12. Financial position and operating results

12.1 Financial Statements

(A) Summary of the Report of the Independent Auditor for 2000 to 2002.

The Company appointed Mr. Ruth Chaowanagawi, a Certified Public
Accountant no. 3247 of Ernst and Young Limited as auditor. The audit
reports for the years 2000 to 2002 do not contain any qualifying
opinions.

  (B) Summary of financial statements for the Company and its subsidiary
  companies for the years ended 31 December 2000, 2001 and 2002.

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

BALANCE SHEETS

AS AT 31 DECEMBER 2000, 2001 AND 2002

+-----------------------------+-------+----+-------+----+-------+----+
| Consolidated                | 2000  | %  | 2001  | %  | 2002  | %  |
+-----------------------------+-------+----+-------+----+-------+----+
| Assets                      |       |    |       |    |       |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Cash and deposits at        | 2     | 4% | 4     | 5% | 5     | 6% |
| financial institution       | 80,25 |    | 11,97 |    | 13,37 |    |
|                             | 4,672 |    | 0,464 |    | 8,897 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Loan to financial           | 1,1   | 1  | 1,3   | 1  | 7     | 9% |
| institutions                | 00,54 | 5% | 80,59 | 8% | 85,36 |    |
|                             | 7,589 |    | 1,975 |    | 9,329 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Investment                  |       |    |       |    |       |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Trading securities          | 1,2   | 1  | 7     | 1  | 1,3   | 1  |
|                             | 09,32 | 6% | 65,46 | 0% | 97,17 | 6% |
|                             | 2,910 |    | 7,361 |    | 2,884 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Av                          | -     | -  | 9,32  | 0% | -     | -  |
| ailable-for-sale securities |       |    | 9,609 |    |       |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Securities held for sale    | -     | -  | -     | -  | 3,0   | 3  |
|                             |       |    |       |    | 80,36 | 6% |
|                             |       |    |       |    | 9,286 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Debt s                      | 1,2   | 1  | 6     | 9% | 1,1   | 1  |
| ecurities due within 1 year | 32,52 | 6% | 95,50 |    | 19,85 | 3% |
|                             | 5,654 |    | 9,500 |    | 7,983 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Other securities            | 47,42 | 1% | 64,09 | 1% | 62,58 | 1% |
|                             | 3,826 |    | 5,669 |    | 0,966 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Held-to-maturity securities | 7,75  | 0% | 3,1   | 4  | 7,80  | 0% |
|                             | 6,072 |    | 97,39 | 1% | 4,857 |    |
|                             |       |    | 3,215 |    |       |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Net investment              | 2,4   | 3  | 4,7   | 6  | 5,6   | 6  |
|                             | 97,02 | 3% | 31,79 | 1% | 67,78 | 6% |
|                             | 8,462 |    | 5,354 |    | 5,976 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Investment in subsidiary    | 2,9   | 3  | -     | -  | -     | -  |
| companies                   | 10,80 | 9% |       |    |       |    |
|                             | 0,273 |    |       |    |       |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Trading transaction with    | 2     | 0% | 14,92 | 0% | 65,09 | 1% |
| securities companies        | 9,309 |    | 4,604 |    | 6,926 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Securities business         |       |    |       |    |       |    |
| receivables and accrued     |       |    |       |    |       |    |
| interest receivables        |       |    |       |    |       |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Secu                        | 2,8   | 3  | 9     | 1  | 1,3   | 1  |
| rities business receivables | 78,60 | 8% | 08,98 | 2% | 61,01 | 6% |
|                             | 7,015 |    | 6,957 |    | 5,559 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Accrued interest            | 97,76 | 1% | 5,358 | 0% | 17,65 | 0% |
| receivables                 | 4,802 |    |       |    | 9,182 |    |
+-----------------------------+-------+----+-------+----+-------+----+
|   Total securities business | 2,9   | 4  | 9     | 1  | 1,3   | 1  |
|   receivables and accrued   | 76,37 | 0% | 08,99 | 2% | 78,67 | 6% |
|   interest receivables      | 1,817 |    | 2,315 |    | 4,741 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Less: Allowance for         | (2,74 | -3 | (18   | -  | (24   | -  |
| doubtful accounts           | 0,240 | 7% | 9,688 | 3% | 8,653 | 3% |
|                             | ,000) |    | ,198) |    | ,628) |    |
+-----------------------------+-------+----+-------+----+-------+----+
|   Net securities business   | 2     | 2% | 7     | 9% | 1,1   | 1  |
|   receivables and accrued   | 36,13 |    | 19,30 |    | 30,02 | 3% |
|   interest receivables      | 1,817 |    | 4,117 |    | 1,113 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Property, p                 | 2     | 3% | 1     | 2% | 2     | 2% |
| remises and equipment – net | 06,46 |    | 65,85 |    | 06,78 |    |
|                             | 4,101 |    | 5,707 |    | 1,679 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Property foreclosed, net    | 47,27 | 1% | 46,43 | 1% | 67,09 | 1% |
|                             | 4,883 |    | 5,040 |    | 1,195 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Deferred stock exchange     | 55,83 | 1% | 45,83 | 1% | 35,83 | 0% |
| membership fees, net        | 3,333 |    | 3,333 |    | 3,333 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Goodwill                    | -     | -  | 70,04 | 1% | 62,82 | 1% |
|                             |       |    | 1,496 |    | 0,179 |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Consolidated                | 2000  | %  | 2001  | %  | 2002  | %  |
+-----------------------------+-------+----+-------+----+-------+----+
| Other assets                | 1     | 2% | 88,06 | 2% | 72,50 | 1% |
|                             | 24,80 |    | 5,224 |    | 0,662 |    |
|                             | 5,488 |    |       |    |       |    |
+-----------------------------+-------+----+-------+----+-------+----+
| Total assets                | 7,4   | 10 | 7,7   | 10 | 8,6   | 10 |
|                             | 59,16 | 0% | 21,67 | 0% | 06,67 | 0% |
|                             | 9,927 |    | 3,640 |    | 9,289 |    |
+-----------------------------+-------+----+-------+----+-------+----+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

BALANCE SHEETS (Continued)

AS AT 31 DECEMBER 2000, 2001 AND 2002

+-----------------------------+-------+----+-------+----+--------+----+
| Consolidated                | 2000  | %  | 2001  | %  | 2002   | %  |
+-----------------------------+-------+----+-------+----+--------+----+
| LIABILITIES AND             |       |    |       |    |        |    |
| SHAREHOLDERS’ EQUITY        |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Foreign borrowings          | 1,4   | 1  | 1,1   | 1  | 561,5  | 7% |
|                             | 33,77 | 9% | 39,94 | 5% | 90,900 |    |
|                             | 6,150 |    | 3,487 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Trading transaction with    | 43,27 | 0% | 1     | 2% | 14,6   | 0% |
| securities companies        | 6,728 |    | 85,57 |    | 72,640 |    |
|                             |       |    | 5,294 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Securities business payable | 91,67 | 1% | 5     | 7% | 702,1  | 8% |
|                             | 7,154 |    | 70,65 |    | 75,965 |    |
|                             |       |    | 0,765 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Loans and advance from      | 2     | 3% | 27,36 | 0% | 5,1    | 0% |
| related companies           | 14,00 |    | 1,648 |    | 85,640 |    |
|                             | 9,977 |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Other liabilities           | 1     | 2% | 1     | 2% | 197,0  | 2% |
|                             | 17,26 |    | 36,53 |    | 01,021 |    |
|                             | 6,025 |    | 0,906 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Total liabilities           | 1,9   | 2  | 2,0   | 2  | 1      | 1  |
|                             | 00,00 | 5% | 60,06 | 7% | ,480,6 | 7% |
|                             | 6,034 |    | 2,100 |    | 26,166 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| SHAREHOLDERS’ EQUITY        |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Share Registered capital    | 59,0  |    | 37,0  |    | 37     |    |
|                             | 69,34 |    | 69,34 |    | ,069,3 |    |
|                             | 3,690 |    | 3,690 |    | 43,690 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Share paid-up capital       | 14,9  | 20 | 14,9  | 19 | 17     | 20 |
|                             | 30,53 | 0% | 33,52 | 3% | ,332,5 | 1% |
|                             | 1,370 |    | 6,860 |    | 48,630 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Share subscription received | -     | 0% | -     | 0% | 1,000  | 0% |
| in advance                  |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Premium on common stock     | -     | 0% | 7,6   | 9  | 7      | 8  |
|                             |       |    | 78,79 | 9% | ,678,7 | 9% |
|                             |       |    | 7,399 |    | 97,399 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Discount on common stock    | (2,01 | -2 | (9,69 | -  | (11,   | -  |
|                             | 9,391 | 7% | 9,957 | 12 | 116,39 | 12 |
|                             | ,979) |    | ,987) | 6% | 8,011) | 9% |
+-----------------------------+-------+----+-------+----+--------+----+
| Premium from unexercised    | 1     | 1% | 1     | 1% | 101,9  | 1% |
| warrants                    | 01,92 |    | 01,92 |    | 22,580 |    |
|                             | 2,580 |    | 2,580 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Revaluation surplus         | (     | 0% | 32    | 0% | -      | 0% |
| (deficit) in investment     | 3,118 |    | 9,609 |    |        |    |
|                             | ,615) |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Translation adjustment      | 1     | 2% | 2     | 3% | 177,0  | 2% |
|                             | 13,93 |    | 33,72 |    | 04,436 |    |
|                             | 7,222 |    | 1,761 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Retained earnings           | 1     | 2% | 1     | 2% | 117,7  | 1% |
| appropriated – statutory    | 17,76 |    | 17,76 |    | 68,370 |    |
| reserve                     | 8,370 |    | 8,370 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Retained earnings           | 3     | 5% | 3     | 5% | 350,2  | 5% |
| appropriated – general      | 50,20 |    | 50,20 |    | 00,000 |    |
| reserve                     | 0,000 |    | 0,000 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Retained earnings           | (8,07 | -  | (8,05 | -  | (7,    | -8 |
| unappropriated deficit)     | 7,104 | 10 | 4,697 | 10 | 520,68 | 7% |
|                             | ,260) | 8% | ,052) | 4% | 8,985) |    |
+-----------------------------+-------+----+-------+----+--------+----+
| EQUITY ATTRIBUTABLE TO      | 5,5   | 7  | 5,6   | 7  | 7      | 8  |
| COMPANY’S SHAREHOLDERS      | 14,74 | 5% | 61,61 | 3% | ,121,1 | 3% |
|                             | 4,688 |    | 1,540 |    | 55,419 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| MINORITY INTEREST           | 44,41 | 0% | -     | 0% | 4,8    | 0% |
|                             | 9,205 |    |       |    | 97,704 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| TOTAL SHAREHOLDERS’ EQUITY  | 5,5   | 7  | 5,6   | 7  | 7      | 8  |
|                             | 59,16 | 5% | 61,61 | 3% | ,126,0 | 3% |
|                             | 3,893 |    | 1,540 |    | 53,123 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| TOTAL LIABILITY AND         | 7,4   | 10 | 7,7   | 10 | 8      | 10 |
| SHAREHOLDERS’ EQUITY        | 59,16 | 0% | 21,67 | 0% | ,606,6 | 0% |
|                             | 9,927 |    | 3,640 |    | 79,289 |    |
+-----------------------------+-------+----+-------+----+--------+----+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

