2.2 Business Characteristics

  (1) Brief Profile and Significant Development

United Securities Public Company Limited was established by “ Sukanin”
Family on 1 April, 1971 under the name of “Silco Company Limited” to
perform securities business with an initial registered capital of Baht
500,000.

In 1989, the total business was sold to Wongkusolkit group and
Janvatanavit Group and the Company name was changed to “United
Securities Company Limited” . In the year 1991, the company was
designated broker no.38 by SET. The Company had transformed into Public
Company and was renamed accordingly to be United Securities Public
Company Limited. In 1994, we became a member of the Thai Bond Dealing
Center Member No.49.

In January, 2000, United Advisory Services Company Limited was
established in which the company had held 99.99% shares of the paid up
capital of Baht 10 million and United Advisory Services main business is
to provide Financial Advisory services.

In 2001, the Company had issued IPO shares to be sold to the general
public which changed the Company’s Registered Capital to Baht
304,373,570 and all fully paid up with the total shares of 60,874,714
ordinary shares at Baht 5 par value. On 8 August, 2001, the company had
listed its shares in the Stock Exchange of Thailand and adopted the
abbreviation name as “US”.

In 2002, the Company increased its capital of Bht 555.6 million divided
into 11.12 million shares at Bht 5 par value which were allotted into 4
parts, i.e., 30.4 million shares allocated to the existing shareholders,
15.3 million for private placement and 60.8 million shares were reserved
for the future conversion of US-W1 which were offered together with the
subscription of US shares of the existing shareholders and the rest 4.5
million shares were reserved for the conversion of warrant distributed
under ESOP scheme. As at 3 October, 2006, the 3-yr. maturity date of
US-W1, a total of 45,111,328 warrants were converted into the same
amount of ordinary shares. The last conversion of warrants has made the
new total paid-up capital of the Company, as at 31 December, 2005, to be
Bht 844,083,520 or equals to 168,816,704 shares.

In 2003, the company acquired another subsidiary company – Siam Chaisri
Co., Ltd. in addition to United Advisory Services Co., Ltd. in order to
expand its financial advisory business. However, in 2006 as the Company
had already had its own IB team, both subsidiaries were sold to Mr.
Siripong Sombutsiri, the Managing Director in order to reduce the
redundancy of IB business.

In the year 2004, the Company had determined a mission as a guideline to
set a long-term development direction for the operation of its business.
It had restructured an organization suitable for future expansion by
setting up a new unit; namely, the Executive Office, which consists of
corporate planning and risk management section, communication & Investor
Relations section and secretarial section. Simultaneously, the Company
planned to promote its image and set up strategies to develop its
operating system, personnel and technology information. It also planned
to aggressively expand its business by opening a new branch in Chonburi
Province.

In 2005, the company had restructured the organization suitable for
future expansion by setting up two additional marketing units as well as
opening up a total of 7 new branches taken care by the new Managing
Director, Ms. Sudthida Chirapatsakul, while 2 branches, namely Chonburi
and Had Yai Branches, which did not perform were closed down. There
were, however, 2 top managements resigned, namely, Mrs. Sasitorn
Phongsathorn, the President and Mr. Jirayuth Rungsrithong, the Managing
Director in which Mrs. Wilaiwan Tantitham, the Vice Chairman of the
Executive Board had temporarily taken up the President position. In
addition, the company set up Risk Management Committee and Risk
Management Department to take care of the various Company’s operations
risks while the Investment Committee had eventually been inactive to
comply to the Board of Director’s policy of declining of investment. As
for the company’s future operations, 2 new objectives, namely
Derivatives and Securities Borrowing & Lending were newly registered.

In early 2006, the major shareholder group of the Company, Wongkusolkit
group consists of Mr. Vitoon Wongkusolkit, Ufinves Corporation Limited,
TME Capital Limited, City Holding Limited, and Town holding Limited
decided to sell their 42,923,520 shares at Bht 8.04 per share,
representing 25.43% of the Company’s total issued shares to the A.P.F.
Holdings Co., Ltd. which is a company registered in Thailand. The
purchase of shares of the Company is considered as an acquisition of
securities for the purpose of a business takeover by A.P.F. Holdings
pursuant to the Notification of the Securities and Exchange Commission
No. Kor.Jor. 53/2545 Re: Rules, Conditions, and Procedures for the
Acquisition of Securities for Business Takeovers dated 18 November 2002
(the “Takeover Rule”). Thus, A.P.F. Holdings is required to make a
mandatory tender offer for all remaining securities of the Company in
accordance with the Takeover Rule and at the moment, it is during the
tender offer period. However, the new group of management has the
intention to retain the listing status of the Company and has no
intention to significantly change the core business of the company.

