2.3 Business Characteristics of each Undertaking

(1) Business Characteristics

The characteristics of each of the company’s business are classified as
follows:

  Securities Broker Business

Market share value of the company for the past 3 years compared to the
latest updated data as at 31 December, 2005 are shown in the table
below:

Table of Market Share Value

  ---------------------------- ----------- ----------- ----------- -----------
  Securities Trading Volume    2002        2003        2004        2005

  SET (Million Baht)           2,053,357   4,670,281   5,024,399   4,067,181

  US (Million Baht)            142,044     201,645     137,802     100,529

  US Market share (%)          3.45%       2.16%       1.37%       1.24%
  ---------------------------- ----------- ----------- ----------- -----------

New Securities Customer Policy

It is the Company’s policy to welcome all types of customer, domestics,
institutional as well as foreigners. At present, however, most of our
customers are domestic customers and we have set up the screening of new
customers policy according to the rules and regulations of the SET while
focusing on minimizing the Company‘s risk.

Margin accounts Policy

Since 26 June, 2002, the Company has provided margin trading service to
customers in form of Credit Balance under Credit Balance Financing
project. The amount of credit line has been set up in relation to the
securities types which have different degrees of risk in which will be
announced occasionally as appropriate. The Company will set up the list
of securities which are qualified to be put as collaterals. Followings
are the policies to be considered before granting Credit Balance to
customers:

1. Marketing staff should know their customers in person so that they
can evaluate the investment objectives, financial position or
limitations as well as the basic investment knowledge of their customers
clearly.

2. Determine appropriate maximum limit of credit line of each customer
under a certain period of time. The Credit Balance Line and the credit
line for stock borrowings for short sale should be approved under one
maximum total credit line for the same customers.

3. Disclose the relationships between marketing staff and the customers
or between the Company and the customers to notify the Company’s
compliance to the Code of Ethics like that of a professional company,
and which is considered to be a provision in the Compliance manual to be
strictly obeyed.

4. Approved authority of the credit line is dependable on the Executive
Board.

5. The marketing staff has to certify that the person who makes the
buying and selling decision is the eligible person not the nominee
person and that the payment should be settled by that particular person.
The Company is therefore, forbidden to approve any credit line to the
nominee of other persons intentionally or unintentionally.

6. In opening a securities trading account, the customers have to make
deposit in cash first before trading can be made at the amount not less
than the initial margin regulated by the Stock Exchange of Thailand (at
present it is 50%).

7. The Company is forbidden to approve for any margin on securities
trading to the customers exceeding their purchasing limit at a certain
period.

8. Purchasing exceeds purchasing limit can be allowed only if the
customers increase their collaterals amount, either by cash or
securities, to the amount not less than the initial margin of the
exceeded volume purchased before purchasing can be done.

9. The Company will set up the marginable list of securities (including
those right offering shares of the listed companies), initial margin
rate, maintenance margin rate and the minimum requirement rate for each
securities in writing at least once a month.

10. In case the customers’ equity gets lower than the Maintenance
Margin, written notice will be sent to inform them to fill in the
collateral on the next working day so that the customers’ equity is not
lower than the Maintenance Margin.

11. In case the equity of any customer has decreased to be equivalent to
or lower than the minimum requirement value, then the Operations
Department will have to do the force sell on the next working day so
that the equity of the customer gets higher than the minimum requirement
value.

12. Interest on margin loan should be charged to the customers and the
Company will also pay interest to the customers calculated on
collaterals remaining in their margin loan account base on the daily
outstanding amount under the agreed rate. The settlement of interest
will be done by adjusting the margin level of each customer at least
once a month.

13. Report on the outstanding balance and monthly interest settlement on
margin loan account will be sent to inform the customers at least once a
month.

Securities Trading Credit Line Approval Policy

The Company has set up the securities trading credit line and appointed
the authorized signers to approve for each level of the Line for the
customers governing each activity such as Short Sell and Net Settlement
/Waive as well as the approval of the Change of order and the Company’s
Error Port. The authorized signatories and related authorities were
appointed by the Board of Directors and was last updated on 13 January,
2005 and which shown in table 1.