EARNINGS STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2000, 2001 AND 2002

+-----------------------------+-------+----+-------+----+--------+----+
| Consolidated                | 2000  | %  | 2001  | %  | 2002   | %  |
+-----------------------------+-------+----+-------+----+--------+----+
| Securities business income  |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Brokerage fee               | 3     | 4  | 2     | 3  | 713,6  | 5  |
|                             | 56,62 | 3% | 33,65 | 2% | 56,104 | 0% |
|                             | 0,756 |    | 1,630 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Fee and service income      | 2     | 2  | 1     | 2  | 192,7  | 1  |
|                             | 40,74 | 9% | 96,87 | 7% | 82,564 | 4% |
|                             | 2,726 |    | 5,977 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Gain on trading in          | (12   | -1 | 18,21 | 3% | 262,6  | 1  |
| securities                  | 5,190 | 5% | 1,332 |    | 15,022 | 9% |
|                             | ,003) |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Interest and dividends      | 1     | 2  | 2     | 3  | 290,5  | 2  |
|                             | 66,07 | 0% | 60,87 | 6% | 62,380 | 0% |
|                             | 5,235 |    | 1,510 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Interest on margin loans    | 42,67 | 5% | 18,93 | 3% | 58,7   | 4% |
|                             | 2,194 |    | 2,538 |    | 60,788 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Total                       | 6     | 8  | 7     | 10 | 1      | 10 |
|  securities business income | 80,92 | 2% | 28,54 | 1% | ,518,3 | 7% |
|                             | 0,908 |    | 2,987 |    | 76,858 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| EXPENSES ON BORROWINGS      | 65,27 | 8% | 69,30 | 9% | 23,6   | 2% |
|                             | 3,205 |    | 3,029 |    | 63,978 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| FEE AND SERVICE EXPENSES    | 57,74 | 7% | 42,29 | 6% | 54,0   | 4% |
|                             | 8,803 |    | 8,597 |    | 09,766 |    |
+-----------------------------+-------+----+-------+----+--------+----+
|  Net                        | 5     | 6  | 6     | 8  | 1      | 10 |
|  securities business income | 57,89 | 7% | 16,94 | 6% | ,440,7 | 1% |
|                             | 8,900 |    | 1,361 |    | 03,114 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Reversal of bad debt and    | (2    | -  | 6,96  | 1% | (49,29 | -  |
| doubtful accounts (bad      | 5,724 | 3% | 2,423 |    | 1,268) | 3% |
| debts and doubtful          | ,345) |    |       |    |        |    |
| accounts)                   |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
|   Net securities business   | 5     | 6  | 6     | 8  | 1      | 9  |
|   income after bad debt and | 32,17 | 4% | 23,90 | 7% | ,391,4 | 8% |
|   doubtful accounts         | 4,555 |    | 3,784 |    | 11,846 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Share of profitof           | 2     | 2  | -     | -  | -      | -  |
| subsidiary & associated     | 16,67 | 6% |       |    |        |    |
| companies                   | 6,730 |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| GAIN ON DISPOSAL OF         | -     | -  | 60,13 | 8% | -      | -  |
| INVESTMENT IN ASSOCIATED    |       |    | 3,214 |    |        |    |
| COMPANIES                   |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| GAIN ON EXCHANGE RATE       | 25,79 | 3% | 91    | 0% | -      | -  |
|                             | 4,788 |    | 4,695 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| OTHER INCOME                | 57,12 | 7% | 34,64 | 5% | 27,6   | 2% |
|                             | 2,852 |    | 0,959 |    | 35,979 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Total revenue               | 8     | 10 | 7     | 10 | 1      | 10 |
|                             | 31,76 | 0% | 19,59 | 0% | ,419,0 | 0% |
|                             | 8,925 |    | 2,652 |    | 47,825 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| OPERATING EXPENSES          |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Personnel expenses          | 3     | 4  | 3     | 5  | 550,6  | 3  |
|                             | 93,44 | 7% | 73,03 | 2% | 88,729 | 9% |
|                             | 5,422 |    | 2,083 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Premises and equipment      | 1     | 1  | 1     | 2  | 165,3  | 1  |
| expenses                    | 20,69 | 4% | 46,52 | 0% | 36,349 | 2% |
|                             | 0,807 |    | 6,533 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Taxes and duties            | 15,41 | 2% | 7,10  | 1% | 10,2   | 1% |
|                             | 6,746 |    | 5,685 |    | 77,901 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Directors’ remuneration     | 4,71  | 1% | 4,79  | 1% | 6,1    | 0% |
|                             | 6,500 |    | 2,991 |    | 83,517 |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Other expenses              | 1     | 1  | 1     | 1  | 128,9  | 9% |
|                             | 46,18 | 8% | 22,98 | 7% | 58,908 |    |
|                             | 7,993 |    | 8,379 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Total operating expenses    | 6     | 8  | 6     | 9  | 861,4  | 6  |
|                             | 80,45 | 2% | 54,44 | 1% | 45,404 | 1% |
|                             | 7,468 |    | 5,671 |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| EARNINGS BEFORE INCOME TAX  | 1     | 1  | 65,14 | 9% | 557,6  | 3  |
|                             | 51,31 | 8% | 6,981 |    | 02,421 | 9% |
|                             | 1,457 |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| CORPORATE INCOME TAX        | (7    | -  | (3    | -  | (23,59 | -  |
|                             | 0,051 | 8% | 0,120 | 4% | 4,354) | 2% |
|                             | ,187) |    | ,968) |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| EARNINGS BEFORE MINORITY    | 81,26 | 1  | 35,02 | 5% | 534,0  | 3  |
| INTEREST                    | 0,270 | 0% | 6,013 |    | 08,067 | 8% |
+-----------------------------+-------+----+-------+----+--------+----+
| EARNINGS IN RESPECT OF      | (1    | -  | (1    | -  | -      | -  |
| MINORITY INTEREST           | 7,536 | 2% | 2,618 | 2% |        |    |
|                             | ,286) |    | ,805) |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| NET EARNINGS FOR THE YEAR   | 63,72 | 8% | 22,40 | 3% | 534,0  | 3  |
|                             | 3,984 |    | 7,208 |    | 08,067 | 8% |
+-----------------------------+-------+----+-------+----+--------+----+
| Basic earning per share,    | 0.04  |    | 0.02  |    | 0.33   |    |
| net earnings                |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+
| Diluted earning per share,  | 0.04  |    | 0.01  |    | 0.32   |    |
| net earnings                |       |    |       |    |        |    |
+-----------------------------+-------+----+-------+----+--------+----+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF RETAINED EARINNGS

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+--------------------------------+------------+-----------+------------+
| Consolidated                   |   2000     | 2001      | 2002       |
+--------------------------------+------------+-----------+------------+
| RETAINED EARNINGS –            |            |           |            |
| UNAPPROPRIATED:                |            |           |            |
+--------------------------------+------------+-----------+------------+
| Balance – beginning of the     | (8,14      | (8,077    | (8,05      |
| year (deficit)                 | 0,828,244) | ,104,260) | 4,697,052) |
+--------------------------------+------------+-----------+------------+
| Net earning for the year       | 63,723,984 |   2       | 5          |
|                                |            | 2,407,208 | 34,008,067 |
+--------------------------------+------------+-----------+------------+
| Balance – ending of the year   | (8,07      | (8,054    | (7,52      |
| (deficit)                      | 7,104,260) | ,697,052) | 0,688,985) |
+--------------------------------+------------+-----------+------------+
| RETAINED EARNINGS –            |            |           |            |
| APPROPRIATED:                  |            |           |            |
+--------------------------------+------------+-----------+------------+
| Statutory reserve              | 1          | 11        | 1          |
|                                | 17,768,370 | 7,768,370 | 17,768,370 |
+--------------------------------+------------+-----------+------------+
| General reserve                | 3          | 35        | 3          |
|                                | 50,200,000 | 0,200,000 | 50,200,000 |
+--------------------------------+------------+-----------+------------+
| Total retained earnings –      | 4          | 46        | 4          |
| appropriated                   | 67,968,370 | 7,968,370 | 67,968,370 |
+--------------------------------+------------+-----------+------------+
| TOTAL RETAINED EARINGS         | (7,60      | (7,586    | (7,05      |
| (deficit)                      | 9,135,890) | ,728,682) | 2,720,615) |
+--------------------------------+------------+-----------+------------+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+---------------------------------+-----------+-----------+-----------+
| Consolidated                    | 2000      | 2001      | 2002      |
+---------------------------------+-----------+-----------+-----------+
| ORDINARY SHARES                 |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | 14,93     | 14,93     | 14,93     |
|                                 | 0,531,370 | 0,531,370 | 0,531,370 |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | -         |           | 2,39      |
|                                 |           | 2,995,490 | 9,021,770 |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | 14,93     | 14,93     | 17,33     |
|                                 | 0,531,370 | 3,526,860 | 2,548,630 |
+---------------------------------+-----------+-----------+-----------+
| WARRANTS                        |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | 10        | -         | -         |
|                                 | 1,922,580 |           |           |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | (101      | -         | -         |
|                                 | ,922,580) |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | -         | -         | -         |
+---------------------------------+-----------+-----------+-----------+
| SHARE SUBSCRIPTIONS RECEIVED IN |           |           |           |
| ADVANCE                         |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | -         | -         | -         |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | -         | -         |   1,000   |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | -         | -         |   1,000   |
+---------------------------------+-----------+-----------+-----------+
| PREMIUM ON COMMON STOCKS        |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   (2,019  | (7,698    | (7,698    |
|                                 | ,391,979) | ,797,399) | ,797,399) |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        |   -       |   -       |   -       |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   (2,019  | (7,698    | (7,698    |
|                                 | ,391,979) | ,797,399) | ,797,399) |
+---------------------------------+-----------+-----------+-----------+
| DISCOUNT ON COMMON STOCKS       |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   -       | (9,698    | (9,699    |
|                                 |           | ,189,378) | ,957,987) |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        |   -       |   (1      |   (1,416  |
|                                 |           | ,768,609) | ,440,024) |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   -       | (9,699    | (11,116   |
|                                 |           | ,957,987) | ,398,011) |
+---------------------------------+-----------+-----------+-----------+
| PREMIUM FROM UNEXERCISED        |           |           |           |
| WARRANTS                        |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   -       |   10      |   10      |
|                                 |           | 1,922,580 | 1,922,580 |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        |   10      |   -       |   -       |
|                                 | 1,922,580 |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   10      |   10      |   10      |
|                                 | 1,922,580 | 1,922,580 | 1,922,580 |
+---------------------------------+-----------+-----------+-----------+
| REVALUATION SURPLUS IN          |           |           |           |
| INVESTMENTS (DEFICIT)           |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   (8      |   (3      |   329,609 |
|                                 | ,938,456) | ,118,615) |           |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        |   (3      |   -       |   -       |
|                                 | ,118,615) |           |           |
+---------------------------------+-----------+-----------+-----------+
| DECREASE DURING THE YEAR        |           |           |           |
|                                 | 8,938,456 | 3,448,224 | (329,609) |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   (3      |   329,609 |   -       |
|                                 | ,118,615) |           |           |
+---------------------------------+-----------+-----------+-----------+
| TRANSLATION ADJUSTMENTS         |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   -       |   11      |   23      |
|                                 |           | 3,937,222 | 3,721,761 |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        |   11      |   11      |   (56     |
|                                 | 3,937,222 | 9,784,539 | ,717,325) |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   11      |   23      |   17      |
|                                 | 3,937,222 | 3,721,761 | 7,004,436 |
+---------------------------------+-----------+-----------+-----------+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Continue)

