9. Management

1.  Organization Structure

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1.  Board of Directors

According to managing and monitoring the company business, the board of
directors and the management have the policy to follow the principle of
good corporate governance, including other advices from Securities and
Exchange Commission, Thailand

  As of October 31, 2006, the company have 18 directors in company
  board, as followings:

  1. Mr.Manoo Leopairote Chairman and Independent Director

  2. Mr.Chamroon Chinthammit Director

  3. Mr.Prapas Chutimavoraphand Director

  4. Mr.Pornsin Thaemsirichai Director

  5. Mr.Somchai Chinthammit Director

  6. Mr.Supasawn Sukhanindr Director

  7. Mr.Tarkarn Chunharojrit Director / Secretary

  8. Ms.Duangkae Chinthammit Director

  9. Ms.Duangdao Chinthammit Director

  10.Mr.Chatri Chinthammit Director

  11.Mr.Chalush Chinthammit Director

  12.Mr.Sukhum Tokaranyaset Director

  13.Mr.Thawatchai Rojanachotikul Director

  14.Mr.Tachpong Pakornsiriwongse Independent Director

  15.Mr.Somchat Chinthammit Independent Director

  16.Mr.Pramoon Vichiensin Independent Director

  17.Pol.Gen.Boonpen Bumpenboon Independent Director

  18.Mr.Sitti Leelakasamelurk Independent Director

The Company’s Shareholders have appointed the board of directors. The
board of directors has set up the Company Secretary to recommend and
assist the board of directors to conduct their duties in compliance with
relevant laws, corporate regulations and corporate governance including
taking into consideration the interests of Shareholders within best
practices of business ethics.

  Scope of Duties and Responsibilities

1.  Conduct their duties in compliance with relevant laws, corporate
    objectives, corporate regulations, and resolutions of shareholder
    meetings, except for matters requiring approval from shareholder
    meetings before working, such as activities required by legislation
    for resolutions of any shareholder meetings, articles of association
    of the Company, and major acquisition and disposition of assets
    requiring compliance of regulations issued by the Stock Exchange of
    Thailand or any other government agencies.

1.  Appoint or replace executive directors.

2.  Determine policies, strategies, and directions of the Company.
    Ensure the Management’s compliance with the policies, strategies,
    and directions determined with effectiveness and efficiency in order
    to maximize shareholders’ wealth and sustainable growth.

3.  Consider and make decisions concerning significant matters, for
    instance, business plans, budgets, major investment projects,
    administrative power, and any other articles required by related
    laws.

4.  Evaluate the Management’s performance and determine the Management’s
    remunerations.

5.  Be responsible for operation results and the work of the Management.
    Conduct duties with devotion and carefulness.

6.  Establish an accounting system, financial reports, and reliable
    audits. Ensure that there are procedures for internal control
    evaluation, effective and efficient internal audits, risk
    management, financial reports, and follow-ups.

7.  Prevent any conflicts of interest between interested persons and the
    Company.

8.  Ensure that the business is operated with integrity.

9.  Issue requirements and regulations considering the Company’s
    internal activities.

10. Present a full statement on responsibilities of the Company’s Board
    of Directors in preparing the annual report together with the
    audited financial statements and other significant matters in line
    with the SET Code of Best Practice for Directors of Listed
    Companies.

11. May appoint any other individual or other committees to function in
    the Company’s operation under the Board’s supervision or a power of
    attorney within a period approved by the Board. The authorization
    can be terminated, canceled, changed, or amended.

12. Supervise the Company’s day-to-day operations.

    1.  Audit Committee

  As of October 31, 2006, the Company has the members of the audit
  committee, as followings:

  1. Mr.Pramoon Vichiensin Chairman

  2. Pol.Gen.Boonpen Bumpenboon Director

  3. Mr.Sitti Leelakasamelurk Director

The Chairman of the Audit Committee shall appoint the secretary of the
audit committee.

Scope of Duties and Responsibilities

1.  Ensure that the Company maintains accurate and sufficient financial
    statements

2.  Ensure that there is sufficient and efficient internal control and
    internal audit

3.  Consider, select, and appoint the auditor

4.  Ensure that the Company performs in accordance with the securities
    and exchange laws, regulations of the Stock Exchange of Thailand,
    and laws concerning the business of the Company.

5.  Consider the disclosure of information of the Company for matters
    that may constitute a connected transaction or have any conflict of
    interest to be full and accurate.

