Transparency, integrity, trustworthiness, and a sense of responsibility are basic values on which Tongkah Harbour’s reputation is built. Our own principles of corporate governance, transparent for all stakeholders, set out the principles for the work of the executive and supervisory boards of Tongkah.

Tongkah sees effective corporate governance as critical to achieving corporate goals and increasing the company's value. Naturally, openness about the company's corporate governance principles, practice, and structure is itself an important element in Tongkah's policy.

Tongkah believes that a reputation for integrity is one of the most important assets any company can possess. We support corporate governance as it adds more transparency for investors and more accountability for those in positions of financial stewardship.

Governance (1)

Tongkah Harbour PCL., whose history is more than a hundred years, has always been committed to its shareholders and stakeholders to maintain the highest principles of Corporate Governance, the Code of Best Practices as provided by the Stock Exchange of Thailand, the Company’s Articles of Association, and Other Regulations of the Kingdom of Thailand.

The Board of Directors will continue to maintain and to safeguard the interests of the Company’s shareholders and stakeholders.

As the Company is listed on the Stock Exchange of Thailand (SET), its Board is committed to all the best practice standards required by the SET and the Company’s Articles of Association.

In this regard, the Company has implemented guidelines to monitor corporate practice to ensure that its conduct and principles are appropriate to maintaining business excellence and accommodation to changing circumstances.

Corporate Governance Guidelines (1b)

I. The Board of Directors (Board)

Composition of the Board

In Accordance to the Company’s Articles of Association, the Board must be elected by the Shareholders and must comply with the following:

1. The minimum number of directors shall be five.
2. At least half of the total number of directors must reside in Thailand.
3. A director may or may not be a Company shareholder.

The Company, in best practice, will always ensure that there is sufficient number of independent members in the Board of Directors so that, from time to time, it is able to express an independent opinion about the conduct of the Company’s business.

Independent directors do not hold any position in management. They are not employees and do not represent any major shareholders, but are represented in the Board to ensure objectivity and balance in the protection of rights and equitable treatment of all shareholders

Size of the Board

The Board members consist of the Board Chairman (an independent member), Managing Director, Executive Directors, and Non Executive Directors. The Chairman of the Board manages the Board’s activities and is the Leader at the Company at Board Level.

The Managing Director and Executive Director(s) manage the Company as delegated by the Board through its overall policies and guidelines. The Managing Director is responsible to ensure that the Board has adequate understanding of Management activities through links with the Senior Management staff as they conduct Company Business.

THL, as at the date of this Annual Report, consists of One (1) Chairman to the Board, One (1) Managing Director, Three (3) Executive Directors, and Six (6) Non executive Directors.

Role of the Board

The primary role of the Board of Directors (Board) is to oversee the Company and its controlled entities in the best interests of its shareholders in accordance with the Company’s Articles of Association, and all laws and regulations.

Principal Duties and Responsibilities of the Board

The principal Duties and Responsibilities of the Board are as follows:

a) Recommending and monitoring Company objectives, goals, and strategic operational plans, for management’s
    implementation as approved by the Company’s shareholders at the Company’s Annual General Meetings (AGM’s).

b) Striving for growth and stability leading to good returns for shareholders in the long term.

c) Monitoring the Company’s financial performance.

d) Ensuring the existence of adequate internal controls.

e) Monitoring the Company’s compliance and adherence to internal controls.

f) Ensuring that significant business risks are appropriately managed.

g) Reviewing management performance.

h) Recommending to shareholders the selection and appointment of new directors upon vacancy.

i) Ensuring that management maintains proper business standards and ethical behavior.

Role of the Chairman and Managing Director

The Chairman, elected by the board of directors, chairs the Board meetings, and also the shareholder’s meetings. He should assure that important matters are raised for deliberation in meetings and that the board puts the right emphasis on reviewing and approving strategies presented by the management, and monitors that the strategies are implemented. The Chairman must ensure that the board provides leadership vision and encouragement to the management.

The Chairman should assure that Company maintains an effective Board of directors, and that they perform effectively as a team. Every director, executive or non executive, should be encouraged to fully and actively play one’s role, in both business undertakings and corporate governance. In addition, the Chairman’s authority and responsibility as a board member remains the same as the rest of the members

The Managing Director, appointed by the board of directors, leads the management team and assures implementation of approved strategies under the framework determined by the Board of directors.  The Managing Director is responsible for overall responsibility in developing and implementing business strategies provide the leadership and vision to executive directors and senior management in achieving the Company’s operation goals as set by the Board of Directors and shareholders.

II. Board Meetings

Board structure and procedure

The Board of directors meetings are regularly scheduled in advance. The Chairman and the Managing Director consider listing the agenda of a board meeting prior to the meeting and ensure that important matters are included for Board discussion. Each director has freedom to suggest any matter to the meeting agenda. The Chairman promotes prudent consideration and allocates appropriate time for the management to present adequate issues and for the directors to broadly discuss important matters with care.

The agenda of the meeting and the Board papers will be prepared and sent by the Secretary to the Board seven days before the meeting date to ensure that board members have adequate time to understand and deliberate on the matters indicated. The Secretary to the Board ensures that information gathered is adequate for the Board Discussion.

It is a duty of directors to attend every board meeting, except with reasonable excuses. If need arises for the non-executive directors to discuss critical issues and management problems, the non-executive director, led by the independent Board Chairman, shall conduct a meeting without the presence of the Company’s executive directors and senior management.

Senior Management will be invited to attend board meetings as needed. Additional and detailed information may be needed from them where they are directly involved with certain matters. The Board should also invite other top executives to attend as deemed necessary.