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+---------------------------------+-----------+-----------+-----------+
| Consolidated                    | 2000      | 2001      | 2002      |
+---------------------------------+-----------+-----------+-----------+
| RATAINED EARNINGS               |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| APPROPRIATED                    |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Statutory reserve               |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   11      |   11      |   11      |
|                                 | 7,768,370 | 7,768,370 | 7,768,370 |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   11      |   11      |   11      |
|                                 | 7,768,370 | 7,768,370 | 7,768,370 |
+---------------------------------+-----------+-----------+-----------+
| General reserve                 |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   35      |   35      |   35      |
|                                 | 0,200,000 | 0,200,000 | 0,200,000 |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   35      |   35      |   35      |
|                                 | 0,200,000 | 0,200,000 | 0,200,000 |
+---------------------------------+-----------+-----------+-----------+
| UNAPPROPRIATED                  |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   (8,140  |   (8,077  |   (8,054  |
|                                 | ,828,244) | ,104,260) | ,697,052) |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | 6         | 2         | 53        |
|                                 | 3,723,984 | 2,407,208 | 4,008,067 |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   (8,077  |   (8,054  |   (7,520  |
| (deficit)                       | ,104,260) | ,697,052) | ,688,985) |
+---------------------------------+-----------+-----------+-----------+
| MINORITY INTEREST               |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   3       |   4       |   -       |
|                                 | 5,632,919 | 4,419,205 |           |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        |   1       |   1       |           |
|                                 | 7,536,286 | 2,618,805 | 4,897,704 |
+---------------------------------+-----------+-----------+-----------+
| DECREASE DURING THE YEAR        |   (8      |   (57     |   -       |
|                                 | ,750,000) | ,038,010) |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   (44     |   -       |           |
|                                 | ,419,205) |           | 4,897,704 |
+---------------------------------+-----------+-----------+-----------+
| TOTAL SHAREHOLDERS’ EQUITY      |   5,55    |   5,66    |   7,12    |
|                                 | 9,163,893 | 1,611,540 | 6,053,123 |
+---------------------------------+-----------+-----------+-----------+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+------------------------------------+-----------+---------+-----------+
| Consolidated                       | 2000      | 2001    | 2002      |
+------------------------------------+-----------+---------+-----------+
| Cash flows from operating          |           |         |           |
| activities                         |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Net earnings                       | 6         | 22,     | (534      |
|                                    | 3,723,984 | 407,208 | ,008,067) |
+------------------------------------+-----------+---------+-----------+
| Adjustments to reconcile net       |           |         |           |
| earnings to net cash provided by   |           |         |           |
| (paid from) operating activities:- |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Earnings in respect of minority    | 1         | 12,     | -         |
| interest                           | 7,536,286 | 618,805 |           |
+------------------------------------+-----------+---------+-----------+
| Share of profit of subsidiary and  | (216      | -       | -         |
| associated companies               | ,676,730) |         |           |
+------------------------------------+-----------+---------+-----------+
| Gain on disposals of investment in | -         | (60,1   | -         |
| associated companies               |           | 33,214) |           |
+------------------------------------+-----------+---------+-----------+
| Depreciation and amortisation      | 5         | 83,     | 7         |
|                                    | 8,530,590 | 706,936 | 5,048,883 |
+------------------------------------+-----------+---------+-----------+
| Bad debts and doubtful accounts    | 2         | (6,9    | 4         |
| (reversal)                         | 5,724,345 | 62,423) | 9,291,268 |
+------------------------------------+-----------+---------+-----------+
| Gain on evaluation of investments  | 16        | (33,6   | (67       |
|                                    | 5,826,767 | 93,544) | ,671,645) |
+------------------------------------+-----------+---------+-----------+
| Loss on disposals of assets        | 8,461,966 | 1,      | 3,350,702 |
|                                    |           | 638,708 |           |
+------------------------------------+-----------+---------+-----------+
| Loss on disposals of property      | (8        |         | -         |
| foreclosed                         | ,400,000) | 400,717 |           |
+------------------------------------+-----------+---------+-----------+
| Increase of goodwill               | 1,082,924 | (73,1   | -         |
|                                    |           | 04,527) |           |
+------------------------------------+-----------+---------+-----------+
| Adjusted net present value of      | (6        | (5,6    | (3        |
| negotiable certificates of deposit | ,678,669) | 66,382) | ,407,138) |
| of a subsidiary company            |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Decrease (increase) in accrued     | 2         | 113,    | (21       |
| interest receivables and dividend  | 6,628,340 | 897,006 | ,061,947) |
| income                             |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Decrease (increase) in accrued     | 1         | 4,      | (2        |
| income                             | 3,854,847 | 242,495 | ,422,046) |
+------------------------------------+-----------+---------+-----------+
| Increase in interest payable       | 2,192,291 | -       | -         |
+------------------------------------+-----------+---------+-----------+
|   Increase in accrued expenses     | (232      | 14,     | 1         |
|                                    | ,317,747) | 976,864 | 3,775,821 |
+------------------------------------+-----------+---------+-----------+
| Earnings (loss) from operating     | (80       | 74,     | 58        |
| activities before changes in       | ,510,806) | 328,649 | 0,911,965 |
| operating assets and liabilities   |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Decrease (increase) in operating   |           |         |           |
| assets                             |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Loans to financial institution     | 22        | (280,1  | 59        |
|                                    | 8,586,344 | 70,850) | 4,590,000 |
+------------------------------------+-----------+---------+-----------+
| Negotiable certificate of deposit  | 8         | -       | -         |
|                                    | 1,654,969 |         |           |
+------------------------------------+-----------+---------+-----------+
| Short-term investment              | (708      | 1,005,  | (990      |
|                                    | ,143,687) | 235,638 | ,574,399) |
+------------------------------------+-----------+---------+-----------+
| Trading transactions with          | 1,838,249 | (14,8   | (50       |
| securities companies               |           | 95,295) | ,172,322) |
+------------------------------------+-----------+---------+-----------+
| Securities business receivables    | 42        | (569,2  | (429      |
|                                    | 1,177,926 | 60,181) | ,661,847) |
+------------------------------------+-----------+---------+-----------+
| Cash received from disposals of    |   1       | 4,      | -         |
| property foreclosed                | 7,600,000 | 248,566 |           |
+------------------------------------+-----------+---------+-----------+
| Property foreclosed from loan      | (29       | (4,8    | (10       |
| settlement – net                   | ,288,000) | 80,640) | ,200,000) |
+------------------------------------+-----------+---------+-----------+
| Other assets                       | (12       | 1,      | 9,710,939 |
|                                    | ,776,416) | 708,627 |           |
+------------------------------------+-----------+---------+-----------+
| Increase (decrease) in operating   |           |         |           |
| liabilities                        |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Domestic borrowings                | 89,846    | -       | -         |
+------------------------------------+-----------+---------+-----------+
| Trading transactions with          | (19       | 142,    | (170      |
| securities companies               | ,123,879) | 298,566 | ,902,654) |
+------------------------------------+-----------+---------+-----------+
| Securities business payable        | (321      | 478,    | 13        |
|                                    | ,356,076) | 973,611 | 1,525,200 |
+------------------------------------+-----------+---------+-----------+
| Consolidated                       | 2000      | 2001    | 2002      |
+------------------------------------+-----------+---------+-----------+
| Other liabilities                  | (54       | 4,      | 4         |
|                                    | ,183,810) | 288,016 | 6,698,672 |
+------------------------------------+-----------+---------+-----------+
| Net cash from (used in) operating  | (474      | 841,    | (288      |
| activities                         | ,435,340) | 874,707 | ,074,446) |
+------------------------------------+-----------+---------+-----------+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF CASH FLOWS (Continue)

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

  ------------------------------------ ----------------- --------------- ---------------
  Consolidated                         2000              2001            2002

  Cash flows from investing activities                                   

  Decrease (increase) in long-term     16,574,436        (231,927,275)   68,055,231
  investment                                                             

  Increase in investments in           (2,698,325,082)   -               -
  subsidiary and associated companies                                    

