BUSINESS LINES

(1) TYPES OF BUSINESS

(A) Securities Broker

KGI Securities (Thailand) Public Company Limited, a member of the Stock
Exchange of Thailand (SET Broker seat No. 13), provides broking services
to both local and foreign investors and to both individual and
institutional investors. As of 15 March 2008, the Company has 15
branches locations throughout the country (see branches information in
page 79). The Company has experienced teams of marketing officers and
analysts to offer advisory services on both fundamental and technical
basis. Clients can access the trading information on a real time basis,
technical analysis, and other knowledge for investors on the Company’s
website, www.kgieworld.co.th, in order to support them in making
accurate and effective investment and trading decisions. In 2007, the
Company ranked No. 7 with a 4.18% equities brokerage market share.

Clients can place trading orders through marketing officers or internet
trading at www.kgieworld.co.th. The commission for trading orders
through marketing officers is 0.25% and the commission for internet
trading is only 0.15%-0.20%.

Internet Trading (E-Business)

KGI Securities (Thailand), one of Thailand’s leading securities
companies, provides Internet trading services and also Future online
trading services. Clients can see the real time information to follow up
the movement of price for 24 hours a day, 7 days a week, wherever they
are.

Our company also provides in-depth research for fundamental analysis and
technical analysis. The reports issued by our KGI’s research department
as a decision making tools for clients.

KGI provides the foremost high quality services which are fast and
accurate. The company also employed high technology enabling clients to
trade stock trading via mobile phone and Pocket PC.

Investors are being updated with various important information, they can
trade, get an updates about stock prices and check their portfolio
anywhere anytime online. The commission rates for trading online are low
at only 0.15% for Cash Deposit account and 0.20% for Non-deposit
account.

Our company aims at providing services with high level of customer
satisfaction. We continue to develop our internet trading service so
that it becomes even more convenient, efficient and secure for our
clients. Our E-business division cooperates closely with Settrade.com
Co., Ltd, a subsidiary of the SET, to develop Internet trading program
in order to facilitate our investors to access the trading via internet.
We also offer seminars and trainings for clients and investors every
three months. In these seminars, clients learn to use the internet
trading program to trade both equity and derivatives products. Our
object in these seminars is to demonstrate the ease and convenience of
internet trading to new clients or clients who never traded online
before.

If you have any enquiry, need additional information or would like to
open an Internet Trading account with our company, please visit our
website : www.kgieworld.co.th or contact our
E-business Division at Hotline : 02-631-0222 or email :
ebusiness@kgi.co.th

Account opening procedures

Both groups of clients who trading orders through marketing officers or
internet trading can open accounts with the Company by divided into 2
types of accounts, as follows:

(1) Cash Accounts:

    1.  Cash account is the account that client can trade by deposit
        collateral of 10% of the amount at which clients may transact
        the purchase, with compliance to the regulations of the SET.
        Clients have to pay the purchasing within the third business day
        following the date of purchase and the Company has to pay to the
        clients for the selling securities within the third business day
        following the date of selling.

  1.2 Cash Balance Account: The company will set the buying power of the
  client according to the amount of funds deposited by client. When the
  client sells, the money form selling will be kept in the client’s
  account for setting the new buying power.

  (2) Credit Balance Account: Clients can borrow money from the Company
  to purchase the securities by deposit money and/or other assets for
  collateral at least 50% or any percent that the SET required. The
  Company also acts as intermediate for clients, who want to borrow
  money from the Thailand Securities Finance Corporation (TSFC), with
  clients that trading with the Company’s account.

The following table shows breakdown by type of clients and type of
accounts for the past 3 years.

