and rewarding mutual relationship.
Supplied Materials Risk
Raw material risk is associated with possible shortages of key materials that could lead to an unplanned shutdown of the production line, the usage of materials that don’t meet specifications or that are of sub-standard quality, as well as inflated material costs. KCE has invested in a subsidiary, Thai Laminate Manufacture Co., Ltd. (TLM) to produce laminate and supply it to all of KCE’s PCB plants. This helps to ensure the availability of some key raw materials and allows for the optimized usage of such materials, as TLM can supply laminates of a specific size or type to better fit the Company’s production processes.
The acquisition in 2012 of Chemtronic, a PCB ink producer and chemical recycling operation, has lowered the risk of raw material shortages and reduced the waste-treatment burden on KCE’s factories while also giving the Company the capability to recycle used chemicals. In the same year, the Company entered into a joint venture with KCE Taiwan with an aim to enhance its sourcing of raw materials and equipment. The arrangement has also boosted the Company’s bargaining and negotiating power, further minimizing supply risk.
Materials price Risk
The price of materials that contain copper or gold – such as laminate, copper foil, copper anode and gold salt— fluctuate according to commodity prices inthe global market. Due to the volatility of these markets, the Company must closely monitor prices and use derivative contracts to hedge risk, which is in keeping with the Company’s policy on price risk management. In addition, the Company must maintain an appropriate level of stocks to support production through certain periods.
KCE sources raw materials and supplies from at least three main sources for each item from an approved vender list and regularly acquires new quotations to get the most competitive price. The Company has forged good relationships with its major suppliers, supported by its long track record.
As PCBs remain the basic, irreplaceable component of all electronic products, KCE’s exposure to technological risk is mainly related to detailed changes in design, production techniques or raw material type. KCE thus invests in necessary, up-to-date equipment so that it can manage such changes effectively. As the trend in the electronics industry is toward smaller, more efficient and more complicated designs, PCBs are consequently shrinking while also becoming more intricate with higher layer counts. This necessitates regular changes in production technology to boost efficiency and reliability. Moreover, as environmental concerns grow, there are more demands for manufacturers to use “green” raw materials such as halogen-free laminates and lead-free PCBs or for high performance materials that can cope with environments of sharply varying temperatures.
The previously mentioned technological changes may affect production capacity, sales and operating profit. However, KCE is prepared to meet such technological challenges through continuous research and development to advance its products and manufacturing processes and to increase production capacity to meet the needs of customers. As the Company focuses on producing medium- to high-quality PCBs, its already advanced machinery and processes are less affected by changes in technology. The Company’s policy, which is aimed at ensuring quality control, on-time delivery and assistance to customers, has sustained long-term working relationships with leading international customers, and helps KCE cope effectively with evolving technology.
World Economy Risk
The growth of the electronics industry corresponds closely to fluctuations in the world economy and the growth of industries that require electronic components such as the telecommunication, computer, automobile, industrial equipment, high-technology instrument and peripherals sectors. Thus, cyclical changesin the economy and the electronics industry can result in undesirable changes in sales volumes and prices.
The company’s strategy is to focus on growing end markets, which tend to be more stable than other sectors, and in particular on the fast-growing automotive sector. Buyers in the automotive sector tend to give priority to product quality, which is a strong point of KCE. However, to diversify risk, the Company has also become involved in other sectors including Industrial, telecommunication, medical equipment, computer and high-end consumer products.
Market Risk & Competition Risk
Many factors affect market risk, ranging from the origin of customers — i.e. the economic and political situations in their home countries, international trade policies, war, unrest and terrorism, etc. — to factors arising at the customer level, such as mergers or takeovers of companies and changes in buying policies. In order to decrease market risk, KCE has diversified its sales across many industries, even though its largest market is the automotive sector, and across different regions throughout the world, including Europe, the U.S. and Asia.
