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 the year 2002, shareholders’ meeting was called and had approved a
new capital increase of a total of 555.62 million Baht or a total of
111.12 million shares at 5 Baht par value by which 30.437 million shares
were allocated to the existing shareholders in the ratio of 2 old shares
to one new share and the shareholders were also eligible to receive a
warrant (US-W1) in the ratio of 1 common share receive 2 warrants for
free. Another 15.31 million shares were allocated by way of Private
Placement and the rest 65.3 million were reserved for the conversion of
US-W1 of which 60.87 million shares were for the conversion by the
existing shareholders and 4.5 million shares were for the conversion by
the employees under ESOP scheme. Therefore, in June 2002, the Company’s
registered capital was 860 million Baht and the paid up capital had
increased to 533.12 million Baht. US-W1 was registered in the SET on 14
October, 2002. And from the first conversion of the third year (the
final year of the Warrant) in November, 2004, there were altogether
0.596 million shares converted at 5 Baht each. Therefore, the Company’s
paid-up capital had increased from 615.5 million Baht in the year 2003
to 618.5 million Baht or 123.7 million shares as at 31 December, 2004.

.

In the year 2003, the Board of Directors had a resolution to buy up the
100% shares of Siam Chaisri Co.,Ltd. From CNT Holdings Co., Ltd. to
become another subsidiary of the Company in addition to United Advisory
Services Co., Ltd., which already acquired license from SEC, in order to
expand Financial Advisory business of the Company. In addition, the
Company also acquired the Financial Advisory License from SEC since 22
December, 2003.

In 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.

(2) The Company’s Business

The Company’s business was done under securities license to perform 4
types of securities businesses, i.e. Securities Brokerage, Securities
Trading, Investment Advisory and Underwriting business. As at 31
December 2004, the Company has altogether 5 branches - Rangsit,
Nakornsawan, Nakornpathom , Had Yai, and Chonburi. Moreover, the Company
also provides Internet Trading services and its Investment Banking
Department provides the financial advisory services which was licensed
by 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.

(3) Income Structure of the Company and its Subsidiary

+--------------------------+--------+------+-----+------+------+------+
| Income                   | Ac     | % of | 31  |      | 31   |      |
|                          | quired |      | De  |      | Dece |      |
|                          |        |      | cem |      | mber |      |
|                          |        |      | ber |      |      |      |
|                          |        |      | 2   |      | 2004 |      |
|                          |        |      | 003 |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
|                          | by     | S    | M   | %    | Mil  | %    |
|                          |        | hare | ill |      | lion |      |
|                          |        | Held | ion |      |      |      |
|                          |        |      |     |      | (B   |      |
|                          |        |      | (Ba |      | aht) |      |
|                          |        |      | ht) |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
| 1. Securities Business   | US &   | -    |     |      |      |      |
| Income                   | Subsi  |      |     |      |      |      |
|                          | diries |      |     |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
| Brokerage Fees           |        |      | 498 | 7    | 33   | 8    |
|                          |        |      | .65 | 9.67 | 4.38 | 4.06 |
+--------------------------+--------+------+-----+------+------+------+
| Fee and Service          |        |      | 6   | 9.99 | 57   | 1    |
|                          |        |      | 2.5 |      | .70* | 4.50 |
+--------------------------+--------+------+-----+------+------+------+
| Gain(loss) on Trading in |        |      | 43  | 6.91 | (16  | (4   |
| Securities               |        |      | .26 |      | .13) | .05) |
+--------------------------+--------+------+-----+------+------+------+
| Interest & dividend on   |        |      | 11  | 1.82 | 9.56 | 2.40 |
| securities investmt.     |        |      | .39 |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
| Interest on loan         |        |      | 9.2 | 1.47 | 1    | 2.95 |
|                          |        |      |     |      | 1.75 |      |
+--------------------------+--------+------+-----+------+------+------+
| Securities Business      |        |      | 62  | 9    | 39   | 9    |
| Income                   |        |      | 5.0 | 9.86 | 7.26 | 9.86 |
+--------------------------+--------+------+-----+------+------+------+
| 2. Other Income          | US &   | -    | 0   | 0.14 | 0.54 | 0.14 |
|                          | Subsid |      | .89 |      |      |      |
|                          | iaries |      |     |      |      |      |
+--------------------------+--------+------+-----+------+------+------+
| Total Income             |        |      | 625 | 10   | 39   | 10   |
|                          |        |      | .89 | 0.00 | 7.80 | 0.00 |
+--------------------------+--------+------+-----+------+------+------+

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

  (4) The Company’s Objectives

The Objectives of the Company and its subsidiaries are to focus on 4
groups of businesses or incomes as follows:

1)  Securities Brokerage business : The Company aims at about 2 percent
    market share by expanding its marketing teams, opening up new
    branches in potential areas to expand its customer base and plans to
    have at least 2 new branches a year. Marketing staff will be trained
    and developed and the loan for securities trading under Credit
    Balance system are targeted to be 30 percent of the total volume of
    the Company in order to increase purchasing power for the customers
    as well as rising of the Company’s incomes on brokerage fees and
    Interest on loan income.

2)  Investment Banking business : The Company still pays much attention
    in financial advisory and underwriting businesses in belief that it
    is an important strategy to support securities business income.
    Therefore, it is targeted that the Financial Advisory and
    Underwriting businesses be expanded in a continuous manner and at
    present, there are 15 cases on hand. Moreover, there are still other
    Investment Banking businesses or services which the Company can
    offer such as the merging of business, debt re-structuring advisory
    services.

3)  Securities Analysis : The objective is to build standard and
    accuracy of the analyst reports to serve the needs of various kinds
    of customers. In addition, the Company plans to set up Investment
    Advisory Department to serve needs of those VIP customers who may
    need specific advices. However, the needs and objectives, the
    affordability of risk, financial status as well as investment
    expertise of such individual customer are factors to be considered
    in making sound advices on stock selection and asset allocation for
    that customer.

4)  Securities Trading : The Company has investment on both debt and
    equity instruments which believed to produce best yield to the
    Company.

Consequently, it is expected that in the year 2005, the Company’s income
structure will appear as follows:

  1. Securities Brokerage Income 85%

  2. Investment Banking Income 7%

  3. Securities Trading Income 5%

  4. Interest on Margin Loans Income 3%

In 2004, the brokerage fee income was Baht 334million, the income from
Financial Advisory and Underwriting fees was Baht 57 million and a net
loss from securities trading of Baht 16 million.