2.10 Financial Status and Performance

(1) Financial Statement: Summary of the Company’s financial status and
its operations for the past 3 years

  (a) Independent Auditor

During the year 2009- 2011, the Company appointed Ernst & Young Office
Limited, as independent auditor. The auditing team is as follows:

Mr. Sophon Permsirivallop CPA No. 3182

Ms. Vissuta Chariyathanakorn CPA No. 3853

  Ms. Pimjai Manitkachonkit CPA No. 4521

According to the sale and transfer of business to UOB Kay Hian
Securities (Thailand) Public Company Limited, the Extraordinary General
Meeting of Shareholder No. 2/2011 held on 30 November 2011 resolved to
change independent auditor from Ernst & Young Office Limited to Deloitte
Touche Tohmatsu Jaiyos Audit Co., Ltd. for the first year with the
following CPAs.

Mr. Niti Jungnitnirundr CPA No. 3809

Dr. Suphamit Techamontrikul CPA No. 3356

Mr. Permsak Wongpatcharapakorn CPA No. 3427

(b) Report of Independent Auditor

For the past 3 years, the company’s financial statements had been given
an unqualified opinion from the Independent Auditor every year except
for FY2011 in which the emphasis regarding the adjustment of accounting
standard effective in FY 2011 has been added.

Balance Sheet

  (Unit: Thousand Baht)

+--------------------------+------+-----+------+-----+------+-----+
|                          | 2009 |     | 2    |     | 2    |     |
|                          |      |     | 010* |     | 011* |     |
+--------------------------+------+-----+------+-----+------+-----+
|                          | Am   | %   | Am   | %   | Am   | %   |
|                          | ount |     | ount |     | ount |     |
+--------------------------+------+-----+------+-----+------+-----+
| Assets                   |      |     |      |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Cash and cash            | 108  | 8   | 528  | 37  | 738  | 75  |
| equivalents              | ,186 | .57 | ,740 | .03 | ,525 | .41 |
+--------------------------+------+-----+------+-----+------+-----+
| Long-term deposits at    | 63   | 5   | 63   | 4   | 63   | 6   |
| financial institutions   | ,121 | .00 | ,182 | .43 | ,240 | .46 |
+--------------------------+------+-----+------+-----+------+-----+
| Investments in debt and  | 533  | 42  | 365  | 25  | 121  | 12  |
| equity securities, net   | ,395 | .25 | ,911 | .63 | ,054 | .36 |
+--------------------------+------+-----+------+-----+------+-----+
| Receivable from clearing | 58   | 4   | 55   | 3   | -    | -   |
| house                    | ,998 | .67 | ,827 | .91 |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Securities business      | 432  | 34  | 361  | 25  | 14   | 1   |
| receivables, net         | ,073 | .22 | ,723 | .33 | ,323 | .46 |
+--------------------------+------+-----+------+-----+------+-----+
| Premises improvement and | 13   | 1   | 8    | 0   | 230  | 0   |
| equipment, net           | ,903 | .10 | ,048 | .56 |      | .02 |
+--------------------------+------+-----+------+-----+------+-----+
| Intangible assets, net   | 19   | 1   | 12   | 0   | 5    | 0   |
|                          | ,833 | .57 | ,574 | .88 | ,486 | .56 |
+--------------------------+------+-----+------+-----+------+-----+
| Other assets, net        | 33   | 2   | 31   | 2   | 36   | 3   |
|                          | ,029 | .62 | ,851 | .23 | ,463 | .72 |
+--------------------------+------+-----+------+-----+------+-----+
| Total assets             | 1    | 100 | 1    | 100 | 979  | 100 |
|                          | ,262 | .00 | ,427 | .00 | ,321 | .00 |
|                          | ,538 |     | ,856 |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Liabilities and          |      |     |      |     |      |     |
