2. BUSINESS DESCRIPTION

2.1 Background

On September 30, 1981, the Company was established with a registered
capital at this initial stage of Baht 2 million. Upon registration in
the Stock Exchange of Thailand on September 13, 1993, it became a listed
company and its stock began selling and buying on September 16, 1993.

2.1.1 CHANGE AND NOTABLE DEVELOPMENT REGARDING CONTROLLING POWER OF THE
COMPANY

2004 saw neither change nor crucial development in terms of controlling
power of the Company, with both Mr. Min Intanate and his business ally
from Apsilon Ventures Pte Ltd. holding 365,196,500 shares or 42.36% of
the issued and called-up capital. In addition, Mr. Min Intanate and
Apsilon Ventures Pte Ltd. co-jointly owned a warrant for the Company’s
common stock of 84,960,000 units, accounting for 96.60% of the unused
warrant. Thus, Mr. Min Intanate and Apsilon Ventures Pte Ltd. still held
the majority shares and had the authority to control the Company.

2.1.2 CHANGE AND NOTABLE DEVELOPMENT REGARDING BUSINESS OPERATION IN THE
PAST

In 2004, the Company presented “Collaboration Model” to its business
partners in five countries: Nepal, Laos, Indonesia, Sri Lanka and
Myanmar, and hoped to sell the concept to another five countries over
the next three years. “Collaboration Model” was the business cooperation
style that would allow Company and its business partners to benefit
together by launching personal computers under their own trademark to
compete with imported PCs. Hence, the Company would be less dependent on
the companies owning the products while at the same time increase profit
margin as a result of decreased costs, the procedure hardly possible in
the past due to high investment in procuring computer parts and devices
as well as self-acquiring international standards.

Company was supplying computer parts and devices that met the standards
of the SVOA-branded computers which enjoyed great success in the market
of computers assembled in Thailand (Thai brand). Moreover, Company would
train technicians of its business partners to be able to assemble and
fix computers with the same standard provided at the SVOA service
center. Not only would this permit the Company to expand its
distribution channel abroad but Company and its business partners would
gain from low costs resulting from a massive supply of computer parts
and devices.

In 2004, the Company opened two new branches in Chiangrai and Rayong
respectively. The Company also established “Components Distribution
Business Unit” or CDBU to sell electronics and computers imported from
foreign direct manufacturers wholesale. The Company’s main market were
corporations selling electronic and computer parts and companies
assembling computers for sale.

At present, SVOA computers are enjoying high sales with the Company’s
market shares ranked at the top end in the computer market. Therefore,
direct access to the raw materials of computer parts will decrease
production costs, leading to greater profitability enabling the Company
to compete with imported brand computers.

In October 2004, the Company, with its committee’s resolution, decided
to join forces with AET Technology Co., Ltd. or AET-the company founded
by Mr. Lai, Hsiao-Fong and selling electronics and computers in the Thai
market for long time by taking a 49% stake in the Company and aimed to
register AET in the Stock Exchange of Thailand within the next three
years. By doing that, the Company’s management would be separated from
AET, with Mr. Lai, Hsiao-Fong as its managing director holding 35% of
the shares. Besides, Mr. Lai, Hsiao-Fong would have to end all his
business transactions in the former AET.

Following this joint venture, the Company resolved to integrate the
Components Distribution Business Unit with the AET team so as to avoid
conflict of interest while allowing for smooth management and dealing
with its customers including those who, like SVOA, assemble computers to
sell.

2.  Nature of Business

SVOA Public Company Limited or SVOA and its associated companies are the
distributors of leading brands of office automation, computers and
peripherals. The company also provides consulting services and
full-service computer installation to customers.

Company aims at enhancing the efficiency and increasing the flexibility
of the company in order to serve the customers’ needs more effectively
by dividing its business into 5 categories as follows:-

1. IT DISTRIBUTION STRATEGIC BUSINESS UNIT (ITDSBU)

Nature of Business

ITDSBU distributes both local and imported computer software and hardware to customers. SVOA computers - the locally assembled brand, are popular in the computer market and has passed various quality standard systems including the ISO 14000, ISO 9000 version 2000, ISO 9002, FCC, NSTL, etc. The company also distributes leading brands of peripherals such as EPSON, Roland, Autodesk, Mustek to customers.

Moreover, ITDSBU offers the maintenance and repair services to IT
products by becoming one of the service networks of EPSON, Acer, HP,
Apple, Canon, Mustek, Roland, Lexmark. SVOA has established “ IT CLINIC”
which is the franchise of computer equipment maintenance center that
sells genuine spare parts and offer services by skilled technicians to
customers.

Business Potential

ITDSBU is specialized in managing the distribution channels of products
with networks throughout the country. There are more than 1,000
distributors and the company has established “SVOA centers” in large
provinces in each region. At present, there are 14 centers, all of which
play an important role in providing services and distributing products
to regional distributors.

Target Customers

The Company’s main customers include general computer users and small as
well as medium sized enterprises (SMEs) that require high quality
products and full-scale services.

2. SYSTEMS INTEGRATION STRATEGIC BUSINESS UNIT (SISBU)

Nature of Business

SISBU operates by offering complete of IT solution including hardware,
software installation, software implementation, software customization.
This business unit provides services in designing, installation,
development and consulting by adapting the computer system to suit the
customers’ business requirements and providing maintenance and
after-sale services for the systems.

