Description of business

1.  Background and major development

KGI Securities (Thailand) Public Company Limited is a member of the
Stock Exchange of Thailand (SET Broker seat No. 13). The Company has
developed its computer and information system to better serve the needs
of all its clients. It also serves clients with investment
recommendations and provides consultations so that the clients are able
to make the right decisions in securities trading at the right time.

In 2001, the Company ranked No. 6 with a 5.11% brokerage market share.
The Company targets to increase its market share from the current 6-7%
to 10% within year-end. It is expected that in the first quarter of
2002, the Company’s market share will increase to 8%.

In the past year, the Company has opened two new branches (Surawongse
and Asoke, Bangkok). As of February 28^(th) 2002, there were 14 branch
offices throughout the country (Please see details in branches).

The Company offers an Internet trading service via its website,
www.kgieworld.co.th, which allows clients to place orders 24 hours a
day.

Significant development in 2002 

The followings are changes in business and management during the past
year:

Year 2001

January 3, 2001 Surawongse Branch, Bangkok was opened

May 25, 2001 The Company’s name was changed from “KGI Securities One
Public Company Limited” to “KGI Securities (Thailand) Public Company
Limited”

June 1, 2001 Sathorn Branch, Bangkok was closed

June 18, 2001 9 branches were granted approval from the Office of the
Securities Exchange Commission to become full branch offices.

August 1, 2001 Become 100% shareholders in One Asset Management Limited,
(formerly owned 75% of total shares)

August 23, 2001 The Board of Directors’ Meeting acknowledged the change
in the Company’s Organization structure

August 31, 2001 Narativas and Surin branches were closed

December 17, 2001 Asoke branch, Bangkok was opened

Year 2002

January 14, 2002 Yaowaraj branch, Bangkok was opened

February 25, 2002 Phuket branch was closed

Changes in the overseas investment structure

The details of change to the Company’s overseas investment structure are
in the Notes to the financial statements, specifically, Note 2.3 “ Basis
for the preparation of the consolidated statements” and Note 7
“Investment in subsidiary & associated companies”. The notes make
reference to the Company’s wholly owned subsidiary, HOLDCO, a holding
company.

Change in KGII

KGII was initially a wholly owned subsidiary of the Company. Four
Directors of the Company were appointed as directors of KGII. KGII's
Director history is as follows:

KGII directors

On April 22^(nd) 2000, six Directors were appointed:

1.  Au Yi Sum Lily ^(/1)

2.  Chang An-Ping Nelson ^(/1)

3.  Koo John-Ynn Angelo ^(/2)

4.  Pun Kin Wa Albert ^(/3)

5.  Wong Wai Kai Paul ^(/2, /3)

6.  Yung Anthony ^(/3, /4)

  Note: ^(/1) Directors from KGI Group

  ^(/2) Resigned as directors of KGII on July 7^(th) 2000

  ^(/3) Director of the Company (KGI Thailand)

  ^(/4) Director of the Company (KGI Thailand) resigned on February
  21^(st) 2002

Details of KGII capital increase

In October 2000, KGII issued 43.4mn new shares to existing shareholders
by way of rights issue at US$1.78. The Company and Jumbo Win Worldwide
Corp. did not take up that rights and instead KGI International Holding
Limited [1] (HOLDCO) subscribed those rights. Also KGII placed a further
5.4mn shares with other investors in order to raise funds to repurchase
the distributed assets.

In December 2000, KGII issued new shares to other investors. Including
these new shares, paid-up capital was 75.6mn shares. Jumbo Win sold its
shares back to KGII and paid by cash. As a result of the above rights
offerings, the Company's shareholding in KGII was diluted from 46.6% to
0.32%.

Information of KGII

+--------------------------+-------------------------------------------+
| Country of establishment | Cayman Island                             |
+--------------------------+-------------------------------------------+
| Date of incorporation    | April 20, 2000                            |
+--------------------------+-------------------------------------------+
| Registered capital       | US$500mn (500mn shares, par value of US$1 |
|                          | per share)                                |
+--------------------------+-------------------------------------------+
| Paid-up capital (as of   | US$75.59mn                                |
| Dec. 31, 2000)           |                                           |
+--------------------------+-------------------------------------------+
| Accounting period        | End of March each year                    |
+--------------------------+-------------------------------------------+
| Business                 | Investment in other business particularly |
|                          | brokering and investment banking business |
|                          | in Hong Kong, Korea, Philippines, China,  |
|                          | Macau, and other countries in Asia        |
+--------------------------+-------------------------------------------+