| Shareholders’ equity     |      |     |      |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Liabilities              |      |     |      |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Domestic borrowings      | -    | -   | 8    | 0   | -    | -   |
|                          |      |     | ,315 | .58 |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Payables to clearing     | 10   | 0   | 7    | 0   | -    | -   |
| house                    | ,278 | .81 | ,656 | .54 |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Securities business      | 129  | 10  | 175  | 12  | 11   | 1   |
| payables                 | ,495 | .26 | ,761 | .31 | ,521 | .18 |
+--------------------------+------+-----+------+-----+------+-----+
| Liabilities under        | 119  | 9   | 224  | 15  | -    | -   |
| commercial paper sold    | ,031 | .43 | ,733 | .74 |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Provision for            | 8    | 0   | 8    | 0   | 8    | 0   |
| liabilities from         | ,826 | .70 | ,732 | .61 | ,824 | .90 |
| litigation               |      |     |      |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Liabilities for          | -    | -   | -    | -   | 1    | 0   |
| employees’ benefits      |      |     |      |     | ,565 | .16 |
| after retire             |      |     |      |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Accrued expenses         | 28   | 2   | 35   | 2   | 8    | 0   |
|                          | ,428 | .25 | ,626 | .50 | ,242 | .84 |
+--------------------------+------+-----+------+-----+------+-----+
| Other liabilities        | 2    | 0   | 6    | 0   | 4    | 0   |
|                          | ,429 | .19 | ,337 | .44 | ,649 | .47 |
+--------------------------+------+-----+------+-----+------+-----+
| Total liabilities        | 298  | 23  | 467  | 32  | 34   | 3   |
|                          | ,487 | .64 | ,160 | .72 | ,801 | .55 |
+--------------------------+------+-----+------+-----+------+-----+
| Shareholders’ equity     |      |     |      |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Issued and paid up       | 844  | 66  | 844  | 59  | 844  | 86  |
| capital                  | ,083 | .86 | ,083 | .12 | ,083 | .20 |
+--------------------------+------+-----+------+-----+------+-----+
| Premium on ordinary      | 53   | 4   | 53   | 3   | 53   | 5   |
| shares                   | ,227 | .21 | ,227 | .73 | ,227 | .43 |
+--------------------------+------+-----+------+-----+------+-----+
| Revaluation deficit on   | -    | -   | -    | -   | -    | -   |
| investments              |      |     |      |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Appropriated – Statutory | 16   | 1   | 16   | 1   | 16   | 1   |
| reserve                  | ,173 | .28 | ,371 | .15 | ,371 | .67 |
+--------------------------+------+-----+------+-----+------+-----+
| Unappropriated           | 43   | 3   | 47   | 3   | 30   | 3   |
|                          | ,148 | .42 | ,015 | .28 | ,838 | .15 |
+--------------------------+------+-----+------+-----+------+-----+
| Equity attributable to   | 956  | 75  | 960  | 67  | 944  | 96  |
| the parent’s             | ,631 | .77 | ,696 | .28 | ,520 | .45 |
| shareholders             |      |     |      |     |      |     |
|                          | 7    | 0   | -    | -   | -    | -   |
| Minority interest        | ,420 | .59 |      |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+
| Total Shareholders’      | 964  | 76  | 960  | 67  | 944  | 96  |
| equity                   | ,051 | .36 | ,696 | .28 | ,520 | .45 |
+--------------------------+------+-----+------+-----+------+-----+
| Total liabilities and    | 1    | 100 | 1    | 100 | 979  | 100 |
| shareholders’ equity     | ,262 | .00 | ,427 | .00 | ,321 | .00 |
|                          | ,538 |     | ,856 |     |      |     |
+--------------------------+------+-----+------+-----+------+-----+

