2. Risk factors

In the last year , the company has reviewed the requirements for the
risk management . To provide for the obligation to deliver to customers
the ability to perform perfectly and can operate continuously. It is
conjectured that the risks facing the company substantially. There are
measures to prevent losses due to such risks , including ensuring the
safety in the event of a crisis. And the subsequent management measures
to limit losses in the least .

The Company’s risk management policy is , The Company must ensure safety
of life and body of employees by considering as the highest priority and
must maintain process property and to cope with risk by coordinate with
local and government offices, make a relationship with other industries
as well as provide suggestions of necessary and adequate information for
risk management measures

The Company structure of risk management systems, as follows.

- The executive responsible for the oversight of risk management .

- Provide executive level of risk management committee. The President is
the Chairman of the Committee , to perform risk and crisis response. The
preparation and management of information. (Security) social activities
, prevent the problem recurring , and the drafting and verification of
risk management policy and report such action to the Board of Directors
of the Company.

Risk Management Committee has prepared a guide to determine how the risk
control environment risk is expected to affect the company's operations.
Including risks arising from the misconduct of individuals in the
company. To accommodate risks and crisis that quickly , and requires the
verification of the control such condition each year.

-Establishment of the Business Continuity Plan (BCP) in case of crisis
from approval by The Risk Management Committee , to served unified
response to the crisis so that they can continue to operate and manage
the risks linked with Stanley Electric Co., Ltd.. Japan.

Last year , the company have performed simulations flood crisis. Start
from the implementation of management responsible for risk oversight
,the Risk Management Committee ‘s operation and establishment of the
Business Continuity Plan and various operations to normal levels . So
that all departments understand the role and the simulation results to
improve the risk management plan of each agency accordingly with the
cooperation of the Stanley Electric Co,Ltd., Japan to advise such
simulations.

Furthermore of such measures , in the other departments have responsible
for risk control that have been prepared terms and measures in case that
crisis. Such as conflagration, substances chemical leak. Including
preparation of training plans. Simulation Evaluation of a record, and
monitoring the safety of the facility and has established the TOP GUN
and training as a special case to as a team supplement in helping
prevent and suspend conflagration preliminary to reduce the damage that
may occur.

From company Risk Assessment in business risk has not significant effect
on investment of the investors. There are only business risk in general
and in middle level , that to risk reduce by cost of protection which
must be carefully considered. In the budget and must take measures to
reduce risk within the fixing date as follows ,

1. Risk caused from economics and political instability in the country

Performance Improvement Strategy Office has been established in order to
study about cost reduction as well as study business environment to find
measures of maintaining profit margin. Management meeting is held and
update information is posted on announcement board every week.

2. Risk caused from foreign exchange rate and loan

Risk from foreign exchange rate .This risk arises because of raw
materials importing and exporting. Such business transaction is usually
in short term, approximately 1-3 months with currency of Yen and U.S.
dollar. Measure of preventing this risk is to use Forward Contract.

Executive committee is the person who considers acceptable risk level
for each transaction and each partner. Forward contract policy remains
unchanged which can prevent risk by 50% of total net debt in foreign
currency. The contract will be made only with the main bank that the
company is using service. The company will not do speculating business
transaction.

Risk caused from loan. The company has no significant risk from loan
clustering. The company made a contract of derivatives and deposited
cash with the reliable financial institutions.

3. Risk caused from increasing in materials cost and being short of
suppliers

The policy on this matter is not dealing solely with any particular
manufacturer or supplier. As the supply is more than demand for this
material, the company can choose the supplier who is strong, capable,
and stable in financial status. All factors can be a purchasing power of
the company to negotiate with the suppliers.

4. Risk caused from infrastructure

In the year 2011 the company has been affected by the floods that
occurred in Thailand , that losses of the infrastructure system and
production was stop line. the Company's risk management to reviewed to
protect and find solutions to action plans and the impact of such risk
management activities as part of this year. Beginning to coordinate the
government, the data centre related news, including monitoring
operations to prevent and reduce the impact of flooding from the
government. And the private sector involved.

The company has construction the retaining wall around company area, and
to installation the Stop-log equipment for protection factory. Including
the emergency operations plan for supporting situation and assigned to
training every year.