3. NATURE OF BUSINESS OF EACH PRODUCT LINE

3.1 Products and Services

-   Products

Major products of Company consists of:-

  1. Hardware

  SVOA Group acts as importer and distributor of small to large-sized
  computer which are Micro Computer, Server, Workstation and Mainframe
  Computer, and local assembler of its own brand PC “SVOA” which has
  passed various quality standard systems including the ISO 9001, ISO
  14000, NSTL, FCC, UL, NECTEC, and TISI , including distributor of
  various peripherals. Furthermore, Company distributes various brands
  and sizes of computer starting from 10,000 Baht to over 50 Million
  Baht per unit to capture most demands of target groups, from
  individual to large organization.

  Peripherals, which are printer, large format monitor, scanner, network
  products, projector, PC software and accessories, are offered in many
  price levels to be compatible with demand of respective target group.

Details of Products

+--------------+----------+--------------------------+-----------------+
| Brand        | Import   | Specification            | Target Group    |
|              | from     |                          |                 |
+--------------+----------+--------------------------+-----------------+
| 1. SVOA      | Thailand | Personal Computer,       | Home,           |
|              |          | Server, Notebook         |                 |
|              |          |                          | Corporate,      |
|              |          | Distinct qualification:  |                 |
|              |          | local assembled products | Educational     |
|              |          | with similar quality as  | institute,      |
|              |          | import products, but     | Government, and |
|              |          | cheaper, constant        | Consumer        |
|              |          | efficiency and           | markets         |
|              |          | hi-technology of         |                 |
|              |          | products with the well   |                 |
|              |          | cooperation of Intel     |                 |
|              |          | Thailand                 |                 |
+--------------+----------+--------------------------+-----------------+
| 2. EPSON     | Japan    | Printer, Large Format,   | Government      |
|              |          | Laser, Multifunction,    | sector,         |
|              |          | Scanner, Video           | Financial       |
|              |          | Projector, Accessories   | institution,    |
|              |          | and Peripherals          | Educational     |
|              |          |                          | institute,      |
|              |          | Distinct qualifications: | Business        |
|              |          | high capacity products   | sector,         |
|              |          | :- work efficiency,      | Individual,     |
|              |          | standard quality, being  |                 |
|              |          | usable with any Thai     | SOHO & Home     |
|              |          | codes, and being         | Use, SMEs,      |
|              |          | well-accepted in the     | Digital         |
|              |          | market                   | solution        |
+--------------+----------+--------------------------+-----------------+
| 3. HP        | USA      | Micro Computer, Printer, | Educational     |
|              |          | Server, Scanner,         | institutes,     |
|              |          | Accessories              | Hospital,       |
|              |          |                          | Financial       |
|              |          | Distinct qualifications: | institution,    |
|              |          | American standard        | General         |
|              |          | products suitable for    | businesses,     |
|              |          | any works requiring high | SOHO,           |
|              |          | efficiency and huge data | Individual      |
|              |          | assessment               |                 |
+--------------+----------+--------------------------+-----------------+
| 4. Hitachi   | Japan    | Huge storage and high    | Financial       |
| Data Systems |          | speed hard disk which    | institution,    |
| (HDS)        |          | can thoroughly work on   | Government      |
|              |          | platforms together at    | sector,         |
|              |          | the same time such as:-  | Tel             |
|              |          | Mainframe, Unix, and NT  | ecommunications |
|              |          | Linux                    | business,       |
|              |          |                          | Retailing       |
|              |          |                          | business, and   |
|              |          |                          | General         |
|              |          |                          | businesses      |
+--------------+----------+--------------------------+-----------------+
| 5. Tandem    | USA      | Mini Computer            | Financial       |
|              |          |                          | Institution,    |
|              |          | Distinct qualifications: | Industrial      |
|              |          | Hardware designed for    | sector          |
|              |          | online transaction       |                 |
|              |          | processing or fault      |                 |
|              |          | tolerant                 |                 |
+--------------+----------+--------------------------+-----------------+
| 6. Roland    | Japan    | Large Format Printer,    | Sign business   |
|              |          | Sticker Cutter, 3D       | and             |
|              |          | engraving machine        |                 |
|              |          |                          | Mold industrial |
|              |          | Distinct qualifications: | business        |
|              |          | Machine for graphic      |                 |
|              |          | design and drawing, and  |                 |
|              |          | engineering design       |                 |
+--------------+----------+--------------------------+-----------------+
| 7. Acer      | Taiwan   | Micro Computer, Monitor, | Government      |
|              |          | Components and           | sector,         |
|              |          | Accessories              |                 |
|              |          |                          | General         |
|              |          | Distinct qualifications: | businesses,     |
|              |          | high standard products   | Individual,     |
|              |          | designed and developed   |                 |
|              |          | to be competitive with   | SOHO & Home Use |
|              |          | new technology products  |                 |
|              |          | in USA and Europe        |                 |
+--------------+----------+--------------------------+-----------------+
| 8. Mustek    | Taiwan   | Scanner–peripherals      | Home Use, SOHO  |
|              |          |                          | and general     |
|              |          | Distinct qualifications: | companies       |
|              |          | high Taiwanese standard  |                 |
|              |          | product designed and     |                 |
|              |          | developed to be          |                 |
|              |          | competitive with new     |                 |
|              |          | technology products of   |                 |
|              |          | USA and Europe, which    |                 |
|              |          | are suitable for general |                 |
|              |          | works, simplicity in     |                 |
|              |          | use, high efficiency,    |                 |
|              |          | inexpensive price, and   |                 |
|              |          | well-accepted products   |                 |
+--------------+----------+--------------------------+-----------------+
| 9. NetScreen | USA      | Hardware Firewall for    | Financial       |
|              |          | organization:-Firewall,  | institutions,   |
|              |          | Virtual Private Network  | Government      |
|              |          | and Traffic Management   | sector,         |
|              |          |                          | Te              |
|              |          |                          | lecommunication |
|              |          |                          | business,       |
|              |          |                          | Retailing       |
|              |          |                          | business,       |
|              |          |                          | General         |
|              |          |                          | businesses      |
+--------------+----------+--------------------------+-----------------+
| 10. EDC      | S        | Credit & Smart Card      | Financial       |
| Products     | ingapore | Reader                   | institutions    |
| (PAX, Sagem) |          |                          |                 |
+--------------+----------+--------------------------+-----------------+
| 11. SVOA     | Taiwan   | Digital camera imported  | Home,           |
| Digital      |          | from Taiwan, with high   | Education,      |
| Camera       |          | capacity and attractive  | Corporate       |
|              |          | design                   |                 |
+--------------+----------+--------------------------+-----------------+
| 12. Wacom    | Japan    | Leader of digital        | Graphic         |
|              |          | drawing board particular | designer,       |
|              |          | 2D and 3D for            | engineer        |
|              |          | professional graphic     |                 |
|              |          | designer                 |                 |
+--------------+----------+--------------------------+-----------------+