  Increase (decrease) in loans and     214,009,977       (186,648,329)   (22,176,008)
  advances from related companies                                        

  (Increase) decrease in accrued       -                 (46,856,326)    46,856,326
  interest due from related company                                      

  Cash paid for purchase of fixed      (138,201,760)     (28,449,756)    (108,027,368)
  assets                                                                 

  Cash received from disposals of      4,941,140         7,915,642       4,066,425
  fixed assets                                                           

  Cash paid for purchase of share from -                 (49,538,010)    -
  minority interest                                                      

  Net cash used in investing           (2,601,001,289)   (535,504,054)   (11,225,394)
  activities                                                             

  Cash flows from financing activities                                   

  Decrease in foreign borrowings       1,433,776,150     (174,048,124)   (590,179,315)

  Cash received from share capital     -                 1,226,881       982,581,746
  increase                                                               

  Dividend paid to minority interest   (8,750,000)       (7,500,000)     -

  Share subscription received in       -                 -               1,000
  advance                                                                

  Increase in minority interest        -                 -               4,897,704

  Net cash from (used in) financing    1,425,026,150     (180,321,243)   397,301,135
  activities                                                             

  TRANSLATION ADJUSTMENT               113,937,222       -               -

  NET INCREASE IN CASH AND CASH        (1,536,473,257)   126,049,410     98,001,295
  EQUIVALENTS                                                            

  CASH AND CASH EQUIVALENTS AS AT 1    1,717,916,933     181,443,676     307,493,086
  JANUARY                                                                

  CASH AND CASH EQUIVALENTS AS AT 31   181,443,676       307,493,086     405,494,381
  DECEMBER                                                               

  Supplemental cash flows                                                
  information:-                                                          

  Cash paid during the year for:-                                        

  Interest expenses                    61,579,576        68,175,962      24,877,294

  Corporate income tax                 69,854,108        21,490,210      27,466,759

  Non-cash transaction:-                                                 

  Sales of investment in associated    -                 2,883,518,153   -
  companies in consideration for bonds                                   

  Transfer investment in associated    -                 27,282,120      -
  companies to long-term investment                                      

  Amortised goodwill and deferred      -                 23,557,319      -
  expenses from investments in                                           
  subsidiary and associated companies                                    

  Write-off securities business        -                 2,538,880,689   -
  receivables                                                            
  ------------------------------------ ----------------- --------------- ---------------

 

(C) Ratio (Consolidated) as of year 2000, 2001 and 2002

  ------------------------------------ ------------ ---------- ------------
  Consolidated                         2000         2001       2002

  Profitability Ratio                                          

  Gross profit margin (%)              81.93%       84.68%     94.88%

  Net profit margin (%)                7.66%        3.11%      37.63%

  Return on equity (%)                 1.17%        0.40%      8.35%

  Return on investment (%)             1.83%        7.72%      10.64%

  Efficiency Ratio                                             

  Return on assets (%)                 0.94%        0.30%      6.54%

  Assets turnover (times)              0.12         0.09       0.17

  Financial Ratio                                              

  Liquid assets to loan (times)        1.44         1.90       3.57

  Earning revenue to loans (times)     2.24         4.69       8.53

  Liquid assets to total assets (%)    27.59%       28.07%     23.29%

  Earning assets to total assets (%)   43.07%       69.29%     55.68%

  Debt to equity (times)               0.34         0.36       0.21

  Dividend payment (%)                 0%           0%         0%

  Other ratios                                                 

  Securities investment to total       33.48%       61.28%     65.85%
  assets (%)                                                   

  NCR to net liquid assets (SEC        -            -          -
  requirement)                                                 
  ------------------------------------ ------------ ---------- ------------

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

BALANCE SHEETS

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+-----------------------------+-------+----+--------+----+--------+----+
| Company Only                | 2000  | %  | 2001   | %  | 2002   | %  |
+-----------------------------+-------+----+--------+----+--------+----+
| Assets                      |       |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Cash and deposits at        | 1     | 2% | 297,2  | 5% | 384,5  | 5% |
| financial institution       | 11,97 |    | 80,326 |    | 22,691 |    |
|                             | 2,640 |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Loan to financial           | 9     | 1  | 1      | 1  | 650,0  | 8% |
| institutions                | 77,86 | 7% | ,270,9 | 9% | 00,000 |    |
|                             | 8,849 |    | 12,329 |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Investment                  |       |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Trading securities          | 1,2   | 2  | 765,4  | 1  | 1      | 1  |
|                             | 09,32 | 1% | 67,361 | 2% | ,397,1 | 7% |
|                             | 2,910 |    |        |    | 72,884 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Av                          | -     | -  | -      | -  | -      | -  |
| ailable-for-sale securities |       |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Securities held for sale    | -     | -  | -      | -  | -      | -  |
+-----------------------------+-------+----+--------+----+--------+----+
| Debt s                      | 1,2   | 2  | 695,5  | 1  | 1      | 1  |
| ecurities due within 1 year | 32,52 | 1% | 09,500 | 1% | ,119,8 | 4% |
|                             | 5,654 |    |        |    | 57,983 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Other securities            | 47,42 | 1% | 37,1   | 0% | 36,2   | 0% |
|                             | 3,826 |    | 48,468 |    | 85,274 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Held-to-maturity securities | -     | -  | 65,0   | 1% | -      | -  |
|                             |       |    | 00,000 |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Net investment              | 2,4   | 4  | 1      | 2  | 2      | 3  |
|                             | 89,27 | 3% | ,563,1 | 4% | ,553,3 | 2% |
|                             | 2,390 |    | 25,329 |    | 16,141 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Investment in subsidiary    | 1,5   | 2  | 2      | 3  | 2      | 3  |
| companies                   | 29,20 | 7% | ,351,0 | 6% | ,787,2 | 5% |
|                             | 4,736 |    | 97,054 |    | 63,971 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Trading transaction with    | 2     | 0% | 14,9   | 0% | 65,0   | 1% |
| securities companies        | 9,309 |    | 24,604 |    | 96,926 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Securities business         |       |    |        |    |        |    |
| receivables and accrued     |       |    |        |    |        |    |
| interest receivables        |       |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Secu                        | 2,8   | 5  | 908,9  | 1  | 1      | 1  |
| rities business receivables | 78,60 | 0% | 86,957 | 4% | ,361,0 | 7% |
|                             | 7,015 |    |        |    | 15,559 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Accrued interest            | 97,76 | 2% | 5,358  | 0% | 17,6   | 0% |
| receivables                 | 4,802 |    |        |    | 59,182 |    |
+-----------------------------+-------+----+--------+----+--------+----+
|   Total securities business | 2,9   | 5  | 908,9  | 1  | 1      | 1  |
|   receivables and accrued   | 76,37 | 2% | 92,315 | 4% | ,378,6 | 7% |
|   interest receivables      | 1,817 |    |        |    | 74,741 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Less: Allowance for         | (2,74 | -4 | (      | -  | (      | -  |
| doubtful accounts           | 0,240 | 8% | 189,68 | 3% | 248,65 | 3% |
|                             | ,000) |    | 8,198) |    | 3,628) |    |
+-----------------------------+-------+----+--------+----+--------+----+
|   Net securities business   | 2     | 4% | 719,3  | 1  | 1      | 1  |
|   receivables and accrued   | 36,13 |    | 04,117 | 1% | ,130,0 | 4% |
|   interest receivables      | 1,817 |    |        |    | 21,113 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| ACCRUED INTEREST DUE FROM   | -     | -  | -      | -  | -      | -  |
| RELATED COMPANY             |       |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Property, p                 | 1     | 3% | 154,2  | 2% | 182,4  | 2% |
| remises and equipment – net | 93,08 |    | 38,913 |    | 52,325 |    |
|                             | 1,111 |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Property foreclosed, net    | 47,27 | 1% | 46,4   | 1% | 67,0   | 1% |
|                             | 4,883 |    | 35,040 |    | 91,195 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Deferred stock exchange     | 55,83 | 1% | 45,8   | 1% | 35,8   | 0% |
| membership fees, net        | 3,333 |    | 33,333 |    | 33,333 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Goodwill                    | -     | -  | -      | -  | -      | -  |
+-----------------------------+-------+----+--------+----+--------+----+
| Other assets                | 92,95 | 2% | 60,1   | 1% | 152,2  | 2% |
|                             | 8,337 |    | 56,730 |    | 17,924 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Total assets                | 5,7   | 10 | 6      | 10 | 8      | 10 |
|                             | 33,62 | 0% | ,523,3 | 0% | ,007,8 | 0% |
|                             | 7,405 |    | 07,775 |    | 15,619 |    |
+-----------------------------+-------+----+--------+----+--------+----+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

BALANCE SHEETS (Continue)

