X. Supervisory Board

Article 31 Appointment of Supervisory Board

31.1. The Company has a Supervisory Board and the members of the Supervisory Board, as stipulated in Article 123 of the Enterprise Law and this Charter, principally the following powers and responsibilities:

a. Being consulted by the Board of Directors on appointing independent auditing companies, auditing fees and matters relating to the resignation or dismissal of an independent auditing company;

b. Discussing with independent auditors the scale and nature of the audit prior to the beginning of the auditing work;

c. Soliciting ideas from professional independent consultants or legal advisors and guaranteeing the participation of experts from outside the Company with professional knowledge appropriate for the Company’s work, if necessary;

d. Inspecting the annual, semiannual and quarterly financial reports before presenting them to the Board of Directors;

e. Discussing the problems and shortcomings identified in the results of the mid-term or final audits as well as issues raised by independent auditors;

f. Examining the management letters from independent auditors and feedback from the Company’s executive board;

g. Reviewing the Company’s reports on internal checking systems before the Board of Management’s approval; and

h. Reviewing the findings of internal checking systems and feedback from the executive board.

31.2. Shareholders and groups of Shareholders owning more than 10% of the common shares for a period of at least 6 consecutive months have the right to nominate a member to the Supervisory Board.

31.3 Members of the Board of Directors, the Managing Director and Mangers should provide all information and documents related to the activities of the Company requested by the Supervisory Board and the Company Secretary should assure that all copies of financial information, all other information provided to the members of the Board of Directors and the copies of the Board of Directors’ Minutes of meeting will be provided to the members of the Supervisory Board at the same time they are provided to the Board of Directors.

31.4. The Supervisory Board cannot have fewer than 3 members or more than 5 members, of whom one member is qualified in accounting and is not a member or employee of the outside independent auditing company nor an employee of the Company itself. The Supervisory Board must appoint one member who is a Shareholder of the Company to be the Chairman. The Supervisory Board Chairman has the following authorities and responsibilities:

a. To convene the meeting of the Supervisory Board and function as the Chairman of the Supervisory Board;

b. To request the Company to provide relevant information to report to the Supervisory Board members; and

c. To draft and sign the Supervisory Board’s reports after consulting with the Board of Directors to present to the Shareholders Meeting.

31.5. The total amount of compensation allocated to the Supervisory Board will be decided by the Shareholders Meeting. Supervisory Board members will be compensated for travel and accommodation expenses and other legally arising expenses from participating in Supervisory Board meetings or other activities relating to the Company’s operations.

31.6. After consulting with the Board of Directors, the Supervisory Board can issue regulations on its meetings and methods of operation, but there must be no fewer than two meetings annually and no fewer than two members at each meeting.

31.7. The members of the Supervisory Board are elected by the Shareholders Meeting in accumulate votes. The members of the Supervisory Board are appointed by the Shareholders Meeting to a maximum term of 5 years and can be re-elected at the next Shareholders Meeting. When voting for members of Supervisory Board, the Company will achieve the goal of renewing at least one third of the members or reelecting at every Annual Shareholders Meeting.

31.8. A Supervisory Board member will no longer have member status when:

a. The member is forbidden by the Law to be a Supervisory Board member;

b. The member resigns with a written announcement sent to the Company’s headquarters;

c. The member is influenced by a mental disorder and other Supervisory Board members have enough professional evidence to prove that the member is not competent.

d. The member is absent from Supervisory Board meetings for a period of 12 consecutive months without permission from the Supervisory Board, and the Supervisory Board determines that the post is vacant.