  2. Software

Business and Operation 

Company distributes not only computer products and peripherals but also other foreign programs/applications.

Details of Products

+----------------+---------+------------------------+----------------+
| Brand          | Import  | Specification          | Target Group   |
|                | from    |                        |                |
+----------------+---------+------------------------+----------------+
| 1. Computer    | USA     | Software for IT        | Banking        |
| Associates     |         | infrastructure         | business,      |
| (CA)           |         | management of          | Tele           |
|                |         | large-sized            | communications |
|                |         | organization :-        | business,      |
|                |         | monitoring all         | Government     |
|                |         | performance of IT      | sector,        |
|                |         | systems of             | Retailing      |
|                |         | organization,          | business,      |
|                |         | distributing new       | General        |
|                |         | software version in    | businesses     |
|                |         | network, managing      |                |
|                |         | Helpdesk and Call      |                |
|                |         | center to every work   |                |
|                |         | stations               |                |
+----------------+---------+------------------------+----------------+
| 2. ORACLE      | USA     | Software :-            | Financial      |
|                |         | Accounting, inventory  | institution,   |
|                |         | control, CRM, which    | Tele           |
|                |         | assist in classifying  | communications |
|                |         | target group and set   | business,      |
|                |         | up strategic plan to   | Insurance      |
|                |         | penetrate market       | business,      |
|                |         |                        | General        |
|                |         |                        | businesses     |
+----------------+---------+------------------------+----------------+
| 3. INTERWISE   | USA     | Software:-             | Financial      |
|                |         | Communications         | institution,   |
|                |         | management through     | Tele           |
|                |         | Net, functioning upon  | communications |
|                |         | communications         | business,      |
|                |         | infrastructure         | Insurance      |
|                |         |                        | business,      |
|                |         |                        | Government and |
|                |         |                        | State          |
|                |         |                        | Enterprises    |
|                |         |                        | sectors        |
+----------------+---------+------------------------+----------------+
| 4. BASS        | M       | Software: Filing       | Financial      |
|                | alaysia | management including   | institution,   |
|                |         | e-documents and        | Government     |
|                |         | internal process       | sector, and    |
|                |         |                        | General        |
|                |         |                        | businesses     |
+----------------+---------+------------------------+----------------+
| 5.             | USA     | Program solution on    |   Financial    |
| W              |         | credit & debit cards   |   institution, |
| inStoredValue, |         | system between seller  |   Insurance    |
| WinCard,       |         | & buyer in department  |   business,    |
| B              |         | stores. Program helps  |   and          |
| ASE24-frequent |         | to generate trading    |   Tele         |
| shopper,       |         | opportunity and save   | communications |
| BASE24-card,   |         | costs                  |   business     |
| ACI Smart Chip |         |                        |                |
| Manager,       |         |                        |                |
| BASE24-pos     |         |                        |                |
+----------------+---------+------------------------+----------------+
| 6. Wincollect, | USA     | Program solution for   | Financial      |
| ACI Proactive  |         | risk management which  | institution,   |
| Risk Manager   |         | may incur from credit  | Insurance      |
|                |         | & debit cards system.  | business, and  |
|                |         | Program helps to save  | Tele           |
|                |         | costs, time, and       | communications |
|                |         | expense in correcting  | business       |
|                |         | information.           |                |
+----------------+---------+------------------------+----------------+
| 7. ACI Claims  | USA     | Program solution for   | Financial      |
| Manager, ACI   |         | payment gateway system | institution,   |
| Payments       |         | through banking system | Insurance      |
| Manager        |         | including exchange and | business, and  |
|                |         | collection             | Tele           |
|                |         | transactions with      | communications |
|                |         | foreign countries      | business       |
+----------------+---------+------------------------+----------------+
| 8. ACI Virtual | USA     | Program solution for   | Financial      |
| Wallet, ACI    |         | collection system of   | institution,   |
| Commerce       |         | online credit          | Insurance      |
| Gatew          |         | procedure linked with  | business, and  |
| ay,BASE24-atm, |         | collection system of   | Tele           |
| BASE24-pos,    |         | point of sales         | communications |
| BASE24-es,     |         |                        | business       |
| Base24-check   |         |                        |                |
| auth,          |         |                        |                |
| WinCheck,      |         |                        |                |
| WinPayment     |         |                        |                |
+----------------+---------+------------------------+----------------+
| 9 WinRefunds,  | USA     | System for audit of    | Financial      |
| BASE24-refunds |         | returned products      | institution,   |
|                |         | which helps to clarify | Insurance      |
|                |         | corporate policy of    | business, and  |
|                |         | retuned products       | Tele           |
|                |         | whether receipt is     | communications |
|                |         | presented or not       | business       |
+----------------+---------+------------------------+----------------+
| 10. Bizflow    | USA     | Launched in 1996,      | Financial      |
|                |         | turnkey Business       | institution,   |
|                |         | Management system for  | Insurance      |
|                |         | procedures of bidding, | business, and  |
|                |         | planning, human        | Tele           |
|                |         | resources, and         | communications |
|                |         | business management    | business,      |
|                |         | process for personnel, | Government     |
|                |         | activities, and IT     | sector         |
|                |         | system                 |                |
+----------------+---------+------------------------+----------------+
| 11. Webtra     | M       | Filing Management      | Financial      |
|                | alaysia | system, helping to     | institution,   |