Competitive risk in the PCB industry comes in two main forms: price competition, with the main competitors being Taiwanese and Chinese manufacturers, and from perceptions of quality. Even though KCE and Chinese manufacturers do not directly compete, as they serve different customer groups, KCE cannot avoid the impact of indirect pricing pressure. At the same time, the Company faces competition from local PCB manufacturers in Europe and the U.S. PCBs produced in Europe are perceived to be of better quality than PCBs made in Thailand (in addition to the issue of proximity, which makes transportation more convenient). However, price pressures are driving most electronic equipment manufacturers to turn to Asia for lower-priced products. As a result, migration of PCB production from Europe and the U.S. has accelerated, and it is expected that PCB plants in Europe and the U.S.will continue to downsize or close their operations.
Dependency on a Product or Market Risk
PCBs for automotive electronic equipment represent about 70% of the Company’s production, with most exported to Europe, which accounts for 55% of total sales. Dependency on the automotive industry and European markets could be a riskto the Company in the event of a major change in product demand in this category or in a particular market. However, the automotive industry is considered reasonably stable, compared to the consumer or telecommunication markets, which the Company does not target. Furthermore, the Company has a marketing plan to expand its business in the Asia region and start production of PCBs for high-end consumer and industrial products, which will minimize its dependency on the automotive sector and the European market.
Natural Disaster Risk
The Company’s plants could be exposed to risk from fire or natural disasters; as such incidents might interrupt production, resulting in the loss of customers to competitors. In addition, there are additional costs related to the start-up production lines after such interruptions. Therefore, the Company and its subsidiaries have taken out insurance to protect themselves from possible damage caused by fire and business interruptions as a result of a forced plant shutdown. An annual review is conducted to ensure that proper coverage is maintained for all eventualities.
After the severe flooding in 2011, the Hi-tech Industrial Estate in Ayutthaya constructed a permanent water barrier around its boundaries. The estate’s management is confident that the new protection system will be effective, given it matches the highest water levels ever recorded at the site. As for the new plant construction at Latkrabang Industrial Estate, the design incorporates features to help the plant deal with flooding, such as a raised production floor.
Interest rate risk
The Company and its subsidiaries are exposed to risks from interest-rate fluctuations for their deposits, overdraft accounts and bank loans. The risk to cash deposits stems from the THB interest rate, while its interest-bearing debts, both short and long-term, are in THB, USD and EUR. Most of the Company’s and its subsidiaries’ loans have floating rates, which are currently at record low levels. It appears that the interest rate for EUR and USD loans will remain at the current low levels for some time, while THB interest rates may potentially increase in the next coming year. Consequently, the Group is exposed to risk from an interest rate increase. To reduce this risk, the Company closely monitors financial market movements and trends and also has a policy to finance its liquidity requirements in currencies where the outlook is for rates to remain at their current low levels. In addition, the Company can enter into financial derivative products such as interest rate swap (IRSs) and cross-currency swaps (CCSs) to manage the interest-rate risk arising from long-term loans. Currently, the cost of hedging and negative carry are reasonable and the interest hedging percentage is flexible enough to effectively manage excess cash for the best benefit of the Group.
Foreign exchange rate
The Company is exposed to foreign exchange rate risk as approximately 75% of its sales and 50% of payments for raw materials along with investments in imported machinery and a portion of its debts are denominated in foreign currencies (mostly USD).The fluctuation of exchange rates can thus directly affect the Company's earnings. To mitigate the foreign exchange rate risk, the Company has done the following: i) developed a treasury programto provide regular, up-to-date reports on the status of the Company’s foreign exchange exposure to individual currencies, so that exchange rate movements, trends and related factors can be closely monitored; ii) fully applied a natural hedge concept in which the Company uses its foreign currency revenues to settle its obligations from raw material purchases, investments, and debts denominated in the same foreign currency to lower the risk from currency fluctuations; and iii) proactively prepared financial strategies to deal with unexpected situations by utilizing derivative products such as forward contracts, swaps and options. The Company manages its risks, based on conservative principles and strictly for hedging purposes only, and not for speculation.