KGII’s shareholding structure

  ----------------- --------- --------- ------ ------------ --------- ------------ ------- --------- ------------- ------- --------- --
                    Oct 8,              Oct 9                                      Dec 31                          Dec 31,           
                    2000                2000                                       2000                            2002              

  Shareholders of   No. of    % holding        No. of       % holding No. of               % holding No. of shares         % holding 
  KGII              shares                     shares                 shares                                                         

  KG Investments    3,935     0.54             43,438,073   87.60     43,438,073           57.46     74,929,042            69.97     
  Holding Limited                                                                                                                    

  KGI Securities    342,522   46.64            342,522      0.69      342,522              0.45      342,522               0.32      
  (Thailand)                                                                                                                         
  International                                                                                                                      
  Holdings Limited                                                                                                                   
  (HOLDCO)                                                                                                                           

  Taiwan Cement     0         0.00             0            0.00      15,690,000           20.76     15,690,000            14.65     
  Corporation                                                                                                                        

  Jumbo Win         387,913   52.82            387,913      0.78      0                    0.00      0                     0.00      
  Worldwide Corp                                                                                                                     

  Other Taiwanese   0         0.00             5,418,382    10.93     16,128,291           21.33     16,128,291            15.06     
  investors                                                                                                                          

  Total             734,370   100.00           49,586,890   100.00    75,598,886           100.00    107,089,855           100.00    
  ----------------- --------- --------- ------ ------------ --------- ------------ ------- --------- ------------- ------- --------- --

Summary of KGII’s financial statement (as of December 31^(st) 2001)

  ----------------------- ----------------------- -----------------------
  (US$ mn)                March 31, 2001          December 31, 2001

  Total assets            738.38                  714.41

  Total liabilities       475.38                  474.89

  Capital and reserve     191.08                  239.52

  Revenue                 106.17                  47.34

  Operating profit        13.18                   (6.48)

  Tax, minorities         (4.85)                  1.79

  Net profit              8.22                    (10.04)
  ----------------------- ----------------------- -----------------------

As KGII’s major revenue derived from securities business in Asia; that
is, Hong Kong (51.2%), Korea (48.6%), and Philippines (0.2%), the stock
market in each country would directly affect to its financial position
and operation. In order to reduce such risk, KGII diversifies its
investment in several countries.

It is currently expected that KGII will be listed before the maturity
date of the debentures. Any listing will be subject to market conditions
and unforeseen circumstances.

In order to avoid any conflict of interest, in all issues relating to
the convertible debentures and debentures issued to KGI (Thailand) by
KGII, all KGI Group Directors of the Company have agreed to abstain from
voting at the Board of Directors Meetings. This decision was disclosed
to shareholders at the Extraordinary General Shareholders Meeting No.
1/2001 dated March 8^(th) 2001. The Audit Committee has also been
informed of this decision.

The policy to invest in KGII’s shares depends on various factors at the
time of conversions, including amongst other, market condition and
outlook, KGII prospects and market valuation of the shares.

2.  Industry Overview

KGI Securities (Thailand) Public Company Limited (KGI) is engaged in the
securities business under the Operation of Finance, Securities & Credit
Foncier Business Act, B.E. 2522 (1979). The Company has licenses to
operate the following businesses:

  --------------------------------- -------------------------------------
  1) Securities broker              5) Securities registrar

  2) Securities trading             6) Private fund management [2]

  3) Investment advisory            7) Securities borrowing & lending

  4) Securities underwriting        
  --------------------------------- -------------------------------------

3.  Revenue Structure of KGI Securities (Thailand) Public Company
    Limited

  --------------- ------------ ------------ ------------ -------- ---- ------- ----- -- -------------------- ----------------- ------ ------------ ------ -------- ---- ------- -----
                                            2001                                                                                                   2000                         

                  Securities   Investment   Fund         Contra        Total            Securities           Investment(Hong          Fund                Contra        Total   
                  business     (Hong Kong)  Management                                  business(Thailand)   Kong)                    Management                                
                  (Thailand)                (Thailand)                                                                                (Thailand)                                

  Brokerage fees  234          -            -            -             234              357                  -                        -                   -             357     

  Fees & service  8            -            191          (2)           197              55                   -                        189                 (4)           240     
  income                                                                                                                                                                        

