Going Public Guide

Matching Your Right Financial Opportunities : English Version

This booklet explains the listing criteria and its process, applicable to both

The Stock Exchange of Thailand (SET) and Market for Alternative Investment (mai).

Going Public Guide

The Securities and Exchange Commission Thailand (SEC)

333/3 Vibhavadi-Rangsit Road Chomphon Chatuchak, Bangkok 10900 tel: 0-2695-9999 fax: 0-2695-9660 website: www.sec.or.th

Federation of Thai Capital Market Organizations (FETCO)

11th Flr. Room 1106 62 Ratchadapisek Road Klong Toey, Bangkok 10110tel: 0-2229-2609 fax: 0-2654-7755 website: www.fetco.or.th

Thailand Listed Companies Association (TLCA)

8th Flr. 62 Ratchadapisek Road Klong Toey, Bangkok 10110tel: 0-2229-2162-3 fax: 0-2654-5559 website: www.thailca.com

mai Listed Companies Association (maiA)

62 Ratchadapisek Road Klong Toey, Bangkok 10110tel: 0-2654-5564 fax: - website: -

Association of Thai Securities Companies (ASCO)

Lake Rajada Office Complex 2, 5th Floor 195/6 Rachadapisek Road, Klongtoey, Bangkok 10110tel: 0-2264-0909 fax: 0-2661-8505-6 website: www.asco.or.th

Association of Investment Management Companies (AIMC)

Lake Rajada Office Complex 2, 3rd Floor 195/4 Rachadapisek Road, Klongtoey, Bangkok 10110tel: 0-2264-0900-3 fax: 0-2264-0904 website: www.aimc.or.th

Federation of Accounting Professions (FAP)

133 Sukhumvit 21 Road, Wattana Dist., Bangkok 10110tel: 0-2685-2500 fax: 0-2685-2501 website: www.fap.or.th

The Stock Exchange of Thailand

62 Ratchadapisek Road Klong Toey, Bangkok 10110

New Listing Department

tel: 0-2229-2222 fax: 0-2654-5596

website: www.set.or.th, www.mai.or.th

Table of Contents

Benefits of listing on the exchange 4

Going public: benefits to the company 5

Going public: benefits to shareholders 6

Preparation 8

Prior to listing on the exchange 8

Listing process 9

Listing qualifications on The Stock Exchange of Thailand (SET) and 13

Market for Alternative Investment (mai)

General listing qualifications 13

Listing qualifications for infrastructure companies 14

Listing qualifications for holding companies 15

Listing qualifications for renewable energy businesses 17

Relaxation of listing requirements 18

Good governance 18

Listing expenses 19

Corporate governance 23

Independent Director and Audit Committee members 24

Internal control 26

Corporate secretaries 27

Public disclosure 28

Other statistics and information

SET and mai listing statistics 7

What SET provides to its listed companies 30

Benefits of listing on the

exchange

If your company’s key objectives are to achieve

sustainable growth and business continuity, listing can

help ensure these objectives be achieved successfully.

Business opportunity, expansion,

and sustainability

Listed companies have access to a long-term

funding source; allowing further financial flexibility

and also enhances reputation and credibility.

Flexibility, reputation, and credibility combined

will create opportunities which a listed status is

able to grant to businesses. Your business will become

more systematic and professional, attracting a

quality workforce as a result of being listed.

5

Going public: benefits to the company

1. Long-term funding source

Listing creates opportunities to connect with

investors via an initial public offering (IPO). Funds raised

via an IPO are free from repayment obligations, therefore

providing further financial flexibility.

2. Numerous funding methods for

effective financial management

Listed companies may issue various kinds of finan-

cial instruments - whether it is equity, debt, or a hybrid

of both, debentures, convertible bonds, warrants and

more. Innovative utilization of financial instruments will

enhance a company’s financial structure and maximize

effective financial management.

3. Reputation and credibility

Listed companies gain a certain level of recogni-

tion. They could improve their corporate image because

of their professional management, including adherence

to SET’s disclosure policies, creating trust and confi-

dence among customers, financial institutions, inves-

tors, and partners. In addition, there will be increasing

business opportunities in attracting strategic partners

for expansion and sustainable growth.