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+-----------------------------+-------+----+--------+----+--------+----+
| Company Only                | 2000  | %  | 2001   | %  | 2002   | %  |
+-----------------------------+-------+----+--------+----+--------+----+
| LIABILITI                   |       |    |        |    |        |    |
| ES AND SHAREHOLDERS’ EQUITY |       |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Foreign borrowings          | -     | -  | -      | -  | -      | -  |
+-----------------------------+-------+----+--------+----+--------+----+
| Trading transaction with    | 43,27 | 1% | 185,5  | 3% | 14,6   | 0% |
| securities companies        | 6,728 |    | 75,294 |    | 72,640 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Securities business payable | 91,67 | 2% | 570,6  | 9% | 702,1  | 9% |
|                             | 7,154 |    | 50,765 |    | 75,965 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Loans and advance from      | -     | -  | 4,1    | 0% | 6,5    | 0% |
| related companies           |       |    | 48,992 |    | 92,440 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Other liabilities           | 83,92 | 1% | 101,3  | 1% | 163,2  | 2% |
|                             | 8,835 |    | 21,184 |    | 19,155 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Total liabilities           | 2     | 4% | 861,6  | 1  | 886,6  | 1  |
|                             | 18,88 |    | 96,235 | 3% | 60,200 | 1% |
|                             | 2,717 |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| SHAREHOLDERS’ EQUITY        |       |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Share Registered capital    | 59,0  |    | 37     |    | 37     |    |
|                             | 69,34 |    | ,069,3 |    | ,069,3 |    |
|                             | 3,690 |    | 43,690 |    | 43,690 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Share paid-up capital       | 14,9  | 26 | 14     | 22 | 17     | 21 |
|                             | 30,53 | 0% | ,933,5 | 9% | ,332,5 | 6% |
|                             | 1,370 |    | 26,860 |    | 48,630 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Share subscription received | -     | -  | -      | -  | 1,000  | 0% |
| in advance                  |       |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Premium on common stock     | -     | -  | 7      | 11 | 7      | 9  |
|                             |       |    | ,678,7 | 8% | ,678,7 | 6% |
|                             |       |    | 97,399 |    | 97,399 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Discount on common stock    | (2,01 | -3 | (9,    | -  | (11,   | -  |
|                             | 9,391 | 5% | 699,95 | 14 | 116,39 | 13 |
|                             | ,979) |    | 7,987) | 9% | 8,011) | 9% |
+-----------------------------+-------+----+--------+----+--------+----+
| Premium from unexercised    | 1     | 2% | 101,9  | 2% | 101,9  | 1% |
| warrants                    | 01,92 |    | 22,580 |    | 22,580 |    |
|                             | 2,580 |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Revaluation surplus         | (     | 0% | 3      | 0% | -      | -  |
| (deficit) in investment     | 3,118 |    | 29,609 |    |        |    |
|                             | ,615) |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Translation adjustment      | 1     | 2% | 233,7  | 3% | 177,0  | 3% |
|                             | 13,93 |    | 21,761 |    | 04,436 |    |
|                             | 7,222 |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Retained earnings           | 1     | 2% | 117,7  | 2% | 117,7  | 2% |
| appropriated – statutory    | 17,76 |    | 68,370 |    | 68,370 |    |
| reserve                     | 8,370 |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Retained earnings           | 3     | 6% | 350,2  | 5% | 350,2  | 4% |
| appropriated – general      | 50,20 |    | 00,000 |    | 00,000 |    |
| reserve                     | 0,000 |    |        |    |        |    |
+-----------------------------+-------+----+--------+----+--------+----+
| Retained earnings           | (8,07 | -  | (8,    | -  | (7,    | -9 |
| unappropriated deficit)     | 7,104 | 14 | 054,69 | 12 | 520,68 | 4% |
|                             | ,260) | 1% | 7,052) | 3% | 8,985) |    |
+-----------------------------+-------+----+--------+----+--------+----+
| EQUITY ATTRIBUTABLE TO      | 5,5   | 9  | 5      | 8  | 7      | 8  |
| COMPANY’S SHAREHOLDERS      | 14,74 | 6% | ,661,6 | 7% | ,121,1 | 9% |
|                             | 4,688 |    | 11,540 |    | 55,419 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| MINORITY INTEREST           | -     | -  | -      | -  | -      | -  |
+-----------------------------+-------+----+--------+----+--------+----+
| TOTAL SHAREHOLDERS’ EQUITY  | 5,5   | 9  | 5      | 8  | 7      | 8  |
|                             | 14,74 | 6% | ,661,6 | 7% | ,121,1 | 9% |
|                             | 4,688 |    | 11,540 |    | 55,419 |    |
+-----------------------------+-------+----+--------+----+--------+----+
| TOTAL LIABILITY AND         | 5,7   | 10 | 6      | 10 | 8      | 10 |
| SHAREHOLDERS’ EQUITY        | 33,62 | 0% | ,523,3 | 0% | ,007,8 | 0% |
|                             | 7,405 |    | 07,775 |    | 15,619 |    |
+-----------------------------+-------+----+--------+----+--------+----+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

EARNINGS STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+-----------------------------+-------+---+-------+---+--------+----+
| Company Only                | 2000  | % | 2001  | % | 2002   | %  |
+-----------------------------+-------+---+-------+---+--------+----+
| Securities business income  |       |   |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Brokerage fee               | 3     | 5 | 2     | 4 | 713,6  | 5  |
|                             | 56,62 | 4 | 33,65 | 1 | 56,104 | 6% |
|                             | 0,756 | % | 1,630 | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Fee and service income      | 55,23 | 8 | 7,92  | 1 | 12,7   | 1% |
|                             | 5,692 | % | 0,457 | % | 82,296 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Gain (loss) on trading in   | (12   | - | 18,21 | 4 | 262,6  | 2  |
| securities                  | 5,190 | 1 | 1,332 | % | 15,022 | 1% |
|                             | ,003) | 9 |       |   |        |    |
|                             |       | % |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Interest and dividends      | 1     | 2 | 1     | 1 | 104,9  | 8% |
|                             | 60,52 | 4 | 10,30 | 9 | 16,800 |    |
|                             | 0,832 | % | 7,577 | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Interest on margin loans    | 42,67 | 7 | 18,93 | 3 | 58,7   | 4% |
|                             | 2,194 | % | 2,538 | % | 60,788 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Total                       | 4     | 7 | 3     | 6 | 1      | 9  |
|  securities business income | 89,85 | 4 | 89,02 | 8 | ,152,7 | 0% |
|                             | 9,471 | % | 3,534 | % | 31,010 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| EXPENSES ON BORROWINGS      | 1,50  | 0 | 1,02  | 0 | 2,5    | 0% |
|                             | 1,337 | % | 4,904 | % | 03,618 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| FEE AND SERVICE EXPENSES    | 40,38 | 6 | 38,06 | 7 | 50,7   | 4% |
|                             | 3,739 | % | 2,790 | % | 43,786 |    |
+-----------------------------+-------+---+-------+---+--------+----+
|  Net                        | 4     | 6 | 3     | 6 | 1      | 8  |
|  securities business income | 47,97 | 8 | 49,93 | 1 | ,099,4 | 6% |
|                             | 4,395 | % | 5,840 | % | 83,606 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Reversal of bad debt and    | (2    | - | 6,96  | 2 | (49,29 | -  |
| doubtful accounts(bad debts | 5,724 | 4 | 2,423 | % | 1,268) | 4% |
| and doubtful accounts)      | ,345) | % |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
|   Net securities business   | 4     | 6 | 3     | 6 | 1      | 8  |
|   income after bad debt and | 22,25 | 4 | 56,89 | 3 | ,050,1 | 2% |
|   doubtful accounts         | 0,050 | % | 8,263 | % | 92,338 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Share of profitof           | 1     | 2 | 1     | 3 | 202,4  | 1  |
| subsidiary & associated     | 59,70 | 4 | 84,21 | 2 | 13,851 | 6% |
| companies                   | 1,173 | % | 6,052 | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| GAIN ON DISPOSAL OF         | -     | - | -     | - | -      | -  |
| INVESTMENT IN ASSOCIATED    |       |   |       |   |        |    |
| COMPANIES                   |       |   |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| GAIN ON EXCHANGE RATE       | 25,79 | 4 | 91    | 0 | -      | -  |
|                             | 4,788 | % | 9,224 | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| OTHER INCOME                | 50,44 | 8 | 28,97 | 5 | 23,0   | 2% |
|                             | 3,612 | % | 4,576 | % | 59,443 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Total revenue               | 6     | 1 | 5     | 1 | 1      | 10 |
|                             | 58,18 | 0 | 71,00 | 0 | ,275,6 | 0% |
|                             | 9,623 | 0 | 8,115 | 0 | 65,632 |    |
|                             |       | % |       | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| OPERATING EXPENSES          |       |   |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Personnel expenses          | 3     | 5 | 3     | 5 | 478,1  | 3  |
|                             | 28,95 | 0 | 04,55 | 4 | 32,260 | 7% |
|                             | 3,381 | % | 8,485 | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Premises and equipment      | 1     | 1 | 1     | 2 | 150,1  | 1  |
| expenses                    | 07,88 | 6 | 33,83 | 3 | 40,949 | 2% |
|                             | 7,794 | % | 6,287 | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Taxes and duties            | 15,41 | 2 | 7,10  | 1 | 10,2   | 1% |
|                             | 6,746 | % | 5,685 | % | 77,901 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Directors’ remuneration     | 4,19  | 1 | 4,29  | 1 | 3,8    | 0% |
|                             | 1,500 | % | 8,333 | % | 60,000 |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Other expenses              | 1     | 2 | 98,80 | 1 | 99,2   | 8% |
|                             | 38,01 | 1 | 2,117 | 7 | 46,455 |    |
|                             | 6,218 | % |       | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Total operating expenses    | 5     | 9 | 5     | 9 | 741,6  | 5  |
|                             | 94,46 | 0 | 48,60 | 6 | 57,565 | 8% |
|                             | 5,639 | % | 0,907 | % |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| EARNINGS BEFORE INCOME TAX  | 63,72 | 1 | 22,40 | 4 | 534,0  | 4  |
|                             | 3,984 | 0 | 7,208 | % | 08,067 | 2% |
|                             |       | % |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| CORPORATE INCOME TAX        | -     | - | -     | - | -      | -  |
+-----------------------------+-------+---+-------+---+--------+----+
| NET EARNINGS FOR THE YEAR   | 63,72 | 1 | 22,40 | 4 | 534,0  | 4  |
|                             | 3,984 | 0 | 7,208 | % | 08,067 | 2% |
|                             |       | % |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Basic earnings per share,   | 0.04  |   | 0.02  |   | 0.33   |    |
| net earnings                |       |   |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+
| Diluted earning per share,  | 0.04  |   | 0.01  |   | 0.32   |    |
| net earnings                |       |   |       |   |        |    |
+-----------------------------+-------+---+-------+---+--------+----+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF RETAINED EARNINGS