6.  Prepare the report of the Audit Committee to be revealed in the
    annual report of the Company which shall be signed by the Chairman
    of the Audit Committee

7.  Any other matters assigned by the Board of Directors and approved by
    the Audit Committee

The Audit Committee is delegated a two-year term and required to be held
at least four meetings in a year.

1.  Board of Executive Directors

As of 31 October 2006, the Company’s Board of Executive directors are as
follows:

  1. Mr.Chamroon Chinthammit Chairman

  2. Mr.Prapas Chutimavoraphand Executive Director

  3. Mr.Pornsin Thaemsirichai Executive Director

  4. Mr.Somchai Chinthammit Executive Director

  5. Mr.Supasawn Sukhanindr Executive Director

  6. Mr.Tarkarn Chunharojrit Executive Director / Secretary

  7. Ms.Duangkae Chinthammit Executive Director

  8. Ms.Duangdao Chinthammit Executive Director

  9.Mr.Chalush Chinthammit Executive Director

  10.Mr.Sukhum Tokaranyaset Executive Director

  11.Mr.Thawatchai Rojanachotikul Executive Director

The Chairman of the Board of Executive directors shall appoint the
secretary of the Company’s Board of Executive directors.

Scope of Duties and Responsibilities

1.  Determine policies, directions, strategies, and significant
    management structures for the Company’s operations that suit and
    support the economy and competition, as announced to corporate
    shareholders. Submit the proposed policies, directions, strategies,
    and structures to the Board of Directors for approval.

2.  Determine business plans, budgets, and the Company’s administrative
    power, as well as submit them to the Board of Directors for
    approval.

3.  Establish organizational structures and manpower policy including
    overviews of recruitment, training, employment, supporting young
    management team, and performance evaluation and remuneration
    criteria for all corporate employees.

4.  Examine and monitor policies and management plans to ensure their
    effectiveness and suitability for the corporate operations.

5.  Monitor the Company’s performance to ensure compliance with the
    approved business plans.

6.  Consider major investment projects of the Company in accordance with
    the provided guidelines for project approval.

7.  Conduct financial activities with financial institutions involving
    account opening, borrowing, pawning, mortgages, guarantees, and
    other activities including property trading and land ownership
    registration according to specified objectives and amounts of money
    in order to facilitate the Company’s operation.

8.  Monitor the development of managing system and risk management in
    each division.

9.  Carry out tasks assigned by the Board of Directors.

Any power of attorney given to the Board of Director must be controlled
by related legislation and the Company’s regulations. Any activities
that benefit/may benefit or affect interest of any executive director or
individual, or that may lead to conflicts of interest (according to the
SEC), are required to be presented by the Board of Executive Directors
to the Board of Directors for consideration. The particular executive
director and the interested individual are not allowed to vote in the
Board of Director meeting concerning the issue.

9.1.4) Nomination and Remuneration Committee

As of December 22, 2006, the Company has the members of the Nomination
and Remuneration committee, as followings:

  1. Mr.Pramoon Vichiensin Chairman

  2. Pol.Gen.Boonpen Bumpenboon Director

  3. Ms. Duangdao Chinthimmit Director

The Chairman of the Nomination and Remuneration committee shall appoint
the secretary of the Nomination and Remuneration committee.

Scope of Duties and Responsibilities

1.  Determine policies, regulations, and procedures for nomination of
    directors and executives including remunerations and other benefits
    in accordance with their responsibility, the operating results of
    the Company, the normal practices in the same industries and as
    indicated in the Board of Executive director’s policy.

2.  Select and nominate qualified personnel to the Board of Director for
    consideration and appointment of directors, directors in committees,
    executives including other committees.

3.  Review and give recommendations to the Board of Director
    corresponding to the organization structure, size and members of the
    Board of Director.

4.  Develop guidelines for evaluating performance of directors and
    executives in order to determine appropriate annual remunerations
    corresponding to their duties, responsibilities, and risks.

5.  Supervise to disclose reports of the work of the Nomination and
    Remuneration Committee in the corporate annual report, commencing in
    2008.

The Nomination and Remuneration Committee is delegated a two-year term
and required to be held at least two meetings in a year.

9.1.5) Risk Management Committee

As of December 22, 2006, the Company has the members of the risk
management committee, as followings:

  1. Mr.Somchat Chinthammit Chairman

  2. Mr.Sitti Leelakasamelurk Director

  3. Mr.Chalush Chinthammit Director

The Chairman of the Risk Management committee shall appoint the
secretary of the Risk Management committee.

