CG Principle

The Company is fully aware, and gives all its attention to the “Good Corporate Governance”. The Company believes that the good corporate governance reflects the efficient and transparent management system, which will help promoting the confidence of the Shareholders, investors and all parties involved and will ultimately lead to a sustainable growth of the Company and an increase in value. The Company has continuously encourages the implementation of good corporate governance by advising the directors and the management to develop good corporate governance and the practices in accordance with the international standards. This is done by following the good corporate governance, as directed by the Stock Exchange of Thailand, and adapts it to the Company’s corporate governance. Measures are taken to further improve the said policies in accordance with the guidelines of the Stock Exchange of Thailand, which me change in the future to be better suited for the evolving environment of the Company. The practices cover 5 categories as follows;

1. Shareholders’ Rights

The Company is fully aware and gives its utmost attention to the rights of the Shareholders. This is shown by not taking any actions which may violate or reduce the rights of the Shareholders, including encouraging the Shareholders to use their rights. The basic rights of the Shareholders are, trading or transferring shares, sharing profits with the Company, receiving sufficient information about the Company, attending the meetings to use their rights to vote for appointing or removing the directors, appoints the auditors and any issues which have a direct impact to the Company for example, dividend allocation, setting or amending the regulations and the Memorandum of association, decreasing or increasing the capital and authorizing special transactions.

The Company has the policy to promote conveniency for the shareholders, including the institutional investors by holding the meeting in the place with sufficient access from the public transport so that the shareholders can easily attend the meetings. The Company always provides information, dates, time, place and agendas including all relevant information for making decisions to the Shareholders prior to the meeting and also notifies the shareholders about all the requirements, as well as the voting procedures. The Company encourages the Shareholders to exercise their rights to fully attend the meeting and to vote, and also to express their opinions and raise any questions relating to the Company in the meeting.The Shareholders may also submit the inquiries or agendas prior to the meeting. The Shareholders may also appoint a proxy to attend the meeting in the case of their absence.

2. Equal Practice to Shareholders

The Company treats all shares holders fairly and equally, no matter the Shareholders who are Executives, non –Executive, foreign Shareholders and minor shareholders which reinforce the confidence in the shareholders that the board and the management has taken great care in the spending of the shareholders funds which is the main factor in creating the confidence for investing with the Company. The Board of Directors holds the responsibility to make sure that all shareholders are treated fairly and that all their basic rights have been met equally.

The Board of Directors have arranged for the Shareholders Meeting in a way that encourages equal practice to all shareholders and give the chance even for minor shareholders to propose any individuals to take the position as directors, prior to the meeting and in an appropriate time frame. The Company also allows the shareholders who cannot attend the meeting themselves to let their proxies attend the meeting, and also have the rights to vote in their stead.

The Board of Directors has stated the methods to protect and prevent the use of the internal information in writings and will announce this as guidelines for all members of the organization.

3. Stakeholders’ Roles

The Company is fully aware of its responsibility and practices to different groups of stakeholders and will seek the mutual benefits so that all groups of stakeholders can be confident that their rights will be fully protected and well exercised. This has been set as a guideline to follow in order to clearly meet the demands of all groups of the stakeholders as stated in the “Code of Conducts and Business Ethics” and will promote the Board of Directors, the management team including the workers to regard this as the fundamental principles for working in the Company and to take it as the important responsibility for all members. The guidelines for responding to the needs of each stakeholder group are as follows.