*Remark: For the year 2010 and 2011, the shown data was from separate
financial statement only.

Comprehensive Income Statement

  (Unit: Thousand Baht)

+--------------------------+------+------+------+------+------+------+
|                          | 2009 |      | 2010 |      | 2    |      |
|                          |      |      |      |      | 011* |      |
+--------------------------+------+------+------+------+------+------+
|                          | Am   | %    | Am   | %    | Am   | %    |
|                          | ount |      | ount |      | ount |      |
+--------------------------+------+------+------+------+------+------+
| Revenues                 |      |      |      |      |      |      |
+--------------------------+------+------+------+------+------+------+
| Brokerage fee from       | 145  | 5    | 201  | 6    | 137  | 6    |
| securities business      | ,388 | 5.14 | ,156 | 6.30 | ,453 | 0.37 |
+--------------------------+------+------+------+------+------+------+
| Brokerage fee from       | 310  | 0.12 | 12   | 4.02 | 13   | 6.00 |
| derivatives business     |      |      | ,202 |      | ,682 |      |
+--------------------------+------+------+------+------+------+------+
| Fee and service income   | 19   | 7.38 | 4    | 1.47 | 1    | 0.56 |
|                          | ,446 |      | ,471 |      | ,284 |      |
+--------------------------+------+------+------+------+------+------+
| Gain (Loss) on trading   | 1    | 0.44 | 12   | 4.25 | 18   | 8.05 |
| in securities            | ,171 |      | ,896 |      | ,336 |      |
+--------------------------+------+------+------+------+------+------+
| Interest and dividend    | 44   | 1    | 33   | 1    | 32   | 1    |
|                          | ,256 | 6.79 | ,609 | 1.08 | ,896 | 4.45 |
+--------------------------+------+------+------+------+------+------+
| Interest on margin loans | 47   | 1    | 35   | 1    | 22   | 9.69 |
|                          | ,051 | 7.84 | ,611 | 1.74 | ,038 |      |
+--------------------------+------+------+------+------+------+------+
| Other income             | 6    | 2.29 | 3    | 1.14 | 2    | 0.88 |
|                          | ,055 |      | ,458 |      | ,005 |      |
+--------------------------+------+------+------+------+------+------+
| Total Revenue            | 263  | 10   | 303  | 10   | 227  | 10   |
|                          | ,677 | 0.00 | ,403 | 0.00 | ,694 | 0.00 |
+--------------------------+------+------+------+------+------+------+
| Expenses                 |      |      |      |      |      |      |
+--------------------------+------+------+------+------+------+------+
| Expenses on borrowings   | 9    | 3.89 | 9    | 3.28 | 5    | 2.29 |
|                          | ,596 |      | ,957 |      | ,224 |      |
+--------------------------+------+------+------+------+------+------+
| Fee and service expenses | 19   | 7.92 | 25   | 8.30 | 22   | 9.72 |
|                          | ,549 |      | ,188 |      | ,130 |      |
+--------------------------+------+------+------+------+------+------+
| Bad debts and doubtful   | (2,  | (1   | (6,  | (1   | 8    | 3.80 |
| accounts (Reversal)      | 582) | .05) | 024) | .98) | ,644 |      |
+--------------------------+------+------+------+------+------+------+
| Operating expenses       |      |      | 28   | 9.39 | -    | -    |
|                          |      |      | ,500 |      |      |      |
+--------------------------+------+------+------+------+------+------+
| Personnel expenses       | 115  | 4    | 136  | 4    | 105  |      |
|                          | ,754 | 6.87 | ,591 | 5.02 | ,901 |      |
+--------------------------+------+------+------+------+------+------+
| Premises and equipment   | 54   | 2    | 49   | 1    | 37   | 4    |
| expenses                 | ,645 | 2.13 | ,854 | 6.43 | ,581 | 6.51 |
+--------------------------+------+------+------+------+------+------+
| Tax and duties           | 1    | 0.45 | 1    | 0.40 | -    | -    |
|                          | ,124 |      | ,221 |      |      |      |
+--------------------------+------+------+------+------+------+------+
| Directors’ remuneration  | 32   | 1    | 33   | 1    | 25   | 1    |
|                          | ,068 | 2.99 | ,281 | 0.98 | ,963 | 1.40 |
+--------------------------+------+------+------+------+------+------+
| Other expenses           | 24   | 9.79 | 24   | 8.17 | 25   | 1    |
|                          | ,184 |      | ,794 |      | ,117 | 1.03 |
+--------------------------+------+------+------+------+------+------+
| Total expenses           | 254  | 10   | 303  | 9    | 230  | 10   |
|                          | ,338 | 2.99 | ,362 | 9.99 | ,560 | 1.25 |
+--------------------------+------+------+------+------+------+------+
| Income (Loss) before     | (7,  | (2   | 41   | 0.01 | (2,  | (1   |
| income tax               | 385) | .99) |      |      | 866) | .25) |
+--------------------------+------+------+------+------+------+------+
| Corporate income tax     | -    | -    | -    | -    | -    | -    |
+--------------------------+------+------+------+------+------+------+
| Net income (Loss) for    | (7,  | (2   | 41   | 0.01 | (2,  | (1   |
| the year                 | 385) | .99) |      |      | 866) | .25) |
+--------------------------+------+------+------+------+------+------+
| Net income (Loss)        |      |      |      |      |      |      |
| attributed to:           |      |      |      |      |      |      |
+--------------------------+------+------+------+------+------+------+
| Equity holders of the    | 1    | 0.55 | 4    | 1.34 | (2,  | (1   |
| parent                   | ,368 |      | ,064 |      | 866) | .25) |
+--------------------------+------+------+------+------+------+------+
| Minority interests of    | (8,  | (3   | (4,  | (1   | -    | -    |
| the subsidiary           | 753) | .54) | 023) | .33) |      |      |
+--------------------------+------+------+------+------+------+------+
|                          | (7,  | (2   | 41   | 0.01 | (2,  | (1   |
|                          | 385) | .99) |      |      | 866) | .25) |
+--------------------------+------+------+------+------+------+------+
| Basic earnings per share |      |      |      |      |      |      |
+--------------------------+------+------+------+------+------+------+
| Net income (Loss) (Baht  | 0.01 | -    | 0.02 | -    | (0   | -    |
| per share)               |      |      |      |      | .02) |      |
+--------------------------+------+------+------+------+------+------+
| Weighted average number  | 168  |      | 168  |      | 168  |      |
| of ordinary shares       | ,817 |      | ,817 |      | ,817 |      |
| (Thousand shares)        |      |      |      |      |      |      |
+--------------------------+------+------+------+------+------+------+