4. Employee engagement and loyalty

A company’s human resources department is one

of the most important factors contributing to its success.

Giving employees the chance of ownership will boost

employees’ engagement and loyalty levels. Employers

may engage employees in variety of proven incentive

programs such as employee joint investment program

(EJIP) or an employee stock option program (ESOP).

Benefits of going public

Becoming listed is not only beneficial to business and its shareholders but also to all stakeholders, which are

namely business partners, creditors, debtors, investors, capital market, and the economy. However, immediate benefits

are depicted on business and shareholders levels.

6

Going public: benefits to shareholders

1. Liquidity

Listed companies will have higher liquidity than

before, characterized by level of trading activities, as

shares are exchanged from one person to another nu-

merous times a day. All in all the market price should

reflect the real value of the business.

2. Collateral

As securities are liquid and are based on trading

value; they are easily accepted as collaterals for loans

from financial institutions.

5. Professionalism

Once listed, the exchange requires listed compa-

nies to constantly disclose relevant information—includ-

ing their news and activities, via SET’s communication

channels. Companies will get increasing publicity and

become attractive to a wider range of investors. As

such, management will uplift its standards, becoming

increasingly professional, and taking on more respon-

sibility.

6. Business sustainability

By being listed, the management of a family busi-

ness will become more professional, and recruit profes-

sional managers to strengthen team. Future generation

family members can stay or leave the company to do

other businesses, while remaining shareholders. Thus

the business their forefathers have built will not be lost

and shall continue towards expansion and sustainability.

3. Leverage

Credibility earned through vigorous tests and re-

quirements from both the SEC and SET helps increase

trust in dealings with financial institutions. The company’s

negotiating power increases and it can also reduce its

collateral burden.

4. Tax exemption on individual

shareholders’ capital gain

Capital gains on listed securities for individuals

are tax exempt. This is unlike unlisted securities, where

gains are not tax exempt and could be taxed under a

progressive structure that goes as high as 35%.

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Total number of listed companies on SET and mai

Number of newly - listed companies Number of listed companies

579

7

SET and mai listing statistics

SET has seen a continuous growth in number of listed companies, by the end of 2013,

there are 579 listed companies’ securities trading on the exchange.

Newly-listed companies

Total listed companies

Source: SET

Dec 27, 2013

Remarks: Newly-listed and listed companies do not include property and infrastructure funds, or

companies undergoing re-structuring or change of name.

8

Preparation

Prior to listing on the

exchange

Procedure:

A company planning to list its securities on the exchange may take the following precautions before selecting

a designated financial advisor(s) by:

If necessary, replacing the company’s auditor with one approved by the SEC to audit the financial state-

ments of the latest fiscal year prior to IPO filing;

Upgrading vigorous changes in the company’s accounting and internal control systems to meet the

standards;

Recruiting competent independent directors and audit committee members;

Preparing a clear business plan showing how funds raised by the IPO will be used to secure the compa-

ny’s sustainable growth;

Arranging documents systematically in categories, making it convenient for the financial advisers to study

and prepare due diligence and other necessary documents for IPO filing.

After such preparations, the company may appoint financial advisor(s) to assist in re-structuring the company,

its business, capital and shareholding structures, as well as its IPO filing application preparation to be filed with the

SEC and the listing application to be submitted to the exchange. The company should appoint competent financial

advisor(s) who are dedicated and committed to the task as well as being able to satisfactorily work with the company.

9

Listing process

Step 1 Appoint financial advisor(s) and

auditor (if not appointed prior to this

point)

Duration: approximately 6 months - 1 year

The company shall select financial advisor(s)

approved by the SEC to assist in its IPO filing preparation.

The duties of the financial advisor are as follow:

Establishing listed-standard internal con-trol system;

Conducting due diligence;

Re-structuring the company’s business, equity and shareholding structures;

Preparing the company’s information for IPO filing with the SEC as well as the listing application with the exchange;

Distribute securities (if possess an under-writing license) or coordinate in acquiring an underwriter(s) to help distribute secu-rities;

Continue to assist the company for at least another fiscal year, starting from its first trading day on the exchange.