Shareholders treatment

1. The Company allows the shareholders who cannot attend the meeting in person to assign a proxy to the Independent Directors or other individuals to attend the meeting in their stead and to vote for the shareholders.
2. The Company allows the shareholders to propose the agendas and to propose the names of the individuals to be elected as the Directors in the Shareholders Meeting in advance, following the regulations indicated by the Company. The details have been published through the Company’s website at http://www.sankothai.net and the proposed names must be submitted to the Company 3 months in advance before the Shareholders Meeting.
3. The Company will not add extra agendas to the meeting without notifying the shareholders in advance without good reasons, especially significant agendas that requires the shareholders to study the information prior to the meeting.
4. The Board of Directors allows the shareholders to elect the Directors individually and encourage the voting method so that the process is transparent and verifiable.
5. The Board of Directors has set up measures to prevent insider trading for individuals including Directors, Executives, staffs and employees including their spouses and underage children that are related to the information, and also assigns disciplinary actions regarding the disclosure of the Company’ s information or using the Company’ s information for personal gains under the “ Confidential Information Protection Policy”.
6. Raise the awareness of the Board of Directors and the Company’s Executives regarding the responsibility for reporting their ownership of the Company’s assets, their spouses’ and their underage children’s, including reporting the changes to the assets ownership to the Securities and Exchange Commission under the section 275 of the Securities and Exchange Act B.E. 2535 and under the regulations of the Stock Exchange of Thailand.
7. The Company’s Board of Directors and the Executives must announce the buying and selling of the Company’s assets at least 1 day before trading the stocks by notifying the Company’s secretary, and then the secretary will notify the Board of Directors. When the trading is completed, the report of assets ownership must be made for the Securities and Exchange Commission and the Directors and the Executive must report the changes of the asset’s ownership to the Board of Directors meeting in order to prevent the buying or selling of stocks using insider information and to avoid any scandals regarding the appropriateness of the stocks trading by inside individuals.

Customers Treatment

1. Pay attention and be responsible equally to all customers by emphasizing on producing goods with high quality and up to standards, and can respond fully to the demands of the customers. The staffs must protect the customers’ confidential information and not using for personal gains before being permitted by the customers including providing quality and professional services at the fair and appropriate price to all customers.
2. Present quality products that match with the demands of the customers. Reveal all information regarding the products fully and accurately and provide a channel for complaints to allow the customers to comment about the services and proceed as quickly as possible to respond to the customers’ requests.
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3. Provide high quality, efficient and excellent services that impress the customers.
4. Protect and look after the customer’s interests appropriately and fairly.
5. Strictly follow the terms given to the customers. In the case that the terms cannot be followed, quickly notify the customers for solutions.
6. Treat the customers with respect and be trustworthy.
7. Deliver quality products on time.
8. Support the customers’ CSR operations

Trade partners and/or creditors treatment

1. Not requesting, accepting or giving any unethical benefits to trade partners or creditors and follow the agreed terms appropriately and fairly.
2. The purchasing and sub-contracting of the companies of or relating to the companies of the Directors, Executives or all levels of staffs, must be under the principle of equality, transparency and fair, for the best interest of the Company, and must be proceeded under the Company’ s regulations, including revealing all information to the public.
3. Avoid the purchasing or sub-contracting that holds conflicts of interests with the Company.
4. All staffs involving with the purchasing or sub-contracting operations must not seekpersonal gains both directly or indirectly from the trade partners and must remain neutral with no close relations that may influence their decisions.
5. If incidents that prevents the procedures to go according to the agreed terms or contracts, the staffs in charge must report to the superior immediately and notify the trade partners and/or the officers in advance, in order to come up with the solution together.
6. Strive to maintain a stable relationship with the trade partners with clear objectives in terms of the product quality and trust in each other.
7. Treat the creditors equally and fairly and on the basis of mutual benefits on both sides.

Competitors Treatment

1. Operate fairly within the terms and regulations of the competitions.
2. Not damaging the reputation of the competitors intentionally.
3. Not violating the intellectual properties or copyrights.
4. Not seeking the competitors’ confidential information by inappropriate or unethical means.
5. Treat the competitors according to the laws and regulations according to the international standards.
6. Keep the connection with the competitors which may be developed as a commercial partner in the future.

