Thai Language

Responsibilities of the Board of Directors

The Board of Directors has appointed Committees, comprising: directors, independent directors, and members of management who are knowledgeable, competent, and experienced in being Committee, to implement special duties in evaluating and assessing various matters with great clarity, accuracy, and suitability, before presenting the fndings to the Board of Directors for their opinion, acknowledgement, or endorsement as necessary. This procedure will support the Company’s overall operations in line with good corporate governance. The Board of Directors has clearly listed the qualifcation and responsibilities and/or terms of each each Committees, and these elements are frequently revised and updated as appropriate.

Structure of the Board of Directors

The Board of Directors consists of knowledgeable, capable, skillful, and experienced individuals in the operation of the business, and understands their roles and responsibilities well, to enable the organization to operate effectively.

In support of good corporate governance, the Board of Directors has stipulated that the Chairman of the Board an individual who is not a Co-Chief Executive Offcer, with clearly segregated responsibilities and scope of authority, as outlined in the Company’s Authorization and Procedure Manual. Furthermore, the roles, responsibilities, and authority of the Board of Directors is different from that of the Management, indicated in detail in the section “Management Structure” on page 55-57. There is additional communications sent to publicize these roles and responsibilities to all directors, management, and employees on a regular basis.

Checks and Balance with Non-Executive Directors

The Board of Directors has a system that clearly divides the authority, roles and responsibilities of the Board from the Management Team. Every director has the freedom to openly express their opinions on the Company’s operations, while being responsible for duties executed in accord with the law, the Company’s Articles of Association, and resolutions passed at shareholders’ meetings. Directors are expected to carry out their duties with integrity and protect the interests of the Company and all stakeholders. The Board of Directors has been organized with the appropriate number of directors for the scale of the Company’s business. As at 31 December, 2010, the Board comprises 12 qualifed members:

Executive Directors 8
Independent (Non- Executive) Directors 4 (33.33% of the Board of Directors)

Policy for Company’s Directors and management who are directors in other companies

Under the recommendation of the Stock Exchange of Thailand (SET), the Company is currently revising and updating the policies related to directors and management team members who are also directors in other listed companies.

At the Annual General Meeting over the past year, the Board of Directors proposed the appointment of directors whose terms are due to expire. By law, one in three Directors of the Board are required to step down from their positions, with Directors who have been appointed the longest step down from their positions frst. Directors whose terms have expired may be re-elected. However, the procedure has to be in accordance with the Public Limited Companies Act and Article 14 of the Company’s Articles of Association. Therefore, the Company currently has not determined the duration of the Board of Directors’ terms, because the view is that these Directors are knowledgeable, capable, and experienced individuals who have generated value to the Company and can continue to perform and fully dedicate their time and effort to the Company. Nevertheless, the appointment of each Director to the Board is made through resolution at the Annual General Meeting.

The move for the Company’s Chief Executive Offcer and senior management team members to serve as directors in other companies, the protocol should follow the Public Limited Companies Act B.E. 2535. In the past, the Company’s Co- Chief Executive Offcers and members of the senior management team are permitted to simultaneously serve as directors in companies within the Group, as necessary. This is regarded as a positive move which benefts the Group as a whole and does not affect their performance and responsibilities, as long as the decision is approved by the Board of Directors or authorized parties.

Policy setting and monitoring

The Board of Directors is responsible for setting policies and ensuring that the Company operates under good corporate governance principles, laws, and various regulations, along with efforts to care for society and the environment. The Board of Directors is jointly responsible for determining the Company’s vision, mission, strategy, and objectives, as well as various policies on corporate governance. The Business Ethics and Code of Conduct Handbook outlines policies that prevent conficts of interest, as well as policies to develop human resources and internal control systems. These rules and regulations are used as a point of reference and as a guideline to manage and operate the organization

The Board of Directors has arranged the publication of the Company’s strategies, goals, vision, mission, and corporate governance policies in the “Business Ethics and Code of Conduct Handbook” and distributed it to directors, management, and employees, as well as various other channels including the intranet and the company website (http://www.gmmgrammy.com) so that the entire organization can apply the ideas at work, and execute individual duties responsibly, transparently, honestly, and ethically towards themselves, the organization, shareholders, and stakeholders.