|                |         | save costs             | Insurance      |
|                |         |                        | business, and  |
|                |         |                        | Tele           |
|                |         |                        | communications |
|                |         |                        | business,      |
|                |         |                        | Government     |
|                |         |                        | sector         |
+----------------+---------+------------------------+----------------+
| 12.            | USA     | Effective and          | Tele           |
| Firewall/VPN/  |         | inexpensive security   | communications |
| Traffic        |         | system                 | business,      |
| Management,    |         |                        | Government     |
| Intrusion      |         |                        | sector ,       |
| Detection      |         |                        | General        |
| Prevention     |         |                        | retailing      |
| System (IDP),  |         |                        | businesses     |
| NetScreen      |         |                        |                |
| Security       |         |                        |                |
| Management,    |         |                        |                |
| SSL VPN        |         |                        |                |
+----------------+---------+------------------------+----------------+
| 13. Oracle     | USA     | Automatic Business     | General        |
| E-Business     |         | Procedures System      | retailing      |
| Suite 11i      |         |                        | businesses     |
+----------------+---------+------------------------+----------------+
| 14. HP Server  | USA     | Hosting of working     | Financial      |
| and Storage    |         | systems, terminals,    | institution,   |
|                |         | printer, including     | Insurance      |
|                |         | main software :- OS,   | business,      |
|                |         | Application Utility,   | Foreign        |
|                |         | etc.                   | tele           |
|                |         |                        | communications |
|                |         |                        | business       |
+----------------+---------+------------------------+----------------+
| 15. Sun Server | USA     | Hosting of working     | Financial      |
| and Storage    |         | systems including main | institution,   |
|                |         | software :- OS, Web    | Insurance      |
|                |         | Server, etc.           | business,      |
|                |         |                        | Foreign        |
|                |         |                        | tele           |
|                |         |                        | communications |
|                |         |                        | business       |
+----------------+---------+------------------------+----------------+
| 16. Epicor     | USA     | Enterprise Resource    | Manufacturing  |
|                |         | Planning Software      | and Retailing  |
|                |         |                        | businesses     |
+----------------+---------+------------------------+----------------+
| 17. HDS        | USA     | Well-known information | Financial      |
|                |         | management system :-   | institution,   |
|                |         | storage solution       | Insurance      |
|                |         | including software     | business, and  |
|                |         | system & services for  | Foreign        |
|                |         | information center,    | tele           |
|                |         | online business and    | communications |
|                |         | organization           | business       |
|                |         | procedures             |                |
+----------------+---------+------------------------+----------------+
| 18. Autodesk   | USA     | Software solution for  | Engineer and   |
|                |         | quality design &       | architect      |
|                |         | pattern:- minimize     |                |
|                |         | errors, create models  |                |
|                |         | and save times         |                |
|                |         | consisting of AutoCAD, |                |
|                |         | AutoCAD LT, 3D Studio  |                |
|                |         | VIZ, Volo View, DWF    |                |
|                |         | Composer               |                |
|                |         |                        |                |
|                |         | AutoCAD : Program for  |                |
|                |         | 3D design (width,      |                |
|                |         | length, height)        |                |
|                |         |                        |                |
|                |         | AutoCAD LT : Program   |                |
|                |         | for 2D design and      |                |
|                |         | drawing                |                |
|                |         |                        |                |
|                |         | 3D Studio Viz :        |                |
|                |         | Program for designed   |                |
|                |         | presentation (still &  |                |
|                |         | moving pictures) with  |                |
|                |         | details of fac, color  |                |
|                |         | and shadow             |                |
|                |         |                        |                |
|                |         | DWF : Program for      |                |
|                |         | revision of output     |                |
|                |         | including              |                |
|                |         | shorten/enlarge        |                |
|                |         | functions which can    |                |
|                |         | easily send-receive    |                |
|                |         | (as set) through web   |                |
+----------------+---------+------------------------+----------------+
| 19. Adobe      | Si      | Group of software for  | Printing       |
| Software       | ngapore | graphic work, printed  | office,        |
|                |         | design, document       | printing &     |
|                |         | management, and        | design         |
|                |         | printed matter         | company,       |
|                |         |                        | graphic        |
|                |         |                        | designer       |
+----------------+---------+------------------------+----------------+
| 20. CardPro    | M       | Management program for | Financial      |
|                | alaysia | credit card system     | institution    |
|                |         | covering acquirer and  |                |
|                |         | issuer                 |                |
+----------------+---------+------------------------+----------------+
| 21. Polaris    | India   | Program for core       | Financial      |
| Intellect      |         | banking system         | institution    |
|                |         | management :- deposit, |                |
|                |         | loan, collection,      |                |
|                |         | foreign exchange, and  |                |
|                |         | trade finance          |                |
+----------------+---------+------------------------+----------------+
| 22. Intranet   | USA     | Management system and  | Financial      |
|                |         | payment transaction    | institution    |
|                |         | system                 |                |
+----------------+---------+------------------------+----------------+

