9. Internal Control

The Company strongly and continually emphasizes on internal control. The
Board of Directors assigns the Audit Committee to review and evaluate
the internal control system and report to the Board of Directors in
order to specifies the corporate governance and the internal control in
various areas, namely, Organization Control and Environment Measure,
Risk Management Measure, Management Control Activities, Information and
Communication Measure, and Monitoring as follows:

1. Organization Control and Environment Measures

The Company considers having organization structure and good environment
as important basis of the efficient internal control system. Therefore,
it is necessary to create the conditions or factors that facilitate the
internal control system to operate as the Company expects, and encourage
every member of the Company to realize the necessity of internal control
system as follows:

-   The Board of Directors is responsible for setting a clear business
    goal. The management had a meeting to set the business goal, and
    business plan as well as budgeting plans for both long and short
    terms on a yearly basis. Also, there is a notification to the
    management of all departments in order to ensure that their
    management is carried out in line with the established goal. The
    Company also conducts the assessment of business operation on a
    quarterly basis to assess overall performance outcome and improve
    the operation plan.

-   The Company considers and reviews the specification of the business
    goals of each operation level carefully by reviewing the past
    performance outcome, economics situation, and others factors to
    carry out the assigned duties efficiently, and to motivate or
    compensate the employees appropriately.

-   The Company sets up the organization structure by considering the
    efficiency of organizational management, and notifies the employees
    of such structure.

-   The Company establishes guidelines on Code of Conducts, rules,
    practices, and punishments for management and employees.

-   The Company sets up policy and procedures concerning approval of
    transactions related to finance, procurement, and management clearly
    to prevent any misconduct.

-   The Company has policy regarding Good Corporate Governance
    principles and operation plan by taking into consideration fairness
    in doing the business with all related parties (stakeholders).

2.  Risk Management

  The Company has specified clear and harmonized objectives; both in
  organizational and operational levels in order for the Company to
  accomplish the work using the specified budget and resource. The
  Company evaluates and manages the risk in line with the current
  situation. Hence, the management conducts the following actions on a
  regular basis.

-   Regularly arrange the meeting for the purpose of evaluating the
    causes of the risks in the business operation, also monitoring the
    situation which may trigger the risks in order to establish the
    policy to prevent or minimize such risk.

-   The Company informs the supervisors of each department of the action
    plan according to the risk management policy in order for them to
    convey such information to each employee for the purpose of accurate
    implementation. The Company also monitors the performance of risk
    management policy implementation.

3. Management Control Activities

The Company has the policy and operation guidelines for the management
to ensure that the policy specified by the management is complied with
and responded to by the members of the Company as follows:

-   The Company specifies clearly in writing the scope of duties and
    authorized credit limit of each level of management.

-   The Company clearly divides the duties and responsibilities into the
    3 following areas; (i). approval (ii). booking and recording the
    accounting and information and (iii). keeping of property. This is
    in order to ensure the efficiency of cross-checking and monitoring.

-   The Company has strict and clear measures to govern Company’s
    transaction entered into with its major shareholders, directors,
    executives or connected persons. The Company specifies that the
    related transactions between the Company itself or its subsidiaries,
    and any person who may have conflict of interest, must be subjected
    to reasonable conditions, or normal trading clauses or market
    prices. Such transaction must also be presented to the Audit
    Committee on a quarterly basis in order for them to provide the
    comment on the rationality of such transaction. In case of the
    execution of the related transaction, which is not in the normal
    trading conditions, it is required that such transaction must be
    submitted to the Audit Committee for consideration of its
    appropriateness, in order to propose the comment on the transaction
    to the Board of Directors or shareholders, as the case may be, for
    approval prior to the execution of such transaction. Also, such
    transaction can only be approved by persons who do not have conflict
    of interest in such transaction and taking into consideration the
    optimal benefits of the Company.

-   In case that the transaction to be entered into with a connected
    person will oblige the Company on a long term, it is required that
    such transaction be monitored to ensure the compliance with the
    agreed conditions. In addition, such transaction must be reported to
    the Audit Committee for consideration of its appropriateness through
    out the term of the agreement. In addition, the Audit Committee
    shall determine the measure to prevent any related persons from
    using the opportunity or benefit of the Company for their own
    benefit.

-   The Company monitors the operations of the Company’s subsidiaries
    and affiliates on a regular basis, as well as provides guidelines to
    the persons appointed as directors or management of such companies
    in order to ensure that these companies’ operations will be in line
    with the Company’s goal. The Company also sets up a monitoring
    policy to ensure that the operations of the Company, its
    subsidiaries and affiliates are complied with the relevant laws and
    regulations. The Company adopts the preventive measurements in order
    to prevent any violation of laws.

3.  Information and Communication Measures

  The Company organizes the information system for the information
  related to the performance, financial report, business operation,
  policy compliance, and other practices to be used as controlling
  measures to ensure the effective communication which effects on the
  achievement of the objective and goal of the Company. Therefore,
  communication of such information to the relevant persons is extremely
  important and may encourage effective internal control system as
  prescribed follows:

-   The Company adequately provides the Board of Directors with the
    essential information to support their decision making. Such
    documents are delivered together with the invitation to the Board of
    Directors’ meeting at least 7 days in advance prior to the meeting
    so that the Board of Directors will have sufficient time to study
    such documents.

-   The Company requires that the minutes of the Board of Directors’
    meetings must contain appropriate details, which are key contents in
    making decision in each agenda. Also, there must be a record of
    directors’ inquiries, comments, and observations on each matter
    being considered during the meeting.