The shareholders’ structure of A.P.F. Holdings Co., Ltd. are as follows:

As of 12 January 2006 the registered and paid-up capital was Baht
80,000,000 held by the following persons:

1. Sanwa World Service Company Limited (50.99%)

  (Sanwa World Service Company Limited carries the business of
  investment both in and outside The Stock Exchange of Thailand (Holding
  Company) having as of 11 January 2006 the registered and paid-up
  capital of Baht 40,000,000 held by Mr. Mitsuji Konoshita (45%), Mr.
  Fumio Kyuma (2%), Mr. Tatsuya Konoshita (2%), Mr. Phongsak Thongluang
  (9.9%), Mr. Anek Arampanich (9.9%), Sanwa World Media Co., Ltd.
  (16.1%) (Sanwa World Media Co., Ltd. carries the business of
  investment both in and outside The Stock Exchange of Thailand (Holding
  Company) having as of 28 November 2005 the registered and paid-up
  capital of Baht 6,000,000 held by Mr. Kotaro Maru (30%), Mr. Tatsuya
  Konoshita (19%), Mr. Phongsak Thongluang (24%), Mr. Anek Arampanich
  (24%), Miss Suntree Vijitchanachai (1%), Miss Ruedee Ditsarat (1%),
  Mrs. Thongyim Chakthong (1%)) and Samdao Trading Co., Ltd. (15.1%)
  (Samdao Trading Co., Ltd. carries the business of investment both in
  and outside The Stock Exchange of Thailand (Holding Company) having as
  of 20 January 2005 the registered and paid-up capital of Baht
  8,000,000 held by Mr. Phongsak Thongluang (30%), Mr. Anek Arampanich
  (29.975%), Mr. Deephong Sahachartsiri (29.975%), Mr. Tetsuhiko Miki
  (10%), Mr. Nutthawut Sritha (0.0125%), Miss Veena Boorchum (0.0125%),
  Miss Suntree Vijitchanachai (0.0125%), Miss Pissamai Wattanavikkrum
  (0.0125%))

2. Mr. Mitsuji Konoshita (20%)

3. Mr. Osamu Shigematsu (20%)

4. Mr. Kenji Tanaka (9%)

5. Mr. Phongsak Thongluang (0.000125%)

6. Mr. Anek Arampanich (0.000125%)

7. Miss Chanpen Auasangdeekul (0.000125%)

Totaling 100% of registered and paid-up capital of A.P.F. Holdings.

As for the changing of Board of Directors as well as executive board
structure, please see no. 2.9 Management under Board of Director
Section.

(2) The Company’s Business

The Company is licensed to perform 4 types of securities businesses,
i.e. Securities Brokerage, Securities Trading, Investment Advisory and
Underwriting business. In 2005, the Company has altogether 12 branches -
Rangsit, Nakornsawan, Nakornpathom , Had Yai, and Chonburi, Baan
Pong(Rajburi), Udornthani, Sathorn, Ubonrajathani, Khon Kaen, Lampoon
and Bang na. However, as the performances of Had Yai and Chonburi
branches had not met with the set target, both branches were closed down
and toward the end of the year, there were 10 branches left.

Moreover, the Company also provides Internet Trading services and its
Investment Banking Department provides the financial advisory services
which was licensed by the SEC. Such services comprise of financial
advisory services, Shareholder Structure, Fund raising by issuing
various kinds of financial instrument such as common and preferred
stocks, bonds, debenture with warrant, etc. and listing them in the
Stock Exchange of Thailand as well as the Market for Alternative
Investment (MAI) according to the license provided.

As for the 2 subsidiary companies of the Company – United Advisory
Services Co.Ltd.(UAS) and Siam Chaisri Co. Ltd., both provide financial
advisory services. Whereas UAS provides the services under SEC license
like US, Siam Chaisri operates general financial advisory business such
as financial re-structuring, Non-IPO Deal and merging of business, etc.
However, the two subsidiary companies was divested as formerly
mentioned.