Apart from distributing through dealer, ITDSBU created a new channel called “Modern Trade” starting from 2002 till now. Shops, selling of SVOA PC, Epson printer, etc., under modern trade group consist of Tesco Lotus, Power Buy, Carrefour, Big C, The Mall, Courts Megastore, Makro Office, Siam Makro, Home Pro.

With the marketing activities of modern trade, sales persons would be
positioned at each branch and service partner of modern trade all over
the country to introduce products and provide after-sales services.

Opportunity and limitation in doing business

To be assigned distributor of computer, peripherals, or solutions is a
major factor of doing business. At present, Company still acts as both
sole distributor and main distributors of various products.

2.  Market and Competitive Situation

(a) Product and service

Trends of competition was growing at the increasing rate, and computer
and peripherals together with systems integrator and provider were still
demanded by the market. With the high rapid growth of competition, both
foreign and local companies proposed products which had similar prices,
warranty, and premium resulting lower gross profit. Under such
competitive situation, companies must had enough sources of funds and
differentiate products.

-   Competitive Strategy

    1.  Marketing Strategy

1.  Product Strategy

Company provided various brands and prices of turnkey computer products
with peripherals to meet customers’ demand in levels and gained higher
market share.

2.  Management Strategy

    1.  With the provision of various types and prices of products,
        Company was able to meet customers’ full demand.

    2.  Company provided complete hardware and software products,
        systems integration, and standard after-sales service such as
        repair, maintenance, and training.

    3.  There were 6 distribution channels as followed :-

        1.  Direct sales: Sales persons were assigned to sell all
            products directly to particular group of customer such as
            government sector, financial institution, education
            institute, state-enterprises, and large-sized company.

2. Dealer : There were 99 dealers in the country particularly in major
economic provinces.

3. Value Added Reseller (VAR) : VAR would select Company’s products to
be assembled with others’ products to meet the customers’ demand. The
deal between VAR and Company would be made by case.

