O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT 49 After the aviation industry was beginning to recover from Covid-19 in the past year, Thai AirAsia accelerated proactive plans to remediate the deficiency and included additional procedures to ensure the significant deficiency is not repeated in the future. We also followed the IATA Operational Safety Audit (IOSA), a global industry standard for airline operational safety auditing, and assigned the aviation safety department (or corporate safety) to ensure that the safety of employees is not put at risk. Thai AirAsia has established proactive methods to identify work-related risks, and eliminate or minimise them so far as is reasonably practicable, together with continuous updates of standards to reflect regulatory revisions and publishing safety-related issues within the organisation. Further, Thai AirAsia has set up the Quality Assurance Department and the Internal Audit Department to ensure compliance and maintain operational safety, efficiency and quality. 3. The compliance of the Air Navigation Act B.E. 2497 (1954) and other related laws Since Air Navigation Act B.E. 2497 and its secondary legislations as well as Regulation of the Civil Aviation Board No.97 Re: Granting Licensing to Civil Aviation Business: Commercial Air Transport and Aerial Work and the notifications of Civil Aviation Board impose that Thai airline shall directly or indirectly have Thai shareholders not less than 51 percent of the total shares (“Eligible Persons”), AAV and Thai AirAsia, consequently, have been aware of such issues and been complying with the aforementioned regulations as the violation of the regulations may result in the withdrawal of Air Operation Licence (AOL) and Air Operator Certificate (AOC) of Thai AirAsia. The foreign limit set for AAV was not exceeding 0.1 percent of total shares. In addition, Thai AirAsia must comply with the Foreign Business Act 2497 B.E., The Declaration of the Revolutionary Council Release 58, and the Air Navigation Act which indicate that Thai AirAsia’s shareholders must consist of persons with Thai nationality for not less than 51 percent of the total capital, whether it is a person of each type alone or a combination of types defined as follows. (1) Natural person who holds Thai nationality; (2) Ministry, sub-ministry, department or State agency; (3) Limited company or public limited company which Ministry, sub-ministry, department or State agency hold not less than 51 percent of the total shares; (4) Limited company or public limited company which natural person, who holds Thai nationality, hold not less than 51 percent of the total shares; (5) Limited partnership, of which all partners of the unlimited liability hold Thai nationality and not less than 51 percent of the capital belongs to a natural person holding Thai nationality; (6) Registered ordinary partnership, of which all partners hold Thai nationality; (7) Mutual funds established under the Securities and Exchange Act where a securities company, which is not a foreigner pursuant to the Foreign Business Act, is responsible for the operation of the mutual fund. (8) Provident funds established under the Provident Fund Act, which is not a foreigner pursuant to the Foreign Business Act, with a fund manager who is not a foreigner pursuant to the Foreign Business Act. (9) Limited company or public limited company in which the juristic person under Clause (7) or (8) holds not less than 51 percent of the total shares (10) Limited company or public limited company in which a natural person who hold Thai nationality under Clause (1), a juristic person under Clause (2), (3) or (4) or a juristic person under Clause (7) or (8), collectively hold not less than 51 percent of the total shares; In this regard, the juristic persons under Clause (3) (4) (5) (6) (7) (8) (9) or (10) above must be registered under Thai law and have a head office located in the Kingdom of Thailand. In summary, the Air Navigation Act stipulates that Thai AirAsia must have persons who are not eligible persons and persons who are not Thai nationals directly and indirectly holding shares in Thai AirAsia not exceeding 49 percent of the total shares of Thai AirAsia. The Company reserves the right to refuse registration of any transfer of shares or registration of any person as a shareholder of the Company if such registration will cause the Company or the Company’s group to lose its rights under the Air Navigation Act. This might result in such a non-eligible person having to sell the Company’s shares. If the transfer of shares continues to result in the violation of all criteria above, this may lead to the suspension of the air navigation licence and cause significant negative effects on the business such as financial issues, operating results and business prospects of Thai AirAsia. In addition, if the proportion of foreign shareholders reaches the maximum limit, Thai shareholders will be restricted in transferring shares to foreigners. This will cause a lack of liquidity and affect the market price including
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