Step 2 Conversion of company limited

into public company limited

Duration: approximately 1 month

Prior to its IPO filing, a company limited is required

to officially convert to a public company limited—con-

forming to all laws regarding such status as well. Nor-

mally, the conversion process takes 1-2 months in order

for it to become effective. A legal advisor (can be an

in-house officer) will undertake relevant actions regarding

the conversion as well as consultation and advisory.

10

Characteristics of a public company limited

According to the Public Company Limited

Act B.E. 2535, structure of a public company limited

needs to comply with the following provisions:

1. Number of shareholders : at least 15 or more

shareholders

2. Registered capital : no minimum

3. Paid-up capital : all shares are equal in

value and paid in full

4. Number of directors : at least 5 directors and

no less than half the

number of directors

must have Thai residency

Registration documents

1. Complete application form(s),

2. Memorandum of Association (MOA),

3. Objectives,

4. Registration form,

5. The list of shareholders,

6. Annual report, copy of financial statement, and

copy of AGM/EGM meeting report,

7. Code of conduct,

8. Name reservation form (in case name was not

in Thai),

9. Power of attorney form (if any).

Steps for Conversion to a Public Company.

Private Company

The Board of Directors approves the convening of an extraordinary/annual meeting

of shareholders (EGM/AGM);

Notices of the extraordinary meeting of shareholders are sent out to shareholdes

and published in a newspaper;

The meeting approves the conversion(3/4 of the total voting rights);

The existing board hands over the

business to the new board;

The conversion is registered with Thai Minitry of Commerce.

Agenda- Approve the conversion- Consider the memorandum of

association, including company name, objectives, and capital

- Consider the articles of association, elect directors and specify the authority of directors

- Other (if any)

No fewer than 14 days apart

Within 7 days

Within 14 days

11

Step 3 Applying for IPO and listing

Duration: approximately 2-3 months

Afterregistrationofthepubliccompanylimitediscompleted;thefinancialadvisor(s),astheagent(s)ofthecompany,will:

Submit IPO filing to the SEC. The IPO filing consists of three sets of documents, as follows: 1) Application for public offering; 2) Registration statement; 3)*Draft Prospectus.

Submit an application for securities listing to the exchange.

At this stage, the SEC and the exchange will review the submitted documents and later schedule a visit to the company.

The company shall submit additional information requested by the SEC and should be able to provide adequate responds to

any inquiries. The SEC will further revise the IPO filing, which usually takes 45 days after having received all requested infor-

mation. Upon receiving the SEC’s approval to IPO, the exchange will consider the company’s listing application on condition

that the company distributes its securities/shares to minority shareholders at/above the minimum allocation required by the

exchange.

Listing Process

Private Company

Public Limited Company

SEC SET or mai

Filing is approved

IPO Distribution of shares

Submit relevant documents

and fee payment

Trade

Financial Advisor

Minimum share distribution

requirement

*Note: changes can be made to the prospectus while the SEC considers the filing.

12

The SEC put emphasis on good governance with matters regarding shareholders for instance; management

must take into account shareholders rights. Moreover, management must understand its role and responsibilities

regarding its duties according to the Securities and Exchange Act B.E. 2535. Financial statements must comply with

relevant accounting standards and must be collated by SEC-approved auditor. Sensitive and appropriate information

must be disclosed to inform the public for instance; the company has not been pledged guilty of any wrongdoings,

no apparent history regarding compliance with the Securities and Exchange Act B.E. 2535, and/or a copy of annual

shareholders meeting report.

Once filing is approved by the SEC, the exchange will accept the company’s listing application on condition

that they must conform to the exchange’s shares distribution allocation requirements.

Step 4 Distribution of shares to the public

Duration: approximately 3-5 days

Upon obtaining approval to IPO and granted a

listing status on the exchange, it is obligatory that the

company distribute its securities/shares to minority

shareholders at/above the minimum requirement. The

company shall appoint underwriter(s) to assist in the

task of shares distributions.

Therearetwomainmethodsofunderwriting;

Firm underwriting: The underwriter must

distribute all securities. Failing to do so, the

underwriter shall buy all unsold/undistribut-

ed securities. This way, the company can

ensure that the full amount of capital can

be sought.