Attendance at Board Meetings

The Board of Directors meet at least on quarterly basis, and on any other occasion deemed appropriate, to ensure full and effective control over Company activities. During year 2007 the Company held 8 Board meetings.

Visits to Locations

The Board members shall from time to time visit sites of Company business to understand and to acknowledge the work is being carried out. All directors have the access to visit Company business locations without restriction.

Access to Information and Advice

The Board has unrestricted access to all information within the Company and is able to seek direct explanation or briefing on important matters from Senior Management over the Conduct of the Business
The directors are entitled to seek independent professional advice concerning the affairs of the Company, at the Company’s expense, where it is determined that such action is in the best interest of the Company.

The Board also has one Senior Advisor and one Senior Consultant. The Secretary to the Board is a registered lawyer to assist with regulatory compliance matters, and to ensure compliance with all rules of conduct and procedures at Board Meetings.

The Board will be regularly updated on any new law, regulation, guidelines by the Stock Exchange, and other relevant law and regulation

Relationship of the Board to Senior Management

The Management of the Company consists of the Managing Director, Executive Director and Senior Management appointed by the Executive Committee to assist the Managing Director in carrying out his or her duties. Regular meetings with senior management and invitation to attend Board Meetings are encouraged.

Re-election of Directors

In accordance with the Articles of Association and Company best practices. the following conditions have been set out for re-election of directors.

a) At least one third of the directors must retire from office at the AGM each year. The retiring directors are
    eligible for reelection.

b) If a vacancy occurs other than by rotation, the Board of Directors, by a vote of not less than three-fourths of the
    number of the remaining directors, may elect a qualified and legally eligible person to fill the vacancy at the
    following meeting of the Board of Directors.

c) Directors appointed by the Board must submit to election by shareholders at the next AGM.

Number of directorship in other Public Companies

The Board of Directors observes and considers the number of directorship holdings by each director in other Public Listed Companies, to ensure that appointed directors have sufficient time and energy to deliberate on Company matters.

Executive Directors, and Senior Company Management, who wish to hold a Directorship in Companies other than those in the Group, must obtain the Board’s consent before accepting an appointment.

Director and Management’s Remuneration

Remuneration for Board members is set based on the following policies:

a) The remuneration package for directors should be appealing enough to attract and retain quality directors whom
    the board needs, but not excessive.

b) Remuneration for non-executive directors should be comparable to the general practice in the industry, commensurate
    with work experience and commitment, as well as the benefits each director brings. Directors who are assigned extra
    work (being members of committees, for example) should be paid appropriately more.

c) Executive Directors should receive the remuneration that is linked to the performances of the Company and
    that of each director.

d) Remuneration for the Managing Director and Senior Management should be determined in accordance with the principles
    and policies set by the Board.

e) The Board should appoint a Remuneration Committee to assist in the setting of the remuneration package for directors
    and Company Senior Management to ensure that it is decided on with transparency.

III. Board Committees

In order to ensure effectiveness and efficiency of the Board in carrying out its duties, the Board may delegate some of its responsibilities to Board committees which will conduct their duties in accordance to its terms of references and modus operandi approved by the Board.

Except for Chairman of the Executive Committee, Only Independent Directors can be appointed as Chairmen of Board Committees. Independent Directors are encouraged to be Committee Chairman.

Executive Committee

The Executive Committee comprises Three Directors as Committee members.

The duties of the Executive Board are to consider and execute decisions and matters as assigned by the Board of Directors. All members are involved in the Company’s day-to-day operations. Formal meetings take place as required, twice a month on average. Member of the Senior Management can be invited to attend meetings.


Audit Committee

The Audit Committee comprises three Independent Directors as the members of the Committee.

The Audit Committee's terms of reference included the following:

1. Ensuring that all financial reporting is in accordance with generally accepted accounting procedures.

2. Ensuring timely and transparent regulatory compliance.

3. Making informed recommendations regarding the Company’s accounting policies, practices, and disclosures.

4. Reviewing the scope, cost and results of internal and external audits.

5. Maintaining communication between the Board of Directors and the Company’s internal finance department and/or
    external auditors.

6. Assessing the adequacy of the Company's administrative, operating and accounting controls and making suggestions for
    possible improvement.

7. Review and nomination of external auditors for recommendation to the Board of Directors for adoption by the shareholders
    at the Company’s AGM

8. Reviewing connected transactions involved with related companies.

9. Reviewing any matter that may potentially affect the financial welfare of the company.

Remuneration Committee

The Remuneration Committee comprises two Independent Directors and one Executive Director as the Committee members.

The Committee is responsible for reviewing compensation arrangements for all directors (including the Employee Stock Option Plan (“ESOP”) as well as for reviewing annual and ad hoc staff remuneration which is considered by management and allocated commensuration with the individual’s qualifications and contributions made to the Company.

Recommendations concerning compensation for directors are made by the Committee and voted upon and approved by the Company’s shareholders at the Company’s AGM.

The Remuneration Committee meets at least annually, and additionally if necessary.

Nomination Committee

The Nomination Committee comprises three Independent Directors as the Committee members.

The Committee is responsible for overseeing selection of new directors by considering, defining, and reviewing, the required knowledge, experience, and skills, of a potential candidate prior to their nomination to the Board to ensure that it reflects an appropriate balance of skill and independence.

The Committee should consider the relevant age, skill, field of specialization, and the willingness to dedicate time and effort to the company.

The Board consists of directors with a depth of senior level experience in engineering, technical, geological, operational management, financial, legal, and accounting areas, which helps to ensure that it is equipped to deal with a broad range of issues.

The Nomination Committee meets at least annually, and additionally if necessary.