The Company adheres to corporate governance principles which are consistent with international principles and the Stock Exchange of Thailand’s policy, the Company therefore has established “The Principles of Good Corporate Governance” in order to ensure the ethical conduct of its business. The Company strongly believes that its good corporate governance procedures are beneficial to the Company’s performance, being one of the keys to achieving its basic goal. The Company’s Corporate Governance Policy is divided into seven categories, as follows:

• The Board of Directors
• Rights of shareholders
• Equitable Treatment of Shareholders
• Role of Stakeholders
• Disclosure and Transparency
• Internal Controls and Risk Management
• Philosophy and Code of Conduct

The Company communicated “The Principles of Good Corporate Governance” on the Company’s website, www.ps.co.th, has encouraged the Directors, Management and employees to acknowledge and observe.

1. The Board of Directors

The Board of Directors is accountable to the shareholders for ensuring that the business of the Company is managed properly in the best interests of the shareholders and other stakeholders, as well as the general public. The Board of Directors has a key role in making sure that management commit themselves to performance excellence, with due consideration to the risk exposure of the Company

1.1 Structure of the Board of Directors The Board of Directors comprises at least five directors, of whom at least one third, but no fewer than three, shall be independent directors. Chairman of the Board of Directors and Chairman of Executive Committee should not be the same person

The Board of Directors of Preuksa Real Estate Public Company Limited comprises 5 non-management Directors (4 Independent Directors: Dr.Pisit Leeahtam, Professor Emeritus Dr.Trungjai Buranasomphop, Mr.Weerachai Ngamdeevilaisakand Mr.Adul Chandanachulaka, which exceeds one third of the entire Board) and 5 management Directors. Besides, Chairman of the Board of Directors (Dr.Pisit Leeahtam) and Chairman of the Executive Committee (Mr.Thongma Vijitpongpun) are not the same person.

11.2 Director Qualifications Directors on the Board of Directors shall possess all the qualifications stated in the public company law and other related laws, as well as the notifications of the Office of the Securities and Exchange Commission.

Directors must also have sufficient knowledge and expertise, and a high standard of integrity and business ethics. In addition, they must be able to commit enough time to perform their duties for the Company.

Independent directors must additionally meet the independence criteria adopted by the Company in accordance with the guidelines specified in the Notification of the Stock Exchange of Thailand on Qualifications and Scope of Work of the Audit Committee.

By making unconditional opinions, independent directors are expected to be capable of safeguarding the interests of all the shareholders

1.3 Term of Service A Board of director’s term of service is fixed for three years. A period of one year is hereby defined as the period between the Annual General Meeting of Shareholders of the year of appointment and the Annual General Meeting of Shareholders of the following year. Upon the expiration of the term, a director may be re-elected by the shareholders.

Sub-Committees’ term of service is in line with the term of the Boards’. Upon the expiration of the term, a committee may be re-elected by the Boards.

1.4 Sub-Committees

The Company has established the Audit Committee pursuant to the regulations of the SET and has also established the following sub-committees to carry out duties as assigned by the Board of Directors: the Risk Management Committee, the Corporate Governance Committee, and the Nomination and Remuneration Committee.

• 1.4.1 Audit Committee

The Audit Committee is responsible for reviewing the Company’s financial statements and financial reports to ensure the accuracy and completeness of the financial statements and the reports with adequate disclosures of information, connected transaction(s) and transactions with a potential conflict of interest (if any); Reviewing and evaluating to ensure the adequacy and effectiveness of the internal control system; Preparing the Audit Committee Report for disclosure in the Company’s Annual Report; Reviewing to ensure compliance with the regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand or laws and regulations relevant to the business of the Company; Making recommendations on the appointment of external auditors of the Company and propose their remuneration, for consideration of the Board of Directors; Performing any other tasks within the scope assigned by the Board; Reviewing and giving opinions in an independent and objective manner on any internal auditing tasks performed by Internal Audit Department; and Consulting regularly with the external auditors.

• 1.4.2 Risk Management Committee

The Risk Management Committee is responsible for prescribing policy and guidelines and providing recommendations to the Board with respect to the management of external and internal risks to Company operations to ensure they are within the appropriate and acceptable level.

• 1.4.3 Nomination and Remuneration Committee

The Nomination and Remuneration Committee is responsible for nominating persons to be appointed as new Directors, Chairman of Executive Committee and Managing Director or as replacements at the end of the term of office or when vacancies occur for other reasons.

Besides, the Nomination and Remuneration Committee has the responsibility to propose guidelines and methods for payment of remuneration and other benefits to the Directors, Committee Members, Chairman of Executive Committee and Managing Director. This includes setting criteria for review and evaluation of remuneration to make it commensurate with their duties and responsibilities, overall business performance of the Company and the general business circumstances.