*Income Statement of FY2011, the shown data was from separate financial
statement only due to the sale of subsidiary.

Cash flow statements

  (Unit: Thousand Baht)

+--------------------------------------+----------+---------+---------+
|                                      | 2009     | 2010    | 2011    |
+--------------------------------------+----------+---------+---------+
| Cash flows from operating activities |          |         |         |
+--------------------------------------+----------+---------+---------+
| Net income (Loss)                    | (7,385)  | 3,962   | (2,866) |
+--------------------------------------+----------+---------+---------+
| Adjustments to reconcile net income  |          |         |         |
| (loss) to net cash                   |          |         |         |
+--------------------------------------+----------+---------+---------+
| provided by (paid for) operating     | (19,186) | 9,063   | (       |
| activities;-                         |          |         | 25,703) |
+--------------------------------------+----------+---------+---------+
| Decrease (increase) in operating     |          |         |         |
| assets                               |          |         |         |
+--------------------------------------+----------+---------+---------+
| Long-term deposit at financial       | (117)    | (61)    | (58)    |
| institutions                         |          |         |         |
+--------------------------------------+----------+---------+---------+
| Short-term investments               | 164,772  | 143,368 | 244,347 |
+--------------------------------------+----------+---------+---------+
| Receivable from clearing house       | (36,154) | 3,171   | 55,827  |
+--------------------------------------+----------+---------+---------+
| Securities business receivables      | 117,214  | 76,374  | 91,790  |
+--------------------------------------+----------+---------+---------+
| Other assets                         | (1,553)  | 642     | 1,305   |
+--------------------------------------+----------+---------+---------+
| Increase (Decrease) in operating     |          |         |         |
| liabilities                          |          |         |         |
+--------------------------------------+----------+---------+---------+
| Loan from financial institution      | (70,000) | 8,315   | (8,315) |
+--------------------------------------+----------+---------+---------+
| Payable to clearing house            | 10,257   | (2,622) | (7,656) |
+--------------------------------------+----------+---------+---------+
| Securities business payables         | 71,464   | 46,265  | (1      |
|                                      |          |         | 64,240) |
+--------------------------------------+----------+---------+---------+
| Liabilities under commercial papers  | (        | 105,000 | (2      |
| sold                                 | 180,000) |         | 25,000) |
+--------------------------------------+----------+---------+---------+
| Other liabilities                    | 2,177    | 12,099  | (       |
|                                      |          |         | 29,071) |
+--------------------------------------+----------+---------+---------+
| Net cash flows from operating        | 51,489   | 405,577 | (       |
| activities                           |          |         | 69,639) |
+--------------------------------------+----------+---------+---------+
| Cash flows from investing activities |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash paid for acquisition of         | -        | 10,000  | -       |
| investment in subsidiary             |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash proceeds from sale of           | -        | 10,624  | -       |
| investment in subsidiary             |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash received from interest          | 32,377   | 29,174  | 33,172  |
+--------------------------------------+----------+---------+---------+
| Cash paid for purchase of premises   | 600      | 3       | 530     |
| improvement and equipment            |          |         |         |
|                                      |          |         |         |
| and qu                               |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash proceeds from sale of premises  | (1,165)  | (1,628) | (1,021) |
| improvement and equipment            |          |         |         |
|                                      |          |         |         |
| and qu                               |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash paid for purchase of intangible | (228)    | (1,351) | (224)   |
| assets                               |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash proceed from transferring of    | -        | -       | 246,967 |
| margin loans                         |          |         |         |
+--------------------------------------+----------+---------+---------+
| Net cash flows provided by investing | 31,584   | 26,822  | 279,424 |
| activities                           |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash flows from financing activities |          |         |         |
+--------------------------------------+----------+---------+---------+
| Proceed from paid-up share capital   |          |         |         |
| from minority                        |          |         |         |
+--------------------------------------+----------+---------+---------+
| shareholders of subsidiary           | 3,000    | -       | -       |
+--------------------------------------+----------+---------+---------+
| Net cash flows from financing        | 3,000    | -       | -       |
| activities                           |          |         |         |
+--------------------------------------+----------+---------+---------+
| Net increase (decrease) in cash and  | 86,073   | 432,398 | 209,785 |
| cash equivalents                     |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash and cash equivalents at         | 22,113   | 96,342  | 528,740 |
| beginning of the year                |          |         |         |
+--------------------------------------+----------+---------+---------+
| Cash and cash equivalents at the end | 108,186  | 528,740 | 738,525 |
| of the year                          |          |         |         |
+--------------------------------------+----------+---------+---------+

