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 555.6 million divided
into 111.12 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 2005 The Company 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 of 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. And the Company has prepared to re-submit for
Derivatives license approval from the SEC in early 2008 after suspended
last year when we viewed that there was still very small volume in the
market.

In 2006 In early 2006, Wongkusolkit group decided to sell its stake in
the Company total 42,923,520 shares, or equal to 25.43% of the Company’s
paid-up capital to A.P.F. Holdings Company Limited which is a company
registered in Thailand. After the mandatory tender offer in accordance
with the Takeover Rule completed, A.P.F. Holdings had acquired a total
of 132,565,419 shares or equal to 78.53% of the Company’s total paid up
capital and became the Company’s new major shareholder while the
Company’s status remained as a listed company in the Stock Exchange of
Thailand.

In addition, in March, 2006, after the new major shareholder coming in,
the Company has reorganized its Directors’ structure by appointing Mr.
Mitsuji Konoshita as Chairman of the Board, Mr. Tatsuya Konoshita as
Chairman of the Executive Board and Mr. Jeremy Liau as Managing Director
or the highest management in order to replace the resigned directors,
i.e. Mr. Vitoon Wongkusolkit, Mr. Kulvat Janvatanavit, Mrs. Wilaiwan
Tantitham and Mr. Verajet Vongkusolkit

In 2007 There was a change in Managing Director – Securities Marketing
Head. Miss Suthida Chirapatsakul had resigned from the Company on 15
June and Mr. Yothin Viriyenawat was promoted in replacement taking the
position of Executive Director – Thai Marketing. In addition, Ms.
Tippranee Chatmanop was also promoted to the position of Executive
Director – Business Support Division from the position of Senior
Executive Vice President.

During the year, the Company closed 8 of its provincial branches, namely
Ban Pong, Udonthani, Ubonrajathani, Khon Kaen, Lampoon, Yala, Baetong
and Sakonnakorn and 2 branches in Bangkok, namely Bang-na and Asoke
branches. Consequently, as at the end of the year 2007, the Company had
total 3 branches, namely Rangsit, Nakhon Pathom and Nakhon Sawan. The
branches closing was to reduce costs and re-align the Company’s business
focus. However, the closing of branches does not have any adverse effect
on the Company. On the contrary, it helps to reduce the costs which
benefits to its profit.

On 17 January, 2008 the Company had started a joint venture with Mr.
Verajet Vongkusolkit and his family to open a subsidiary company, named
United Asset Management Company Limited to undertake Private Fund
Management business. The subsidiary company has a registered capital of
25,000,000 Baht divided into 250,000 shares at 100 Baht par value. The
Company’s total investment is 51% or in the amount of not exceeding
12,750,000 Baht and the subsidiary company is expected to begin its
operation around April, 2008 after receiving the license from the
Ministry of Finance.

(2) The Company’s Business

The Company is licensed to perform 4 types of securities businesses,
i.e. Securities Brokerage, Securities Dealing, Investment Advisory and
Underwriting business. As at the end of 2007, the Company has 3
branches, namely, Rangsit, Nakornpathom and Nakornsawan. 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. Moreover, the
Company also has securities dealing business in debt instrument trading
in which it also contributed to the Company’s income in addition to the
securities brokerage income which is the principal income of the
Company. In addition, the Company also acts as a selling agent of unit
trusts representing altogether 13 asset management companies so that the
customers will have a wide variety to choose to invest and it also
provides more investment channel for them.

In early 2008, the Company started a joint venture with Mr.Verajet
Vongkusolkit and his family to open up 1 subsidiary company namely
United Asset Management Company Limited, in order to provide private
fund business. The Company’s investment was 51% or in the amount of not
exceeding 12.75 million Baht of the registered capital of 25 million
Baht divided into 250,000 shares at a par value of 100 Baht and expected
to begin its operation in April, 2008.

(3) Income Structure of the Company

+-------------------------+-------+------+------+------+------+------+
| Income                  | 31    |      | 31   |      | 31   |      |
|                         | Dec   |      | Dece |      | Dece |      |
|                         | ember |      | mber |      | mber |      |
|                         |       |      |      |      |      |      |
|                         | 2005  |      | 2006 |      | 2007 |      |
|                         |       |      |      |      | 2006 |      |
+-------------------------+-------+------+------+------+------+------+
|                         | Mi    | %    | Mil  | %    | Mil  | %    |
|                         | llion |      | lion |      | lion |      |
|                         |       |      |      |      |      |      |
|                         | (     |      | (B   |      | (B   |      |
|                         | Baht) |      | aht) |      | aht) |      |
+-------------------------+-------+------+------+------+------+------+
| 1. Securities Business  |       |      |      |      |      |      |
| Income                  |       |      |      |      |      |      |
+-------------------------+-------+------+------+------+------+------+
| Brokerage Fees          | 2     | 8    | 19   | 7    | 17   | 6    |
|                         | 51.04 | 5.18 | 7.22 | 4.16 | 1.94 | 3.05 |
+-------------------------+-------+------+------+------+------+------+
| Fee and Service         | 14.61 | 4.96 | 9.88 | 3.71 | 1    | 4.80 |
|                         |       |      |      |      | 3.09 |      |
+-------------------------+-------+------+------+------+------+------+
| Gain(loss) on Trading   | (     | (1   | 6.58 | 2.48 | 8.34 | 3.06 |
| in Securities           | 5.15) | .75) |      |      |      |      |
+-------------------------+-------+------+------+------+------+------+
| Interest & dividend on  | 10.01 | 3.40 | 2    | 1    | 2    | 9.01 |
| securities investment   |       |      | 8.32 | 0.65 | 4.56 |      |
+-------------------------+-------+------+------+------+------+------+
| Interest on loan        | 23.46 | 7.96 | 2    | 8.08 | 4    | 1    |
|                         |       |      | 1.50 |      | 4.77 | 6.42 |
+-------------------------+-------+------+------+------+------+------+
| Total Securities        | 2     | 9    | 26   | 9    | 26   | 9    |
| Business Income         | 93.97 | 9.75 | 3.50 | 9.08 | 2.70 | 6.34 |
+-------------------------+-------+------+------+------+------+------+
| 2. Other Income         | 0.73  | 0.25 | 2.43 | 0.92 | 9.98 | 3.66 |
+-------------------------+-------+------+------+------+------+------+
| Total Income            | 2     | 10   | 26   | 10   | 27   | 10   |
|                         | 94.71 | 0.00 | 5.93 | 0.00 | 2.68 | 0.00 |
+-------------------------+-------+------+------+------+------+------+

  (4) Business Goals

In 2008, the Company’s primary aim is to provide customers with ”value”.
This will be achieved by providing a variety of products, offering
quality services , while at the same time minimizing operational and
transactional risks. The Company’s business goals are as follows.

1.  

2.  Securities Brokerage Service: In 2007, due to the adverse market
    situation, the Company rationalized its operations. This resulted in
    a reduction of market share but on increase in profitability. In
    2008, US will continue to focus on profitability and will only
    increase marketing capacity if the Company can increase
    profitability.

3.  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.

4.  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.

5.  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.