Best effort underwriting: The underwriter

uses its best efforts to sell/distribute as many

securities as possible. In case that under-

writer is unable to distribute/sell all shares,

the underwriter does not need to buy the

unsold securities. Normally, the fee for this

method is lower than the firm underwriting.

Step 5 Trading and listing on SET or mai

Afterhavingdistributedsharestominorityshare-

holders in accordance with theminimum allocation

requirementbySETormai,SET/maiwillstarttrading

securities.Priortotrading,thecompanymust:

Appoint a securities registrar by opening an

account with Thailand Securities Depository

Co., Ltd. (TSD);

Deposit securities in the amount required

by SET or mai with TSD;

Prepare all reports to be submitted to SET

after IPO; including statement of capital

issued by the Ministry of Commerce,

share distribution report and relevant fees

receipts;

Having received all relevant documents,

SET/mai will announce the listing of the

company’s securities.

In order to reduce the risk of price volatility due to market conditions, SET suggests that distributed shares

shall be traded soonest, such as within 4-5 working days from the last day of distribution.

13

Listing qualifications on SET and mai

SET and mai are committed to seek and to select potential companies to be listed on the exchange in order to

create confidence for investors. To obtain a listing status, a company must have a substantial track record, generates

revenues, and must be able to readily distribute its shares to the public. More importantly, such company must have

good corporate governance as well as pronounced credibility. A listed company must meet all of the following quali-

fications according to each exchange and listing test:

1. General listing qualifications for SET and mai

Code

The Stock Exchange of Thailand (SET) Market for Alternative Invest-

ment (mai)

Net Profit Market Cap. Test

( ≥ THB 5 billion )

Net Profit Market Cap. Test

( ≥ THB 1 billion )

Paid-up capital after IPO > THB 300 million > THB 300 million > THB 20 million

Shareholders’ equity > THB 300 million > THB 300 million > THB 20 million

Track record > 3 years > 3 years > 2 years > 1 years

Netprofit/market capitalization

Total net profit in the latest two or three years > THB 50 million

Market capitalization*>THB 5 billion

Market capitalization*> THB 1 billion

+ most recent year > THB 30 million Profit in most recent

year > 0

+ accumulative results in the most recent quarter > 0

+ accumulative results in the most recent quarter > 0

Same management > 1 year > 1 year

Freefloat Numberoffreefloatrequirement- No less than 1,000 shareholdersPercentageoffreefloatrequirement- No less than 25% of paid-up capital (THB 300 million ≤

paid-up capital ≤ THB 3,000 million )- No less than 20% of paid-up capital (paid-up capital >

THB 3,000 million )

Numberoffreefloatrequirement- No less than 300 shareholdersPercentageoffreefloatrequirement- No less than 20% of paid-up capital

Offering Paid-up capital < THB 500 million - No less than 15% of paid-up capital Paid-upcapital≥THB500million- No less than 10% of paid-up capital or no less than THB

75 million (whichever is higher)

No less than 15% of paid-up capital

*Note:MarketCapitalizationcanbecalculatedbythefollowing

(1) In case the applicant submits a listing application to SET within one year, counting from last day of its

public offering;

(2) In case that the applicant submits a listing application to SET after a year or more from the last date of its

public offering, the fair price determined by the financial advisor shall apply.

14

Silent period for general listing

Strategic shareholders* are not allowed to sell their respective shares in the following conditions:

Amount : 55% of paid-up capital

Period : 1 year after 1st trading day

Permissible sale : May sell 25% of silent period shares (55%) after shares have traded more than 6

months and may sell the rest after another 6 months

*Note: strategic shareholders

Executive directors, management, and relevant individuals;

Shareholders with >5% (including all related parties).

2. Listing qualifications for infrastructure companies

Infrastructures are vital components to growth and development of the national economy. The exchange

realizes the magnitude of these projects and encourages listing of such companies; via a fast-track listing process.