(c) Significant Financial Ratio which reflects the Company’s financial
    Status and Securities Business Operation Results.

 Unit: Percentage

+------------------------------------+----------+----------+----------+
| Financial Ratios                   | 2009     | 2010     | 2011     |
+------------------------------------+----------+----------+----------+
| Profitability Ratio                |          |          |          |
+------------------------------------+----------+----------+----------+
| Gross Profit Margin                | 89.00    | 90.29    | 84.05    |
+------------------------------------+----------+----------+----------+
| Net Profit Margin                  | 0.55     | 1.34     | (125.88) |
+------------------------------------+----------+----------+----------+
| Return on Equity                   | 0.14     | 0.42     | (30.35)  |
+------------------------------------+----------+----------+----------+
| Return on Investment               | 9.16     | 10.34    | 21.04    |
+------------------------------------+----------+----------+----------+
| Efficiency Ratio                   |          |          |          |
+------------------------------------+----------+----------+----------+
| Return on Assets                   | 0.10     | 0.30     | (0.24)   |
+------------------------------------+----------+----------+----------+
| Assets Turnover                    | 0.18     | 0.23     | 0.19     |
+------------------------------------+----------+----------+----------+
| Financial Ratio                    |          |          |          |
+------------------------------------+----------+----------+----------+
| Liquid assets to Loan              | N/A      | 71.18    | N/A      |
+------------------------------------+----------+----------+----------+
| Performing assets to Loan          | N/A      | 87.5     | N/A      |
+------------------------------------+----------+----------+----------+
| Liquid Assets to Total Assets      | 13.57    | 41.46    | 94.23    |
+------------------------------------+----------+----------+----------+
| Performing Assets to Total Assets  | 76.47    | 50.96    | 12.36    |
+------------------------------------+----------+----------+----------+
| Debt to Equity                     | 0.31     | 0.49     | 0.04     |
+------------------------------------+----------+----------+----------+
| Dividend Payment                   | -        | -        | -        |
+------------------------------------+----------+----------+----------+
| Other Ratios                       |          |          |          |
+------------------------------------+----------+----------+----------+
| Net Investment in Securities to    | 42.25    | 25.63    | 12.36    |
| total Assets                       |          |          |          |
+------------------------------------+----------+----------+----------+
| Net Capital Ratio                  | 178.95   | 134.30   | 2,442.00 |
|                                    |          |          |          |
| (based on SEC’s Net Capital Rules) |          |          |          |
+------------------------------------+----------+----------+----------+

(2) Management Discussion and Analysis on Consolidated Financial
Statements

1.  Operation Overview During the Past Year

In 2011, the situation of securities trading in the stock exchange had
some positive factors so that the overall SETI increased despite the
political problem. Nevertheless, as a result from the temporary stop of
stock brokerage and derivative brokerage businesses of the Company since
25 October 2011 due to the sale and transfer of such business to UOB Kay
Hian Securities (Thailand) Public Company Limited, the Company’s revenue
dropped from Baht 302.66 million in FY2010 to Baht 54.02 million or
82.15% decreased. After business transfer, the Company leans mainly on
debt securities trading business which originated Baht 54.02 million
income to the Company in FY2011 or 23.72% of total income (including
those of the transferred businesses).