+-------+-------+-------+-------+-------+-------+----------+----------+
| TABLE | App   |       |       |       |       |          |          |
| 1     | roval |       |       |       |       |          |          |
|       | A     |       |       |       |       |          |          |
|       | uthor |       |       |       |       |          |          |
|       | ities |       |       |       |       |          |          |
|       | of    |       |       |       |       |          |          |
|       | Secur |       |       |       |       |          |          |
|       | ities |       |       |       |       |          |          |
|       | Bus   |       |       |       |       |          |          |
|       | iness |       |       |       |       |          |          |
+-------+-------+-------+-------+-------+-------+----------+----------+
| C     | New   | Net   | Short | C     | Error |          |          |
| redit | Cash  | Settl | Sell  | hange | Port  |          |          |
| Line  | Ac    | ement |       | Order |       |          |          |
|       | count | &     |       |       |       |          |          |
|       | Op    | Waive |       |       |       |          |          |
|       | ening |       |       |       |       |          |          |
+-------+-------+-------+-------+-------+-------+----------+----------+
|       |       |       |       |       | Error | Error    | Transfer |
|       |       |       |       |       | with  | with     | the      |
|       |       |       |       |       | a     | Deficit  | di       |
|       |       |       |       |       | S     |          | fference |
|       |       |       |       |       | quare |          | into     |
|       |       |       |       |       |       |          | C        |
|       |       |       |       |       |       |          | ompany’s |
|       |       |       |       |       |       |          | Port     |
+-------+-------+-------+-------+-------+-------+----------+----------+
| Not   | Assi  | Assi  | Assi  | -     | -     | Not      | Head of  |
| exce  | stant | stant | stant |       |       | e        | M        |
| eding | Vice  | Vice  | Vice  |       |       | xceeding | arketing |
|       | Pres  | Pres  | Pres  |       |       | 30,000   | co-sign  |
| 2     | ident | ident | ident |       |       | Baht     | with     |
| mi    |       |       |       |       |       |          | Managing |
| llion |       |       |       |       |       |          | Director |
| Baht  |       |       |       |       |       |          | or       |
|       |       |       |       |       |       |          | P        |
|       |       |       |       |       |       |          | resident |
|       |       |       |       |       |       |          | or       |
|       |       |       |       |       |       |          | E        |
|       |       |       |       |       |       |          | xecutive |
|       |       |       |       |       |       |          | Director |
|       |       |       |       |       |       |          | and Head |
|       |       |       |       |       |       |          | of       |
|       |       |       |       |       |       |          | M        |
|       |       |       |       |       |       |          | arketing |
|       |       |       |       |       |       |          | su       |
|       |       |       |       |       |       |          | mmarizes |
|       |       |       |       |       |       |          | the      |
|       |       |       |       |       |       |          | tran     |
|       |       |       |       |       |       |          | sactions |
|       |       |       |       |       |       |          | to be    |
|       |       |       |       |       |       |          | ackn     |
|       |       |       |       |       |       |          | owledged |
|       |       |       |       |       |       |          | by the   |
|       |       |       |       |       |       |          | E        |
|       |       |       |       |       |       |          | xecutive |
|       |       |       |       |       |       |          | Board    |
+-------+-------+-------+-------+-------+-------+----------+----------+
| Not   | Vice  | Vice  | Vice  | Vice  | Vice  | Head of  |          |
| exce  | Pres  | Pres  | Pres  | Pres  | Pres  | M        |          |
| eding | ident | ident | ident | ident | ident | arketing |          |
|       |       |       |       |       |       | co-sign  |          |
| 5     |       |       |       |       |       | with     |          |
| mi    |       |       |       |       |       | Managing |          |
| llion |       |       |       |       |       | Director |          |
| Baht  |       |       |       |       |       | or       |          |
|       |       |       |       |       |       | P        |          |
|       |       |       |       |       |       | resident |          |
|       |       |       |       |       |       | or       |          |
|       |       |       |       |       |       | E        |          |
|       |       |       |       |       |       | xecutive |          |
|       |       |       |       |       |       | Director |          |
+-------+-------+-------+-------+-------+-------+----------+----------+
| Not   | S     | S     | S     | S     | S     | Not      |          |
| exce  | enior | enior | enior | enior | enior | e        |          |
| eding | Vice  | Vice  | Vice  | Vice  | Vice  | xceeding |          |
|       | Pres  | Pres  | Pres  | Pres  | Pres  | 30,000   |          |
| 8     | ident | ident | ident | ident | ident | Baht     |          |
| mi    |       |       |       |       |       |          |          |