Track record of ≤ 3 years is allowed. While every other condition on the general listing still applies. However, to

minimize risk exposure of investors, the exchange requires such companies to comply with the following additional

qualifications:

Code Requirements

Project(mustfulfillatleastonerequirement)

- Received 20 years or more on project concession from either the public sector or state enterprise with at least 15 years of concession remaining at listing ap-plication date;

- Has been approved by either the public sector or state enterprise;

- Possess contract of sale with public sector or state enterprise, in which such contract guarantees steady revenue.

Sourceoffinancing Distinct and sufficient for operations

*Note : infrastructures include construction and/or system which are essential to growth and development of the

national economy

Electrical units generation and distribution Waterworks and irrigation system Road systems for public use and traffic control Seaport and airport Telecommunication system Pollution control and/or prevention system

15

Silent period for infrastructure companies

Silentperiodrequirementsforinfrastructurecompaniesareasfollow:

Having operating revenue from its main

business prior to listing application

Having no operating revenue from its main

business prior to listing application

Amount : 55% of paid-up capital Amount : 55% of paid-up capital

Period : 3 years after 1st trading day Period : Since its 1st trading day and 3 years after the company obtains its operating revenue from its mainbusiness

Permissible sale : May sell 20% of silent period shares (55%)aftershareshavebeentradedfor1yearandmaysell20%ofsilentperiodsharesatatimeafterevery6months

Permissible sale : May sell 20% of silent period shares (55%) a year after the company obtains its operatingrevenuefromitsmainbusinessandmaysell20%atatimeaftereverysixmonths.

3. Listing qualifications for holding companies

Listingofholdingcompaniesstructuredtoinvestinothercompaniesisbecomingpopularbecause:

Business tend to continuously grow because of the flexibility to expand into related or unrelated businesses;

Affiliated companies are interested in listing their securities at the exchange in which will require restructuring of which takes time, money, and effort;

When a company has affiliates operating different businesses in the same group, it may be difficult to select which one to apply for listing.

The exchange has introduced listing qualification specially designed to accommodate the listing of holding

company, as follows:

16

Holding company Core company

Holding company defined : Company mainly invests in other companies with no significant revenue realized from business operations

Complies with all general listing requirements (excep-tion—track record) Holding company must complied with either profit or market capitalization test;

Invest in at least 1 core company by holding its shares as if core company is its subsidiary or no less than 40% if laws and/or regulations do not allow more in case of public sector and/or state enterprise;

At least 1 year in operation under same management team as that of core company (exception—financial institution holding company and/or core company engages in infrastructure projects);

Controlling interest in core company is proportionate to shares held;

Not an investment company—defined by the SEC as a company that does not invest in core businesses* more than 25% of holding company’s net asset value (calculation by the SEC);

Hold shares in a core company throughout its listed status, however its core company may be changed 3 years after its 1st trading day.

Core company defined : company limited or public company limited which

Complied with all general listing requirements (exception—free-float requirement and inter-dependent directors/audit committee);

Not a listed company;

Operating business;

Core company incorporated outside Thailand (pension fund requirement is not compulsory).

*Note : Core business is defined as

1. Invest no less than 75% of its net asset value in either subsidiaries or affiliates in which the holding company has

invested in no less than 25% or both;

2. Invest in subsidiaries with no less than 25% of net asset value.

General listing requirements’ silent period is also applicable to holding companies.

17

4. Listing qualifications for renewable energy businesses*

Renewable energy business strengthens the Thai economy and support the sustainability of national energy

development. However, many projects struggle to raise fund for their initial investments due to many reasons. The

exchange seeks to promote the renewable energy initiative listing on the mai; therefore we have improved current

listing criteria with requirements of track record, market cap., and net profit to match the characteristics of renewable

energy businesses.

Code Requirements for renewable

energy business

Paid-up capital

General listing requirements apply

Shareholders’ equity

Free float

Public offering

Agencies/governance/internalaudit/

auditor/pensionfund

Netprofit -

Market capitalization ≥ THB 500 million

Track record ≥ 1 year from COD

Same management ≥ 1 year

Silent Period Amount : 55% of paid-up capital Period : 2 years after its 1st trading day Permissible sale : May sell 25% of silent period shares

(55%) after shares have been traded for at least 6 months and later 25% at a time every 6 months

*Note : renewable energy, according to The Energy Conservation Promotion Act B.E. 2535, renewable energy

business operations must revolve around energy that is re-usable and/or renewable i.e. energy from biomass,

hydropower, solar power, waste-to-energy, and wind power. Renewable energy business must prove to be

profitable in the long run by verifying effective sale contract (Power Purchase Agreement) between public

sector/state enterprise and the company or other verifiable sale contracts. Renewable energy business must

have been in operation for at least 1 year after its commercial operation date.