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+--------------------------------+------------+-----------+------------+
| Company Only                   | 2000       | 2001      | 2002       |
+--------------------------------+------------+-----------+------------+
| RETAINED EARNINGS –            |            |           |            |
| UNAPPROPRIATED:                |            |           |            |
+--------------------------------+------------+-----------+------------+
| Balance – beginning of the     | (8,14      | (8,077    | (8,05      |
| year (deficit)                 | 0,828,244) | ,104,260) | 4,697,052) |
+--------------------------------+------------+-----------+------------+
| Net earning for the year       | 63,723,984 |   2       | 5          |
|                                |            | 2,407,208 | 34,008,067 |
+--------------------------------+------------+-----------+------------+
| Balance – ending of the year   | (8,07      | (8,054    | (7,52      |
| (deficit)                      | 7,104,260) | ,697,052) | 0,688,985) |
+--------------------------------+------------+-----------+------------+
| RETAINED EARNINGS –            |            |           |            |
| APPROPRIATED:                  |            |           |            |
+--------------------------------+------------+-----------+------------+
| Statutory reserve              | 1          | 11        | 1          |
|                                | 17,768,370 | 7,768,370 | 17,768,370 |
+--------------------------------+------------+-----------+------------+
| General reserve                | 3          | 35        | 3          |
|                                | 50,200,000 | 0,200,000 | 50,200,000 |
+--------------------------------+------------+-----------+------------+
| Total retained earnings –      | 4          | 46        | 4          |
| appropriated                   | 67,968,370 | 7,968,370 | 67,968,370 |
+--------------------------------+------------+-----------+------------+
| TOTAL RETAINED EARINGS         | (7,60      | (7,586    | (7,05      |
| (deficit)                      | 9,135,890) | ,728,682) | 2,720,615) |
+--------------------------------+------------+-----------+------------+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+---------------------------------+-----------+-----------+-----------+
| Company Only                    | 2000      | 2001      | 2002      |
+---------------------------------+-----------+-----------+-----------+
| ORDINARY SHARES                 |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | 14,93     | 14,93     | 14,93     |
|                                 | 0,531,370 | 0,531,370 | 3,526,860 |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | -         | 2,995,490 | 2,39      |
|                                 |           |           | 9,021,770 |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | 14,93     | 14,93     | 17,33     |
|                                 | 0,531,370 | 3,526,860 | 2,548,630 |
+---------------------------------+-----------+-----------+-----------+
| WARRANTS                        |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | 10        | -         | -         |
|                                 | 1,922,580 |           |           |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | (101      | -         | -         |
|                                 | ,922,580) |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | -         | -         | -         |
+---------------------------------+-----------+-----------+-----------+
| SHARE SUBSCRIPTIONS RECEIVED IN |           |           |           |
| ADVANCE                         |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | -         | -         | -         |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | -         | -         | 1,000     |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | -         | -         | 1,000     |
+---------------------------------+-----------+-----------+-----------+
| PREMIUM ON COMMON STOCKS        |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year |   (2,019  | 7,67      | 7,67      |
|                                 | ,391,979) | 8,797,399 | 8,797,399 |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | -         | -         | -         |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       |   (2,019  | 7,67      | 7,67      |
|                                 | ,391,979) | 8,797,399 | 8,797,399 |
+---------------------------------+-----------+-----------+-----------+
| DISCOUNT ON COMMON STOCKS       |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | -         | (9,698    | (9,699    |
|                                 |           | ,189,378) | ,957,987) |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | -         | (1        | (1,416    |
|                                 |           | ,768,609) | ,440,024) |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | -         | (9,699    | (11,116   |
|                                 |           | ,957,987) | ,398,011) |
+---------------------------------+-----------+-----------+-----------+
| PREMIUM FROM UNEXERCISED        |           |           |           |
| WARRANTS                        |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | -         | 10        | 10        |
|                                 |           | 1,922,580 | 1,922,580 |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | 10        | -         | -         |
|                                 | 1,922,580 |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | 10        | 10        | 10        |
|                                 | 1,922,580 | 1,922,580 | 1,922,580 |
+---------------------------------+-----------+-----------+-----------+
| REVALUATION SURPLUS IN          |           |           |           |
| INVESTMENTS (DEFICIT)           |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | (8        | (3        | 329,609   |
|                                 | ,938,456) | ,118,615) |           |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | (3        | -         | -         |
|                                 | ,118,615) |           |           |
+---------------------------------+-----------+-----------+-----------+
| DECREASE DURING THE YEAR        | 8,938,456 | 3,448,224 | (329,609) |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | (3        | 329,609   | -         |
|                                 | ,118,615) |           |           |
+---------------------------------+-----------+-----------+-----------+
| TRANSLATION ADJUSTMENTS         |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – beginning of the year | -         | 11        | 23        |
|                                 |           | 3,937,222 | 3,721,761 |
+---------------------------------+-----------+-----------+-----------+
| INCREASE DURING THE YEAR        | 11        | 11        | (56       |
|                                 | 3,937,222 | 9,784,539 | ,717,325) |
+---------------------------------+-----------+-----------+-----------+
| BALANCE – end of the year       | 11        | 23        | 17        |
|                                 | 3,937,222 | 3,721,761 | 7,004,436 |
+---------------------------------+-----------+-----------+-----------+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF SHAREHOLDERS’ EQUITY (Continue)

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

  ---------------------------------- ----------------- ----------------- -----------------
  Company Only                       2000              2001              2002

  RATAINED EARNINGS                                                      

  APPROPRIATED                                                           

  Statutory reserve                                                      

  BALANCE – beginning of the year    117,768,370       117,768,370       117,768,370

  BALANCE – end of the year          117,768,370       117,768,370       117,768,370

  General reserve                                                        

  BALANCE – beginning of the year    350,200,000       350,200,000       350,200,000

  BALANCE – end of the year          350,200,000       350,200,000       350,200,000

  UNAPPROPRIATED                                                         

  BALANCE – beginning of the year    (8,140,828,244)   (8,077,104,260)   (8,054,697,052)

  INCREASE DURING THE YEAR           63,723,984        22,407,208        534,008,067

  BALANCE – end of the year          (8,077,104,260)   (8,054,697,052)   (7,520,688,985)
  (deficit)                                                              

  MINORITY INTEREST                                                      

  BALANCE – beginning of the year    -                 -                 -

  INCREASE DURING THE YEAR           -                 -                 -

  DECREASE DURING THE YEAR           -                 -                 -

  BALANCE – end of the year          -                 -                 -

  TOTAL SHAREHOLDERS’ EQUITY         5,514,744,688     5,661,611,540     7,121,155,419
  ---------------------------------- ----------------- ----------------- -----------------

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+------------------------------------+-----------+---------+-----------+
| Company Only                       | 2000      | 2001    | 2002      |
+------------------------------------+-----------+---------+-----------+
| Cash flows from operating          |           |         |           |
| activities                         |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Net earnings                       | 6         | 22,     | 53        |
|                                    | 3,723,984 | 407,208 | 4,008,067 |
+------------------------------------+-----------+---------+-----------+
| Adjustments to reconcile net       |           |         |           |
| earnings to net cash provided by   |           |         |           |
| (paid from) operating activities:- |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Earnings in respect of minority    | (159      | (184,2  | (202      |
| interest                           | ,701,173) | 16,052) | ,413,851) |
+------------------------------------+-----------+---------+-----------+
| Share of profit of subsidiary and  | -         | -       | -         |
| associated companies               |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Depreciation and amortisation      | 5         | 66,     | 6         |
|                                    | 9,679,600 | 821,247 | 0,993,296 |
+------------------------------------+-----------+---------+-----------+
| Bad debts and doubtful accounts    | 2         | (6,9    | 4         |
| (reversal)                         | 5,724,345 | 62,423) | 9,291,268 |
+------------------------------------+-----------+---------+-----------+
| Gain on evaluation of investments  | -         | (33,6   | (67       |
|                                    |           | 93,544) | ,671,645) |
+------------------------------------+-----------+---------+-----------+
| Loss on evaluation of investments  | 16        | -       | -         |
|                                    | 5,826,767 |         |           |
+------------------------------------+-----------+---------+-----------+
| Loss on disposals of assets        | 7,425,700 | 1,      | 4,424,108 |
|                                    |           | 655,250 |           |
+------------------------------------+-----------+---------+-----------+
| Loss on disposals of property      | (8        |         | -         |
| foreclosed                         | ,400,000) | 400,717 |           |
+------------------------------------+-----------+---------+-----------+
| Increase of goodwill               | 1,082,924 | -       | -         |
+------------------------------------+-----------+---------+-----------+
| Decrease (increase) in accrued     | 2         | 108,    | (20       |
| interest receivables and dividend  | 6,209,810 | 974,079 | ,782,264) |
| income                             |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Decrease (increase) in accrued     | 1         | 4,      | (2        |
| income                             | 3,854,847 | 242,495 | ,422,046) |
+------------------------------------+-----------+---------+-----------+
| Increase in interest payable       | -         | 12,     | 1         |
|                                    |           | 578,879 | 2,166,976 |
+------------------------------------+-----------+---------+-----------+
| Increase in accrued expenses       | (236      | -       | -         |
|                                    | ,249,247) |         |           |
+------------------------------------+-----------+---------+-----------+
| Earnings (loss) from operating     | (40       | (7,7    | 36        |
| activities before changes in       | ,822,443) | 92,144) | 7,593,909 |
| operating assets and liabilities   |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Decrease (increase) in operating   |           |         |           |
| assets                             |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Loans to financial institution     | 25        | (292,4  | 62        |
|                                    | 3,871,047 | 91,767) | 0,000,000 |
+------------------------------------+-----------+---------+-----------+
| Negotiable certificate of deposit  | 8         | -       | -         |
|                                    | 1,654,969 |         |           |
+------------------------------------+-----------+---------+-----------+
| Short-term investment              | (713      | 1,014,  | (999      |
|                                    | ,567,955) | 565,247 | ,904,008) |
+------------------------------------+-----------+---------+-----------+
| Trading transactions with          | 1,838,249 | (14,8   | (50       |
| securities companies               |           | 95,295) | ,172,322) |
+------------------------------------+-----------+---------+-----------+
| Securities business receivables    | 42        | (569,2  | (429      |
|                                    | 1,177,926 | 60,181) | ,661,847) |
+------------------------------------+-----------+---------+-----------+
| Cash received from disposals of    | 1         | 4,      | -         |
| property foreclosed                | 7,600,000 | 248,566 |           |
+------------------------------------+-----------+---------+-----------+
| Property foreclosed from loan      | (29       | (4,8    | (10       |
| settlement – net                   | ,288,000) | 80,640) | ,200,000) |
+------------------------------------+-----------+---------+-----------+
| Other assets                       | (5        | (3,5    | 7,085,183 |
|                                    | ,644,774) | 96,033) |           |
+------------------------------------+-----------+---------+-----------+
| Increase (decrease) in operating   |           |         |           |
| liabilities                        |           |         |           |
+------------------------------------+-----------+---------+-----------+
| Domestic borrowings                | 89,846    | -       |           |
+------------------------------------+-----------+---------+-----------+
| Trading transactions with          | (19       | 142,    | (170      |
| securities companies               | ,123,879) | 298,566 | ,902,654) |
+------------------------------------+-----------+---------+-----------+
| Securities business payable        | (321      | 478,    | 13        |
|                                    | ,356,076) | 973,611 | 1,525,200 |
+------------------------------------+-----------+---------+-----------+
| Other liabilities                  | (58       | 4,      | 4         |
|                                    | ,916,813) | 813,469 | 9,730,996 |
+------------------------------------+-----------+---------+-----------+
| Net cash from (used in) operating  | (412      | 751,    | (484      |
| activities                         | ,487,893) | 983,399 | ,905,543) |
+------------------------------------+-----------+---------+-----------+