Moreover, the Board of Directors carefully monitors the progress and performance of the organization’s internal control and risk management systems to see whether they are suffcient for the nature of the Company’s business. The Directors also provides guidelines on assessing the performance of management and operational staff, whether they are effcient and effective in delivering according to business plans and targets, according to the law, various rules issued by regulatory bodies from different departments and related authorities, and resolutions from the Annual General Meetings, to generate the greatest economic value to the business.

In 2010, the Company did not act in any way that broke rules and regulations of the Stock Exchange of Thailand and the Securities and Exchange Commission.

Internal Control System and Internal Audits

Internal Control System The Board of Directors recognizes the importance of an internal control system, and has installed an internal control system that governs the fnancial, management and operational aspects for greater effectiveness and effciency, in accordance with related laws and regulations, while emphasizing continuous improvement according to COSO (The Committee of Sponsoring Organizations of the Treadway Commission). The Board has set clearly written guidelines of duties and authorities for the management, as well as laying down controls and ways that the Company’s assets can be used to generate the greatest benefts. To serve as checks and balances, the roles and duties of front-line operators, supervisors and evaluators are also clearly delineated. In addition, the Company ensures that there is a fnancial reporting system to be presented to those in the direct line of responsibility. The Board of Directors has expressed its opinion on the suffciency of the Company and subsidiaries’ internal control system

Internal Audit The Company’s Internal Audit Department is responsible for reviewing the operation systems, as well as providing advice and opinions on the internal control system, risk management, and corporate governance. This is done so the Board of Directors can evaluate the effciency and suffciency of the Company and subsidiaries’ internal control system. To ensure that major operations and important fnancial transactions of the Company and subsidiaries are conducted effciently and that the policy and objectives set by the management have been fulflled. The Department also reviews whether the Company abides by relevant laws and regulations, so the organization can continue to improve its process. To push the Company to excel, the Internal Audit Department has to operate according to international standards by using the COSO Internal Control Integrated Framework which is linked to the COSO Enterprise Risk Management Framework.

So that the Internal Audit Department remains independent in order to be able to fully assess and perform its duty as a checks and balances, the Board of Directors has stipulated that the Internal Audit Department report directly to the Audit Committee and perform internal auditing according to an annual plan approved by the Committee. The Department reports on the audit results and makes suggestions to the Audit Committee and Chief Executive Offcer in a timely and consistent manner.

Risk Management The Company views the importance of having risk management procedures to minimize internal and external risk factors to an appropriate and acceptable level for each business unit by actively encouraging the participation of management and employees at all levels. In 2009, the Board of Directors evaluated and approved the Risk Management Committee Charter, as well as the Risk Management Policies and Framework for the Company as proposed by the Risk Management Committee. The Board has reviewed the appointment of a Risk Management Committee, and the scope of work and responsibilities of this Committee. The Risk Management Committee will coordinate with the Audit Committee on reporting important risks and solutions to the Board of Directors and the risk management procedure. The Committee will also review the Risk Management Policies and Framework as needed, and propose the fndings to the Board of Directors for approval.

Risk Management Policies and Framework The Board of Directors is well aware of the importance of developing a risk management system that encompasses the entire organization. Therefore at the Board of Directors’ meeting No. 1/2551, the Board approved of a Risk Management Policies and Framework to manage the Group’s risks, effective as of 28 February, 2008. The information was publicized through the Group’s intranet so the entire organization realizes its signifcance. The content of the announcement is summarized as follows:

The Management and all employees have to realize that one cannot avoid risks in operating a business. At work, risks may arise from carrying out duties and responsibilities or from external factors, which will affect the ability to achieve the organization’s objectives. Therefore, there is a need to manage risks according to the type of business conducted. To be able to systematically manage risks, there is a need to determine the risk appetite and risk tolerance as standards in ranking key risk factors and devise measures in managing those risks that deviate from the standards or the index that measure the degree to which objectives are achieved. In order to manage risks, it is necessary to gauge the relationship between risks and benefts through different techniques and steps that form the risk management framework. By doing so, this will allow the organization to learn to identify and evaluate the risks that exist and may arise. This will enable the organization to decide on a path to manage those risks, and accept risks that can be controlled and quantifed.