4. IT Clinic Franchise (Service & Retail Shop) : Apart from 14 SVOA
centers, there were 31 IT Clinic centers acting as representative shops
of Company, providing maintenance services of both in-warranty and
out-of-warranty, and distributing disposable parts or products such as
toner.

5. SVOA Authorized Service Center (SASC) : There were 106 computer and
office automation service centers assigned to be SASC of the Company.
Any juristic persons were welcomed to make the investment in opening
center at determined location such as shopping center, department
stores, business area, main street or appropriate place under standard
of Company.

6.  Modern Trade Market : This was another distribution channel to
    sustain sales expansion. Company has started to offer SVOA PC, Epson
    printer, and Scanner Mustek through modern trade market since 2002.
    The first launch was at Tesco Lotus, and Company has continued to
    expand to other modern trades such as Home Pro, The Mall Group,
    Carrefour, Power Buy, and Chulalongkorn Bookstores. Sales person
    would be assigned to be stationed at each branch to provide and
    suggest products’ information. Company proposed total solution to
    add value and meet customers’ requirements with the trend of current
    technology. And the Company would avoid lowering prices on products
    as SVOA Computer + All in One (Scanner, Printer, and Copy) or
    Computer + Epson photo printer + digital camera.

2. Sales Promotion Strategy

1.  Participate in exhibition to introduce products to the public and
    provide academic knowledge to visitors

2.  Organize business Road Show abroad to emphasize the relationships
    between Company and dealers including training arrangement and site
    visit.

3.  Establish SVOA Center in regional area all over the country for

    1.  Provide news and knowledge to customers or representative of
        SVOA center

    2.  Establish services center to sustain services to SVOA center

    3.  Act as wholesaler for dealers

There were currently 14 SVOA centers :- Bangkok (Ratburana area),
Chiangmai, Khon Khaen, Hat Yai, Cholburi, Nakorn Ratchasrima (2 places),
Pitsanulok, Surat Thani, Ubol Ratchathani, Phuket, Ratchburi, Rayong,
and Chiangrai.

4.  Share expenses of advertisement and material & marketing support
    incurred from sales promotion with dealers, but not more than 1.5%
    of purchase order

5.  Arrange joint marketing activities project with companies of SVOA
    Center such as exhibition. Company would provide marketing
    incentives of not over 3% of total purchase order of the year, by
    which Company would bear a half of total expenses for each event.

Type of customer

  Customers of Company consisted of corporate, government sector, state
  enterprise sector, banking & financial institutions sectors, etc.
  According to servicing to various types of customers, risk occurred
  from selling to a few group of customer was minimized.

(a) Competitive Situation

Business of Company consisted of many distribution channels. One trader
might compete with another in a distribution channel/business line. At
the same time, both traders might be partner in another distribution
channel/business line or competitor or alliance in particular occasion.
This resulted from the possession of similar or different products of
companies which could/could not be substituted upon customer demand.