+-------------------+---------+----+----------+----+----------+-----+
| Trading Volume    | 2007    | %  | 2006     | %  | 2005     | %   |
|                   |         |    |          |    |          |     |
|                   | (Baht   |    | (Baht    |    | (Baht    |     |
|                   | M       |    | Million) |    | Million) |     |
|                   | illion) |    |          |    |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| SET *             | 17      |    | 1        |    | 1        |     |
|                   | ,435.95 |    | 6,393.67 |    | 6,600.71 |     |
+-------------------+---------+----+----------+----+----------+-----+
| The Company *     | 1       |    | 1,293.00 |    | 1,236.51 |     |
|                   | ,458.82 |    |          |    |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| The Company’s     | 4.18%   |    | 3.94%    |    | 3.72%    |     |
| market share (%)  |         |    |          |    |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| Breakdown by      |         |    |          |    |          |     |
| types of clients  |         |    |          |    |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| - The Company’s   | 459.91  | 3  | 197.46   | 1  | 122.11   | 9   |
| portfolio         |         | 1. |          | 5. |          | .88 |
|                   |         | 53 |          | 28 |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| - Fund            | 82.52   | 5. | 63.40    | 4. | 66.27    | 5   |
|                   |         | 66 |          | 90 |          | .36 |
+-------------------+---------+----+----------+----+----------+-----+
| - Retail client   | 839.89  | 5  | 936.80   | 7  | 915.20   | 74  |
|                   |         | 7. |          | 2. |          | .01 |
|                   |         | 57 |          | 45 |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| - Foreign client  | 76.50   | 5. | 95.34    | 7. | 132.93   | 10  |
|                   |         | 24 |          | 37 |          | .75 |
+-------------------+---------+----+----------+----+----------+-----+
| Total             | 1       | 10 | 1,293.00 | 10 | 1,236.51 | 100 |
|                   | ,458.82 | 0. |          | 0. |          | .00 |
|                   |         | 00 |          | 00 |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| Breakdown by      |         |    |          |    |          |     |
| types of account  |         |    |          |    |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| - Cash account    | 1       | 9  | 1,190.72 | 9  | 1,136.94 | 91  |
|                   | ,366.91 | 3. |          | 2. |          | .95 |
|                   |         | 70 |          | 09 |          |     |
+-------------------+---------+----+----------+----+----------+-----+
| - Credit balance  | 91.91   | 6. | 102.28   | 7. | 99.57    | 8   |
| account           |         | 30 |          | 91 |          | .05 |
+-------------------+---------+----+----------+----+----------+-----+
| Total             | 1       | 10 | 1,293.00 | 10 | 1,236.51 | 100 |
|                   | ,458.82 | 0. |          | 0. |          | .00 |
|                   |         | 00 |          | 00 |          |     |
+-------------------+---------+----+----------+----+----------+-----+

Note : * Trading volume referred to volume in both SET and MAI

Policy in accepting Clients

Clients are categorized as follow:

1.  Individuals (locals and foreigners).

2.  Juristic persons:

-   Local financial institutions including finance and securities
    companies, commercial banks, finance companies, insurance companies,
    etc.

-   Foreign financial institutions.

-   Juristic persons registered in Thailand that are limited
    partnerships or limited companies.

-   Juristic persons registered abroad.

For individuals, the Company will consider their occupation, place of
residence, years of work, revenues, financial status, and debt service
ability. For juristic persons, the Company will consider financial
status, shareholders, and management as well as their business
prospects.

Account opening procedures

(1) Cash Accounts

    1.  The marketing officer will request documentary evidence from the
        client in order to find out the client’s investment objectives,
        knowledge and experience of investing in securities, financial
        status and debt service ability. Documentary evidence that must
        be submitted to the Company includes the following: a copy of ID
        card, a copy of house registration, a copy of company’s
        affidavit (in case of juristic person), a copy of business
        license (in case of specific business), a specimen signatures, a
        copy of bank savings book, other evidence of client’s assets, a
        copy of audited financial statements for the past 2 years (in
        case of juristic person) together with the client’s signatures
        in the application form and other agreements. The marketing
        officer will consider all the information and then make a
        recommendation, supported by the documents, to the credit
        division officer.