  Gain/(loss) on  18           -            -            -             18               (125)                -                        -                                 (125)   
  securities                                                                                                                                                                    
  trading                                                                                                                                                                       

  Interest &      173          145          6            (63)          261              187                  -                        6                   (27)          166     
  dividend (net)                                                                                                                                                                

  Interest        1            -            -            -             1                2                    -                        -                   -             2       
  received from                                                                                                                                                                 
  credit balance                                                                                                                                                                
  (net interest                                                                                                                                                                 
  expenses)                                                                                                                                                                     

  Interest        29           -            -            -             29               15                   -                        -                   -             15      
  receipt from                                                                                                                                                                  
  debt                                                                                                                                                                          
  restructuring                                                                                                                                                                 
  (net of                                                                                                                                                                       
  provision)                                                                                                                                                                    

  Share of profit 184          -            -            (184)         -                160                  217                      -                   (160)         217     
  from subsidiary                                                                                                                                                               
  & associated                                                                                                                                                                  
  companies                                                                                                                                                                     

  Other income    30           60           6            -             96               76                   -                        7                                 83      

  Total           677          205          203          (249)         836              727                  217                      202                 (191)         955     
  --------------- ------------ ------------ ------------ -------- ---- ------- ----- -- -------------------- ----------------- ------ ------------ ------ -------- ---- ------- -----

KGI Securities (Thailand)’s shareholding in subsidiaries

As of December 31, 2001

+----------------------------------------+-----------------+-----------+
| Company                                | Business Type   | % holding |
+----------------------------------------+-----------------+-----------+
| KGI E-World Co., Ltd. ^(/1)            | Investment      | 100.00    |
+----------------------------------------+-----------------+-----------+
| KGI Securities (Thailand)              | Investment      | 100.00    |
| International Holdings Limited ^(/2)   |                 |           |
+----------------------------------------+-----------------+-----------+
| One Asset Management Ltd.              | Mutual Fund     | 100.00    |
|                                        | Management      |           |
+----------------------------------------+-----------------+-----------+
| KGI S-One Corporation Co., Ltd. ^(/3)  | Investment      | 100.00    |
+----------------------------------------+-----------------+-----------+
| S-ONE Capital Co., Ltd. ^(/4)          | Leasing         | 50.00     |
+----------------------------------------+-----------------+-----------+

^(/1) holds website address, formerly known as Thanyathada Co., Ltd.

^(/2) change the name from “KGI Securities One International Holdings
Limited”

^(/3) under the liquidation process in 2002

^(/4) subsidiary not consolidated in Company’s financial statement

Subsidiaries and associated companies business

KGI E-World Co., Ltd.

It was formerly known as “Thayathada Co., Ltd.”, a wholly owned
subsidiary. Its name was changed to “ KGI E World Co., Ltd. in order to
register Website.

KGI Securities (Thailand) International Holdings Limited (HOLDCO)

It was formerly known as “KGI Securities One International Holdings
Limited (HOLDCO),” a wholly owns subsidiaries and its name was changed
to “KGI Securities (Thailand) International Holdings Limited (HOLDCO)”
since December 7^(th) 2001. HOLDCO holds 0.32% shares in KGI
International Holdings Limited (KGII).

One Asset Management Limited

A wholly owned subsidiary, One Asset Management Limited, is a mutual
fund management. The funds managed include Equity Funds, Fixed Income
Funds, Flexible Funds, Real estate Funds, other mutual funds for
rehabilitation of financial institutions, mutual funds for Small- and
Medium-sized Enterprises, and Private Funds.

KGI S-One Corporation

- A dormant company currently under liquidation -

United System (Asia) Limited

Unitech, a holding company with copyrights in software, holds shares in
United Group, which provide data service business.

Policy for group operations

KGI Securities (Thailand) and subsidiaries have hired professional
managers, some of whom are directors related to the major shareholder,
the Koos Group. Company directors are responsible for setting the
policies for the Company & subsidiaries.

4.  Business Plan

By end-2002, the Company aims to achieve 10% of market shares. To
compete with competitors, the Company will focus on value-added services
and product diversification. The Company is focus on regular and foreign
clients, which are the major clients of the Company now, but Company
will maintain its existing customers while expanding the mentioned
customer bases at the same time.

[1] ² The Company’s name was changed from “KGI Securities One
International Holding Limited (HOLDCO)”

[2] ³ the Company transferred the Private fund management to One Asset
Management Limited and stopped operating business since March 1^(st)
2002