10. Internal Control

The Company realizes the importance of an internal control system and
therefore monitors the operations of the Company and its Subsidiaries.
This is to ensure that there is a sufficient and appropriate internal
control system to protect the assets of the Company and its subsidiary
from being misused or used without proper authority. It also appointed
an Audit Committee to examine the accuracy of financial statements and
the internal control systems. This Committee is also responsible for
examining the Company’s business practices to ensure compliance with the
Securities and Stock Market laws and regulations. A summary of the
Company’s internal control in various areas is shown below:

1.  Organization and Environment

The Company set goal for business operation and working clearly
according to the types of products, which can be measured, and compare
the target with the actual performance at every stage. The Company
provides incentive or remuneration to the staff by considering the
possibility of the goal. The Company arrange the organization chart to
divide the functions into function lines, and fix about ethics, policy
on business supervision, conflict of interest, including to make the
powers to operate in writing, and adjust it to be suitable with the
current business condition.

10.2 Risk Management

The Company assesses both internal and external risk factors which may
affect its business operations. The purpose is to analyze and rate the
risk levels according to the effects and the possibility of the risk
happening in each business procedure by analyze and leveling the risk
according with the impact and possibility to occur in each procedure of
business, in order to fix the risk management plan, including to have
internal assessment by itself together with the internal control
division every year. The Company has also set a risk management plan in
cooperation with the internal control unit of the Premier Group of
Companies and regularly monitors the situations or risk factors.

3.  The Control of Management’s Operations

The Company has prepared a manual on operational authorities which
clearly specifies the scope of authorities and the amount each
management level is authorized to approve. The Company has also
organized the work structure under which the duties to approve
transactions, record accounting transactions and managing assets are
separated. It also monitors the Company’s performance and practices to
ensure strict compliance with current laws and regulations.

4.  Information and Communication Systems

Important information on various matters is compiled for management
decisions. For meeting appointments, invitation meeting letters along
with documents will be sent 7 days in advance. Minutes will be taken
during each meeting. The Company follows generally accepted accounting
principles and retains all necessary accounting documents by the Revenue
Department’s laws and regulations.

The Company provides the communication systems which are the
communication of the responsibilities and duties to employees since they
started their work, the orientation, training and probation. The Company
provides various channels for the employees’ opinion, the internal
communication and the outsiders. When the Company is reported or
complained of the products, services or the other, the Company finds out
of the cause and resolves it immediately

5.  Monitoring Systems

The Company monitors and evaluates corporate operating performance by
comparison with predetermined targets. A Rolling Plan is made every
quarter, and each unit is required to analyze the reasons for any
differences. The aim is to identify directions for improving the
operations.