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Relaxation of general listing requirements

SET may relax the following listing requirements if the listing of such company is beneficial and advantageous

to the Thai Capital Market—however, consideration is made on a case by case basis:

1. Paid-up capital

2. Distribution of shares

3. Track record

4. Financial status

Good governance

Instilledbalanceinmanagementpower,presenceoftheauditcommitteeandindependentdirectorswill

ensuregoodgovernance.Moreover,ajustifiableinternalcontrolsystemmustbeabletomakecertain

thatmanagementcredibilityandresponsibilitiescanbevalidated;

Noconflictofinterestbetweenmanagementandmajorshareholdersorbetweencompanyand/orcom-

paniesinwhichitssharesareheldbythesamegroupofshareholders;

FinancialstatementsareaccountablebytheSEC-approvedauditor;

Financialadvisor(s)isapprovedbytheSEC.

19

Listing

expenses

Listing expenses comprise of two types of expenses, they are IPO initial expenses and annual expenses. IPO

initial expenses are financial advisor(s) fee, underwriter(s) fee, public relations expenses, and IPO prospectus printing

expenses.

While annual expenses include auditor fee, securities depository service fee, independent director/audit com-

mittee compensation, annual fee for the SEC and the exchange.

Expenses estimation:

1. Filing preparation

Financial advisor(s) fee

The costs depend on the complexity of each case, fee will be charged accord-

ingly. The following are among the most popular methods used by financial

advisors:

Lump sum

Portion (%) of raised fund

Percentage of completion

20

2. Application expenses

The Security and Exchange Commission

Application fee : THB 50,000

Initial fee : 0.08% of paid-up capital

THB 30,000 on first date of filing

The rest (if any) is due when filing is approved

Annual fee : proportionate to shareholders’ equity

Shareholders’ equity (THB million) Fee (THB)

< 500 50,000

500 – 1,000 100,000

> 1,000 300,000

Listing on the Stock Exchange of Thailand (SET)

Application fee : THB50,000

Initial fee :

MinimumTHB100,000

MaximumTHB3,000,000

0.05% of paid-up capital

Annual fee :

MinimumTHB50,000

MaximumTHB3,000,000

0.01 – 0.035% of paid-up capital

(ataregressiverate)

21

Listing on the Market for Alternative Investment (mai)

Application fee : THB25,000

Initial fee :

MinimumTHB50,000

MaximumTHB1,500,000

0.05% of paid-up capital

Annual fee :

MinimumTHB25,000

MaximumTHB1,500,000

0.02% of paid-up capital

Securities registrar service fee

Securitiesregistrarservicefeeandpaid-upcapitalarecalculatedataregressiverate:

Paid-up capital

(THB million)

Fee calculated at for every THB

1 million of paid-up capitalMinimum fee (THB)

≤1,000 430 30,000

1,001-5,000 380 430,000

5,001-10,000 320 1,900,000

≥10,000 230 3,200,000

3. Underwriting expenses

Underwriters’ fee

The usual rate of which underwriters charge for underwriting securities is approximately 3% of raised

capital value.

22

4. Other expenses

The minimum expense for auditor is apx. THB 500,000;

IPO prospectus printing expense is apx. THB 100,000-300,000;

Public relations expenses.

5. Directors and management compensation

In 2012, The Exchange’s Corporate Governance Center (CG Center) compiled information on assessment of

directors and management compensation:

Position

Number of Listed

Companies

Assessed in 2012*

Average Compensation (Baht)

2008 2009 2010 2011 2012

Directors 523 558,430 527,980 584,206 669,127 655,241

Executivedirectors 358 - - 515,731 546,066 550,605

Non-executivedirectors 447 - - 633,836 799,871 730,987

Chairperson(Board) 423 1,001,151 895,779 978,215 1,044,862 1,014,722

Audit committees 220 209,050 218,912 212,620 220,045 208,027

Chairperson(A/C) 202 269,638 266,596 280,535 255,483 271,128

Executives 462 3,367,438 3,564,679 3,884,658 4,156,458 4,434,509

*Note : The number of listed companies assessed in 2012 was 533, minus 10 companies giving incomplete

information.