| llion |       |       |       |       |       |          |          |
| Baht  |       |       |       |       |       |          |          |
+-------+-------+-------+-------+-------+-------+----------+----------+
| Not   | Head  | Head  | Head  | Head  | Head  | Head of  |          |
| exce  | of    | of    | of    | of    | of    | M        |          |
| eding | Mark  | Mark  | Mark  | Mark  | Mark  | arketing |          |
|       | eting | eting | eting | eting | eting | co-sign  |          |
| 15    |       |       |       |       |       | with     |          |
| mi    |       |       |       |       |       | Managing |          |
| llion |       |       |       |       |       | Director |          |
| Baht  |       |       |       |       |       | or       |          |
|       |       |       |       |       |       | P        |          |
|       |       |       |       |       |       | resident |          |
|       |       |       |       |       |       | or       |          |
|       |       |       |       |       |       | E        |          |
|       |       |       |       |       |       | xecutive |          |
|       |       |       |       |       |       | Director |          |
|       |       |       |       |       |       | and Head |          |
|       |       |       |       |       |       | of       |          |
|       |       |       |       |       |       | M        |          |
|       |       |       |       |       |       | arketing |          |
|       |       |       |       |       |       | su       |          |
|       |       |       |       |       |       | mmarizes |          |
|       |       |       |       |       |       | the      |          |
|       |       |       |       |       |       | tran     |          |
|       |       |       |       |       |       | sactions |          |
|       |       |       |       |       |       | to be    |          |
|       |       |       |       |       |       | ackn     |          |
|       |       |       |       |       |       | owledged |          |
|       |       |       |       |       |       | by       |          |
|       |       |       |       |       |       | E        |          |
|       |       |       |       |       |       | xecutive |          |
|       |       |       |       |       |       | Board    |          |
+-------+-------+-------+-------+-------+-------+----------+----------+
| Not   | Head  | Head  | Man   | Head  | Head  |          |          |
| exce  | of    | of    | aging | of    | of    |          |          |
| eding | Mark  | Mark  | Dir   | Mark  | Mark  |          |          |
|       | eting | eting | ector | eting | eting |          |          |
| 20    | co    | co    | or    | co    | co    |          |          |
| mi    | -sign | -sign | Pres  | -sign | -sign |          |          |
| llion | with  | with  | ident | with  | with  |          |          |
| Baht  | Man   | Man   | or    | Man   | Man   |          |          |
|       | aging | aging | Exec  | aging | aging |          |          |
|       | Dir   | Dir   | utive | Dir   | Dir   |          |          |
|       | ector | ector | Dir   | ector | ector |          |          |
|       | or    | or    | ector | or    | or    |          |          |
|       | Pres  | Pres  |       | Pres  | Pres  |          |          |
|       | ident | ident |       | ident | ident |          |          |
|       | or    | or    |       | or    | or    |          |          |
|       | Exec  | Exec  |       | Exec  | Exec  |          |          |
|       | utive | utive |       | utive | utive |          |          |
|       | Dir   | Dir   |       | Dir   | Dir   |          |          |
|       | ector | ector |       | ector | ector |          |          |
+-------+-------+-------+-------+-------+-------+----------+----------+
| 20    | Exec  | Exec  | Man   | Man   | Man   |          |          |
| mi    | utive | utive | aging | aging | aging |          |          |
| llion | Board | Board | Dir   | Dir   | Dir   |          |          |
| Baht  |       |       | ector | ector | ector |          |          |
| and   |       |       | or    | or    | or    |          |          |
| above |       |       | Pres  | Pres  | Pres  |          |          |
|       |       |       | ident | ident | ident |          |          |
|       |       |       | or    | or    | or    |          |          |
|       |       |       | Exec  | Exec  | Exec  |          |          |
|       |       |       | utive | utive | utive |          |          |
|       |       |       | Dir   | Dir   | Dir   |          |          |
|       |       |       | ector | ector | ector |          |          |
+-------+-------+-------+-------+-------+-------+----------+----------+
| 100   | Board | Board | Man   | -     | -     |          |          |
| mi    | of    | of    | aging |       |       |          |          |
| llion | Dire  | Dire  | Dir   |       |       |          |          |
| Baht  | ctors | ctors | ector |       |       |          |          |
| and   |       |       | or    |       |       |          |          |
| above |       |       | Pres  |       |       |          |          |
|       |       |       | ident |       |       |          |          |
|       |       |       | or    |       |       |          |          |
|       |       |       | Exec  |       |       |          |          |
|       |       |       | utive |       |       |          |          |
|       |       |       | Dir   |       |       |          |          |
|       |       |       | ector |       |       |          |          |
+-------+-------+-------+-------+-------+-------+----------+----------+

