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 1991 was designated broker no.38 by SET.

In 1993 transformed into Public Company and was renamed accordingly to
be United Securities Public Company Limited.

In 1994 became a member of the Thai Bond Dealing Center Member No.49.

In 2000 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 of “US”.

In 2002 The Company increased its capital of Bht 555 million divided
into 111 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 2005 restructured the organization 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
were closed down. In addition, the Company set up Risk Management
Committee and Risk Management Department to take care the various
Company’s operations risks while the Investment Committee had scaled
down its activities to comply to the Board of Director’s policy of
reducing investment exposure. As for the company’s future operations, 2
new objectives, namely Derivatives and Securities Borrowing & Lending
were newly registered. However, the Company has not yet been approved by
the SEC for the Derivatives license and since there was still very small
volume in the market we, therefore, decided to suspend the re-submission
of license for approval.

In 2006 in February, 2006, the major shareholder group of the Company,
Wongkusolkit group consisting of Mr. Vitoon Wongkusolkit, Ufinves
Corporation Limited, TME Capital Limited, City Holding Limited, and Town
Holding Limited had sold their 42,923,520 shares at Bht 8.04 per share,
representing 25.43% of the Company’s total issued shares to 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 was required to make a
mandatory tender offer for all remaining securities of the Company and
after the tender offer, A.P.F Holdings shares increased to 132,565,419
shares or equaled to 78.53 % of the Company’s paid-up capital. 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.

In addition, in March, 2006, there were some Directors resigned and a
replacement of Directors details as follows :

  1. Mr. Vitoon Wongkusolkit resigned and replaced by Mr. Mitsuji
  Konoshita to be the Chairman of The Board

2.  Mr. Verajet Vongkusolkit resigned and replaced by Mr. Osamu
    Shigematsu to be Director (without power of management) (later on
    Mr. Osamu Shigematsu withdrawn due to his personal obligations in
    Japan)

3.  Mr.Kulvat Janvatanavit resigned and replaced by Mr. Jeremy Liau to
    be Director (with power of management), Managing Director and
    Executive Director

4.  Mrs.Wilaiwan Tantitham resigned and replaced by Mr.Tatsuya Konoshita
    to be Director (with power of management) and Chairman of the
    Executive Board

(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 2006, the Company has altogether 12 branches
scattered around almost all regions of the country, 3 of which are in
Bangkok and its vicinity, and 9 in the provincial areas of which 2 are
online branches and without any subsidiary company. 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 including advising on merges & acquisitions, 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.

(3) Income Structure of the Company

+----------------------------------+-------+--------+--------+--------+
| Income                           | 31    |        | 31     |        |
|                                  | Dec   |        | De     |        |
|                                  | ember |        | cember |        |
|                                  |       |        |        |        |
|                                  | 2005  |        | 2006   |        |
+----------------------------------+-------+--------+--------+--------+
|                                  | Mi    | %      | M      | %      |
|                                  | llion |        | illion |        |
|                                  |       |        |        |        |
|                                  | (     |        | (Baht) |        |
|                                  | Baht) |        |        |        |
+----------------------------------+-------+--------+--------+--------+
| 1. Securities Business Income    |       |        |        |        |
+----------------------------------+-------+--------+--------+--------+
| Brokerage Fees                   | 2     | 83.32  | 197.21 | 74.16  |
|                                  | 51.04 |        |        |        |
+----------------------------------+-------+--------+--------+--------+
| Fee and Service                  | 21.08 | 7.00   | 9.87   | 3.71   |
+----------------------------------+-------+--------+--------+--------+
| Gain(loss) on Trading in         | (     | (1.71) | -      | -      |
| Securities                       | 5.15) |        |        |        |
+----------------------------------+-------+--------+--------+--------+
| Interest & dividend on           | 10.11 | 3.36   | 28.32  | 10.65  |
| securities investmt.             |       |        |        |        |
+----------------------------------+-------+--------+--------+--------+
| Interest on loan                 | 23.46 | 7.79   | 21.50  | 8.08   |
+----------------------------------+-------+--------+--------+--------+
| Securities Business Income       | 3     | 99.74  | 256.9  | 96.60  |
|                                  | 00.54 |        |        |        |
+----------------------------------+-------+--------+--------+--------+
| 2. Other Income                  | 0.77  | 0.26   | 9.00   | 3.39   |
+----------------------------------+-------+--------+--------+--------+
| Total Income                     | 3     | 100.00 | 265.93 | 100.00 |
|                                  | 01.31 |        |        |        |
+----------------------------------+-------+--------+--------+--------+

  (4) Business Goals

In 2007, the Company’s primary aim is to provide customers with seamless
service. This will 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 needs. The Company’s business goals
are as follows.

1.  Securities Brokerage Service: The Company hopes to capture
    approximately 1.3 per cent of the total market volume expanding its
    marketing teams, upgrading its marketing officers, offering
    financing for 20-30 per cent of the trading values 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. And in 2007, the Company will also actively
    market its services to foreign clients, primarily Japanese.

2.  Investment Banking: The Company remains very much focused in its
    financial advisory service as well as the securities underwriting
    business as these are considered an important strategy which will
    support the Company’s securities business. In addition, other
    investment banking transactions pursued by the Company include
    merges and acquisitions 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: The Company’s objective is to create quality
    stock analysis reports that respond to various types of customers.
    In this area, the Company has also started producing research
    reports as well as Japanese website targeted at the Japanese
    investors.

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.

In 2007, the Company’s income structure is as follows.

  1. Incomes from securities brokerage 80 per cent

  2. Fee and service-based incomes 8 per cent

  3. Interest incomes and dividends 5 per cent

  3. Loan interest incomes 7 per cent