    2.  The credit division officer will check the client’s background
        and calculate an appropriate credit line for the client
        according to the company’s criteria, which include the financial
        status, debt service ability as well as debt service history.

    3.  As of 1 January 2007, the Company has introduced new and
        improved “Know Your Client” and “Client Due Diligence”
        processes, covering new account openings and regular client
        reviews.

    4.  Once all necessary steps have been completed, a credit officer
        will then propose to the appropriate authorized persons to
        approve the credit line.

(2) Credit balance account

  The Company provides credit balance account using the same credit line
  issuing system as that of cash accounts. The Company produces a list
  of marginable securities that have good fundamentals and high
  liquidity in the market. The Company reviews the list of marginable
  securities and makes the necessary adjustments to the list on a
  monthly basis at minimum. The margin of each security will not be
  lower than the margin specified by the SEC and/or SET. The Company
  announces the list on a regular basis and the clients will always be
  informed whenever there is a change.

Authority in approving credit line for trading accounts

The company has set different levels of authority for persons authorized
to approve credit lines for cash accounts and credit balance accounts
from marketing division heads up to the Chief Operating Officer. The
policy covering credit line approval has been set up by the Credit Risk
Sub-committee for Brokerage Business, under the Risk Management
committee’s guidance.

(B) Securities Dealer

The Proprietary Trading Department and Fixed Income Department are
responsible for stock selection and investment allocation according to
the established policy, while the Risk Management Division will closely
track the departments’ exposure to control the Company’s overall risks.
In 2007, trading gain from securities and derivatives generated profits
for the company around Baht 448 million.

(C) Investment Advisory

SEC granted an approval to the Company to operate investment advisory
business on 6 January 2004, allowing the Company to provide a full range
of services.

(D) Financial advisory and securities underwriting

The SEC has granted the Company approval to operate financial advisory
business under the scope specified by the SEC which covers the full
range of Investment Banking Services, including fund raising, IPOs and
secondary market placements, mergers and acquisitions, firm valuations,
loan arrangements, debt restructuring and other advisory works. In
addition, the Company also provides a securities underwriting service to
those companies intending to issue securities including debt, equity,
and equity-linked products.

In 2007, the stock market was very volatile, primarily as a result of
the sluggish economy, rising oil prices, political uncertainty and
measures by the Bank of Thailand regarding currency exchange control. As
a result, many companies delayed their listing plans which led to
fewer-than-expected companies being listed on the stock market. However,
in Q4/2007 the Stock Exchange of Thailand extended the period for
granting tax privilege for companies intending to list within 2008.
Hence, many companies have submitted listing applications to list on the
Stock Exchange of Thailand within 2008 in order to reserve its right to
obtain tax privilege.

In 2007, the Company acted as co-underwriter in 6 IPOs and was appointed
to act as financial advisor and lead underwriter of 6 IPOs. Furthermore,
the Company has successfully diversified its source of revenues by
focusing more on other financial advisory services including private
placements, M&A related services, valuation, etc.

With our group of experienced staff and expertise in financial
engineering to structure products that suit our clients' needs and with
our regional group network, KGI's investment banking team can provide a
full line of products and services in both the domestic and foreign
markets.

(E) Securities Borrowing and Lending (SBL)

The Ministry of Finance granted the Company approval to conduct
securities borrowing and lending business on February 26, 1999. The
Company was the first broker to act as a principal and agent assisting
all types of clients who want to lend or borrow securities: 1.
Institutional Lenders, 2. Institutional Borrowers, 3. Retail Lenders,
and 4. Retail Borrowers. This service will help increase liquidity and
price stability to the Thai equity market, which will benefit all
parties and further develop the Thai equity market.

In 2007, SBL gained in popularity due to the volatile stock market.
Consequently, KGI’s SBL volume reached 8,000 million baht by year end.
In 2008, the Company plans to expand its SBL business as follows:

1.  Continue to develop and improve its internal system to support SEC’s
    relaxation on regulations. Among the relaxation is the allowance of
    borrowing and lending of stocks both local and foreign, allowing
    cash in any foreign currency apart from U.S. dollar as collateral,
    etc. This increases flexibility, variety and speed as well as
    reduces transaction cost.