• 1.4.4 Corporate Governance Committee

Corporate Governance Committee is responsible for overseeing and reviewing major best practices of the Company to ensure its compliance with good governance. This includes reviewing corporate governance policy, principles and practices; making recommendations on business ethical requirements and best practices for directors, executives, employees; ensuring that such requirements are met effectively; making reports to the Board of Directors about the Company’s corporate governance, giving opinions on best practices adopted in order to improve or adjust them as needed; reviewing and proposing publicising of the Company’s efforts with respect to good corporate governance.

1.5 Charter of the Board of Directors

The Company has established a charter for the Board of Directors and for the sub-committees in order for each to have a clearly-defined operating procedure.

1.6 Conflict of Interest

The Company attaches great importance to proper management of conflicts of interests of parties concerned in both corporate level and employee level, handling them in a careful, fair and transparent manner and determine best practice in handling the conflict of interest. Full disclosure of information thereof is required in all cases. Where a member of the Board of Directors or an executive has an interest in a matter under consideration, he or she shall leave the meeting room or abstain.

1.6.1 Remuneration for Directors and Management

The Company remunerates the directors for their service at an appropriate and motivating level in order to retain quality directors. The remuneration is offered both in monetary and non-monetary forms. The Nomination and Remuneration Committee is responsible for reviewing and proposing appropriate remuneration for directors, for approval by shareholders annually.

Management directors shall only be remunerated only for their service in the capacity of Management. Such remuneration shall be based on the Company’s operation performance and their individual performance.

1.7 Knowledge Development and Training for Board of Directors

A newly appointed director shall be adequately informed of the rules and regulations and business of the Company on a continual basis. In addition, the Board of Directors shall participate in training courses regularly as their increased knowledge and expertise have contributed to the efficient oversight of Company business.

So far, 9 of the 10 Directors have attended the Director Certification Program (DCP), and one attended the Director Accreditation Program (DAP) of the Thai Institute of Directors (IOD).

1.8 Appraisal of the Board of Directors’ Performance

The Board of Directors is required to carry out a self-performance appraisal, summarise overall performance and suggest and make recommendations for the purpose of enhancing their overall efficiency.

  top

2. Rights of shareholders

Recognising the importance of the rights of shareholders, the Company refrains from any act that may violate or curtail the rights of the shareholders, for instance, rights to attend shareholders’ meeting and vote, rights to grant proxy to any one to attend the meeting and vote on behalf, rights to ask make comments and ask questions in the shareholders’ meeting, rights to appoint directors and rights to appoint external auditors and determine auditors' fees, etc.

Shareholders’ Meeting

• Date, time, and venue of the meeting

The Company shall hold an annual general shareholders’ meeting within four months of the annual account closing date, and will fix the date, time, and venue of the meeting that are convenient for the shareholders to attend.

The Company may call an extraordinary meeting of the shareholders if the Board of Directors deems this necessary.

The Company shall send an invitation to the shareholders to attend the meeting at least 14 days in advance to allow sufficient time for shareholders to consider the agenda and prepare details of the matters they wish to propose for consideration at the meeting. Each agenda item shall clearly indicate whether it is a matter for acknowledgement, deliberation or approval, and shall be accompanied by opinions of the Board of Directors.

In addition, the Company shall publish the invitation in a Thai daily newspaper for at least three consecutive days as well as in the Company’s website, www.ps.co.th (Investor Relations / Shareholders’ Meeting), complete with details of the date, time, venue and agenda of the meeting, downloadable proxy form B and proxy foam C and sufficient information pertaining to the matters to be considered at the meeting.

• Invitation to Shareholders’ Meeting

In attending a meeting, shareholders should carry a document showing their identity, for example, an ID card or passport. In case of attendance by a proxy of a natural person, the documents of the appointer must also be produced, i.e. a filled-out proxy, a copy of ID card or passport. In case of proxy of a juristic person, the documents of the appointer must be produced, i.e. a filled-out proxy form and a certified copy of the juristic person registration. The Company will arrange for the shareholders to register for the meeting in advance of the meeting time.

• Board of Directors’ attendance in shareholders’ meeting

Shareholders’ Meeting is considered very important and the directors will normally attend such a meeting, which is usually chaired by the Chairman of the Board of Directors.

In addition, the Chairman of Executive Committee, Managing Director, Chairman of each sub-committee, and the Company’s auditors or representative and legal advisor will also attend the meeting to listen to comments and answer queries of the shareholders.