Remark : The approved credit line for new cash account opening in each
level above will also apply to the temporary credit line approval and
each temporary credit line approved to each customer should not exceed
the total approved credit line of that customer.

Definitions in Table 1 - The Approval Authorities of Securities Business

  ------------------------------- ------- --------------------------------
  Credit Line                     means   securities trading limits
                                          approved for newly-open cash
                                          accounts or the new trading
                                          limits after the increasing or
                                          decreasing of the previous limit

  Assistant Vice President, Vice  means   Assistant Vice President, Vice
  President and Senior Vice               President and Senior Vice
  President                               President of Marketing
                                          Department

  Head of Marketing               means   First Executive Vice President
                                          or Executive Vice President of
                                          Marketing Department

  Executive Board                 means   Board of Executive Directors
                                          appointed by the Company

  Executive Director              means   The director from the Executive
                                          Board
  ------------------------------- ------- --------------------------------

Settlement Control Policy

The Company has set up a strictly control policy over the customers’
settlement in order to comply with the rules and regulations of SET as
follows:

Payment for securities purchased should be settled on time. Late payment
or chequedefault cases will be followed up by the Company’s marketing
officer in order to urge the customers to make payment either by cash or
by depositing into the company’s account and to warn them to be more
careful in the future. Late payment or late submission of share
certificates will subject to a fine. And if the late payment of any
customer happens 3 times in a year, then the account will be closed.

Securities Trading

The Company’s temporary and long-term investment activities both in
listed securities at the Stock Exchange of Thailand (SET), the Market
for Alternative Investment (MAI) or the Bond Dealers’ Club, and
non-listed equity and debt instruments are controlled by an Investment
Committee appointed by its Board of Directors to ensure that they will
correspond with its investment policy.

In 2005, the Company set up the policy not to make any additional
investment in Company’s portfolio.

Investment Advisory Services

The investment advisory business is to offer specific advice to major
customers by taking into consideration their desire and ability to
absorb risk which is somewhat different from the general advices made by
Securities Analyst. The purpose of this kind of service is to offer a
value-added services for high net worth customers only. It also offers
other investment alternatives other than the equity market.