Risk on Non-payment from Sales Representatives and Customers
Fifty percent of the total sales of the KCE group are transacted through KCE’s sales representatives, while the remaining are shipped directly to customers. Sales representatives also collect the payments from customers on behalf of KCE and remit the money to KCE on an agreed schedule. This could impose a risk of non-payment or delayed payment from representatives or from customers, which would affect the Company’s liquidity and operations. However, such non-payment occurs infrequently. Most sales representatives are KCE associate companies, while many of the independent representatives have had relationships with KCE that go back more than 25 years. Moreover, the majority of KCE’s customers are world-leading companies with a strong financial status. All these factors help eliminate the risk of non-payment from representatives and customers. To reduce delayed payment risk, the Company assigns a group of staff to closely monitor and systematically follow up on outstanding payments.
คณะกรรมการบริษัท เคซีอี อีเลคโทรนิคส์ จำกัด (มหาชน) ("คณะกรรมการบริษัท") เชื่อมั่นเป็นอย่างยิ่งว่ากระบวนการกำกับดูแลกิจการที่ดี จะยกระดับผลการดำเนินงานของบริษัท และเป็นหัวใจสำคัญในการบรรลุเป้าหมายที่สำคัญที่สุดของบริษัท อันได้แก่การเพิ่มมูลค่าสูงสุดให้แก่ผู้ถือหุ้น
คณะกรรมการบริษัทมีความรับผิดชอบตามกฎหมายในการกำกับดูแลการประกอบกิจการบริษัท และรับผิดชอบต่อผู้มีส่วนได้เสียทั้งหลาย อันประกอบด้วย ลูกค้า ผู้ถือหุ้น ลูกจ้าง คู่ค้า เจ้าหนี้ คู่แข่ง และสิ่งแวดล้อม สังคม และชุมชน
ความสัมพันธ์ระหว่างคณะกรรมการบริษัทและฝ่ายจัดการเป็นไปในรูปแบบการทำงานร่วมกัน ประธานเจ้าหน้าที่บริหาร และกรรมการผู้จัดการมีความรับผิดชอบในด้านการดำเนินธุรกิจประจำวันของบริษัทที่เกี่ยวข้องกับการวางแผนการดำเนินการ การตัดสินใจ และการปฏิบัติการ ส่วนคณะกรรมการบริษัทเป็นผู้ให้ข้อคิดเห็นเกี่ยวกับแผนปฏิบัติและเสนอแนะกลยุทธ์ และติดตามดูแลการปฏิบัติการและผลการดำเนินงานของบริษัท
เพื่อให้การกำกับดูแลการปฏิบัติหน้าที่ของคณะกรรมการบริษัท เป็นไปตามกฎหมาย ระเบียบ และข้อบังคับต่างๆ ที่เกี่ยวข้อง ซึ่งคณะกรรมการบริษัทจะต้องปฏิบัติหน้าที่ด้วยความรับผิดชอบและมาตรฐานจริยธรรมสูงสุด
กรรมการต้องรายงานผลการดำเนินงานให้ผู้ถือหุ้นทราบในแบบแสดงข้อมูลประจำปี (แบบ 56-1) และรายงานประจำปี (แบบ 56-2) ของบริษัท โดยมีรายละเอียดอย่างน้อยตามที่กฎหมาย ระเบียบ หรือข้อบังคับที่เกี่ยวข้องกำหนด
คณะกรรมการตรวจสอบถือเป็นกลไกที่สำคัญของระบบการกำกับดูแลกิจการที่ดีโดยคณะกรรมการบริษัทได้แต่งตั้งคณะกรรมการตรวจสอบขึ้น เพื่อให้การดำเนินงานของบริษัทอยู่ภายใต้กรอบการกำกับดูแลกิจการที่ดี เพื่อปฏิบัติหน้าที่กำกับดูแลการดำเนินงานและการบริหารงานให้มีมาตรฐานเป็นไปในแนวทางที่ถูกต้อง โปร่งใส ตลอดจนเพื่อเสริมสร้างประสิทธิภาพในการดำเนินงานและมีผลให้การบริหารจัดการเป็นไปเพื่อประโยชน์โดยรวมของบริษัทเป็นสำคัญ รวมไปถึงบทบาทด้านการกำกับดูแลการบริหารความเสี่ยงและการสอบทานข้อมูลอื่นนอกเหนือจากรายงานทางการเงินด้วย บริษัทฯได้จัดทำกฎบัตรของคณะกรรมการตรวจสอบโดยสอดคล้องตามหลักเกณฑ์และแนวทางของสำนักงานคณะกรรมการกำกับหลักทรัพย์และตลาดหลักทรัพย์ (ก.ล.ต.)และตลาดหลักทรัพย์แห่งประเทศไทย (ตลท.) รวมทั้งแนวทางพึงปฏิบัติที่ดี(Best Practices)เพื่อเป็นแนวทางปฏิบัติของคณะกรรมการตรวจสอบที่จะสนองความคาดหวังของผู้ถือหุ้น คณะกรรมการบริษัทและหน่วยงานกำกับดูแลภายนอกบริษัท ทั้งนี้ให้ยกเลิกกฎบัตรของคณะกรรมการตรวจสอบฉบับก่อนหน้านี้ทั้งหมด โดยกำหนดให้ใช้กฎบัตรของคณะกรรมการตรวจสอบฉบับนี้แทน ซึ่งมีรายละเอียดดังนี้
