1. RISK FACTORS

Risk factors affecting the operation in the Company were external ones
and/or specific characteristics of business such as

1. INTENSE COMPETITION

  Price of IT products have been declining continuously while their
  efficiencies have been improving because of many factors such as
  cancellation of sole distribution systems and rapidly changing and
  fast-obsolete products. Such factors have caused higher competition
  and as a result companies have to constantly adjust to keep up with
  the situation in order to survive. That in turn triggers lower gross
  profit.

  Strategic Measures

  Understanding the situation very well, Company has continuously
  adjusted in order to be profitable in such a tough competition. Out of
  their many adjusting processes, Company has tried to balance the
  product mix in order to prevent the gross profit from declining
  further. The Company has also searched for products with high
  profitability to compensate for lower profitable ones. One of such
  products is “SVOA PC”. Company has offered its brand of PCs since 2000
  and has been very successful. The House Brand is one of the targeted
  strategies which all Company’s business units have to be responsible
  for and operate on.

2. CHANGES IN CUSTOMER BEHAVIOR

  Public and private sectors and IT products consumer behavior have
  changed and the need for efficient work has been enhanced by the use
  of IT. They now depend on outsourcing for their purchase. The role of
  Management Information System was reduced to maintaining the systems
  making it more difficult for the companies who focus only on selling
  their products.

  Strategic Measures

  Company has recognized the changing trend of consumer behavior.
  Company not only sells product, but also provides services to their
  customers. With 20 years of experiences in IT business and a variety
  of products to offer especially their very own “SVOA PC”, the Company
  has managed to respond to the different needs of their customers with
  long-term rental and long-term outsourcing services averaging 3-5
  years. Company has generated the income from service business as one
  of the missions that every business unit especially the Systems
  Integration Strategic Business Unit should be responsible for.

3. RAPID CHANGES OF TECHNOLOGY

  Rapid changes of technology has a negative impact on unsold inventory
  and loss will be incurred if the Company is forced to sell these
  obsolete products.

  Strategic Measures

  Company implemented its inventory management efficiently by keeping
  the inventory not later than the period of technology change or by
  requesting the suppliers to manage their own inventory. In case
  products have been purchased, Company will deliver them to its dealers
  right away in order to maintain the standard level of its inventory.

4. FOREIGN EXCHANGE RATE

  Because Company depends a great deal on import products, unsettled
  foreign currency exchange rate will affect the Company’s
  profitability.

  Strategic Measures

  Company has carried out its buying and selling transactions in Baht or
  request suppliers to take such risks, if it is forced to purchase
  products in foreign currencies, the Company will utilize forward
  exchange contracts to hedge such risks.