Scope of Duties and Responsibilities

1.  Develop policies to be considered by the Board of Directors
    regarding the overall corporate risk management that covers the
    Company’s major risks, such as market risk, liquidity risk,
    management risk, investment risk, and reputation risk.

2.  Design strategies in line with risk management policies to monitor
    and evaluate the corporate risk amount, as well as maintain the
    appropriate risk level.

3.  Review the adequacy of risk management policies and system, as well
    as effectiveness of the system and policies practiced.

4.  Provide recommendations in line with policies and strategies
    determined by the Board of Directors and present those
    recommendations to the Board.

The Risk Management Committee is required to be held at least two
meetings in a year.

9.1.6) The Executives

As at 31 October 2006, there are 7 top executives as follows:

  1. Mr.Chamroon Chinthammit President and CEO

  2. Mr.Prapas Chutimavoraphand Senior Vice President - Administration

  3. Mr.Pornsin Thaemsirichai Senior Vice President – Production &
  Technique

  4. Mr.Sukhum Tokaranyaset Senior Vice President – Accounting & Finance

  5. Mr.Thawatchai Rojanachotikul Senior Vice President - Administration

  6. Ms.Intira Sukhanindr Vice President – Business Development

  7. Ms.Duangdao Chinthammit Vice President – Human Resource

Scope of Duties and Responsibilities of President and CEO

  1. Decide on important matters related to the Company. Determine the
  corporate missions, objectives, guidelines, and policies. Supervise
  the overall work. Be responsible for the Board of Directors.

  2. Have the power to employ, appoint, and transfer personnel as
  necessary and appropriate to be the management or staff members for
  corporate operations. Define appropriate functions, responsibilities,
  and remunerations of employees. Have the power to dismiss, lay off,
  and discharge employees as appropriate.

  3. Have the power to determine business terms and conditions, such as
  credit limits, payment terms, trade agreements, and trade term
  changes.

  4. Have the power to act and appear as a corporate representative to
  outsiders regarding affairs related and advantages to the Company.

  5. Approve the appointment of advisors needed in the corporate
  operations.

  6. Deal with affairs concerning the Company’s general operations.

The functions and responsibilities of President and CEO must be in line
with legislation and the Company’ s regulations. The approval of
President and CEO does not apply to approval of transactions that would
allow President and CEO and related persons to have interest or cause
conflict of interests affecting the Company and its subsidiaries.

Chart 9.1 A summary of approved financial amounts of transactions
according to the Company’s authorization manual

+---+-----------------------------------------+-------+-------+-------+
|   | Approved Financial Amounts for          | BOD   | EXC   | PSD   |
|   | Important Transactions                  |       |       |       |
+---+-----------------------------------------+-------+-------+-------+
| 1 | Approval of purchasing and procurement  | More  | More  | Not   |
|   | done within a budget for each           | than  | than  | over  |
|   | transaction                             |       |       |       |
+---+-----------------------------------------+-------+-------+-------+
|   |                                         | THB   | THB   | THB   |
|   |                                         | 500   | 500   | 500   |
|   |                                         | Mi    | Mi    | Mi    |
|   |                                         | llion | llion | llion |
+---+-----------------------------------------+-------+-------+-------+
| 2 | Approval of purchasing and procurement  | More  | Not   | Not   |
|   | done without a budget requested for     | than  | over  | over  |
|   | each transaction                        |       |       |       |
|   |                                         | THB   | THB   | THB   |
|   |                                         | 300   | 300   | 10    |
|   |                                         | Mi    | Mi    | Mi    |
|   |                                         | llion | llion | llion |
+---+-----------------------------------------+-------+-------+-------+
|   |                                         |       | Rep   | Rep   |
|   |                                         |       | orted | orted |
|   |                                         |       |       |       |
|   |                                         |       | to    | to    |
|   |                                         |       | BOD   | EXC   |
+---+-----------------------------------------+-------+-------+-------+
| 3 | Approval of the sale of inventories,    | More  | Not   | Not   |
|   | fixed assets, and scraps at a financial | than  | over  | over  |
|   | amount for each transaction (under      |       |       |       |
|   | approval of the scrap examination       | THB   | THB   | THB   |
|   | officers)                               | 500   | 500   | 20    |
|   |                                         | Mi    | Mi    | Mi    |
|   |                                         | llion | llion | llion |
+---+-----------------------------------------+-------+-------+-------+
|   |                                         |       | Rep   | Rep   |
|   |                                         |       | orted | orted |
|   |                                         |       | to    | to    |
|   |                                         |       | BOD   | EXC   |
+---+-----------------------------------------+-------+-------+-------+
| 4 | Approval of expenses which a budget has | More  | Not   | Not   |
|   | been requested as a total financial     | than  | over  | over  |
|   | amount for each transaction             |       |       |       |
|   |                                         | THB   | THB   | THB   |
|   |                                         | 500   | 500   | 20    |
|   |                                         | Mi    | Mi    | Mi    |
|   |                                         | llion | llion | llion |
+---+-----------------------------------------+-------+-------+-------+
| 5 | Approval of expenses which a budget has | More  | Not   | Not   |
|   | not been requested as a total financial | than  | over  | over  |
|   | amount for each transaction             |       |       |       |
|   |                                         | THB   | THB   | THB   |
|   |                                         | 300   | 300   | 10    |
|   |                                         | Mi    | Mi    | Mi    |
|   |                                         | llion | llion | llion |
+---+-----------------------------------------+-------+-------+-------+
|   |                                         |       | Rep   | Rep   |
|   |                                         |       | orted | orted |
|   |                                         |       | to    | to    |
|   |                                         |       | BOD   | EXC   |
+---+-----------------------------------------+-------+-------+-------+
|   |                                         |       |       |       |
+---+-----------------------------------------+-------+-------+-------+
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+---+-----------------------------------------+-------+-------+-------+
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+---+-----------------------------------------+-------+-------+-------+