KGI SECURITIES (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY
COMPANIES

STATEMENTS OF CASH FLOWS (Continue)

FOR THE YEARS ENDED 31 DECEMBER 2000, 2001 AND 2002

+------------------------------------+----------+---------+-----------+
| Company Only                       | 2000     | 2001    | 2002      |
+------------------------------------+----------+---------+-----------+
| Cash flows from investing          |          |         |           |
| activities                         |          |         |           |
+------------------------------------+----------+---------+-----------+
| Decrease (increase) in long-term   | 29       | (51,2   | 6         |
| investment                         | ,754,775 | 76,418) | 8,384,841 |
+------------------------------------+----------+---------+-----------+
| Increase in investments in         | (1,121,  | (565,9  | (425      |
| subsidiary and associated          | 940,835) | 75,000) | ,800,000) |
| companies                          |          |         |           |
+------------------------------------+----------+---------+-----------+
|   Dividend received from           | 26       | 62,     | 3         |
|   subsidiary company               | ,250,000 | 500,000 | 0,000,000 |
+------------------------------------+----------+---------+-----------+
|   Increase (decrease) in loans and | -        | 4,      | 2,443,448 |
|   advances from related companies  |          | 148,992 |           |
+------------------------------------+----------+---------+-----------+
|   Cash paid for purchase of fixed  | (126,    | (25,1   | (88       |
|   assets                           | 898,267) | 86,029) | ,290,073) |
+------------------------------------+----------+---------+-----------+
|   Cash received from disposals of  | 3        | 7,      | 2,826,946 |
|   fixed assets                     | ,624,318 | 885,861 |           |
+------------------------------------+----------+---------+-----------+
|   Net cash used in investing       | (1,189,  | (567,9  | (410      |
|   activities                       | 210,009) | 02,594) | ,434,838) |
+------------------------------------+----------+---------+-----------+
|                                    |          |         |           |
+------------------------------------+----------+---------+-----------+
| Cash flows from financing          |          |         |           |
| activities                         |          |         |           |
+------------------------------------+----------+---------+-----------+
| Decrease in foreign borrowings     | -        | -       | -         |
+------------------------------------+----------+---------+-----------+
| Cash received from share capital   | -        | 1,      | 98        |
| increase                           |          | 226,881 | 2,581,746 |
+------------------------------------+----------+---------+-----------+
| Share subscription received in     | -        | -       | 1,000     |
| advance                            |          |         |           |
+------------------------------------+----------+---------+-----------+
|   Net cash from (used in)          | -        | 1,      | 98        |
|   financing activities             |          | 226,881 | 2,582,746 |
+------------------------------------+----------+---------+-----------+
| NET INCREASE IN CASH AND CASH      | (1,601,  | 185,    | 8         |
| EQUIVALENTS                        | 697,902) | 307,686 | 7,242,365 |
+------------------------------------+----------+---------+-----------+
| CASH AND CASH EQUIVALENTS AS AT 1  | 1,713    | 111,    | 29        |
| JANUARY                            | ,670,542 | 972,640 | 7,280,326 |
+------------------------------------+----------+---------+-----------+
| CASH AND CASH EQUIVALENTS AS AT 31 | 111      | 297,    | 38        |
| DECEMBER                           | ,972,640 | 280,326 | 4,522,691 |
+------------------------------------+----------+---------+-----------+
|                                    |          |         |           |
+------------------------------------+----------+---------+-----------+
| Supplemental cash flows            |          |         |           |
| information:-                      |          |         |           |
+------------------------------------+----------+---------+-----------+
| Cash paid during the year for:-    |          |         |           |
+------------------------------------+----------+---------+-----------+
| Interest expenses                  | -        | 101,541 | 1,806,538 |
+------------------------------------+----------+---------+-----------+
| Corporate income tax               | 10       | 503,826 | 1,181,824 |
|                                    | ,681,965 |         |           |
+------------------------------------+----------+---------+-----------+
| Non-cash transaction:-             |          |         |           |
+------------------------------------+----------+---------+-----------+
| Sales of investment in associated  | -        | -       | -         |
| companies in consideration for     |          |         |           |
| bonds                              |          |         |           |
+------------------------------------+----------+---------+-----------+
| Transfer investment in associated  | -        | -       | -         |
| companies to long-term investment  |          |         |           |
+------------------------------------+----------+---------+-----------+
| Amortised goodwill and deferred    | -        | 23,     | -         |
| expenses from investments in       |          | 557,319 |           |
| subsidiary and associated          |          |         |           |
| companies                          |          |         |           |
+------------------------------------+----------+---------+-----------+
| Write-off of securities business   | -        | 2,538,  | -         |
| receivables                        |          | 880,689 |           |
+------------------------------------+----------+---------+-----------+

(C) Ratio (Company only) as of year 2000, 2001 and 2002

  ------------------------------------ ------------ ---------- ------------
  Company only                         2000         2001       2002

  Profitability Ratio                                          

  Gross profit margin (%)              91.45%       89.95%     95.38%

  Net profit margin (%)                9.68%        3.92%      41.86%

  Return on equity (%)                 1.18%        0.40%      8.36%

  Return on investment (%)             1.53%        6.34%      17.86%

  Efficiency Ratio                                             

  Return on assets (%)                 1.08%        0.37%      7.35%

  Assets turnover (times)              0.11         0.09       0.18

  Financial Ratio                                              

  Liquid assets to loan (times)        NA.          NA.        NA.

  Earning revenue to loans (times)     NA.          NA.        NA.

  Liquid assets to total assets (%)    32.27%       30.23%     22.90%

  Earning assets to total assets (%)   55.34%       32.40%     20.52%

  Debt to equity (times)               0.04         0.15       0.12

  Dividend payment (%)                 0%           0%         0%

  Other ratios                                                 

  Securities investment to total       43.42%       23.96%     31.89%
  assets (%)                                                   

  NCR to net liquid assets (SEC        674.62%      185.79%    497.53
  requirement)                                                 
  ------------------------------------ ------------ ---------- ------------

Management discussion & analysis (Consolidated financial statements as
of December 31, 2001)

Performance

  For the year 2002, the Company reported net profits of Bt534mon
  (equivalent to earnings per share of Bt0.33) an increase of 2,327%
  year on year. The Company’s market share increased from 5.11% in 2001
  to 7.56% in 2002, improving its ranking from no. 5 to no. 4. Details
  of the Company’s performance are as follows:

1) Security Business Income

The Company’s securities business income increased from Bt729mn in year
2001 to Bt1,518mn in year 2002, as follows:

1.1 Brokerage Fee

Brokerage fee increased from Bt234mn in year 2001 to Bt714mn in year
2002 (equivalent to a 205% increase) with the following factors:

  A) Market daily average turnover increased from Bt6.44bn in year 2001
  to Bt8.42bn in year 2002

  B) On 14 January 2002, The Stock Exchange of Thailand (SET) introduced
  a minimum brokerage commission rate of 0.25 percent for regular
  trading and 0.20 percent for internet trading. This was done in order
  to encourage members to focus more on the quality of services provided
  to clients especially research information. This resulted in higher
  brokerage fees earned by securities firms.

  C) The Company’s market share increased from 5.11% in year 2001 to
  7.56% in year 2002, ranking also improved from no. 5 in year 2001 to
  no. 4 in year 2002.

1.2 Fee and service income

In year 2002, the Company’s fee and service income was Bt193mn which
consisted of financial advisory fees, underwriting fees, securities
registrar fees, stock borrowing and lending fees and fee and service
income of One Asset Management, a subsidiary which is 97% held by the
Company.

1.3 Gain on Trading Securities

The Company gain from the increase in value of trading securities rose
from Bt18mn in 2001 to Bt263mn in 2002. This income comes mainly from
trading of government bonds, corporate bonds, equity securities, unit
trusts and promissory notes.

1.4 Interest and Dividend Income

The Company’s interest and dividend income increased from Bt261mn in
year 2001 to Bt291mn in year 2002. This income mainly comes from
investment in KGI Securities (Thailand) International Holdings Limited
(HOLDCO) and One Asset Management Co., Ltd. and secondly comes from
investment in government bonds, corporate bonds, equity securities

1.5 Interest from Margin Loans

The Company’s outstanding credit balance loans increased from Bt25mn at
the end of 2001 to Bt216mn at the end of 2002. The Company’s interest
from margin loans increased from Bt19mn during the year 2001 to Bt59mn
in 2002. The Company carefully controls and monitors credit balance
risk, and the Company believes that the risk of loss from these loans
has been minimized.

2) Securities Business Expenses

2.1 Expenses on Borrowings

The Company’s interest on borrowings decreased from Bt69mn in 2001 to
Bt24mn in year 2002. This interest was mainly paid by KGI Securities
(Thailand) International Holdings Limited (HOLDCO), the Company’s wholly
owned subsidiary. During 2002 HOLDCO repaid US$12.9mn of its outstanding
loans, thus reducing its interest burden.

2.2 Fee and Service Expenses

Out of the fee and service expenses totaling Bt54mn, Bt33mn came from
brokerage volume, Bt10mn came from amortization of underwriting fees,
Bt4mn came from fee of stock lending and borrowing transactions and
Bt7mn came from other fees and expenses.

3) Other Income

In year 2002, the Company’s other income totaled Bt28mn, consisting of
Bt17mn from bad debts already written off and Bt11mn from other sources.

4) Operating Expenses

The Company’s operating expenses increased from Bt654mn in 2001 to
Bt861mn in 2002. The increase came mainly from personnel expenses.
Personnel expenses increased from Bt373mn in 2001 to Bt551mn in 2002 due
to the fact that the Company ’s employees (on a consolidated basis)
increased from 494 persons at the end of 2001 to 529 persons at the end
of 2002. However, operating expenses for 2002 was only 61% of total
revenue , compared with 91% in 2001.