InfInformationcategorizedbyfinancialstatus,industry/sector,revenue,andprofitgathered

bySET’sCGCenterareavailableatwww.set.or.th/en/regulations/cg/cg/principle_p1.html.

23

Corporate

Governance

Corporate governance is a set of structures and processes of the relationship between a company’s board

of directors, its management and its shareholders to boost the company’s competitiveness, growth and long-term

shareholder value, taking into account the interests of company’s other stakeholders.

According to SET’s CG Center, the board of directors should ensure:

1. Rights of shareholders;

2. Equitable treatment for all shareholders;

3. Interests of other stakeholders;

4. Disclosure and transparency;

5. Roles and responsibilities of the board.

Informationregardingcorporategovernanceprinciplescanberetrievedvia

http://www.set.or.th/en/regulations/cg/roles_p1.html.

24

Independent director (ID) and

Audit Committee (AC) members

Company applying for listing must have independent directors and an audit committee to represent minority

shareholders as an internal check and balance system:

ID/AC Composition

No less than 1/3 of board members need

to be independent directors , minimum

of 3;

No less than 3 members in the audit

committee, and 1 of which needs to have

expertise in finance.

Independent directors and audit committee must

possess qualifications specified by the SEC and must

be appointed from the board or shareholder’ meeting.

Moreover, they must be able to dedicate a sufficient

amount of time to perform their respective roles.

ID/AC Qualifications

Must be non-executive director;

Holding no more than 1% shares

(including all related persons);

Having no management roles. Never been an

employee or consultant to the company unless

has quit the position in question for minimum

of two years as of the IPO filing date;

Having no business relationship with the

company including not providing professional

auditing services, unless has stopped those

relationships for a minimum of two years as of

IPO filing date;

Not related to management nor major

shareholders;

AC members are not board members of

other listed companies in the group.

25

Audit committee roles and responsibilities

Duties of the committee, prescribed by the board, are described in a committee charter—typically include:

Reviewing the effectiveness of the company internal control system and internal audit as well as ensur-

ing the units independence by authorizing unit head appointment and/or dismissal;

Reviewing the financial report and financial information of the company;

Examine, select, and present appointed auditor as well as considering compensation for the appointed

auditor at an annual meeting between Audit committee and appointed auditor excluding management;

Examine company’s public disclosure when related transaction(s) arises and/or any transaction that

may pose conflict of interests;

Supervising the internal examining unit;

Preparing AC/ID Report as part of the company Annual Report;

Make certain company discloses information regarding Audit committee dismissal prior to term—com-

pany may disclose such information directly to the SEC and SET.

Recommendations

Company should appoint independent directors and audit committee at least 3-6 months prior to its listing

application;

Board and AC members should attend Director Accreditation Program by the Thai IOD prior its filing;

Company should specifies independent directors and AC tenures such as 2-5 years;

Term renewal must be approved by the Board or at a shareholders’ meeting. An automatic renewal is not

advised;

Normally, the AC meets 4 times a year excluding times attending Board of Directors meetings. AC can

request other board’s members, management, internal auditors to attend meetings with specific agenda

items, such as the auditing plan, internal auditing, or financial review.

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Internal control

Thetwokeyconsiderationsforinternalcontrolsystemsare:

1. Adequacy and effectiveness;

2. Ensures checks and balances in management. Clear authority and responsibilities with best practices,

in writing.

Internal control should:

1. Probe for weaknesses;

2. Evaluate management policies and control, ensuring there are checks and balances installed in various de-

cision-making processes, making sure budget-approval processes are delegated in a transparent manner;

3. AC/ID opinion should be independent and conforms to the SEC regulations hence able to protect shareholder’s

rights;

4. Require a committed and comprehensive team ensuring internal control is efficient; also reports regularly to

the Audit Committee.