Chart 9.2 Number of Meeting Attended

[]

9.2) Selection of Directors and Management

On December 22, 2006, Board of director appointed 3 directors as a
member of the Nominating and Remuneration Committee. Two of three
members are company’s independent directors. This committee has planed
to determine policies, regulations, and procedures for nomination of
directors in order to select and nominate qualified personnel to the
Board of Director and shareholder for consideration in annual
shareholder meeting on year 2008. However, the criteria for
consideration must be not less than the qualifications specified in
Section 68 of The SEC ACT B.E. 2535 (including the revised version) and
related announcements of the SEC. The election of directors is organized
in line with the following Company’s regulations:

1.  The corporate Board of Directors consists of at lease five
    directors, which not less than half of the number of directors must
    reside in the Kingdom. The directors must be qualified individuals
    who do not possess characteristics as prohibited by the laws.

2.  The election of directors by the shareholder meeting is in line with
    the majority of votes, and the following regulations and procedure:

(a) One vote per share is allowed for a shareholder.

(b) Shareholders vote for each individual nominated as a director. The
    number of vote(s) received by each nominee does not exceed the
    number of share(s) held by the particular voter, as specified in
    (a). The shareholder cannot allot any of their share(s) to any other
    individual. Directors are those individuals receiving the highest
    votes. Should the individuals receive the same number of votes where
    only one place for a director remaining, the chairperson shall be
    granted the final vote.

    1.  In an annual general meeting, one third of the directors are
        required to resign. If the total number of directors does not
        allow such division, the number of directors to resign should be
        at the closest to one third of the total.

    3.  Directors’ and Executives’ remuneration

  Directors’ Remuneration

  The Company has specified remuneration for its directors with approval
  from the shareholder meeting on February 27, 2006 as follows:

  Not Exceed to Actual Payment

  The amount of on Year 2006

  THB per year

1.  Remuneration for Chairman of 480,000 THB 480,000 THB

  Board of Director

2.  Remuneration for Chairman of 480,000 THB 480,000 THB

  Audit Committee

3.  Remuneration for 16 Directors 6,400,000 THB 6,400,000 THB

  (THB 25,000 per month + Bonus 4 months)

4.  Meeting allowances for 11 executive directors attending

  (THB 500 per meeting) 66,000 THB 62,500 THB

5.  Meeting allowances for 3 audit committee attending

  (THB 3,000 per meeting) 27,000 THB 27,000 THB

  * Note, the directors’ remuneration are not include the remuneration
  from subsidiary companies

  Remunerations for the Management

  Remunerations for the Management are in line with the Company’s
  procedures and policies, and in relation to corporate operation
  results and each individual’s performance. Amounts of the
  remunerations are motivational and enable the company to achieve
  loyalty among the competent Management.

  Remuneration in Cash

1.  Remuneration for directory, paid in year 2006:

  []

  Note :

(1) Directors receive remuneration and bonus from board of director
    meeting

(2) Executive Director receive remuneration and bonus from board of
    director meeting and meeting allowance from board of executive
    directors.

