10. Internal controls.

In the minutes of the company’s Board of Directors of 2/2007, held on
February 26, 2007 which involved the Board of Directors together with
the Audit committee, the Audit committee evaluated internal control
systems according to reports. They gave management an explanation about
all five operating systems; the company and its circumstance, risk
management, operational control of management, Information technology
systems, and internal control systems. The Audit committee concluded
that the existence of internal control systems is sufficient as follows.

1.  Control of the internal environment.

With the company structure in written format, there are specific
responsibilities of each department. The company sets the goals for each
department’s future operation in which all personnel are involved in
driving to reach those goals. The company concentrates on the ethics of
working, such as honesty, loyalty and truthfulness. The company also
writes rules and punishments for any behavior which cause to the company
damages.

2.  Risk assessment.

Management gives more attention to risk management because the nature of
the company business is related directly to its risk. Management also
gives more care and circumspection in financial management and the
credit approval process by evaluating potential risk and setting
preventive measure and risk management. There are preventive measure and
evaluations of risk from information technology which is at the heart of
operational performance. In addition, management also continuously
evaluates outside factors which can cause risk to the company’s
operation.

3.  Control activities.

The company’s organization is written to clarify specific
responsibilities for each department. To ensure accuracy and compliance
with law and the company’s regulation, internal control system are
introduced to verify and control the operation of each department.

4.  Information technology and communication.

The company always gives support to information technology system and
communication system for speed, accuracy, and promptness in gathering
and compiling. Setting the format of the operation helps personnel to
receive clear information. This system also supports the decision
process of management, correctly and promptly both solving problems and
future plans - especially accounting and financial information.

5.  Monitoring

Internal control processes have been introduced to follow the company’s
continuous operation to ensure the success of meeting the goals. In
addition there is the meeting of management once a month, and for
emergencies the meeting will be arranged to solve problems which affect
normal operations.

Furthermore the company also hires outsource-tax Specialist Company
Limited to consult about internal control systems. This consultant works
independently, which supports and suggests both risk management and
internal control systems. The objectives of hiring outsource are;

1)  To increase the efficiency of company operations and report the
    result to Audit committee and management.

2)  To ensure that the company’s assets are used efficiency.

3)  To inform the Audit committee and management about the potential
    problems, and to solve that problems promptly.

4)  To ensure the existence of appropriate systems, and to ensure
    personnel always follow the prescribed systems.