“กรรมการอิสระ” หมายความถึง กรรมการที่ไม่มีส่วนร่วมบริหารงาน ไม่เป็นพนักงาน/ลูกจ้าง/ที่ปรึกษาที่ได้รับเงินเดือนประจำ / ผู้มีอำนาจควบคุมของบริษัท บริษัทใหญ่ บริษัทย่อย บริษัทร่วม บริษัทย่อยลำดับเดียวกันหรือนิติบุคคลที่อาจมีความขัดแย้ง(ปัจจุบันและช่วง 2 ปีก่อนได้รับการแต่งตั้ง) ทั้งนี้ให้เป็นไปตามหลักเกณฑ์ที่กำหนดในประกาศของสำนักงานคณะกรรมการกำกับหลักทรัพย์และตลาดหลักทรัพย์ (ก.ล.ต.)
“พรบ.” หมายความถึง พระราชบัญญัติหลักทรัพย์และตลาดหลักทรัพย์
7. การพ้นจากตำแหน่ง : กรรมการตรวจสอบพ้นจากตำแหน่งเมื่อ
11. การประเมินผลคณะกรรมการตรวจสอบ (Self-Assessment)
คณะกรรมการตรวจสอบควรประเมินผลการปฏิบัติงานของตนเองเป็นรายคณะอย่างน้อยปีละ1 ครั้งและรายงานผลการประเมินตนเองต่อคณะกรรมการบริษัทเพื่อทราบและอาจพิจารณาให้ความเห็นเพิ่มเติม เพื่อนำมาปรับปรุงการดำเนินงานของคณะกรรมการตรวจสอบให้มีประสิทธิภาพยิ่งขึ้นและบรรลุวัตถุประสงค์
12. ค่าตอบแทนคณะกรรมการตรวจสอบ (Compensation)
ให้คณะกรรมการสรรหาและกำหนดค่าตอบแทน กำหนดค่าตอบแทนของกรรมการตรวจสอบเสนอต่อคณะกรรมการบริษัทเพื่อพิจารณา แล้วจึงเสนอต่อที่ประชุมผู้ถือหุ้นเป็นผู้พิจารณาอนุมัติ
กฎบัตรฉบับนี้ให้มีผลใช้บังคับตั้งแต่วันที่ 17 มิถุนายน พ.ศ. 2557 เป็นต้นไป
กฎบัตรนี้จัดทำขึ้นเพื่อให้ผู้ปฏิบัติงานทุกระดับมีความเข้าใจโดยสรุปเกี่ยวกับวัตถุประสงค์ ขอบเขต อำนาจ หน้าที่และความรับผิดชอบของส่วนงานตรวจสอบภายในขององค์กร
" การตรวจสอบภายใน " เป็นหน้าที่งานเกี่ยวกับการประเมินผลอย่างอิสระที่จัดให้มีขึ้นในองค์กรเพื่อให้ บริการแก่องค์กรในการตรวจสอบและประเมินกิจกรรมต่างๆ วัตถุประสงค์ของการตรวจสอบภายในเพื่อช่วยผู้ปฏิบัติงานในองค์กรให้ทำงานในหน้าที่ความรับผิดชอบของแต่ละคนได้อย่างมีประสิทธิภาพ และเพื่อให้ได้ผลตามวัตถุประสงค์ โดยผู้ตรวจสอบภายในจะทำหน้าที่วิเคราะห์ ประเมิน ให้ข้อเสนอแนะ ให้คำปรึกษา และให้ข้อมูลเกี่ยวกับกิจกรรมที่สอบทานวัตถุประสงค์ของการตรวจสอบภายใน รวมถึงการส่งเสริมให้มีการควบคุมอย่างมีประสิทธิภาพ ภายใต้ค่าใช้จ่ายที่เหมาะสม
ขอบเขตของการตรวจสอบภายใน ได้แก่ การทดสอบการประเมินความเพียงพอและความมีประสิทธิภาพของระบบการควบคุมภายในขององค์กร รวมทั้งคุณภาพของการปฏิบัติงานภายในองค์กร โดยขอบเขตการปฏิบัติงานของผู้ตรวจสอบภายในมีดังนี้
การตรวจสอบทางการเงิน (Financial Auditing) เป็นการตรวจสอบความถูกต้องเชื่อถือได้ของข้อมูลทางการเงิน ครอบคลุมการดูแลป้องกันทรัพย์สิน และประเมินความเพียงพอของระบบการควบคุมภายในของระบบงานต่างๆ
ประกาศ ณ วันที่ 17 มิถุนายน 2557
To comply with the company’s good governance practice, the code of conduct is defined. The company’s directors, management and employee must follow the code and treat it as corporate value and culture; to enable effective management, fairness and transparency in the operation. As a result, this will boost the confidence of shareholders and all stakeholders, and will be the ground for firm and sustainable development.