(3) Audit Committee receive remuneration and bonus from board of
    director meeting and meeting allowance from board of audit
    committee.

(4) Remunerations for directors are not include the remuneration for
    subsidiaries.

    1.  Remuneration for Managements in the past year

  Remuneration for managements include board of executive director,
  total 12 persons, are composed of salary, bonus and allowance, total
  amount at THB 22.07 million

  Other Remunerations

  -None-

3.  Supervision of Business

The Board of Directors understands its functions, duties, and
responsibilities for the Company and shareholders, as well as observes
the Stock Exchange of Thailand’s Code of Best Practice for the
Director’s of Listed Companies as follows:

Rights of Shareholders

The Company always respects rights of its shareholders: basic
shareholder rights, ownership rights through the appointment of members
of the Board, and other legal rights. The followings are the Company’s
summarized practices:

1. The Company provides shareholders, prior to meetings, with the
information on the date, time, venue, and all agenda items with complete
support data concerning issues to be decided. The notice of the meetings
and support document are sent to the shareholders at least 14 days in
advance. The notice of shareholders meeting 2007 is to be posted on the
Company’s website so that the shareholders can study all the information
prior to receiving the notice.

2. The Company’s website where shareholders and those interested may
download corporate financial information, corporate profile, and
meetings information is www.kslsugar.com. Inquiries may be emailed to
ir@kslgroup.com.

3. The Company facilitates and encourages the shareholders to exercise
their rights and vote. There are two closing times of the transfer book.
The transfer book is closed for the shareholders’ right to attend the
shareholders meeting, allowing the shareholders to consider and approve
the annual dividend payment. And the book is closed again for
shareholders’ right to receive dividends, allowing the shareholders to
choose whether they want to hold the stocks for the dividends or not.
Shareholders meetings are organized at convenient venues. In the
previous year, the corporate shareholders meeting was held at Siam City
Hotel in central Bangkok near the Company’s head office. The meetings
are notified on newspapers. The shareholders can register one hour prior
to the meetings. In case a shareholder cannot be physically present at a
meeting, they may appoint their proxy, or appoint an independent
director as their proxy to attend the meeting and vote.

4. In 2006, the Company held the Annual General Meeting 1/2006 on
February 27, 2006, where 16 directors were present. Shareholders could
ask relevant questions directly to the directors and committees for any
specific issues.

Equitable Treatments of Shareholders

The Company treats all shareholders, including those with management
positions, non-executive shareholders and foreign shareholders, in an
equal way. The shareholders meeting procedure facilitates equitable
treatments. There are procedures to protect the use of inside
information by directors and the management for concerning the use and
protection of inside information for abusive self-dealing. In
shareholders meetings, the Board requires that the corporate directors
and management disclose whether they and their related parties have any
interest in any transaction or matter directly affecting the Company.
This is to prevent conflict of interests among directors and the
Company. The followings are the Company’s practices:

1. The Company facilitates minority shareholders to propose any issues
for consideration in shareholders meetings in advance of the meeting
dates by emailing secretary@kslgroup.com. The issues will be presented
to the Board for consideration. Shareholders that may propose, in
advance of the meeting dates, their issues for the Board’s consideration
must be: (1) a single shareholder or a group of shareholders; and (2)
holding not less than one million shares continuously for one year and
still holding those shares on the date the issues are proposed. The
Company takes into consideration the suitability of contents of the
issues proposed, timing, benefits of the Company, readiness of the
Company, and necessity of approval from the shareholders meeting. Some
issues may, instead, be considered by entitled Board of Directors.

2. The Company does not encourage shareholders with management positions
to add any agendas that have not been notified in advance without
necessity. In the Annual Shareholders Meeting 2006, executive
shareholders did not propose any agenda to be added. However, for the
benefit of the Company, if any important agendas are added by executive
shareholders, reasonable time will be given to the shareholders for
considering the agendas before decision making.

3. The Board of Directors has provided the Nomination Committee
guidelines for determining procedures and criteria considering
nominations done by minority shareholders. The main aim is to facilitate
the nominations of candidates by minority shareholders 3-4 months prior
to the shareholders meeting date. The particular procedures and criteria
are expected to be applied to the nominations of candidates for
directors in the Annual General Meeting 2008.

4. The Company sends the notice of the meetings to the shareholders
along with proxy forms. With the proxy forms, a shareholder may appoint
the Chairman of the Board of Directors (independent director) as their
proxy. Also, shareholders can specify their votes in their proxy forms.