+---------+----------+----------+------------+----------+-----------+
| Items   | IT       | Systems  | IT Project | IT       | C         |
|         | Dist     | Int      | Strategic  | Su       | omponents |
|         | ribution | egration | Business   | perstore | Dis       |
|         | S        | S        | Unit       | S        | tribution |
|         | trategic | trategic |            | trategic | Business  |
|         | Business | Business | (ITPSBU)   | Business | Unit      |
|         | Unit     | Unit     |            | Unit     |           |
|         | (ITDSBU) | (SISBU)  |            |          | (CDSBU)   |
|         |          |          |            | (IT      |           |
|         |          |          |            | CITY)    |           |
+---------+----------+----------+------------+----------+-----------+
| Comp    | Very     | M        | Very high, | Very     | Very      |
| etitive | high,    | oderate, | using      | high,    | high,     |
| Si      | using    | hiring   | pricing    | c        | computer  |
| tuation | pricing  | q        | strategy   | ompeting | products  |
|         | strategy | ualified | and        | with     | were      |
|         | to       | p        | products   | rapidly  | sensitive |
|         | capture  | ersonnel | qual       | changing | to        |
|         | more     | and      | ifications | and      | pricing   |
|         | market   | allying  | for        | fast-    | and       |
|         | share    | with     | bidding to | obsolete | su        |
|         |          | product  | gain       | p        | bstituted |
|         |          | partner  | c          | roducts, | by other  |
|         |          |          | ompetitive | fake     | brands    |
|         |          |          | advantages | p        | with      |
|         |          |          |            | roducts, | similar   |
|         |          |          |            | infr     | quality   |
|         |          |          |            | ingement | (         |
|         |          |          |            | of       | qualified |
|         |          |          |            | co       | by        |
|         |          |          |            | pyright, | i         |
|         |          |          |            | and      | ndustrial |
|         |          |          |            | value    | s         |
|         |          |          |            | added    | tandard). |
|         |          |          |            | tax      | Pricing   |
|         |          |          |            | dodger   | strategy  |
|         |          |          |            |          | was used  |
|         |          |          |            |          | as a tool |
|         |          |          |            |          | pushing   |
|         |          |          |            |          | products  |
|         |          |          |            |          | to the    |
|         |          |          |            |          | market.   |
+---------+----------+----------+------------+----------+-----------+
| Amount  | Many     | Moderate | Many       | Many     | Many      |
| of      | parties, |          | parties,   | parties, | parties,  |
| com     | not only |          | including  | i        | many      |
| petitor | dealers  |          | small and  | ncluding | local     |
|         | but also |          | middle     | minor    | manuf     |
|         | products |          | companies  | c        | acturers, |
|         | owners   |          | who were   | ompanies | easy to   |
|         | c        |          | bidders    | who were | import,   |
|         | ompeting |          | for the    | indirect | retail    |
|         | directly |          | project    | co       | shops     |
|         |          |          | below 20   | mpetitor | importing |
|         |          |          | Million    |          | some      |
|         |          |          | Baht       |          | products  |
|         |          |          |            |          | directly, |
|         |          |          |            |          | dealer    |
|         |          |          |            |          | ap        |
|         |          |          |            |          | pointment |
|         |          |          |            |          | by        |
|         |          |          |            |          | manu      |
|         |          |          |            |          | facturers |
+---------+----------+----------+------------+----------+-----------+
| Size of | Larger   | Larger   | Larger or  | Largest  | Middle    |
| company | than     | or       | similar to | size     | size      |
| co      | other    | similar  | other      |          |           |
| mparing | comp     | to other | c          |          |           |
| with    | etitors, | com      | ompetitors |          |           |
| comp    | except   | petitors |            |          |           |
| etitors | com      | except   |            |          |           |
|         | petitors | foreign  |            |          |           |
|         | who own  | com      |            |          |           |
|         | products | petitors |            |          |           |
+---------+----------+----------+------------+----------+-----------+
| Comp    | Good     | Good     | Good       | Good     | Good      |
| etitive | p        | p        | position,  | p        | position, |
| si      | osition, | osition, | as SVOA    | osition, | due to    |
| tuation | due to   | due to   | has        | due to   | AET was a |
| and     | SVOA was | SVOA was | carried    | IT CITY  | mid       |
| po      | a major  | a major  | out this   | was a    | dle-sized |
| tential | dis      | dis      | business   | largest  | company   |
|         | tributor | tributor | for more   | IT       | and pays  |
|         | of       | of       | than 20    | su       | lower     |
|         | demanded | demanded | years,     | perstore | admin     |
|         | products | products | SVOA was   | in the   | istration |
|         | such as  | such as  | capable to | country  | expenses  |
|         | EPSON    | ATM      | submit all | with its | than      |
|         | printer, | system   | products   | over 10  | others.   |
|         | Autodesk | program, | and        | branches |           |
