10. Internal Control

The Board of Directors appointed an Audit committee to oversee and
supervise the preparation of financial reports and to ensure that an
acceptable accounting standard pertinent to the business is adopted. The
financial reports must also follow the generally accepted accounting
principles as prescribed. Additionally they must comply with the
announcements of the Securities Exchange of Thailand, the relevant legal
framework, good corporate governance and unquestioned ethical standard.
The audit committee also oversees the risk management process and ensure
that an effective internal control is in place. It is also responsible
for the selection of an outside auditor to be forwarded to the Board of
Directors to consider and propose for the shareholder’s election.

For 2006 we, the audit committee, are of the opinion that the company
followed the accounting standard as prescribed by the Institute of
Certified Accountants and Auditors of Thailand and the various
announcements of the SET in the reporting of the quarterly and 2006
annual statements for both the company and for the consolidated
statements with subsidiaries and associated companies. No deed of
substance that would indicate non compliance to good corporate
governance was noted. An acceptable and adequate internal control
process pertinent to the business is evident and, in line with the
external auditor’s opinion, no material deficiency is noted in the
operation. (The audit committee report is attached)

Report of the Audit Committee 2006

In 2006 the audit committee duly carried out its responsibility in
accordance with the scope of authority delegated by the Board of
Directors of Pico Thailand. This includes the duties as prescribed by
the regulation governing audit committee and to ensure that good
corporate governance is adhered to. During the year 4 meetings were held
with the results summarized as follows:

1)  Good governance practice. A process to check and ensure that
    practices leading to good corporate governance is in place and
    compliance monitored.

2)  Supervision and auditing of quarterly and annual financial reports
    consolidated and unconsolidated for 2006. Measures were adopted so
    that the preparation of the reports are in full compliance with the
    accounting standard and adheres to the Generally Accepted Accounting
    Principles and the announcements of the Securities Exchange
    Commission and Stock Exchange of Thailand both in terms of adequate
    disclosure and timely completion.

3)  Intercompany transaction. All related transactions were audited to
    ensure that there were no conflicts of interest and that the
    involved transactions were conducted at arms length and are verified
    as normal business engagements. The company is well aware of this
    policy on related transactions.

4)  Internal audit. During 2006 a quarterly review was undertaken on the
    approved internal audit program. Additionally, at mid year a policy
    review of the audit program was conducted to ensure that the process
    is in line with the changes in business environment. This was to
    ensure an effective and accurate financial reporting in accordance
    with the legal framework and regulations as announced by the
    relevant authorities.

5)  Risks Management. Risks management is reviewed quarterly to ensure
    compliance to established guidelines. Risk factors were identified,
    probability and repercussions evaluated and mitigating action plan
    suggested to management. The company’s risks management throughout
    2006 is satisfactory and no risks that would materially impair
    operation were found.

6)  Appraisal of the internal control process of the company. The
    internal control process was reviewed and appropriate and effective
    changes made to accommodate the changes in the economy. The internal
    auditor’s review and comments made are in line with those observed
    by the external auditor in the quarterly and annual audit process.
    No substantive problems or material deficiencies were noted.
    Consistent recognition and rationalization of potential problems
    noted by management with appropriate rectifying measures undertaken
    during the period under review.

On behalf of the Audit Committee

  (Signed) - Signature-

(Dr. Chaiyod Bunyagidj)

Chairman of the Audit Committee

Pico (Thailand) Public Co., Ltd.