9. Internal Control

The Board of Directors of IVL has assigned Audit Committee of IVL to
supervise the financial reporting process of the Company and its
subsidiaries in accordance with generally accepted and consistently
applied accounting standards and in line with the rules and regulations
of the Stock Exchange of Thailand as well as concerned legislations. The
responsibilities of Audit Committee also includes reviewing the company
performance in compliance with corporate governance principles,
maintaining suitable, effective, and well-recognized internal control
and audit systems, selection and recommendation of external auditors,
and any other tasks as designated by the Board of Directors.

The company has in house Internal Audit Department reporting directly to
the Audit Committee. The Internal Audit Department is responsible for
reviewing the adequacy of internal control systems for IVL and its all
subsidiaries. Internal Audit Department reports its findings and
recommendations to the Management and the Audit Committee. Audit
Committee periodically reviews the internal audit findings with the
Internal Audit Department. The Audit Committee together with Internal
Audit Department ensures that recommendations for improvement of
Internal Controls are implemented by the respective entities. The
Internal Audit Department carries out the Internal Control reviews of
various businessprocesses of IVL and all subsidiaries including overseas
subsidiaries. The objective of internal control reviews is to ensure
that there exist an effective system of internal controls which provide
reasonable assurance regarding achievement of company’s objectives.

The Board of Directors of the Company in the Meeting No. 2/2013 held on
22 February 2013 which was attended by all members of the Audit
Committee, after considering the recommendation of the Audit Committee,
has evaluated the opinion for the internal control systems of the
Company and its subsidiaries for the year 2012. Below is a summary on
the Sufficiency of Internal Control Systems of the Company and its
subsidiaries:

Control Environment

The Company has set its vision and mission statements and informed all
employees. This forms the basis of employee goals and objectives at all
the operating units. IVL encourages teamwork and firmly believes in team
performance and rewards rather than individual incentives. The company
has a well-structured organization structure in place which indicates
the individual’s responsibility for key businesses and other functions.
There exist financial authority manual approved by the Board of
Directors for IVL and its subsidiaries to ensure that adequate controls
and checks are exercised by the management to operate efficiently & to
mitigate the risk of frauds or misappropriations. The company has
prepared detailed Code of Conduct for its Directors, executives and
employees. IVL along with its operating units strongly believes in
carrying out all its dealings with various stakeholders in the most
ethical and honest way so as to forge a long- term relationship.

Risk Assessment

At IVL, there is an effective process to identify and manage business
risks. Respective Business Heads closely monitor key business risks and
the respective Management teams regularly review the underlying factors
that may cause the risks so that the risks are identified and analysed
periodically and adequate preventive measures/ controls are taken for
risk mitigation.

Currently PET and PTA businesses have a Risk Management Committee and
related sub committees covering all major functions who reviews and
identifies the internal and external risks that may adversely affect the
business.

However, IVL is in the process to implement an entity wide Enterprise
Risk Management (ERM) model applicable to all its business segments
(PET, Wool, Feedstock, Polyester Fibers and Yarns).The newly constituted
Risk Management Committee and its sub Committees will be responsible for
this model and will replace the current Risk Management Committes.. The
ERM Committee will have quarterly meetings and will submit its report to
the Audit Committee and Board once in every six months.

Control Activities

IVL and all its subsidiaries have a financial authority manual which
clearly states the authorization limits of the executives. There is an
adequate segregation of duties in respect of authorization, accounting
and asset keeping at all its units. The organization structure of the
company clearly follows the segregation of duties as required by SEC
laws.

All the activities of the various businesses are monitored closely by
the respective President, CEO, COO and Business Heads. All the expansion
and new business acquisition are considered and approved by IVL Board.
The performance of each business is reviewed by the Executive Committee
/ Group CEO on a periodic basis. Subsidiary companies of IVL have common
directors who regularly monitor the operations of respective business
and ensure that they are in line with the overall objectives of IVL. The
IVL Board is briefed regularly on the performance of the subsidiaries.
There is an internal policy on connected and related party transactions
which very clearly stipulates what is a connected transaction, who is a
connected/related party and the procedure to be followed in case the
Company enters into a connected transaction. All connected transactions
have to follow the rules and regulations of the SEC/SET. As per the
Regulations of the SEC/SET, depending on the size of the transaction a
new connected transaction is reviewed by the Audit Committee and
recommended to the Board for their approval. Every quarter a statement
of all connected transaction is submitted to the Audit Committee and the
Board.

It is the policy of the company to strictly abide by all laws and
procedures in force.

Information and Communication

All the subsidiaries of IVL have detailed organisation structure in
place. Job profiles explaining clearly the roles and responsibilities
are made available to the individuals in order to do their jobs more
effectively and efficiently. There is regular communication with the
employees for any development within the Company.

The Company/ management ensures that adequate and sufficient information
is provided to the Board for their consideration. The accounting systems
consistently followed by all the units are in line with GAAP of the
respective Country in which the subsidiary is located. The same is
monitored by the external auditors of the company and quarterly updated
to the Audit Committee and Board.

Monitoring

The performance of each business is reviewed by the Executive Committee
/ Group CEO on a periodic basis. Further, the Company’s performance is
reviewed by the Board of Directors periodically in their quarterly
meetings by comparing budgeted and actual performance.

The Company has in house Internal Audit Department which is responsible
for the Internal Audit activities for IVL and all it’s subsidiaries.
Internal Audit Department reviews the internal controls of various
processes / subsidaries as per the Annual Internal Audit Plan approved
by the Audit Committee.The Internal Audit Department reports the
internal control weaknesses, recommendations for improvement of controls
along with the action plan from auditees to management and Audit
Committee. Regular follow up for implementation of recommendations is
carried out by the Internal Audit Department and reported to the Audit
Committee.