Sustainable Development
Governance and Economic
We have adhered to and complied with the good corporate governance in operating business applying to the directors, executives, and employees. Moreover, good corporate governance is regarded as a key factor in enhancing our overall success as the organization’s responsibility towards society based on the Corporate Governance Code for listed companies 2017 (CG Code) by the SEC. However, there were some principles that had not been implemented in 2021, but we have defined alternative practices that can fulfill the intended outcomes of the principles as follows:
Cumulative voting for the election of directors
According to the Company’s Articles of Association no. 16 stating that each shareholder shall elect a company director, which is made by a majority vote as a resolution. In addition, no. 16(1) specifies that each shareholder shall have a number of votes equal to one share for one vote. Thus, the cumulative voting for the election of directors is not applied at the shareholders’ meeting. However, we have determined measures to treat the rights and encourage the participation of minority shareholders such as proposing agenda in advance for the shareholders’ meeting, nominating a candidate to serve as a director, etc.
Chairman is an independent director
Chairman and Chief Executive Officer are different persons. We clearly separate the roles, duties, and responsibilities of such two positions. Moreover, Chairman is a non-executive director. Although Chairman is not an independent director, he is knowledgeable, and expert in the Company’s business, and also gives all directors the opportunity to express their opinions and suggestions beneficial to the Company. Moreover, the Board of Directors has appointed a designated independent director to participate in setting the board meeting agenda for compliance with good corporate governance principles. In approving a meeting agenda that a non-independent director is involved with a conflict of interest, there must be at least 2 independent directors participating and voting in the meeting.
The Board of Directors establishes the Risk Management Committee and CG Committee (board level)
We have appointed the Risk Management Committee (management level) chaired by the Chief Executive Officer, and the Risk Management Working Group consisting of top executives from each department. The committee has duties and responsibilities for determining the risk management policy, monitoring the risk management, and then reporting to the Audit Committee and Board of Directors. However, the CG Committee has not been established yet because the Board of Directors has the direct responsibility for monitoring the Company’s corporate governance compliance.
Appointment of a high percentage of independent directors (more than 50%) on the Board of Directors
The Board of Directors consists of 9 directors; 2 executive directors or 22.22%, and 7 non-executive directors or 77.77%, of which consists of 3 independent directors or 33.33% of the entire board. This is in compliance with the composition of the Board of Directors and independent directors regarding the regulations specified by the Securities and Exchange Commission which states that the Board of Directors must consist of independent directors at least 1/3 of the entire board but must not be less than 3 independent directors.
We put in a lot of effort to make our directors, executives and employees at all levels comply with and possess desired characteristics with the code of conduct under the corporate governance principles, morality, and business ethics to drive good returns and sustainable growth together with taking responsibility for stakeholders, society, and environment. Our “Corporate Governance and Code of Conduct Handbook” was created for all directors, executives, and employees to acknowledge and abide by.
We pay great attention to operating its businesses with transparency. A whistleblowing issue will be forwarded to the Head of the Internal Audit Division, who is responsible for investigating, coordinating with relevant parties, reporting it to the Audit Committee, as well as following up and implementing preventive measures to avoid the recurrence of the incident. The “No Gift Policy” was announced to employees not to request, receive, or offer gifts. Offering and receiving gifts may influence an act or decision or lead to the first step of bribery or corruption. The Company is in the process of studying and assessing the readiness for a declaration stage in the Self-Evaluation Tool for Thai Private Sector Collective Action Against Corruption (CAC).
Risk management plans have been promoted and implemented for both the Company and its subsidiaries. We also responded to changes and trends to achieve corporate resilience such as digital transformation. Besides, the COVID-19 Control and Emergency Response Committee was appointed to prevent and mitigate negative impacts to ensure business continuity, along with managing environmental risks, IT and cyber security.
We strictly comply with the revenue code and tax laws that are related to business operations, submit related documents adequately and completely within the period required by laws, and abide by regulations on the disclosure of financial and tax information to the state sector and all stakeholders. Seminars are also regularly set up to notify and educate responsible persons about tax measures and tax privileges for full compliance, etc.
In 2021, profit before tax on the separated financial statements was 2,463.8 Million Baht. Tax expenses were 485.9 Million Baht, representing 19.7%, slightly lower than the effective tax rate of 20.0% which is equivalent to the Thai corporate income tax rate. For the year 2021, tax privileges were public charity, education, sports, training and education for employees, hiring persons with disabilities, investment in capital assets, etc. We did not obtain any subsidies from the government.
According to our consolidated financial statements, profit before tax was 2,454.3 Million Baht. Tax expenses were 528.0 Million Baht, accounting for the effective tax rate of 21.5% due to the corporate income tax rate of foreign subsidiaries ranging from 15% to 25%.
Over the past 57 years, our consistent growth propels us to be the No.1 paint in Thailand. We also focus on expanding our businesses into the AEC through lightweight construction materials. Our growth pillar consists of 3 drivers: 1) enhancing brand engagement to be number 1 in the customer’s mind for decorative paints and coatings, 2) growing beyond paints with next-generation products in the category of construction chemicals and construction materials by offering total solutions for customers, and 3) accelerating growth in overseas businesses (AEC) beyond decorative paints and coatings with inclusive solution portfolios.
We consistently develop products to deliver innovative solutions to fulfill customer needs for their emotional benefits through our innovation beyond the consumers’ expectations. So far, we have various products in response to customer preferences covering all functions.
In 2021, we launched our new innovative paint product named “TOA Organic Care” – the first and only safest plant-based paint in Thailand. Under the concept of “Living Care innovation”, we put our best effort to create and innovate our products for better living and achieving worldwide sustainability. The plant-based paint is designed for the protection of everyone in your house, especially children and the elderly, as well as people with allergies or asthma, through proven technology-led natural ingredients with plant-based components from the USA in lieu of traditional petroleum-based raw materials. This paint is certified by the USDA BioPreferred®, USA.
In May 2022, we won the “Best Innovation Award 2022” for this green innovative product for the Architect Expo 2022.
We have emphasized our ongoing development and initiative for the distribution network, service capabilities, and products to assure that our customers will receive satisfaction and a good experience. Besides, we created diversified service platforms such as “One Stop Service”, “WHO Service” – a new construction service to solve customer pain points and ensure that customers have a great experience with TOA’s standards, which is integrated with the new business model “Mega Paint & Home” that is a shop-in-shop center offering the one-stop service with a wider range of product portfolio and solutions, “Protect & Repair Center” – displaying construction chemical products for solving and preventing leakage, seepage, and cracks. “TOA Ide@Color” – color designing services, and customer service to provide information about product usage.