Business Potential

As SISBU is the strategic business partner of the world’s leading
products and has more than 20 years of experiences in systems
integration services, this business unit is capable of providing
international standard services and internationally recognized
technology to customers.

SISBU’s policy is being the partner of its suppliers in order to provide
the highest quality of products and services to customers.

Target Customers

Major groups of SISBU customers include finance and banking business,
telecommunication business, multinational enterprises and large
organizations.

3. IT PROJECT STRATEGIC BUSINESS UNIT (ITPSBU)

Nature of Business

ITPSBU carries out its business by supplying high-quality and
reasonably-priced computer systems and IT equipment to government
agencies and private organizations. It offers full-scaled systems by
installing and offering after-sales services throughout the warranty
period to guarantee effective use of the computer systems and success in
the project operation of organizations.

Business Potential

ITPSBU consists of leading IT personnel who are capable of reaching the
customers’ demand by keeping track of the customers’ work and offering
products and services to serve the customers’ requirements. It also
maintains as well as strengthens good relationship and trust gained from
its customers to achieve long-term success in its business.

Target Customers

ITPSBU main customers are government agencies, state enterprises,
educational institutions, and various private companies.

4. IT SUPERSTORE

Nature of Business

IT Superstore is operated by IT CITY Public Company Limited or “ IT
CITY”. It is a strategic business unit which is a joint venture between
SVOA Public Limited, the Saha Group, employees and suppliers of SVOA (As
at January 31, 2005, SVOA holding 32.59 per cent of total paid-up
capital of IT CITY). It is a full-scale retail center of IT products in
Thailand which accords “The Superstore” slogan. IT CITY has several
branches throughout Bangkok and in large provinces in each region.

Business Potential

IT CITY offers products and services under “One Stop Shopping” concept.
It focuses on product amd service varieties of more than 8,000 items in
which customers can compare quality, efficiency and price of a variety
before making their purchasing decision.

Target Customers

IT CITY’s major customers include general computer users, small and
medium-sized enterprises which need a variety of high-quality IT
products that meet their different needs.

5. COMPONENTS DISTRIBUTION BUSINESS UNIT (CDBU)

Nature of Business

The business is operated by AET Technology Co., Ltd. or AET. This
strategic business unit is a venture capital company between SVOA Public
Company Limited and the former owner of the AET Computer Group and is
currently (as of January 31, 2005) taking a 49% stake of the paid-up
capital in the company. CDBU is responsible for distributing imported IT

Business Potential

The IT industry in Thailand is continuously growing, the demand of IT
components is increasing as well, CDBU is capable of providing high
quality products and better services to customers. Most the Electronic
components are delivered from overseas, more and more customers require
local delivery and service.

Target Customers

Major customers of Electronic components are international and local
manufacturing companies in Thailand, and major customers of IT
components are Systems Integration of computers, Retail shops and end
users who need assembling or upgrading computers.

2.3 Revenue Structure

+----------------------+---------+---------+-----+-------------+-----+
| Product              | O       | Revenue | %   | Earnings    | %   |
| Line/Business Unit   | perated |         |     | before      |     |
|                      | by      | (Baht   |     | interest    |     |
|                      |         | ‘000)   |     | expense     |     |
|                      |         |         |     |             |     |
|                      |         |         |     | (Baht ‘000) |     |
+----------------------+---------+---------+-----+-------------+-----+
| Distribution Channel | ITDSBU  | 2,246   | 57% | 270         | 50% |
+----------------------+---------+---------+-----+-------------+-----+
| Systems Integration  | SISBU   | 1,054   | 27% | 229         | 43% |
+----------------------+---------+---------+-----+-------------+-----+
| IT Project           | ITPSBU  | 553     | 14% | 39          | 7%  |
+----------------------+---------+---------+-----+-------------+-----+
| Component            | CDBU    | 82      | 2%  | -           | 0%  |
| Distribution         |         |         |     |             |     |
+----------------------+---------+---------+-----+-------------+-----+
| Total                |         | 3,935   | 1   | 538         | 1   |
|                      |         |         | 00% |             | 00% |
+----------------------+---------+---------+-----+-------------+-----+
| Net                  |         | 3,935   | 1   | 538         | 1   |
|                      |         |         | 00% |             | 00% |
+----------------------+---------+---------+-----+-------------+-----+

2.4 Business Goal

Corporate goal is set for Company to be able to stably grow reflecting
the business scheme of own brand product offering.

Up to now, SVOA PC has been well accepted and succeeded in a short
period (launched in 2000), and yet almost 50% of total income of IT
Distribution Strategic Business Unit (ITDSBU), which was major revenue,
came from the sales of SVOA PC. In 2004, Company could sell 60,000 PCs
which perfectly broke the top record on the Year 2003 at 49,000 PCs by
which sales of SVOA PC in 2003 could gain 5% of market share (remark:
No. 1 could gain 15% of market share or selling of 180,000 PCs. Company
maintained the policy of business operation and expanded product lines
under its own brand such as digital camera, computer, and notebook
computer.

Outsourcing service business of Systems Integration Strategic Business
Unit (SISBU) has not reached the expected target, which previously
determined that the main income of SISBU would come from outsourcing
service within 3 years (starting from the Year 2003). However, there
would be some finance companies including banks for specific purpose of
government leveling up to be competitive with private financial
institutes as new banks in this year. This would generate business
opportunity to Company particularly in outsourcing service business.