5. For important agendas in shareholders meetings, voting cards are
used. In director election, shareholders are able to vote on individual
nominees.

6. Regarding the use and protection of inside information, the Board of
Directors has established procedures in line with 9.5 The Use and
Protection of inside Information.

Role of Stakeholders

Besides protecting the benefits and rights of shareholders, the Company
realizes the significance of its stakeholders. In corporate governance,
stakeholders include those who contribute to the Company’s prosperity,
financial stability, and sustainability, such as customers, employees,
suppliers, creditors, and the community the Company operates in. A clear
policy on fair treatment for each and every stakeholder has been set,
for instance:

Rights of customers: Apart from the right of customers specified in
contracts, the Company cares about their satisfaction. Follow-up and
customer satisfaction evaluating systems are done periodically in line
with ISO 9001 : 2000, GMP and HACCP. The aim is to promote long-term
relationships between the Company and customers.

Rights of employees: Besides complying with its employees’ legal rights
according to the Labor Relations Act, the Company ensures fair
treatments for all employees regardless of their rank, nationality,
religious belief, and gender. Employees’ benefits are considered and
approved without discrimination. For transparency and fairness in
employees’ promotion and pay raises, the Company has established a
committee comprising of managements of different departments. The
Company encourages knowledge and skill development through in house and
outside training to support its growth. Provident fund has been set for
the employees’ security.

Rights of partners: Most of the Company’s relationships with partners
are in the form of joint ventures. The Company always respects legal
rights of its partners as specified in joint venture agreements, and
ensures integrity, equality, and rights of benefits corresponding to the
investment.

Rights of creditors: Financial supports from creditors are account for
the Company’s growth. Their rights specified in loan agreements are
respected. The Company has built trust among its creditors by operating
with codes of ethics as well as providing information and news
concerning the Company and its financial status.

Rights of the Community: The Company observes legal rights of the
Community it operates in as specified in the Civil and Commercial Code.
Also, other related legislation is observed, such as environmental
legislation and industrial legislation. The Company is well aware of
significance of the community and provides supports by sponsoring,
developing infrastructure, and promoting social activities that bring
understanding and sustainable development to the community. For projects
that may have potential impacts on the community and environment, the
Company listens to the Community’s opinion and tries to minimize those
effects. Specific procedures have been set for environmental and social
studies, minimizing environmental and social impacts, and feasibility
studies. Prior to commencing its ethanol production and electricity
generating projects in Khon Kaen Province, for instance, the Company had
conducted public hearing and analysis of impacts on the community and
environment.

The Company always realizes the importance of all stakeholders as
mentioned. Moreover, it values all suggestions, opinions, and comments
that enable development and improvement of the corporate operation. All
the stakeholders can contact the Company’s Audit Committee if they want
to report incidents, complain, request for clarification / amendments,
or make suggestions by emailing ia@kslgroup.com., or faxing 662-642-6092
to the Internal Audit Office.

Disclosure and Transparency

The Board of Directors ensures that important information relevant to
the Company is disclosed correctly, accurately, on a timely basis, and
transparently through easy-to-access channels that are fair and
trustworthy. The followings are the corporate practices:

1. Annual statements (Form 56-1) and annual reports are disclosed
through the channel of the SET and corporate website www.kslsugar.com.
There are also news related to the Company and the industry provided on
the website to facilitate decision-making.

2. Corporate governance policies that have been approved and
implemented, and the results are disclosed in the Company’s annual
statements (Form 56-1) and corporate website. The policies cover
environmental and social issues. (For policies on environmental and
social issues and implementation results, refer to rights of the
community section in the topic Role of Stakeholders.)

3. A statement of the Board of Directors’ responsibilities concerning
the Company’s financial reports is provided along side the auditor
report in the corporate annual report. The Company also provides a
summary of the corporate governance policy together with the
implementation of the policy through the corporate Form 56-1, annual
reports, and website.

4. The Board of Directors’ roles and responsibilities together with
those of its committees are disclosed. The numbers of meetings and
attendance of each director during the year are reported. The Company’s
directors’ and executives’ remuneration policies that correspond to the
contributions and responsibilities of each person in the term of
salaries and meeting remunerations are disclosed.