Employees Treatment

1. The Company selects the staffs and the contractors based on the suitability of the qualification and the performance without any prejudice on gender, religious beliefs, nationality, age, birth place or physical condition.
2. The Company provides sufficient benefits and fair compensations to all members of staff.
3. The Company provides a safe environment at work for the health, assets and the quality of life of the staffs.
4. The promotion, relocation including the rewards and penalty of the staffs are done through honesty and under moral principles. This takes into account the knowledge, abilities and the appropriateness of the staffs as the core.
5. Provide human resource management system; listen to the opinions and the advices of the employees.
6. The Company gives opportunities for staffs to thoroughly and constantly improve their skills, knowledge and the abilities both for the work and for their daily lives and also encourages them to be able to care for themselves when they reach retirement.
7. Operate the business by avoiding any actions that are unfair, and treat the employees with respect. Respect the employees’ individualities and human dignities according to the international standard of human rights.
8. Be fair and encourage the employees to improve themselves.
9. Provide provident funds for the employees.
10. The Company follows the laws and regulations concerning the staffs strictly.

Community, Society and Environmental Treatment

1. Not cooperating or supporting customers who operate their business illegally or endangering the society or the country.
2. Allow the community and the related parties to voice their opinions for all of the projects that may affect the community and to propose their opinions and complaints that resulted from the business operation of the Company.
3. Be cooperative with operations that follow the international standards or agreements in various issues which are created to protect or reduce the effects on the environment.
4. Design and develop the manufacturing process, machineries and equipment to control and/or reduce the pollution, including waste water, dust, air pollution and all other waste products.
5. The staffs responsible for the manufacturing process, machineries and equipment must control the pollution level so that it is no more than the standard limit.
6. Help reducing the garbage or wastes both from the production process and from general operation.
7. The staffs responsible for the manufacturing process or the machineries mustlook after, improve and maintain the production process or the machineries to the required standard in order to reduce the natural resources used.
8. Be cooperative with the Company’s energy conservation policy.
9. Constantly raise the awareness on the social responsibility and the environment to all levels of staffs.
10. Carry out community, society and environmental campaigns regularly in order to improve the community where the Organization is established for the better both with own projects and those supported by the government and the community.

4. Information Disclosure and Transparency

The Company prioritizes the disclosing of all important information relating to the Company, both financial and non-financial information through an accurate, complete, on-time and transparent channel which is easy to access, fair and respectable.

The Company believes that the quality of the financial related reports is something that the shareholders and the outside information give the utmost importance to, the Board of Directors will make sure that all theinformation displayed in the financial reports are accurate and follow the general standard accounting practices and have been evaluated by an independent auditor. The Company has appointed the Audit Committee, which consists of independent directors who takes responsibility for the quality of the financial report and the internal control. The Board of Directors’ reports, Audit Committee’s report and the auditor’s reports

Other than disclosing the information through the Company’s website at www.sankothai.net, both in Thai and English, for the past year, the Executives of the Company had met with analysts, investors and shareholders as appropriate, opp day, for example at the MAI forumhosted by the MAI Stock Exchange and through other appointments for interviewing by the medias and other investors and analysts. In many occasions, the information had been featured in printed

5. Responsibilities of the Board of Directors

The Board of Directors has the vital role of overseeing the operation to ensure the benefits of the Company. The Board of Directors takes action in place of the shareholders and is independent from the management.

The Board of Directors must have leadership, visions and can make an independent decision for the benefits of the Company and for the shareholders. In order to do so, the system is in place to clearly separate the responsibilities between the Board of Directors and the management, and to ensure that all of the Company’s activities proceed in a lawful and ethical way

The Board of Directors consists of personnel with various qualifications, not only skills and experiences but also specialized talents that are useful to the Company, including their devotion and dedication to strengthen the Company and the Board of Directors.

The procedure to elect the Board of Directors, so that they can be appointed by the shareholders, have been done transparently with no influences of the shareholders or from the management team and is assuring to the outside individuals.

To ensure that the Board of Directors can work efficiently and the effectively, the Board of Directors had asked for the Audit Committee to help supporting the directors in the area of financial reports, internal control system’s efficiency and executing the rules, regulations and all codes of ethics to promote good corporate governance.

Each director has a good understanding of their responsibilities as Board of Directors and to operate the Company, always ready to share their opinions independently and constantly improve themselves to adapt to the modern times. The Board of the Directors holds this position with honesty, carefully and thoughtfully by considering the benefits of the Company and being fair to all shareholders, giving all information fully and completely.