Thai Stock Market in 2005

The Stock Exchange of Thailand (SET) Index moved sideways in 2005.
Throughout the year, the SET Index rose only 6.8 per cent while the
total trading volume was 20 per cent lower than 2004 as it stood at Baht
4.067 trillion or an average trading volume of Baht 16.601 billion a
day. This was lower than the daily trading volume in 2004, which stood
at Baht 20.647 billion a day. There were altogether 50 new IPOs (36 were
listed in the Stock Exchange of Thailand and 14 were introduced to the
Market for Alternative Investment (MAI)), prompting the SET’s market
capitalization to increase from Baht 4.52 trillion in 2004 to Baht 5.12
trillion at the end of 2005 or an increase of as much as Baht 600
billion.

[]

During Q1, investment atmosphere was much improving after the country
had suffered a major natural disaster as the deadly Tsunami stuck the
three southern provinces. In addition, Thailand had to confront with the
unrest in the three southernmost provinces, the increase of oil prices
and the bird flu epidemic. The stock rally was a result of foreign
investors and funds as well as credit-rating agencies added more weight
into the Thai stocks while upgrading Thai banks’ credit rating. This
prompted an influx of foreign money at the beginning of the year. In
addition, Thailand also witnessed an election early in the year which
Thai Rak Thai Party won a landslide victory. All of this prompted the
SET to reach its 2005’s new high on 28 February 2005 at 741.55 points.
However, in late Q1, investors started to load off their investment for
profit-taking purpose, which continued into Q2, due to their concerns of
the overall economic growth, the hike of domestic oil prices, a
potential rise of interest rates, the highest trade deficit Thailand has
suffered during the past eight years as well as the current account
deficit. In addition, the Q1 GDP growth rose by 3.3 per cent from the
same period a year ago, which was lower than what various research
institutes had forecast. This led to an adjustment of the country’s
estimated economic growth rate, which greatly eroded investor’s
confidence. As a result, the SET Index closed at its new low for the
year on 7 July 2005 at 638.31 points. Yet, the sentiment seemed to pick
up in the middle of Q3 thanks to a chain of good news starting from
S&P’s upgrading of Thai banks’ credit rating to China’s strengthening of
its currency by 2.1 per cent. Foreign brokers re-increased more weight
in Thai stocks while Moody’s Investors Service projected a better future
for Asian commercial banks. But as Q4 arrived, the stock market suffered
another negative turn. The index fell due to the Administrative Court’s
order to postpone the listing of EGAT Public Company Limited, a
power-generation state enterprise. At the same time, the political
situation seemed to heat up due to the gatherings of the public to
support the mobile “Thailand Weekly” program held in Lumpini Park.
Simultaneously, foreign investors started to sell their stocks at the
end of the year, leading the SET Index to continue sliding before edging
up a bit prior to year-end after His Majesty the King’s statement in his
birthday that somewhat cooled down the entire political pressure.
Besides, investors also speculated over commercial bank’s performances.

  -------------- --------------------- ------------------ ----------------
                 Index as at 31 Dec.05 Index as at 31     % Changes
                                       Dec. 04            

  Thai           713.73                668.1              6.8%

  Singapore      2347.34               2066.14            13.6%

  Hong Kong      14876.43              14230.14           4.5%

  Malaysia       899.79                907.43             -0.01%

  Indonesia      1162.64               1000.23            16.23%

  China          1220.93               1330.19            -8.2%

  Phillipines    2096.04               1822.83            14.99%
  -------------- --------------------- ------------------ ----------------