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Corporate secretaries

According to Securities and Exchange Act (No.4) B.E. 2551, Board of Directors must appoint a corporate sec-

retary(s) via Board meeting or at a shareholders’ meeting. Responsibilities of a corporate secretary are as follows:

1. Prepare and keep documents

1.1 Directors’ registration;

1.2 Invitation to attend the board meetings, meeting minutes and annual reports;

1.3 Invitation letters to attend shareholder meetings and meeting minutes;

2. Collectreportsfordirectorsandmanagementteamonbenefitsandinterests.Submitcopiestochairman

oftheboardandACchairmanwithin7workingdays.

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Public disclosure

Listed companies compliance

Publicdisclosureisrequiredtoprovideusefulinformationtoinvestorsonatimelybasis.The

exchangeisobligatedtoprovideallpartieswiththemostefficientplatformservicewithintegrity

whiledeliveringafairtradingsystemensuringthatinvestorshavesufficientinvestinginformation.It

is of utmost importance that listed companies make immediate public disclosure of all information

concerningitsaffairs-enablingthepublictomakeinformedinvestmentdecisions.Listinganddis-

closuredepartmentattheexchangesupervisesandcontrolsthistask,followingpublicdisclosure

best practices.

Information to be disclosed

There are 2 types of public disclosure:

1. Periodic reports

2. Non-periodic reports

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Category and disclosure period

Periodic reports

Category Schedule (from end of financial period)

1.Annualfinancialreport(audited) 3 months

2.Quarterlyfinancialreport(reviewed) 45 days

3.Annualreport(56-2) 110 days

4.Annualregistrationstatement(56-1) 3 months

*Note : The annual registration statement (56-1) regards annually updated business fundamentals; originally

filed for IPO (69-1).

Non-periodic reports

Cetegory Schedule

1. Price-sensitive information

Disastrous incident;

Out of business or partially;

Change in nature of business;

Increase and reduction of capital;

Dividend payment decision;

Acquiring other business or being acquired by other business.

Immediately

2. Informational for investors

Change within Board of Director;

Change in Memorandum of Association (MOA);

Relocation of head office;

Auditor change.

Within3daysoftheevent

3. Records for the exchange

List of major shareholders (first 10 names);

Annual and Extraordinary General Meeting reports;

Distribution of common shares.

Within14daysoftheevent

Company must disclose information off trading hours and at least 1 hour before next trading session begins.

Companymustdiscloseviaelectronicchannelprovidedbytheexchangeandsubmithard-copiesofsuchinformation

aswell.Disclosedinformationwillbeavailableonwww.set.or.th,www.mai.or.th,andanyotherSETinformationchannels.

Prior to listing, SET conducts a disclosure training program for company representatives, covering disclosure

principles, guidelines, and reporting system.

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What SET provide to

its listed companies

1. Awards

SET and mai admire and help promote listed

companies that operate with good governance and

outstanding performance. SET presents various awards

annually to those management teams and listed com-

panies well-deserved of high recognition i.e. awards

for distinguished performance, good governance, and

outstanding management.

SET Awards 2013

SET Awards 2013

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2. Networking

SET and mai promote networking among listed

companies by organizing bonding activities for top

executives of listed companies and related organizations,

both public and private sectors, to exchange views and

experiences, building strategic alliances, thus creating synergy.

3. Investor relations

Investor relations activities are promoted via SET’s effective media channels; reaching maximum number of

investors and/or potential investors. SET’s media channels are namely Money Channel, Money and Wealth Magazine,

Opportunity Day (listed companies are able to meet investors and present their business snapshots), Newsletter, and

other listed companies-based materials in collaboration with research departments of various securities houses.

mai FANZI Club

Top Executives Luncheon Talk 2013

Opportunity Day 2013

Money Channel

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4. Knowledge and business

opportunity

SET and mai continually organize seminars for

listed companies throughout the year. The topics are

selected to best suit the executives, especially the hot

issues.

The Stock Exchange of Thailand Building

62 Ratchadapisek Road, Klongtoey Bangkok 10110, Thailand

Tel. 0 2229 2222 Fax 0 2654 5596

www.set.or.th www.mai.or.th