5) Profitability Ratio

In 2002, the Company’s profitability ratios improved significantly.
Gross profit margin was 95%, net profit margin was 38%, return on equity
was 8% and return on investment was 11%

  ------------------------------------ ------------ ---------- ------------
  Profitability Ratio                  2000         2001       2002

  Gross profit margin (%)              81.93%       84.68%     94.88%

  Net profit margin (%)                7.66%        3.11%      37.63%

  Return on equity (%)                 1.17%        0.40%      8.35%

  Return on investment (%)             1.83%        7.72%      10.64%
  ------------------------------------ ------------ ---------- ------------

Financial Status

1.  Assets

As of 31 December 2002, the Company’s consolidated balance sheet showed
Bt8,607mn of total assets which represents an increase of 11% compared
to the year before. Total assets comprises of the following:

Cash and deposits at financial institutions 6%

Loans to financial institutions 9%

Net investments 66%

Trading transactions with securities companies 1%

Net securities business receivables & accrued interest

receivables 13%

Property, premises and equipment, net 2%

Property foreclosed, net 1%

Goodwill 1%

Other assets 1%

Total assets 100%

1.1 Liquid Assets

As of 31 December 2002, the value of the Company’s liquid assets was
high, totaling Bt2,004mn (equivalent to 23% of total assets). These
liquid assets consist of Bt513mn in cash and deposits at financial
institutions, Bt254mn of call loans, Bt853mn of government securities
and Bt384mn of listed securities. In addition, the Company’s NCR was as
high at 497.5% (the SEC requires that the NCR must not be lower than
7%). Related ratios are as follows:

  ------------------------------------ ------------ ---------- ------------
                                       2000         2001       2002

  Liquid assets to loan (times)        1.44         1.90       3.57

  Liquid assets to total assets (%)    27.59%       28.07%     23.29%

  NCR to net liquid assets (SEC        674.62%      185.79%    497.53
  requirement)                                                 
  ------------------------------------ ------------ ---------- ------------

1.2 Cash flows

For 2002, the Company reported cash flows of Bt405mn, an increase of
Bt98mn from the year before, details of cash flows as follows:

  -------------------------------------------- --------------------------
                                               31 December 2002

  Cash flows from operating activities         

  - Earning (loss) from operating              580.91
  activities^(/1)                              

  - Decrease (increase) in operating assets    (876.31)

  - Increase (decrease) in operating           7.29
  liabilities                                  

  Cash flows from investing activities         (11.23)

  Cash flows from financing activities         397.30

  Net increase in cash and cash equivalent     98.00

  Cash and cash equivalent as at 1 January     307.49
  2002                                         

  Cash and cash equivalent as at 31 December   405.49
  2002                                         
  -------------------------------------------- --------------------------

Note: /1 Earning (loss) from operating activities consists of net
earnings and reconciliation adjustments

In 2002 the Company’s cash flows from operating activities were high at Bt580mn. The increase in operating assets came from an increase in short-term investments as well as an increase in loans and securities business receivables. These increases resulted from the expansion of the Company’s businesses. 

In 2002 the Company’s cash flow from financing activities was Bt397mn
this is due to the fact that during 2002 KGI Securities (Thailand)
International Holdings Limited (HOLDCO), the Company’s wholly owned
subsidiary, repaid loans of US$12.9mn. In addition, during year 2002,
the Company received the proceeds from exercise of warrant #3 and
warrant #4 totaling Bt980mn.

1.3 Quality of Assets

The Company’s asset quality is generally good. As of 31 December 2002,
the Company’s assets mainly included Bt254mn of call loans, Bt5,668mn of
investments in securities and Bt1,130mn of securities business
receivables. For assets in the form of investment in securities, the
Company has set up a committee to set investment policies. In addition,
the Company recognizes any reduction in the value of assets according to
normal accounting standards and SEC regulations.

To better manage assets in the form of securities business receivables,
the Company has set up risk management committee to be responsible for
evaluating and monitoring credit risk as well as the Company’s exposure
to single client and to single stock. Thus the Company believes that the
risk from both credit balance lending and default risk from cash
accounts can be minimized. Furthermore, the Company has made an
allowance for doubtful accounts in accordance with accounting standards
and SEC regulations. In 2002 the Company also set up a general provision
for additional loan losses of Bt20mn. In year 2002 the Company’s return
on assets was 6.54% and the Company’s return on investment was 11%.
Details of assets from year 2000 to 2002 are as follows:

  ------------------------------------ ------------ ---------- ------------
                                       2000         2001       2002

  Performing assets to loan (times)    2.57         5.96       12.56

  Performing assets to total assets    49.40%       87.92%     81.94%
  (%)                                                          

  Assets turnover (times)              0.12         0.09       0.17

  Return on assets (%)                 0.94%        0.30%      6.54%

  Return on investment (%)             1.83%        7.72%      10.64%
  ------------------------------------ ------------ ---------- ------------

2. Source of funds

2.1 Appropriateness of fund structure

The Company’s debt to equity ratio is good. As of 31 December 2002, the
Company’s debt to equity ratio was 0.21 times , total liabilities were
Bt1,480mn and total equity was Bt7,126mn.

2.2 Shareholders’ Equity

In 2002 shareholders’ equity increased by Bt1,464mn i.e. increased from
Bt5,662mn as of 31 December 2001 to Bt7,126mn as of 31 December 2002,
with the increase coming from:

A) Paid-up capital increased by Bt2,399.02mn from the exercise by
warrant holders of KGI warrant No.3. A total of 239,902,177 shares, at
par value of Bt10 were issued, and the Company’s paid-up capital
increased from Bt14,933,526,860 to Bt17,332,548,630.

B)  Discount on common stock increased by Bt1,416.44mn due to the issue
    of common shares at a price lower than par under terms and
    conditions of warrants in item A). Details of terms and conditions
    of warrant no. 3 and no. 4 can be seen in item 8 (1) B.)

C)  Accumulated retained loss decreased from Bt8,055mn to Bt7,521mn due
    to the fact that the Company’s net profit in year 2002 was Bt534mn

D)  Translation adjustment decreased by Bt56.72mn

3. Opinion Regarding Capital Restructuring

The Extraordinary General Meeting of Shareholders no. 1/2003 held on 9
January 2003 approved the capital reduction, a transfer of the Company’s
reserves to compensate for certain of its accumulated losses and capital
restructuring as follows:

1. Approved the reduction of the Company’s registered capital from Baht
37,069,343,690 (3,706,934,369 shares, at par value of Bt10) to Baht
30,732,477,230 (3,073,247,723 shares, at par value of Bt10) as a result
of the cancellation of an aggregate number of 633,686,646 unissued
ordinary shares, each with par value of Baht 10, previously reserved to
accommodate the exercise by the holders of Warrant #1, Warrant #2 and
Warrant #3 following the expiration of the said warrants. (The Company
registered this reduction of capital with Ministry of Commerce on 17
January 2003)

2.  Approved the transfer of the Company’s general reserves of
    Bt350,200,000; legal reserves of Bt117,768,370 and share premium
    reserves of Bt6,400,000,000; totaling Bt6,867,968,370 reserves to
    compensate for certain of its accumulated losses.

3.  Approved KGI Securities (Thailand) International Holdings Limited
    (HOLDCO), a Company’s wholly owned subsidiary, to sell the bonds
    issued by KGI International Holdings Limited (KGII) to KG
    Investments Holdings Limited (KGIH)

4. Approved the reduction of the Company’s (i) registered capital from
Baht 30,732,477,230 (3,073,247,723 shares, at par value of Bt10) to Baht
23,049,357,922.50 (3,073,247,723 shares, at par value of Bt7.50) and
(ii) paid-up capital from Baht 17,332,548,630 (1,733,254,863 shares, at
par value of Bt10) to Baht 12,999,411,472.50 (1,733,254,863 shares, at
par value of Bt7.50) (except in the case where holders of Warrant #4
exercise their rights before the register of capital reduction with
Ministry of Commerce which may cause a change in paid-up capital) by way
of a reduction of par value from Baht 10 to Baht 7.50 per share and a
subsequent return of Baht 2.50 per share to all the shareholders
proportionately to their respective shareholding.

In December 2002, a holder of warrant #4 exercised his right regarding
2,000 units at the ratio of 1 warrant to 0.10 common shares at the
exercise price of Bt5.00 to receive 200 common shares. As a result the
paid-up capital before capital reduction in item no. 4 changed to
Bt17,332,550,630 (1,733,255,063 share, at par value of Bt10.00) (The
Company registered the change with the Ministry of Commerce on 8 January
2003)

5. Acknowledged the formula for adjustment of the terms and conditions
of warrant#4 upon the capital reduction and return of capital. The
adjusted terms and condition will take effect on the first day the SET
posts the sign to determine the shareholder list who are entitled to
receive capital return.

The Company would like to clarify the reasons for capital reduction and
capital return as follows:

A) The Company has excess cash as a result of a previous raising of
capital when the Company planned to use that cash for business expansion
in the region. The Company no longer has this strategy, therefore, it
has excess cash.

B) Since the crisis, the Company has been unable to pay a dividend to
shareholders even though the Company’s performance has improved over the
past few years.

C) The Company’s equity was high compared to other securities firms in
Thailand. After the capital reduction and capital return, the Company’s
financial status and liquidity will still be healthy.

Given the reasons above, the Company decided that it is appropriate to
reduce capital and return capital to shareholders.

The funds to be used in the return of capital will come mainly from the
sale of bonds which has already been approved by the shareholders in
item no. 3 above and part of it will come from excess working capital.
After the reduction of capital and return of capital, the Company will
still have sufficient liquidity to operate its businesses and maintain
its NCR ratio at a level higher than SEC regulations require.

This capital reduction and return of capital was approved by the SEC on
14 February 2003 and no creditor objected the plan. The Company closed
the share register book to determine the shareholders entitled to
receive capital return on 17 March 2003 and registered the reduction of
capital with Ministry of Commerce on 21 March 2003. The new registered
capital is Bt23,049,357,922.50 (3,073,247,723 shares, at par value of
Bt7.50) and the new paid-up capital is Bt12,999,412,972.50
(1,733,255,063 shares, at par value of Bt7.50). The capital return will
be paid to all shareholders on 9 April 2003.