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Annual Report 2018 File Size Annual Report 2018 Table of Contents Messages from the Chairman 1 Messages from the Audit Committee 2 Board of Directors 4 General Information 12 Policy and Overview of Business Operations 13 Nature of Business Operations 22 Risk Factors 31 Securities Details and Shareholders 34 Dividend Policy 35 Management Structure and Management 36 Good Governance 42 Corporate Social Responsibility 60 Internal Control and Risk management 62 Related Transactions 65 Management Discussion and Analysis 71 Significant Financial Information 77 Others 86 Auditor’s Report and Financial Statement 87 NFC Public Company Limited Annual Report 2018 Messages from the Chairman In the year 2018, NFC Public Company Limited (the “Company”) has completed the qualification in compliance with the procedure and guidelines for removal from being delisted, and The Stock Exchange of Thailand (SET) has approved the Company removed cause of possible delisting and resumed the securities of the Company to trade on SET under Industrials Industry in Petrochemicals & Chemicals Sector from 15 June 2018 onwards, that followed the goals set by the Company and the intention of the management managed the capital structure, risk management in a comprehensive manner, conduct the business as plan, and preparation to take the organization to the goal that flourished in the future with the cooperation of the Board of Directors, managements and staff at all levels. As a result, the Company had overcome many obstacles and achieved satisfactory outcome. The Company has emphasis on the main business of Chemical distribution, Warehouse services, Logistics and Liquid storage service and Port services. In 2019, The Company continues the policy and business plan and there are a long - term plans in the integrated logistics business to increase the value of the business to continue growth by emphasis is on improving existing assets to fully benefit, reducing unnecessary workload and investing in new projects to create a value for the organization emphasis on good corporate governance with efficient, transparent and auditable management systems in order to build confidence for shareholders, investors, stakeholders for the Company will grow stronger and more sustainable. Thus, the Company uses tools to evaluate the feasibility of various projects before investing, which will help control and limit the risk to an acceptable level. Finally, I would like to thank all of our shareholders, investors, valued customers, financial institutions that have consistently supported the Company. The Board of Directors is committed to perform the duties with caution prudently dedicated talent to move the Company more growth, and hoping that all shareholders will move forward with the Company forever. Gen. Montree Sungkasap Chairman NFC Public Company Limited 1 Annual Report 2018 Audit Committee’s Report The Audit Committee of NFC Public Company Limited is comprised of 3 honorary independent directors who have the qualifications as specified in the Audit Committee Charter that complied with the Securities and Exchange Commission (SEC) regulation, including Assoc. Prof. Dr. Seri Wongmonta being as the Chairman of the Audit Committee, Mrs. Aree Termwattanapakdee, and Mr. Sumit Petcharapiratch being as members of the Audit Committee. The Audit Committee has performed its duties independently and uprightly in accordance with the scope of responsibilities assigned by the Board of Director and according to the charter of the Audit Committee in accordance with the regulations of the Stock Exchange of Thailand and review in accordance with the current situation approved by the Board of Directors every year which review the Company's good Corporate Governance, having accurate and reliable financial reports with the risk management system and the sufficient internal control system for the benefit of all shareholders and stakeholders. In the year 2018, the Audit Committee attending the meeting to constitute a quorum every time which summarizes the significance of performing the duties of the Audit Committee for the year 2018 as follows: 1. Review of the financial report: The Audit Committee reviewed the accuracy, completeness and reliability of the financial statements and the consolidated financial statements of the Company and its subsidiaries audited by the auditor of the company for all the quarterly and the year 2018 by meeting with the management and auditors to review important issues, and the appropriateness of important accounting policies and various judgments in the preparation of financial statements and disclosure of information in the notes to the financial statements of the Company according to the law and accounting standards in accordance with generally accepted accounting principles with reliability, transparency and timeliness, as well as adequate information disclosure for the benefit of the financial statements users. Thus, the Audit Committee has a special meeting with the auditor only 1 time without the participation of the management to discuss the audit plan, independence in performing duties and the statement the auditor’s opinion by giving importance to the presentation of information correctly, completely and sufficiently. 2. Review of the related transactions or conflict of interest transactions: The Audit Committee has reviewed, supervised and commented on related transactions or transactions that may cause conflicts of interest on a quarterly basis based on reasonableness, transparency, sufficient disclosure of information is normal in the business and the highest benefit of the Company, the Audit Committee agreed that the management has decided to make such transaction for the benefit of the Company as done with general outsiders in the normal trading conditions with a reasonable price and comparison with market price in such business, including the disclosure of information completely and adequately. 3. Review of the risk management: The Company’s Directors, Risk Management Committee, and managements has focused on risk management, evaluating both internal and external factors the chance of impact and create a risk management plan in order to prevent or reduce the impact that may occur to the business operation at an acceptable level. Thus, the Audit Committee reviewed the effectiveness of the risk management from the Company's performance report. The reports of internal audit and the auditor of the Company which can be confident that the Company’s Risk management is an acceptable level. NFC Public Company Limited 2 Annual Report 2018 4. Review of the internal control system and internal audit: The Audit Committee has reviewed the internal control assessment results by using the internal control system adequacy assessment form according to the guidelines of the Securities and Exchange Commission and the audit results of the internal audit department and the auditor. There were no material issues that affected the Company, and the management had improved continuously the recommendations of the Audit Committee, the auditor and the internal audit department to ensure that the Company had sufficient internal control. 5. Review of the good governance: The Audit Committee has reviewed the compliance with the Corporate Governance policy and the Code of Conduct comply with the laws of the Stock Exchange of Thailand, the regulations both of the Securities and Exchange Commission and the Stock Exchange of Thailand and other laws related to the business of the Company, especially in related transactions to ensure that the Company operates in accordance with normal business conditions and the information is fully disclosed. 6. Supervision of internal audit department: The Audit Committee has reviewed the independent of an internal audit department and has a duty to report directly to the Audit Committee by reviewing the internal audit department's charter, consider and approve the internal audit plan, appropriateness of the expenditure budget including manpower annually and review the operation according to the approved plan, consider significant issues from the audit and provide useful suggestions for increasing the efficiency of the internal audit system and follow up the performance according to the quarterly accurate recommendation. 7. Appointment of auditors for the year 2019: The Audit Committee has considered to select, propose to appoint and propose the auditor's remuneration for the year 2019 based on qualifications of the auditor, skills, knowledge, ability and experience in auditing. The independence of the auditor according to the ethics of the accounting professional and the requirements of the Securities and Exchange Commission including the quality of the audit work in the past year and the appropriateness of the audit fee. Therefore, resolved to propose to the Board of Directors for approval from the shareholders' meeting to appoint an auditor from Karin Audit Company Limited as the auditor for the year 2019. For the summary of year 2018, the Audit Committee performed duties and responsibilities in accordance with the Audit Committee Charter by using knowledge, caution, prudence and adequate independence to monitor the operations of the Company as well as giving opinions and suggestions creatively to be equally benefit for the stakeholders. The Audit Committee opinioned that the Company has properly and accurately reported financial information in accordance with generally accepted accounting standards, adequate disclosure, risk management at an acceptable level, adequate internal
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