Thai Stock Market in 2006: Trends and Directions

Although stock investment in 2006 is subject to several uncertain
factors ranging from an instability in the local political scene to the
world’s oil prices and the interest rise, we still believe that it
should be better than 2005. Factors that support our optimism include
the Thai economy’s growth rate in 2006, which expects to rise by more
than 5 per cent as compared to a 4.5 per cent expansion in 2005. This is
largely due to active domestic spending both from the government’s
investment in its mega projects and Thailand’s recovering export sector
and the strengthening Thai Baht compared to the US dollar which
inevitably attracts more foreign money to park in the Thai stock
exchange. So far, the Thai bourse remains relatively cheap when compared
to other regional markets as its P/E ratio is approximately 10 times
only. In addition, the opening of the derivative market scheduled on 28
April 2006 is considered a supporting factor for stock investment as
derivatives can be used to manage risk resulted from equity investment.
Moreover, as several listed companies postponed their listing in the SET
last year as they hoped to find a better investment moment, it is
expected that at least 100 companies alone will offer their IPOs this
year, which, when combined, will account for a market capitalization of
around Baht 580 billion. This, on the other hand, will increase the
SET’s market capitalization to Baht 5.7 trillion, which should inject
some fresh excitement in the SET’s air. We expect that a daily stock
trading volume in 2006 should be around Baht 20 billion a day, or 20 per
cent increase from 2005’s Baht 16.601 billion a day, based however on an
assumption that the average market capitalization for 2006 will be Baht
5.4 trillion and there is only one turnover.

[]

Competitions in the Securities Business

Since the market liberalization in 1999, which resulted in more
cut-throat competitions and reductions of securities brokerage fee to as
low as 0 per cent just to attract customers without focusing on quality
of analysis work, the result was several securities companies had to go
under. The situation forced the authorities to fix the minimum brokerage
fee to 0.25 per cent of the trading value and 0.20 per cent for the
internet-based trading for a period of three years starting from January
2002. The measure prompted the securities business to revive. Together
with the fact that financial institutions offered the lowest interest
rates in the country’s financial history and a confidence in the Thai
economy, this led to increasing stock-trading transactions starting from
mid 2003 to 2004.

While pricing competition remained to be seen during the initial period,
the discounts being offered was not significant. Regarding competitions
to lure marketing officers in order to increase trading volumes, after a
measure was introduced to govern the marketing officer’s move from one
company to another, the flow of personnel seemed to drop. The fact that
each broker tried to keep its marketing stars by offering
capital-increase shares and warrants was proven a success to a certain
degree. We do find that competitions did decline at a certain level. The
number of brokers fell from 39 in 2004 to 37 at the end of 2005.
However, we continue to believe that the securities business remains
attractive and as long as there are business licenses left, there will
always be an attempt to set up new securities companies to sell and buy
stocks, which will soon make the number of brokers to rise to 39. A main
reason for this is because there remains some time left before a minimum
brokerage fee fixed at 0.25 per cent will become expired, which means it
is not so difficult to generate some profits should an average trading
volume stand at Baht 10-20 billion a day. However, the authorities will
review its move to liberalize the securities brokerage business again
next year. If agreed, the market will be liberalized in January 2007,
which will very much be based on how ready the Thai securities companies
are as competition will become stiffer.

  ------------ --------- ---------------------- ------ ---------- --------------------
  [][][]List                                                      
  of all                                                          
  Securities                                                      
  Companies                                                       
  and their                                                       
  market Share                                                    
  FY 2004-2005                                                    

  Rank         Company   FY 2004 (%)            Rank   Company    FY 2005 (%)