5. The Company is well aware of the importance of disclosing information
to investors with accuracy, transparency, and accessibility. A team
setting up to coordinate communications between the Company, investors,
and shareholders can be reached by emailing ir@kslgroup.com or by phone
at

1. Mr. Chanachai Chutimavoraphand Tel. 662-642-6230 EXT 294

Email : chanachai@kslgroup.com

2. Mr. Chalush Chinthammit Tel. 662-642-6230 EXT 291

Email : chalush@kslgroup.com

In 2006, the Company arranged an analyst meeting every three-month in
conference room at KSL Tower for better understanding about the
corporate operation among investors. Meetings were organized for
reporting the Company’s operating results at the SET to provide
opportunities for small investors to access corporate information and
ask questions about the operating results and progress with all the
projects.

For foreign investors, in 2006 the Company worked with securities
issuers, and financial analysts in presenting its operating results and
progress with its projects. Three presentations were done in Singapore
and Hong Kong, two were done in the United States, and one was done in
the United Kingdom. Visits to the Company have been arranged for foreign
investors. The appointments can be made in advance with the Company’s
investor relations team.

Responsibilities of the Board of Directors

1. The structure of the Board consists of 6 independent directors,
accounting for one third of the Board, and the remaining directors are
representative of each group of shareholders. The number of the
directors is proportionate to the ownership of each group. Independent
directors’ possess the qualifications specified by the SEC and SET. Term
of service of directors is 3 years. Before the appointment, each
director is required to disclose information about their positions as a
director in other firms that may have conflict of interests. Directors
who have conflict of interests in any issues are not allowed to vote on
those particular issues. The Company’s directors including executives
must not have any positions in other firms that are the Company’s direct
and indirect competition.

In the structure of the Company’s Board, the positions of Chairman and
Managing Director are served by different individuals. The roles and
responsibilities of the Chairman of the Board are different from those
of the Managing Director. The Chairman of the Board is an independent
director. The Company has separated the roles and responsibilities of
the Board from the executives and managing director. The Company’s
directors have various qualifications, such as skills and expertise in
accounting, finance, law, administration, production technology,
personnel, purchasing, marketing, real estate, internal audit, and
information technology. The Board of Directors has leadership, vision,
independence in making decisions, and a balance of power. It consists
of:

-   11 executive directors

-   7 non-executive directors in which 6 of them are independent
    directors, representing 39 percent of all the directors. 6 of 7
    non-executive directors are independent directors.

-   3 audit directors, representing 17 percent of all the directors

The Company has appointed the corporate General Secretary to deal with
administration, coordinate, and give advice, and facilitate the Board
meetings.

2. Other Committees

The Board has established Other Committees including the Audit
Committee, Nomination and Remuneration Committee, and Risk Management
Committee. Roles and responsibilities are defined. To allow transparency
and independence in the committee’s working, the majority of the
committee members and the chairs are independent directors. The Chairman
of the Board is not either a chairman or a member of any committee to
ensure independence of the committees.

3. Roles and Responsibilities of the Board of Directors

Apart from roles and responsibilities of the Board and Other Committees
specified in 9.1.1- 9.1.5, the Board has defined the followings:

The Board determines the corporate vision, mission, strategies, goals,
business plans, and budget. Also, the Board ensures that the managements
follow the business plans and budget set. It establishes internal
control, internal audit, and risk management, as well as ensures that
they are effective and efficient. Moreover, the Board defines
responsibilities and authority of the management, CEO, and Managing
Director.

The Board has established corporate governance policy as follows: “The
Company is committed to corporate governance to build trust among
shareholders, employees, and customers, as well as to create sustainable
competitive advantage. It emphasizes internal control, internal audit,
and risk management, as well as ensures that the management implements
policies effectively in compliance with legislation and business
ethics.”

The Board has set a written code of business conduct for the Company’s
directors and employees, which covers key matters, such as honesty,
integrity, and conflict of interests. Compliance to the code is
monitored, and penalties are defined.

The Board of Directors thoroughly considers and deals with transactions
with (potential) conflict of interests. Policies and guidelines are in
place to prevent the use of inside information by the management and
related parties for their own interests.

The Board of Directors ensures that the Company’s administration and
internal control are effective. Related complete and reliable
information is provided. Compliance of regulations is monitored. The
Board ensures that the Company’s resources are used efficiently, and
that corporate assets are protected. The Company has the internal audit
unit to analyze, audit and evaluate its operations as well as provide
consultancy facilitating its affairs. The Company’s Audit Committee
reviews and audits the internal control, and ensures that the internal
audit is suitable and effective. Data and information has been managed
and secured, in which only some confidential information is disclosed to
top executives as needed. The Company informs its employees restrictions
on the use of information when it needs to be disclosed. Serious penalty
is imposed on employees who disclose confidential information.