|         | program, | Oracle   | services   | in       | Also,     |
|         | Roland.  | Datab    | together   | Bangkok  | there     |
|         |          | ase/appl | with       | and      | were high |
|         | SVOA     | ication, | a          | pr       | quality   |
|         | also has | CA.      | fter-sales | ovincial | products  |
|         | carried  |          | services   | areas    | imported  |
|         | out this | SVOA     | to every   |          | from      |
|         | kind of  | also had | projects   |          | China and |
|         | business | q        | of         |          | Taiwan,   |
|         | for over | ualified | government |          | people    |
|         | 20 years | p        | and state  |          | could buy |
|         | and been | ersonnel | e          |          | in a big  |
|         | well-    | who      | nterprises |          | volume at |
|         | accepted | could    | sectors as |          | cheaper   |
|         | by the   | serve    | stated in  |          | price.    |
|         | market   | the      | signed     |          |           |
|         | in terms | cu       | contracts  |          | AET had a |
|         | of       | stomers’ |            |          | strong    |
|         | quality  | demand   |            |          | dis       |
|         | and      | with     |            |          | tribution |
|         | aft      | lower    |            |          | channel   |
|         | er-sales | cost,    |            |          | such as   |
|         | service  | c        |            |          | selling a |
|         | i        | omparing |            |          | big lot   |
|         | ncluding | to       |            |          | of parts  |
|         | na       | foreign  |            |          | to SVOA,  |
|         | tionwide | c        |            |          | a large   |
|         | service  | ompanies |            |          | local PC  |
|         | network  | at the   |            |          | assembler |
|         | covering | similar  |            |          | and       |
|         | the      | service  |            |          | selling   |
|         | whole    | level    |            |          | through   |
|         | country  |          |            |          | IT CITY   |
|         |          |          |            |          | S         |
|         |          |          |            |          | uperstore |
|         |          |          |            |          | at        |
|         |          |          |            |          | co        |
|         |          |          |            |          | mpetitive |
|         |          |          |            |          | price,    |
|         |          |          |            |          | and       |
|         |          |          |            |          | imports   |
|         |          |          |            |          | own brand |
|         |          |          |            |          | product   |
|         |          |          |            |          | “SIMMAX”  |
|         |          |          |            |          | which     |
|         |          |          |            |          | focused   |
|         |          |          |            |          | on lower  |
|         |          |          |            |          | price.    |
+---------+----------+----------+------------+----------+-----------+
| Comp    | Such as  | Such as  | Such as    | Data IT  | Synnex    |
| etitors | The      | IBM      | Loxley     | Su       | (         |
|         | Value    | (T       | Plc., CDG  | perstore | Thailand) |
|         | Systems  | hailand) | Systems    | Co.,     | Co.,      |
|         | Co.,     | Co.,     | Co., Ltd.  | Ltd.     | Ltd., D   |
|         | Ltd.,    | Ltd.,    |            |          | Computer  |
|         | ISI      | Datamat  |            |          | Co.,      |
|         | Dist     | Co.,     |            |          | Ltd.,     |
|         | ribution | Ltd.,    |            |          | Four      |
|         | (T       | Metro    |            |          | Systems   |
|         | hailand) | Systems  |            |          | Co., Ltd. |
|         | Co.,     | Cor      |            |          |           |
|         | Ltd.,    | poration |            |          |           |
|         | Powell   |          |            |          |           |
|         | Computer |          |            |          |           |
|         | Co.,     |          |            |          |           |
|         | Ltd.,    |          |            |          |           |
|         | C        |          |            |          |           |
|         | omputech |          |            |          |           |
|         | Co.,     |          |            |          |           |
|         | Ltd., D  |          |            |          |           |
|         | Computer |          |            |          |           |
|         | Co.,     |          |            |          |           |
|         | Ltd.,    |          |            |          |           |
|         | Synnex   |          |            |          |           |
|         | (T       |          |            |          |           |
|         | hailand) |          |            |          |           |
|         | Co.,     |          |            |          |           |
|         | Ltd.,    |          |            |          |           |
|         | Atec     |          |            |          |           |
|         | Co.,     |          |            |          |           |
|         | Ltd.,    |          |            |          |           |
|         | Computer |          |            |          |           |
|         | System   |          |            |          |           |
|         | Co       |          |            |          |           |
|         | nnection |          |            |          |           |
|         | Inter    |          |            |          |           |
|         | national |          |            |          |           |
|         | Co.,     |          |            |          |           |
|         | Ltd.     |          |            |          |           |
+---------+----------+----------+------------+----------+-----------+