  1            KIMENG    11.71                  1      KIMENG     10.2

  2            ASP       8.08                   2      ASP        7.14

  3            ZMICO     5.96                   3      SCBS       5.15

  4            KGI       4.52                   4      PHATRA     4.97

  5            SCBS      4.04                   5      ZMICO      4.28

  6            PHATRA    3.96                   6      CS         4.03

  7            TSC       3.51                   7      UBS        4.00

  8            BLS       3.32                   8      KGI        3.72

  9            CNS       3.25                   9      BLS        3.29

  10           FINANSA   3.21                   10     BFITSEC    3.19

  11           DBSV      3.07                   11     TSC        2.96

  12           UBS       2.93                   12     DBSV       2.93

  13           AYS       2.92                   13     GLOBLEX    2.92

  14           GLOBLEX   2.84                   14     CNS        2.84

  15           NATSEC    2.76                   15     CLSA       2.83

  16           CS        2.65                   16     UOBKHST    2.81

  17           UOBKHST   2.63                   17     AYS        2.70

  18           TRINITY   2.49                   18     NATSEC     2.61

  19           PST       2.40                   19     JPM        2.34

  20           SICSEC    2.28                   20     TMBMACQ    2.17

  21           KKS       2.19                   21     FINANSA    2.13

  22           ASL       2.00                   22     SICSEC     2.05

  23           FES       2.00                   23     FES        2.02

  24           CLSA      1.93                   24     ASL        1.99

  25           SYRUS     1.89                   25     KKS        1.94

  26           IVS       1.74                   26     PST        1.91

  27           JPM       1.59                   27     TRINITY    1.82

  28           TMBMACQ   1.39                   28     SYRUS      1.60

  29           US        1.37                   29     IVS        1.47

  30           BTSEC     1.23                   30     ACLS       1.42

  31           APEX      1.22                   31     US         1.24

  32           KSEC      1.15                   32     BTSEC      1.11

  33           BFITSEC   0.74                   33     APEX       0.51

  34           BNPPP     0.52                   34     SCIBS      0.51

  35           SCIBS     0.42                   35     BNPPP      0.43

  36           TSEC      0.06                   36     TSEC       0.41

                                                37     PSS        0.24

                                                38     KSEC       0.12

                                                39     MERCHANT   0.00
  ------------ --------- ---------------------- ------ ---------- --------------------

Underwriting Business

  In the year 2005, the Company engaged in Underwriting deals either as
  lead underwriter or co-underwriter of the IPO Securities of 10
  companies totalling 351.04 million baht, as follows :

  Single Point Parts (Thailand) PLC. Prinsiri PLC.

  Siam Inter Multimedia PLC. Pre-Built PLC.

  Glow Energy PLC. Thai Ha PLC.

  Eastern Wire PLC. Thai Unique Coil Center PLC.

  Indorama Polymers PLC. CSP Steel Center PLC.

  Moreover, there were 2 Tender offer deals, namely Book Club Finance
  PLC., Alcan Packaging Strong Pack PLC., totaling 1,253.85 million
  baht.

Competition in the Financial Advisory Business

Competition in the financial advisory business and the securities
underwriting business will become fiercer in the future as several
securities companies especially medium to small companies start to focus
more on these businesses to provide supporting incomes to securities
trading business while at the same time creating revenues from financial
fees to compensate those from securities business. However, the business
of financial advisory and securities underwriting remains volatile
according to the SET’s regulatory directions. For us, we believe that we
have experienced teams of financial advisors to compete with our
competitors.

Regarding target customers, the Company focuses both on listed customers
in the stock exchange and companies in general which want to mobilize
funds from both equity and money market. We aim to win new underwriting
deals and at the same time focus on customers who may need financial
advisory services for other non-securities businesses such as financial
restructuring, non-IPO deal and mergers and acquisitions.

(3) Procurement of Products or Services

Sources of Capital

For the past 2 years the company had not engaged in any outside source
of capital. Most capital came from the shareholders’ equity and was
utilized on investment of debt instrument, and underwriting of common
stocks and debt instrument and the rest was used as working capital. The
loan from other financial institution, if any, would be short term . The
sources of capital policy is to choose the source which is more suitable
in relation to the business activities and its objectives and which will
not affect the ratio between total liabilities and shareholders’ equity
as well as the NCR ratio.

Margin loan Policy

In 2005, the Company had allowed margin loan under Credit Balance system
on best cautions. Towards year end, the total Credit Balance outstanding
amounted to 3,406 million Baht.

The Maintenance of Net Capital Rule

The Company will maintain its Net Capital Rule (NCR) to be up to the
Securities & Exchange Commission’s standard on a daily basis. The types
of assets and the capital of the company will be evaluated everyday in
order to control the company’s NCR to be in line with the standard rate
and timely.

The NCR as of FY2005 year end was 491.01%. As for the Company’s NCR
management policy, the company has arranged for various sources of
capital such as to open up credit lines with some financial institutions
or the sources of capital from shareholders’ equity through increasing
of company’s capital by rights issue or Public offering through the SET
at the right timing and through the most suitable financial instruments.