-   The Company keeps and categorizes all its accounting records and
    books in the manner that they can be easily investigated. The
    accounting policy of the Company and the subsidiaries is determined
    in line with the main business operation of the Company and
    subsidiaries, and not in violation of Generally-Accepted Accounting
    Principles.

5. Monitoring

The Company monitors compliance of the established goal on a regular
basis. The internal control system is continuously operated and improved
to be in line with changed situation as well as all errors are
immediately rectified as follows:

-   The Company monitors and evaluates the internal control result and
    operation quality. The Board of Directors regularly conducts the
    meetings to consider whether the performance outcome is different
    from the established goal, and proposes the necessary operation
    guidelines so that the Company can rectify any errors in a timely
    manner.

-   The Company arranges for an inspection on the compliance of the
    internal control system at least once a year by clearly specifying
    the internal control plan. The Company also requires that the
    internal audit shall be under the direct supervision and report the
    result of internal auditing directly to the Audit Committee to
    ensure the honesty of the internal auditor’s performance.

-   If a material error is found, the relevant persons must report to
    the Board of Directors or the Audit Committee to clarify the reasons
    and to propose a solution of such error. Also, the Company requires
    that the progress of the rectification of such error is monitored.
    The progress must be reported to the Board of Directors or the Audit
    Committee within the specific period of time.

May 29, 2009

Subject : Report on the Accounting Internal Control System

To : The Board of Directors

  Tanayong Public Company Limited

With reference to the audit of the financial statements of Tanayong
Public Company Limited for the year ended March 31, 2009 as reported on
May 28, 2009 to obtain the opinion that such financial statements and
the operational results are regulated in accordance with Generally
Accepted Accounting Principles. The proper scope of review has been
based on the assessment of the Company’s internal control system. We did
not find any material irregularities in such system that may affect our
opinion on the financial statements and reports of the Company. Any
other immaterial suggestions to the opinion will be described in a
separate letter later.

Nevertheless, the audit has been conducted on a sampling basis and the
assessment of the Company’s internal control system is intended for the
audit only, and therefore may not represent a complete overview of the
defects that may exist in the control system of the Company.

Yours faithfully,

- Signed -

Thipawan Nananuwat

Certified Public Accountant (Thailand) No.3459

Audit Committee Report

Dear Shareholders and the Board of Directors of Tanayong Public Company
Limited,

The Audit Committee consists of three independent directors, namely, Lt.
Gen. Phisal Thepsithar as the Chairman of the Audit Committee, Mr. Anat
Arbhabhirama and Pol. Maj. Gen. Vara Ieammongkol as members of the Audit
Committee together with Mrs. Duangkamol Chaichanakajorn as the Secretary
to the Audit Committee. The Audit Committee, appointed by the Board of
Directors of Tanayong Public Company Limited, has duties and
responsibilities as assigned by the Board of Directors as follows:

1.  Review the Company’s financial statements and disclosures to ensure
    that they are accurate, adequate, and trustworthy.

2.  Review the Company’s internal control system and internal audit
    system to ensure that they are appropriate and efficient.

3.  Review the Company’s compliance with the laws, rules, regulations
    and relevant policies.

4.  Consider, select, and nominate the auditor as well as determine the
    auditor’s fee.

5.  Consider the information disclosure regarding connected
    transactions, or transactions that may lead to a conflict of
    interest for the Company.

6.  Prepare the Audit Committee report.

7.  Perform any other acts as assigned by the Company’s Board of
    Directors.

In 2008/2009, the Audit Committee has fulfilled their duties as follows:

1. Held 5 Audit Committee meetings in order to perform their duties as
assigned by the Board of Directors and comply with the regulations,
notifications, principles and guidelines of the Securities and Exchange
Commission and the Stock Exchange of Thailand.

2. Reviewed the Company’s quarterly and annual financial statements as
regards the accuracy and adequate disclosure by attending the meetings
with the auditor and/or employees of auditor of the Company. Having
reviewed the documents, there was no significant material to indicate
that the financial statements were neither accurate nor trustworthy.

3. Reviewed that the Company has appropriate internal control and a
sufficient internal control system so that the Company can operate
efficiently. The Audit Committee has exchanged comments with the auditor
concerning the appraisal of the efficiency of the internal controls as
regards the Company’s accounting system in order to determine
appropriate internal control working procedures.

4. Reviewed the Company’s operations to comply with the laws, rules,
regulations, and policies as well as conducted a good corporate
governance assessment. The overall result of the review showed that the
Company has operated in accordance with the Securities and Exchange law,
regulation and notification of the Stock Exchange, and other relevant
laws.

5. Proposed the Board of Directors to appoint Ms.Thipawan Nananuwat
holding Certified Public Accountant No. 3459 of Ernst & Young Office
Limited as auditor. The nomination was approved by the Board of
Directors and the Annual General Meeting of Shareholders.

6. Considered and reviewed the connected transactions in which the
auditor was of opinion that such report has revealed significant
material and disclosed such transactions in the financial statements and
notes to financial statements. The Audit Committee agreed with the
auditor that such transactions were reasonable.

7. Prepared this Audit Committee report by disclosing it in the Annual
Report 2008/2009 with the signature of the Chairman of the Audit
Committee.

8. In 2008/2009, the Audit Committee attended training sessions,
seminars, and meetings regarding the roles and responsibilities of the
Audit Committee that were arranged by the Stock Exchange of Thailand and
other agencies in order to enhance the knowledge and understanding of
the Audit Committee to perform their duties more efficiently.

- Signed - Lt. Gen. Phisal Thepsithar

Chairman of the Audit Committee