Risk management is everyone’s responsibility, from the Board of Directors, Audit Committee, Risk Management Committee, Executive Committee, the Management Team, the Risk Management Sub-Committee, and/or related working committees, as well as employees at every level. Everyone has a responsibility in understanding the principles of risk management within the scope of each person’s work, and takes the responsibility for making appropriate decisions to manage risks. The key risks and the procedure to manage them completely still requires continuous development to ensure that the ways that risk is currently managed serves as a role model in conducting business, add value to the organization, and is in line with the organization’s annual goal and missions. The Risk Management Committee and senior management will play signifcant roles in promoting risk management within the organization.

Therefore, there will be frequent reviews and updates to the Risk Management Policies and Framework to ensure that the system suits the constantly changing corporate environment. Any changes made to the policies and framework will require agreement from the Risk Management Committee and the Board of Directors, respectively.

New Director Orientation

In order for new Directors to achieve their objectives, roles and responsibility that have been assigned, the Company has promoted and facilitated the training and education of new Directors in terms of corporate governance and the Company’s business operations. The Board has assigned the Company Secretary to present information and explain the Company’s business and related information such as its capital structure, shareholders, operational performance, as well as laws and regulations that are useful information for directorship such as:

Moreover, the Company has arranged for new Directors to visit its operations to better understand the nature of the Company’s businesses.

Developing Directors’ Knowledge

The Company is well aware of the importance of augmenting its directors’ knowledge, and has thus supported and facilitated their further study through training developed specifcally for directors, as well as courses or seminars that are aimed at improving operational skills. The Board of Directors has assigned the Company Secretary to keep directors informed of various training courses.

As at 31 December, 2010, six members of the Board and one Executive Committee, totaling seven directors completed 14 training courses organized by the Thai Institute of Directors (IOD). Moreover, two Board members and one Executive Committee, totaling three directors completed seven training courses organized by other institutions, as follows:

Courses offered by the Thai Institute of Directors (IOD):

NAME TITLE COURSES ORGANIZED BY IOD
1. Mr. Sumeth Damrongchaitham Director
Executive Committee		 1. Company Secretary Program (CSP) (Class 28/2551)
2. D&O Insurance: Mitigating Directors Liabilities Risk /
Special Seminar (Class 3/2551)
3. Role of Compensation Committee (RCC) (Class 3/2550)
4. Director Accreditation Program (DAP) (Class 21/2547)
2. Mr. Dej Bulsuk Director
Independent Director
Audit Committee		 1. Director Certifcation Program (DCP) (Class 0/2543)
3. Mr. Weerawong Chittmittrapap Director
Independent Director
Audit Committee		 1. Director Certifcation Program (DCP) (Class 0/2543)
4. Miss Suwapa Charoenying Director
Independent Director
Audit Committee		 1. Successful Formulation & Execution of Strategy
(Class 6/2553)
2. DCP Refresher (Class 1/2548)
3. Finance for Non Finance Director (Class 1/2546)
4. Director Certifcate Program (DCP) (Fellow Member)
(Class 1/2543)
5. Mr. Kreingkarn Kanjanapokin Director
Executive Committee		 1. Financial Statement for Directors (2008)
2. Director Accreditation Program (DAP) (Class 30/2547)
6. Miss Suwimol Juengchotikapisit Director 1. Director Certifcation Program (DCP) (Class 12/2544)
7. Mr. Vichate Tantiwanich Executive Committee 1. Director Certifcation Program (DCP) (Class 2/2544)