The Board of Directors has established the Risk Management Committee to
cover all activities of the Company. The Nomination and Remuneration
Committee was set up for transparency and systematic evaluation.
Evaluation criteria are clearly notified. There is evaluation on the
Board’s performance annually. In the Shareholders Meeting 2006, the
Board’s remunerations were disclosed and approved by shareholders in
appropriate forms and amounts. The management’s remunerations are in
line with procedures and policies established by the Company, and
corresponding with the Company’s operating results and each of the
individuals. The management’s remunerations are motivational so that the
Company is able to keep highly qualified executives.

The Board of Directors is responsible for the Company’s financial
statements and financial information that appears in annual reports. The
Company’s financial statements are thoroughly prepared according to
Thailand’s generally accepted accounting standard. The Board ensures
that there is appropriate accounting policy and adequate disclosure of
information in notes of financial statements. The Company has the Audit
Committee where non-executive members are in charge of the quality of
the Company’s financial statements and internal control system.

4. Board Meetings

The Board sets at least 4 board meetings in a year every 3 months, and
each director of the Board is notified in advance. For the flow of the
Company’s operations, there are monthly executive meetings where the
Board entitles the meeting to make decisions. In every board meetings,
the Board of Directors is informed about the matters that have been
approved by the Company’s executive meeting to ensure that the Board is
able to supervise, control, and monitor the work of the management on a
regular basis.

In board meetings, the Chairman, Managing Director, and Secretary
consider agendas. This is to ensure that the agendas cover important
matters. Each director may propose agendas independently.

The Board Secretary sends meeting documents to each director in advance
of the meeting date. The documents are concise. Confidential issues that
cannot be disclosed in writing or prior to the meetings are brought to
be discussed during the meetings.

In a board meeting, the Chairman of the Board allocates adequate meeting
time for complete management’s presentation and comprehensive directors’
discussion. The Chairman encourages careful consideration in the
meeting. Directors pay attention to each issue presented in the meeting,
including issues concerning governance of the Company. Top executives
from different departments attend the board meeting to present details
on the issues that they are responsible for in order to facilitate the
Board’s decision-making. The Board also has a chance to know more about
the top executives, as well as has access to important additional
information through the top executives. Directors may request more
information about issues in the meeting from the company secretary.

5. Board and Management Training

The Company has reinforced roles, duties and responsibilities of the
Board and executives through internal and external training. It allows
the Board to participate in its operations and ventures. For instance,
in 2006 the Board was invited to visit sites for the Company’s ventures
in Laos and Cambodia. New directors are introduced to the nature of the
business and the operations of the Company like new employees. Also,
appropriate training is provided.

The Company has established an appropriate executive development program
for its future succession plan.

3.  Supervision of Use of Inside Information

The Company prohibits its directors and the Management from using inside
information concerning important matters including trading of securities
before publication for personal gains. Preventive measures against the
use of inside information by the directors and the management are as
follows:

1.  The Company informs the Management about their responsibility to
    report securities holdings of themselves, spouses, and minor
    children. The Management is also required to report any changes of
    their holdings as specified in Section 59 and the penalty in Section
    275 of Securities and Exchange Act BE 2535.

1.  Circulars are sent to the Management informing that those who
    receive significant inside information that affects stock prices are
    required to refrain from trading of corporate securities during the
    one-month period as well as disclosing such information before
    publication of financial statements.

9.6) Personnel

Information concerning the Company’s employee as of October 31, 2006 and
2005 is as follows:

Consolidated The Company Only

2006 2005 2006 2005

Average Number of Employees (persons)

During Production Season Period 3,522 3,106 1,218 1,018

During Normal Period 2,247 2,048 891 862

Employee Expenses (Million THB) 543.55 487.95 200.47 174.19

As of 31 October 2006, the Company had no dispute about labor issue
which might have a potential negative impact to its consolidated
financial statements

Personnel Development Policy

The Company undertakes regular personnel development to enhance
potential, progress, and growth in their employees’ career path. It aims
to provide training for all employees in accordance with business
direction and strategy. The company encourages the employees to have
continuous learning by setting up the library and providing the
knowledge management system by themselves in order to improve their
capabilities.

In addition, the Company creates the incentive system for the employees
to have some good intention in working, to receive the reasonable
salaries related to their capabilities, to use their knowledge
applicable for their job description and to participate in public
activities with social-minded.