3.3 Provision of Products and Services

  (a) Product sourcing

  Company assembled its SVOA PC by sourcing the materials from owners or
  dealers. Products sourcing could be substituted and used as parts or
  for sales such as hard disk, monitor, RAM, etc. Though there was very
  high competition in this business, it was not the obstacle to conduct
  products sourcing which mostly were obtained from local suppliers,
  except CPU which must be imported valuing 20-25% of total computer
  cost. Furthermore, production capacity could be increasing or
  decreasing upon customer demand. Since technology of computer’s parts
  has been highly developed, the functions of assembly were not
  complicating. Therefore, technicians for PC assembly could be hired
  and trained in the short time. At present, warehouse at Ratburana is
  the place of the Company to proceed all functions of PC assembly.

  Besides Company assembled its own “SVOA PC”, Company conducted
  products sourcing for its IT Distribution Strategic Business Unit,
  Systems Integration Strategic Business Unit, IT Project Strategic
  Business Unit, Components Distribution Business Unit, and/or IT
  Superstore. Company and its associates maintained the planned
  direction to be products distributor/owners and/or dealer of foreign
  products which supported product’s know-how by owners detailing as
  follows:-

+----------------------+----------------------+-----------------------+
| Product              | Duration of contract | Other conditions      |
+----------------------+----------------------+-----------------------+
| 1. Peripherals       | 1 year               | Corporate Reseller    |
|                      |                      |                       |
| HP                   | Extended, except     |                       |
|                      | Plotter, PC & Server |                       |
|                      | Expire Renew every   |                       |
|                      | year                 |                       |
+----------------------+----------------------+-----------------------+
| 2. Peripherals       | 3 years              | A                     |
|                      |                      | uthorized Distributor |
| EPSON                | Automatic extended   |                       |
+----------------------+----------------------+-----------------------+
| 3. Mainframe         | 3 years              | Systems Integrator    |
| Computer and         |                      | Agreement             |
| peripherals          | Renew every year     |                       |
|                      |                      |                       |
| HDS Storage          |                      |                       |
+----------------------+----------------------+-----------------------+
| 4. Mini Computer     | 3 years              | Systems Integrator    |
|                      |                      | Agreement             |
| TANDEM               | Renew every year     |                       |
+----------------------+----------------------+-----------------------+
| 5. Printing          | 1 year               | Regional Distributor  |
| equipment            |                      | (Indo China)          |
|                      | Renew every year     |                       |
| ROLAND               |                      |                       |
+----------------------+----------------------+-----------------------+
| 6. Software          | 1 year               | A                     |
|                      |                      | uthorized Distributor |
| autodesk             | Renew every year     |                       |
|                      |                      | (autocad & LT)        |
+----------------------+----------------------+-----------------------+
| 7. Software:         | 3 years              | Authorized            |
| Database             |                      | Distributor           |
|                      | Renew every year     |                       |
| Oracle               |                      |                       |
+----------------------+----------------------+-----------------------+
| 8. Software: Banking | 1 year               | Authorized            |
| Operation ACI        |                      | Distributor           |
|                      | Renew every year     |                       |
+----------------------+----------------------+-----------------------+
| 9. Netscreen         | 1 year               | Authorized            |
| Technology           |                      | Distributor           |
|                      | Renew every year     |                       |
+----------------------+----------------------+-----------------------+
| 10. Software:        | 1 year               | Systems Integrator    |
| Accounting & CRM     |                      | Agreement             |
| Oracle               | Renew every year     |                       |
+----------------------+----------------------+-----------------------+
| 11. Software:        | 1 year               | Authorized            |
| Communication media  |                      | Distributor           |
| Net Interwise        | Renew every year     |                       |
+----------------------+----------------------+-----------------------+
| 12. Software: Filing | 1 year               | Authorized            |
| Management Bass      |                      | Distributor           |
| (Webtra)             | Renew every year     |                       |
+----------------------+----------------------+-----------------------+
| 13. Interactive      | 1 year               | Premier Partner       |
| Intelligence         |                      |                       |
| Multimedia Call      |                      |                       |
| Center               |                      |                       |
+----------------------+----------------------+-----------------------+

(b) Services

Services center of SVOA Public Co., Ltd. has been well-accepted as
Authorized Service Provider of leading brands of products consisting of
trained engineer and technician teams under standard maintenance of
products owners. Therefore, Company was able to provide service and
maintenance for any products under warranty or out of warranty as
below:-

1. Computer such as PC, Notebook, etc.

2. Printer such as Inkjet Printer, Multi-Function Printer (MFP),

  Dot Matrix Printer, Laser Printer, etc.

3. Peripherals such as Scanner, Plotter, Projector, etc.

  With the support of products owners, every branch of SVOA Center was
  ready to provide standard services for brands :- SVOA, HP, ACER,
  ROLAND, EPSON, MUSTEK, CANON, LEXMARK, TOSHIBA.

  Company was appointed to be service center for brands as follows:-

  ------------------------------ ------------ ----------------------------
  Services Center                Duration of  Type of product
                                 contract     

  1. EPSON Authorized Service    1 year       Dot Matrix Printer, Inkjet
  Provider                                    Printer, Laser Printer,
                                              Large Format Printer,
                                              Scanner, Digital Camera,
                                              Projector,

  2. HP Authorized Service       1 year       Desktop PC, Workstation, PC
  Delivery Partner                            Server, LaserJet, DeskJet,
                                              DesignJet, Monitors

  3. HP Support Outsourcing (HP  1 year       HP Pavilion และ HP Presario
  ODM)                                        in Thailand

  4. Lexmark Authorized Service  1 year       Every model of Lexmark
  Center                                      printer

  5. Acer Authorized Service     1 year       Acer and Servex brands
  Center                                      

  6. Canon Certified Service     1 year       Printer, Scanner, Laser
  Center                                      Printer, and other office
                                              supplies

  7. DELL Local Service Provider 1 year       Dell under distribution of
                                              SVOA

  8. AOC Authorized Service      1 year       AOC Monitor, maintenance HP
  Provider                                    branded product

  9. Lite On Authorized Service  1 year       LiteOn Monitor, maintenance
  Center                                      HP branded product
  ------------------------------ ------------ ----------------------------

(b) Impact to Environment

  There was no impact to environment due to Company carried out trading
  business, not parts manufacturer. Company used the parts for PC
  assembly and distributed finished products.

  3.4 Outstanding work

  Type of computer and peripherals business of Company was to install
  computer, peripherals and accessories which required less time for
  work submission, except purchase order of large system with customized
  software. As at 31^(st) December, 2004 (last day of Year ended), there
  was no outstanding work valuing more than 10% of total revenue in
  process of submission work.