Page 65 - EASTERN POLYMER GROUP | ANNUAL REPORT 2015

cost of polymer raw materials, machines, staff compensation
overseas, loans and money loan to subsidiaries overseas.
However, foreign currency exchange is depended on local
economic condition and world economy which subsidiaries
and joint venture companies cannot control or forecast
precisely. If exchange rate changes unfavorably, it may
result in decline of subsidiaries and joint venture companies’ vote in approval of such related transactions. Any approval
profit. However, the corporate group has key advantage
that they can manage foreign currency in an overall view
or natural hedging from trading among subsidiaries . As
a result, the corporate group can mitigate risks from foreign
currency exchange to certain degree. In addition, the
company’s risk prevention policy allows for purchasing of
certain financial instruments such as Forward contract with
financial institutions.
Risks from management
Risks from the company has major shareholders holding
together 75% after shares distribution
The Company’s major shareholders are Vitoorapakorn
group which held altogether 100% of subscribed shares
prior to the distribution of shares for capital increase.
Subsequent to capital increase and share distribution to
public of 25%, the sharing ratio of major shareholders
dropped to 75% of total paid-up capital. Still, major
shareholders can control almost all of the resolutions of
shareholders’ meeting including appointment of directors,
or any other resolutions that require majority votes in the
shareholders’ meeting, or matter related to law or the
company’s articles of association that must receive ¾ of
votes in the shareholders’ meeting. Hence, other
shareholders of the Company face risks from being unable
to gather their votes for check and balance on proposed
agendas from major shareholders to the shareholders’
meeting for consideration.
Nonetheless, according to the corporate structure, the
company has board of directors which consists of 9
directors, of which 4 are independent directors whose
duties are to audit, balance control of decision, and
approve other matters prior to making proposal to the
meeting of shareholders. Besides, in case of connected
transactions with directors, major shareholders, controlling
person, and related companies including person who
might have conflict of interest, said person will not allow to
of transactions must be in compliance with criteria set forth
by the Stock Exchange Commission of Thailand and the
Stock Exchange of Thailand.
To ensure transparent and effective management as well
as to balance the power of major shareholders, the
Company has appointed 4 sets of sub-committee which
are (1) Executive Committee (2) Audit Committee (3) Risk
Management Committee and (4) Nomination and
Remuneration Committee. Each set of committee consists
of independent director or external party who assists in
various fields of managements to achieve better
performance.
Risks from Dependency on Executives and personnel with
professional expertise in specific field
The Company’s business operation is depended on the
ability and profession expertise of executives in setting
organizational vision, and managing complexity of the
business. Particularly,the group of executives and
executives in subsidiaries from Vitoorapakorn family who
have long experience in thermal insulation business,
automotive parts, and packaging business. They are also
well recognized in thermal insulation, automotive parts,
packaging, plastic and polymer industries. If the company
loses any of the executives cannot find replacement,
it may materially affect the Company’s operating result.
The Company also needs personnel with professional
expertise in specific field such as engineers and other
specialists. Losing significant numbers of such professional
personnel may materially affect the company’s business
performance. Losing such personnel may result in the
company’s production formula leaked to the competitors.
63Eastern Polymer Group Public Company Limited