• Queries and comments from the shareholders, voting, and minutes of the meeting

At a shareholders’ meeting, the Company shall explain to shareholders voting and vote-count procedures prior to the meeting. During the meeting every shareholder is offered an opportunity to make comments and ask questions on a fair basis. In voting, one share is represented by one vote and the resolution is passed by majority of votes. In the event of a tie, the chair shall have a second and casting vote. The Company shall record the resolutions passed at each meeting, clearly indicating the “yes,” “no,” and “abstain” votes in the minutes of the meeting, together with the details of questions, answers and comments raised during the meeting.

A shareholder who has an interest in a matter being considered shall refrain from voting, except in the vote to appoint or remove a director.

2.2 Dividend Payment

The annual dividend payment must be approved at a shareholders meeting. Dividends can be paid to shareholders only when the Company has earned profit from its operation and registered no accumulated losses. The dividend amount is divided equally by the number of Company shares.

In case the Company has earned profit from its operation enough to pay dividend, from time to time the Board may consider interim dividend payment and inform shareholders in the next shareholders’ meeting. The residual amount of annual dividend payment or interim payment shall be allocate to reserves and is subject to justifications and considerations that the Board of Directors deems appropriate.

The payment of dividends shall be made within one month of the date of the shareholders’ resolution, or one month of the date of the Board of Directors’ resolution in case of interim dividend payment. The shareholders will be informed in writing of the dividend payment, which will also be announced in a newspaper.

Appointment of the Company’s Auditors

The Shareholders’ Meeting will appoint the Company’s external auditors and also fix the audit fee, proposed by the Board of Directors. The Company’s auditors shall not be a director, officer or employee of the Company.

The Company shall hold an annual general shareholders’ meeting within four months of the annual account closing date, and will fix the date, time, and venue of the meeting that are convenient for the shareholders to attend.

  top

3. Equitable Treatment of Shareholders

The Company is responsible for the fair and equitable treatment of all the shareholders in order to uphold their basic rights.

• 3.1 Nomination of Candidates for Directorship

A process for a shareholder to nominate a candidate for directorship has been established, according to which a shareholder can nominate a qualified person to be elected as director by submitting background information as well as the consent of the nominee to the Chairman of the Board of Directors three days in advance of the shareholders’ meeting

In accordance with the Company’s policy and best practice of promoting good corporate governance as well as for the purpose of equitable and fair treatment to all shareholders, the Company invited shareholders to nominate persons whom he deem qualified, knowledgeable and competent as their representatives to act as directors 3-4 months in advance of the shareholders’ meeting (during November 9 – December 28, 2007)

• 3.2 Shareholders’ Meeting
• Agenda

Prior to each Shareholders’ Meeting, the Company will invite the shareholders to propose agenda items in advance through the Company’s website so that the Board of Directors can consider the appropriateness of the proposed agenda items for inclusion in the meeting agenda

The Company, however, will not unnecessarily take any agenda item that has not been proposed well in advance, especially one which requires considerable time to study before deciding on it.

In accordance with the Company’s policy and best practice of promoting good corporate governance as well as for the purpose of equitable and fair treatment to all shareholders, the Company invited shareholders to propose the agenda of the 2008 Annual General Shareholders’ Meeting 3-4 months in advance of the shareholders’ meeting (during November 9 – December 28, 2007)

• Appointment of proxy to attend and vote at Shareholders’ Meeting

If a shareholder is not able to attend a meeting, he or she can appoint a proxy to attend and vote on his or her behalf by completing a proxy form provided with explanation in the invitation to a meeting. In the invitation, the Company will propose at least one independent director as a choice for the shareholders to appoint as their proxy. (Proxy form B and Proxy form C can be downloaded from the Company’s website: www.ps.co.th (Investor Relations / Shareholders’ Meeting))

• 3.3 Prevention of the Use of Inside Information

The Company has set out and communicated guidelines for safeguarding inside information and the use thereof to the employees for their observance. The Company also requires that the directors and executives who are required by law to hold securities report on their holdings to the Board regularly.

  top

4. Role of Stakeholders

The Company recognises and respects the rights of all stakeholders and has established a code of conduct outlining the guidelines in this respect. The purpose is to ensure that the lawful rights of stakeholders, whether it be shareholders, employees, executives, customers, partners, creditors, or the general public, are properly protected and cooperation among these groups is promoted and benefits generated to all concerned in a fair manner. It is believed that these factors will ensure the sustainable growth of Company’s business.

Shareholders:

The Company intends to be good representative of shareholders operates business in such a way that satisfy shareholders the most; to ensure long-term growth of the Company’s value with sustainable growth of return on equity as well as disclosure and transparency

Employees:

The Company recognised value of human resources and genuinely wants its employees to feel proud of the organization by maintaining an atmosphere in which employee participation is promoted. In addition, the Company offers equal opportunities in respect of career advancement to its employees and consistently supports their endeavors to learn and gain new skills so that the Company can add value and uphold business excellence.

