10. Internal Control

The Board of Directors and management has continued to stress the
important of internal control, by emphasizing on the internal control
system that is appropriate for business operation to maximize management
and also asset monitoring, reduction in errors, the Company’s damage
prevention, financial management, risk management, operation
supervision, which reasonably ensure that the Company can operate as
expected and maximized the added value in long run. The Board of
Directors has made certain that all operations are within the rules and
regulations stipulated by the laws to prevent any possible damage to the
Company.

In the meeting of Audit Committee 5/2007 on November 8, 2007 their have
been an appraisal of the Company internal control sufficiency by
answering the questionnaires as in the documents attached. All the three
members of Audit Committee joined in the meeting and briefly voiced the
opinion about internal control sufficiency into 5 parts as follow:

Part 1 Corporate and Its Environment The Company determines business
goals which are accurate, clear, possible and measurable, by dividing
the plan into short term plan of 1 year and long term 3 year plans.
Moreover, the Company’s structure supports the goals. There are
regulations and penalties to prohibit executives and employees from
possible conflict of interest. The Company, however, is in the stage of
establishing policies and regulations about financial, purchasing and
administrative transactions. All policies are based on fair business
with partners for long-term benefit.

Part 2 Risk Management The Company always considers both internal and
external business risks. The working group consisting of the assistant
managing Directors related to the line of duty, heads of management in
each division and department concerned. Managers analyze risk factors,
as well as the control and follow-up action for risk administrative
plans.

Part 3 Controlling Executive Performance The administrative
responsibilities include authorization, accounting and information
booking and asset keeping. To authorize any transaction, 2 Directors
have to co-sign documents.

Transaction authorization between the Company and major Shareholders,
Director, executives, and related persons are regarded for these
advantages, as with any external transactions with others.

Part 4 Information and Communications System The Company provides enough
information for Directors’ decisions. However, the Company is,
sometimes, able to submit a financial statement with the meeting letter
7 days before the meeting, but it can be proposed just a day before, or
at the meeting room.

Accounting documents are filed systematically in accordance with the
accounting system for the purposes of business policy.

Part 5 Pursuit System The Company uses a follow up system comparing each
quarter’s goal, which is examined by the internal audit, by reporting
the performance directly to the Audit Committee. When significant errors
are encountered, the Internal Audit must immediately inform the
Committee concerned, as well as the updated error correction report.

Moreover, the audit Committee has found that there were not any
significant weakness, from effectiveness assessment, in the accounting
control system.