The responsibility to establish the integrated and effective Internal Control System has been well recognized by senior management of the Company. Based on the Internal Controls Framework defined by COSO (The Committee of Sponsoring Organizations of the Treadway Commission), we have updated the internal control system covering all levels and operating procedures of the Company to comply with relevant laws and regulations, as well as to ensure operations efficiency, reliability of financial reports, the necessary awareness of key risks and to protect interests of shareholders. The Audit Committee of the Board is responsible for overseeing the operation of the internal monitoring systems, so as to ensure that the Board is able to monitor the Company’s overall financial position, to protect the Company’s assets, and to prevent major errors resulting from financial reporting or loss.

 

The rules of Section 404 of “Sarbanes-Oxley Act” (SOX404), issued by SEC, set high standard for the integrity and effectiveness of Internal Control System of a listing company. To comply with the rules of SOX404 in 2006 and following years, the Company has issued policies and procedures to identify responsibilities of all departments and subsidiaries, and to further strengthen Internal Control System of the Company.