(3) Income Structure of the Company and its Subsidiary

+--------------------------+--------+------+-----+------+------+------+
| Income                   | Ac     | % of | 31  |      | 31   |      |
|                          | quired |      | De  |      | Dece |      |
|                          |        |      | cem |      | mber |      |
|                          |        |      | ber |      |      |      |
|                          |        |      | 2   |      | 2005 |      |
|                          |        |      | 004 |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
|                          | by     | S    | M   | %    | Mil  | %    |
|                          |        | hare | ill |      | lion |      |
|                          |        | Held | ion |      |      |      |
|                          |        |      |     |      | (B   |      |
|                          |        |      | (Ba |      | aht) |      |
|                          |        |      | ht) |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
| 1. Securities Business   | US &   | -    |     |      |      |      |
| Income                   | Subsid |      |     |      |      |      |
|                          | iaries |      |     |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
| Brokerage Fees           |        |      | 334 | 8    | 25   | 8    |
|                          |        |      | .38 | 4.06 | 1.04 | 3.32 |
+--------------------------+--------+------+-----+------+------+------+
| Fee and Service          |        |      | 57. | 1    | 2    | 7.00 |
|                          |        |      | 70* | 4.50 | 1.08 |      |
+--------------------------+--------+------+-----+------+------+------+
| Gain(loss) on Trading in |        |      | (   | (4   | (5   | (1   |
| Securities               |        |      | 16. | .05) | .15) | .71) |
|                          |        |      | 13) |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
| Interest & dividend on   |        |      | 9   | 2.40 | 1    | 3.36 |
| securities investmt.     |        |      | .56 |      | 0.11 |      |
+--------------------------+--------+------+-----+------+------+------+
| Interest on loan         |        |      | 11  | 2.95 | 2    | 7.79 |
|                          |        |      | .75 |      | 3.46 |      |
+--------------------------+--------+------+-----+------+------+------+
| Securities Business      |        |      | 397 | 9    | 30   | 9    |
| Income                   |        |      | .26 | 9.86 | 0.54 | 9.74 |
+--------------------------+--------+------+-----+------+------+------+
| 2. Other Income          | US &   | -    | 0   | 0.14 | 0.77 | 0.26 |
|                          | Subsid |      | .54 |      |      |      |
|                          | iaries |      |     |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
| Total Income             |        |      | 397 | 10   | 30   | 10   |
|                          |        |      | .80 | 0.00 | 1.31 | 0.00 |
+--------------------------+--------+------+-----+------+------+------+

Remark: *Being the Fee and Services from United Advisory Services Co.,
Ltd. for Bht 25.93 MB and from Siam Chaisri Co.,Ltd. for Bht 7.89 MB.

(4) Business Goals

In 2006, the Company’s main business concept is “collaboration for
service excellence,” which is expected to be achieved by providing a
variety of products, offering quality services and adding values to its
services to meet customer’s demands and fulfill their satisfaction. The
Company’s business goals are as follows.

1.  Securities Brokerage Service: The Company plans to capture
    approximately 1.5 per cent of the total market volume expanding its
    marketing teams, upgrading its marketing officers, offering credit
    balance for 20-30 per cent of the trading values but not exceeding
    Baht 600 million and increasing its securities brokerage and loan
    interest incomes. In addition, the Company is preparing to launch
    new products and venture into new businesses such as derivatives as
    well as lending and borrowing to purchase securities.

  At the same time, United Securities Public Company Limited remains
  committed to its engagement in investment banking and debt instrument
  businesses as well as selling investment units while seeking other
  business opportunities allowed by the authorities for a comprehensive
  one-stop services and to increase non-securities brokerage incomes to
  be no less than 10 per cent of its total revenues.

2.  Investment Banking: United Securities Public Company Limited remains
    very much focused in its financial advisory service as well as the
    securities underwriting business as these are considered an
    important strategy helping support the Company’s securities
    business. In addition, other investment banking transactions pursued
    by the Company include merger and acquisition and rehabilitation
    advisory service.

  The Company also pays attention to other businesses ranging from
  trading debt instruments to being a sales agent of investment units
  and seeking other business opportunities required by the authorities
  for a comprehensive service and to increase the non-brokerage income
  to no less than 10 per cent of the total revenues.

3.  Securities Analysis: United Securities Public Company Limited’s
    objective is to create quality stock analysis reports that respond
    to various types of customers. The Company has already set up an
    Investment Advisory Unit to accommodate big-time customers who want
    specific advice by taking into consideration each customer’s goal,
    objectives, risk-taking ability, financial status and investment
    experience to come up with a proper stock selection and asset
    allocation scheme tailored made to such individual, which will
    eventually add values to the Company’s services.

4.  Support Services : The Company continues to pay attention to system
    development work especially those concerning information technology
    for service excellence and to accommodate new competitions and
    transaction to be seen in the future.

It is expected that in 2006, the Company’s income structure will be as
follows.

1. Incomes from securities brokerage 89 per cent

2. Fee and service-based incomes 2 per cent

3. Interest incomes and dividends 2 per cent

3. Loan interest incomes 7 per cent