Courses Organized by Other Institutions:

DIRECTOR TITLE COURSE/INSTITUTION
1. Mr. Sumeth Damrongchaitham Director
Executive Committee		 1. Senior Management (Class 8/2552)
(Capital Market Academy)
2. Miss Suwapa Charoenying Director
Independent Director
Audit Committee		 1. Certifed Financial Planner (CFP) (Class 1/2552)
(Thai Financial Planners Association)
2. TLCA Executive Development Program (EDP2) (Class 2/2551)
(Thai Financial Planners Association)
3. Senior Management (Class 1/2548)
(Capital Market Academy)
4. Certifcate in Families Business : Generation to Generation
(2004 - Harvard Business School)
3. Mr. Vichate Tantiwanich Executive Committee 1. Certifed Financial Planner (CFP) (Class 1/2552)
(Thai Financial Planners Association)
2. Executive Leadership Program (2005)
(NIDA - Wharton, Pennsylvania, U.S.A)

Nevertheless, the Company still encourages the Board of Directors and/Executive Committee, as well as the (new) Company Secretary to continue to enroll in training courses or participate in training seminars organized by the Thai Institute of Directors and other institutions (such as the Thai Listed Companies Association and Thai Investors Association), to augment their working knowledge.

Succession Plans

The Board of Directors sees the importance and need to support the development of a succession plan, which is one aspect of corporate strategy in managing human resources. In planning or honing potential resources at the management level to replace or support management who are promoted or transferred, as well as replace vacated key senior management positions, or those who can no longer perform their duties, will enable the Company’s operations to run smoothly.

In 2010, the Company is still studying ways of developing suitable succession plans.

Board of Directors’ Meetings

The Board of Directors arranged the Board meeting schedule for four ordinary meetings one year ahead of time, and extraordinary meetings are added as required. Agenda items in meetings are also determined ahead of time, and divided into clear categories such as: request for approvals, request for approvals and ratifcations, request for agreement, information to be acknowledged, and issues to be evaluated and monitored. The Company has guidelines in evaluating whether an issue should be added to the agenda in a Board meeting, so that only important issues are included. Each Board member can independently propose issues to be added to the meeting agenda. The Company Secretary will issue invitation letters to the Board, complete with the agenda and related documents at least seven days before the meeting so Directors have suffcient time to study the information before attending the meetings, that mostly last one to two hours. Normally, the Chairman will open the foor up to each Director to freely voice their views, while making sure that the meeting agenda discussions are allocated a suitable amount of time for the greatest effcacy. In cases where there are Directors who have signifcant conficts of interest with regards to the issue at hand, the Director will inform the meeting, and abstain from voting and expressing any opinion on that agenda item.

In 2010, the Board of Directors held four ordinary meetings and one extraordinary meeting for a total of fve meetings. Individual directors’ attendance appears under the section, “Management Structure”

Minutes of the meetings are recorded in detail and endorsed by the Board, and is available for inspection by the Board of Directors and related parties.

Moreover, the Board of Directors has a policy of supporting Independent Directors/Audit Committee Directors to hold meetings amongst themselves, as necessary to debate various issues related to areas of interest under their management procedure without the presence of the management.

In 2010, the Audit Committee composed of Independent Directors held one meeting with the External Auditor, which was not attended by any member of the management team.

