Policy on Connected Transactions
The Board of Directors is aware of the importance of conducting its business with transparency and its stakeholders. Therefore, the Company’s good corporate governance policies clearly indicate that connected transactions with the Company and its subsidiaries has, at a minimum, be approved by the Company’s management. In agreements that are considered connected transactions and falls under the criteria stipulated by the Stock Exchange of Thailand, it will be disclosed in line with policies demanded of listed company connected transactions. And/or in cases where the transactions pertain to sales or purchases of listed companies, the Company will follow the rules of the Stock Exchange of Thailand, which requires the Company to seek the opinion and/or approval from the management and/or at the Board of Directors meeting, and/or at the shareholders’ meeting, as is appropriate, whereby related parties are ineligible to vote.
To avoid conficts of interest, the Board of Directors is prudent in looking out for transactions that may potentially lead to such problems, by stating policies and steps to be taken to approve connected transactions in the Authorization and Procedure Manual and/or gain approval from shareholders according to the Stock Exchange of Thailand’s regulations. Moreover, the Company has to follow the Stock Exchange’s guidelines in setting prices and conditions of each transaction at an arm’s length basis. The Audit Committee will evaluate the transaction and present connected transactions and those that may have conficts of interest to the Board of Directors on a regular basis.
The Company and its subsidiaries do not have a policy of conducting connected transactions except in cases where the Company believes that the transaction will yield the highest returns, which may be in terms of pricing and trade conditions, which are generally on par with market rates, similar to agreements with external parties. The Company has ruled that these transactions have to be approved by the management and/or the Board of Directors, and/or shareholders’ meeting as appropriate.
In connected transactions that are in the form of fnancial assistance, the Board of Directors has listed policies for this type of transaction in the Authorization and Procedure Manual, which was approved by the Company’s Board of Directors, as follows:
- 1 . In cases where fnancial assistance is provided or received from connected persons, or from a company that the Company or its subsidiaries owns shares - at a rate that is lower than the connected party’s shares held in that company - the Board of Directors is authorized to approve the transaction.
- 2. In cases where fnancial assistance is provided or received (unlike that in the preceding situation), authorization lies with the Co-Chief Executive Offcers (for amounts within Baht 1 million) or the Board of Directors.
Moreover, as the Board of Directors is aware of the importance of potential conficts of interest, and has assigned that various reports are made. These reports are on:
- 1) Report on probable Conficts of Interest Transactions Details of the parties that may have conficts of interest, their relationships, and type of transaction, terms, pricing policies, transaction value, and reasons why the transaction is necessary, and the views of the Audit Committee are all indicated in the report and/or in the Report Form 56-1 and in the annual report (Form 56-2), which appears in detail under the section “Connected Transactions”
- 2) Report on Security (GRAMMY) Acquisition and Change
The Company has a policy that the Board of Directors, Executive Committee, and management team (as defned by the
Securities and Exchange Commission and the Stock Exchange of Thailand), their spouses and minority offspring report their
GRAMMY shareholdings and changes to the number of shares held, which will be summarized and reported to the Board of
Directors every six months.
As at 31 December, 2010, details of shares held by members of the Board of Directors, Executive Committee, and members of the Management Team appears in the section “Management Structure”
In 2010, the Company did not breach or fail to follow the Stock Exchange of Thailand and the Securities and Exchange Commission’s regulations on connected transactions. - 3) Report on Interest of Directors, Executives, and Related Persons Directors, management and related parties (as defned by the SEC and SET) has to fle a report on their interests to the Company, which will be summarized by the Company Secretary, which will include any changes, and duly presented at the Board of Directors meetings every six months.