The code of conduct is a good practice for operating and is a standard behavior that all KCE’s personnel must follow, to assure that management in all business sectors is going forward in the same direction, morally, transparent, and accountably. The Company’s Board of Directors has defined the code of conduct for guideline as follows:
Code of conduct for the Directors and Executives
Being the role model in behavior and performing their duties with honesty and maintain equitable interest of all stakeholders, the directors, executives must strictly adhere to the core code of conduct as listed below:
To promote KCE to be an efficient company and accountable for stakeholders, the directors, executives, and all employees must adhere to the code of conduct towards the stakeholders and follow practice guideline as below:
1. Policy on respect of law and principles of human rights
2. Policy on maintaining and using inside information
3. Policy on responsibility for the company’s assets
4. Policy on intellectual properties
5. Policy on information security
6. Policy on managing conflicts of interest
7. Policy against fraud and corruption
8. Policy on society, communities, and the environment
9. Policy on energy conservation
10. Policy on safety and occupational health
11. Policy on internal control and internal audit
12. Policy on political participation
13. Policy on Training and Development
In order to encourage stakeholders, both internal and outside the company, to participate in the corporate governance principles, should employees or stakeholders suspect any unlawful activities or those in violation of the law, rules, regulations, code of business conduct, or corporate governance principles, they can undertake whistle-blowing or file complaints with detailed evidence to the company or relevant agencies via the following channels:
KCE Electronics Public Company Limited
|Mail :||72-72/1-3 Soi Chalong Krung 31, Kwang Lumplatew,
Lat Krabang, Bangkok 10520
The company will not unfairly treat employees, temporary employees, or outsourced persons, whether through changes in position, nature of work, or locations of work, suspension, threats, obstruction of work, termination of work, or any unfair act to these people because they:
The Company achieved a score of “Excellent” in the 2015 and 2016 annual surveys conducted by the Thai Institute of Directors Association (IOD) in collaboration with the Stock Exchange of Thailand and the Securities and Exchange Commission. Surveys of the IOD assess the level of Corporate Governance of each company. The consistently high rating for the past years reflects the Company’s management and all employees' dedication to integrate sound ethics and the principles of good Corporate Governance into its business practices continuously.
|Ms. Tanyarat Tessalee|
|Address:||KCE Electronics Public Company Limited
72-72/1-3, Lat Krabang Industrial Estate,
Kwang Lumplatew, Lat Krabang,
Bangkok 10520, Thailand
|Tel:||+66 (0) 2326-0196-9 ext. 1201|
|Fax:||+66 (0) 2326-0300|