Annual Self-Assessment

The Board of Directors’ Self-Assessment

The Board of Directors organized its own Annual Self-Assessment to be used as a framework in evaluating and reviewing its own performance, revisiting problems and obstacles encountered during the course of the past year so that it can make correct and improve its effcacy. Since 2007, the Company has been using the Board self-assessment forms issued by the Stock Exchange of Thailand’s Corporate Governance Center. To comply with international corporate governance practices, the assessment is divided into six categories:

There are fve Board Self-Assessment rankings:

5 = Excellent, 4 = Very Good, 3 = Good, 2 = Fair, 1 = Needs improvement

The Board of Directors’ annual 2010 self-assessment summary is as follows:

The number of Directors on the Board is appropriate for the nature of the Company’s business. The Board comprises individuals who are knowledgeable, competent, experienced, and understands the business well. One in three directors on the Board are non-executive directors. The Board is supported by committees, namely: the Audit Committee, Executive Committee, Nomination and Remuneration Committee, Risk Management Committee, and the Corporate Governance and Ethics Committee that have clearly delineated roles and responsibilities, and directors who are able to allocate suffcient time to perform their duties as the Company’s directors.

The Board of Directors participates in the setting of vision, mission, strategy, goals, and consistently reviews and follows up on the Company’s performance. The scope of authority in operating, evaluating and approving fnancial decisions are clearly set out, emphasizing the importance of accurate fnancial reports, adequacy of information disclosure, ensuring that there are no conficts of interest and that all transactions are conducted on an arm’s length basis. In connected transactions and transactions with conficts of interest, directors with vested interests are prohibited from voting. The Board has cordial relations with the investigation/assessment team that pursues investigations and does not interfere with them while performing their duty.

The Board of Directors monitors that the Company has suffcient internal control and risk management systems appropriate for the business and encourages the Company to continue abiding by the SET and SEC’s rules and regulations, Good Corporate Governance Policies, and the Business Ethics and Code of Conduct Manual.

Audit Committee Self-Assessment

The Board of Directors has stipulated that the Audit Committee conduct an annual self-assessment on the Committee’s performance, and report the results to the Board. Moreover, the assessment allows the Committee to evaluate its performance, problems and obstacles at work during the year, in order to correct and improve its effcacy at work. The Audit Committee Self-Assessment is based on the Audit Committee Charter and the scope of its authority and responsibilities of the Committee as assigned by the Board of Directors, good corporate governance policies that were passed by resolution at the Board of Directors’ meeting No. 1/2552 held on 27 February, 2009. (The resolution became effective the same day). The “Best Practice Guidelines for Audit Committee” compiled by the Stock Exchange of Thailand, the Thai Institute of Directors, and companies that were given excellent rankings in terms of good corporate governance was applied as appropriate in developing the audit assessment. The Committee is assessed in fve areas:

Results in the Audit Committee Self-Assessment is divided into three rankings: “Performed well and appropriately”, “Performed partially”, and “Did not commence operations”.

In 2010, the Audit Committee’s Self-Assessment was: “The Audit Committee performed their tasks as assigned completely and appropriately. The Committee’s duties was carried out knowledgeably, competently, within the authority granted to them, and the responsibilities as assigned according to the Audit Committee Charter, and in line with good corporate governance guidelines for Audit Committees.”

Moreover, the Audit Committee summarized its key missions in terms of corporate governance, and expressed its opinion on the basis of performing their duties (Audit Committee’s Report) in 2010 to the Board of Directors’ meeting No. 1/2554, on the 25 February, 2011. Details can be seen in the section “Audit Committee’s Report”

Co-Chief Executive Offcers’ Assessment

At the Board of Directors’ meeting No. 1/2553, guidelines and procedures for Co-Chief Executive Offcers’ assessment were approved. This was done as a part of good corporate governance and provides a standard to determine remuneration for the Co-CEOs. The Board has authorized the Nomination and Remuneration Committee to conduct the annual performance assessment, and present the results to the Board for approval. The assessment covers three main categories, namely:

The criteria used to assess the Co-CEOs at work can be divided into fve rankings:

5 = Excellent, 4 = Very Good, 3 = Good, 2 = Fair, 1 = Needs improvement

The overall assessment, with total scores of 100% can be classifed into fve levels:

In 2010, the Nomination and Remuneration Committee reported to the Board of Directors at the Board of Directors’ meeting No. 5/2553, held on 12 November, 2009, that the overall assessment of the Co-CEOs in all three categories was: Very Good (90% - 95%).

Corporate Governance