The Company promotes equal treatments in terms of gender, race, ethnicity, religion and belief

The Company is committed to enhancing the wellbeing of its employees and surrounding community, and maintaining a decent working condition. The Company set up work safety procedures in accordance with the laws and relevant regulations.

Customers: The Company aims to build customer engagement and gain their confidence from its quality services and products at affordable prices, and to maintain good relationship with the customers. Guidance is as follows:

• Products & Services
• The Company has paid attention to and has been responsible for customers. It has produced product with quality and up to standards Customers’ confidential information
• Customers’ confidential information
• Directors Management and employees at all level are committed to keep the customers’ information confidential, despite permission granted, or it is required by the law and regulations to disclose information to concerned parties

Competitors:

Business Partners and Creditors:

Social:

The Company complies with the provisions of the relevant laws, rules and regulations to take good care of the rights of these stakeholders

  top

5. Disclosure and Transparency

It is a policy of the Company to fully and sufficiently disclose useful information, both financial and non-financial, in a timely, manner in accordance with the rules and regulations of the SEC and the SET, as well as relevant laws

The Company has established an Investor Relations Department, tasked with coordinating with shareholders, securities analysts, investors, government agencies and other parties concerned, on an equitable basis. Company information is reported via the ELCID platform of the SET for displaying on its website, www.set.or.th. Relevant information is also reported to the SEC and displayed in both Thai and English on the Company’s own website, www.ps.co.th (Investor Relations)

Throughout the year 2007, the Investor Relations Department organised investor relations activities on a regular basis as follows:

• Dissemination of news and information annually and quarterly; for instance, the Financial Statements, the Annual Report, the Annual Registration Statement (Form 56-1), Notice of the Annual General Meeting of Shareholders as well as letters inviting shareholders to propose agenda items and/or to nominate persons deemed capable and suitable to represent them as members of the Board of Directors 3-4 months in advance of the shareholders’ meeting, notification to the SET, documents such as those for analyst & investor meetings, Company visits and presentations for road shows which are displayed on the Company’s website, www.ps.co.th
• Organising Annual Analyst & Investor Meetings to convey the Company’s vision and business plan, including annual and quarterly operating result news conferences, after submission of the Financial Statements and the Analytical Report of Operating Results to the SEC and the SET
• Producing and publicising information and documents pertaining to the Annual Business Plan and the Company’s operating results to securities analysts, investors and interested parties on a quarterly basis
• Creating opportunities for securities analysts and investors to pay a Company visit or have a conference call with the executives to discuss policies, strategies and business plans, as well as financial information (audited by the Certified public Auditor accountant, following notification to the SET and the SEC), non-financial issues and progress of the implementation of various projects of the Company, including exchange of business views on a regular basis
• Organising visits for securities analysts and investors to the precast concrete factory which uses the Semi-Automated Pallet Circulating System, the most advanced system in Thailand, as well as visits to various single-detached house and townhouse projects
• Conducting road shows domestically and internationally at the invitation of the SET and/or securities companies to provide information and attend to queries of shareholders, securities analysts and corporate investors
• Arrangement of executive interviews on television
• participating in activities of the Thai IR Club to exchange knowledge and share experiences with a view to further developing the Company’s Investor Relations function

  top

6. Internal Controls and Risk Management

The Company has comprehensive internal control and internal audit systems, covering matters concerning finance, operations, compliance, and risk management.

6.1 Internal Control and Internal Audit systems

The Company requires that its internal control system be reviewed and reported by responsible executives regularly while the Internal Audit Department, which is an independent unit, is responsible for internal auditing on a regular basis, to ensure that management and employees strictly comply with the rules and regulations, as well as the Management Authorities. These functions are under the supervision of the Audit Committee.

6.2 Risk management

The Company’s risk management policy requires that internal and external risk factors be reviewed regularly in order to contain risk within appropriate and acceptable levels. Such a review shall cover strategic risks, financing risks, construction management risks, and other operational risks. The review also includes an assessment of risk exposure and possible impacts, prevention and impact mitigation measures, the assignment of responsible persons, and the setting up of reporting and follow-up procedures. The Risk Management Committee provides recommendations on guidelines and/or policies on the handling of critical risks.

7. Philosophy and Code of Conduct

The Company has a firm intention to encourage all the executives and employees to adopt the same standard of conduct. Toward this purpose, we have announced “Code of Conduct” and established a department to be responsible specifically for promoting the established Code of Conduct so that employees at all levels understand it and observe it with genuine willingness.