2.  Operation Results

Incomes

In 2011, the Company’s brokerage incomes decreased from Baht 213 million
in FY2010 to Baht 151 million or 29.11% compared with FY2010, resulting
from the temporary stop of stock brokerage and derivative brokerage
businesses of the Company since 25 October 2011

The Company has Baht 1.28 million fees and service income in FY2011
which decreased from Baht 1.86 million or 31.18% compared with FY2010.

However, the Company has more gain on securities from Baht 12.86 million
in FY2010 to Baht 18.34 million in FY2011 or 42.61% increased.

Expenses

Total expenses of the Company for the year 2011 was Baht 230.36 million
decreased from Baht 303.23 million in 2010 or increased by 24.03% due to
the transfer of business to UOB Kay Hian (Thailand) Public Company
Limited resulting to less overall expenses.

Net Income (Loss)

The Company’s income decreased from Baht 302.66 million in FY2010 to
Baht 54.02 million in FY2011 or 82.15% drop and although the total
expenses decreased from Baht 3.94 million in 2010 to Baht 2.34 million
in 2011 or 40.61% drop, the Company still has a net loss of Baht 2.87
million.

3. Financial Status

Total Assets

In 2011, the Company had total assets of Baht 979.32 million decreased
by Baht 448.54 million or 31.41% previous year resulted by the decrease
in receivables from Clearing House of Baht 55.83 million and the
decrease in from the securities and derivatives business receivables of
Baht 347.40 million as well as the increase of cash and cash equivalents
of Baht 209.79 million due to the transfer of business to UOB Kay Hian
(Thailand) Public Company Limited.

Investment in Securities

The Company’s net investment in securities for the year 2011 was Baht
121.05 million reduced by 66.91% from the year 2010, which was mainly
caused from a decrease of debt securities trading investment.

Net Securities Business Receivables and securities and derivatives
business Receivables

The net securities business receivables declined by Baht 346.13 million,
from Baht 360.45 million in 2010 to Baht 14.32 million in 2011. Such
declining was due to the decrease in receivables on cash accounts of
Baht 90.85 million, receivables on margin loans of Baht 241.86 million
and other receivables of Baht 5.14 million. In addition, derivatives
business payables dropped by Baht 1.28 million, net securities and
derivatives business payables reduced from Baht 361.72 million in FY2010
to Baht 14.32 million in FY2011 due to the transfer of such businesses
to UOB Kay Hian (Thailand) Public Company Limited.

Liquidity

Regarding the liquidity for the year 2011, the Company had a net cash
flows raised by Baht 209.79 million resulting from the Baht 279.42
million increase in cash proceed from transferring of margin loans and
Baht 69.64 million of cash flows used in operating activities, due to
the transfer of such businesses to UOB Kay Hian (Thailand) Public
Company Limited.

Sources of Capital

Liabilities

In 2010, the Company had a short term loan used for settlement with the
Thailand Securities Depository Co., Ltd. and for working capital of 8.3
million Baht and such loan had been repaid while there was no short-term
loan in 2011.

The net capital ratio of the Company as at December 31, 2011 was 2,442%
which considerably exceeded the minimum rate regulated by the SEC.

Shareholders’ Equity

The shareholders’ equity of the Company for the year 2011 was Baht
944.52 million decreased from Baht 960.7 million in 2010 resulting from
Baht 13.24 million adjustment of earnings at beginning of the year to be
in line with a new accounting standard which was effective since 2011 as
well as the Company’s net loss of Baht 2.87 million.

4. Significant Factors that influence the Future Operations and
Financial Status

The significant factors that may influence the Company’s future
operation and financial status are economic and political stabilities of
Thailand which impact not only on the investment decision of the
investors but also on the stock market as a whole. And while the
competition in securities business is still fierce, all aforementioned
factors may also have considerable influence on profits and financial
status of the Company.

Nevertheless, after the sale and transfer of stock brokerage and
derivative brokerage businesses to UOB Kay Hian Securities (Thailand)
Public Company Limited, the Company has temporarily stopped operating
such businesses, the Company leans mainly on debt securities trading
business. The Company also plans to expand customer bases, to invest
more in debt securities in order to earn enough income and to continue
growing in this business.

(3) Auditor’s Remunerations

From the past fiscal year, the Company had paid the following fees to 2
auditors:

  3.1 Ernst & Young Office Limited

  - Audit fee: Baht 560,000 and the out-of-pocket expenses of Baht
  3,885.

  - Non-audit fee: -None-

  3.2 Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd.

  - Audit fee: Baht 500,000

  - Non-audit fee: Baht 550