2.  Expand client base, especially foreign institutional clients who are
    increasingly interested in borrowing and lending Thai stocks.

(F) Securities Registrar

The Company received approval to conduct securities registrar business
on 14 June 1994, and the Company continues to maintain its securities
registrar license in order to support its derivatives products in the
future.

(G) Selling Agent of Unit Trust

The Company’s fixed income department has been appointed as a selling
agent for asset management firms such as One Asset Management Limited,
Krungthai Asset Management Public Company Limited, SCB Asset Management,
ING Funds (Thailand) Co., Ltd., TMB Asset Management Co., Ltd., Aberdeen
Asset Magement Co., Ltd., MFC Asset Management Public Company Limited,
Kasikorn Asset Management Co., Ltd., and PrimaVest Asset Management Co.,
Ltd. All clients are advised on the appropriate fund based on their risk
tolerance and investment return requirements.

(H) Futures

The Company received a license to conduct futures business from the
Securities and Exchange Commission (SEC) and also got approval to act as
a futures broker from the Thailand Futures Exchange Plc. (TFEX) and the
Thailand Clearing House Co., Ltd. (TCH). Futures trading started on 28
April 2006.

The Company won the “Best House of the Year 2006”, which was given to
the futures brokerage firm with the outstanding performance and best
service quality, and won the “Most Active House 2006”, which was given
to the futures brokerage firm with the most active futures derivatives
business, at the TFEX Best Awards 2006.

The Company itself also trades futures. Further, it also acted as one of
the first three market makers to help increase the liquidity of the
Thailand Futures Exchange (TFEX).

In 2007, the Company still ranked No.1 with market share of 13.55% of
TFEX market and had new product, SET50 Index Options, to fill the market
need and investment condition. SET 50 Index Options started trading 29
October 2007. For year 2008, the Company is preparing to launching a new
product, Stock Options.

(I) Derivatives

The Company is recognized as one of the leaders in innovation in the
development of derivatives products in Thailand. The Company has spent
more than 10 years preparing for issuing and trading of derivatives
products. The major shareholder, the KGI Group has also provided
valuable assistance by transferring knowledge and technology to the
Company. The KGI Group sent derivatives experts to train our staffs to
be ready for this new market in Thailand. At the same time, the Company
sent staff to its related companies in Taiwan and Hong Kong to closely
study their sophisticated derivatives markets.

The Company adopts the same program and software as those used in Taiwan
and Hong Kong. The software is widely recognized in developed
derivatives markets in many countries and should be effective in the
Thai market as well. Such system will greatly enhance the risk
management capability of the Company in hedging our derivatives
positions. The Company is ready to provide services relating to
derivatives products to clients. At the moment, the Company focuses
mainly on institutional clients who have better understanding about the
risks and rewards of such products.

1. OTC Equity Derivatives

  OTC Equity Derivatives products are tailor-made, and designed
  according to client’s request. The clients may choose to invest in
  derivatives for two purposes: a). to reduce risk, and b). to enhance
  return on their investment portfolio. The Company provides three types
  of OTC Equity Derivatives,

  1) Basic Options, which are Call Options and Put Options

  2) Combination Options, which are Call Spread Options, Put Spread
  Options, and Strangle, etc.

  3) Exotic Options, apart from the basic options and combination
  options, the Company has been launching more complex derivatives, such
  as Asian Call Spread Options and Digital Call Options, and will
  innovate more and more to match clients’ risk and return profiles in
  the future. The Company will regularly organize training/seminars to
  ensure that our clients thoroughly understand the products before
  investing in equity derivatives with us and that our equity
  derivatives products would help reduce risk and/or enhance return of
  clients’ portfolio.

2. Structured Products

  The Company is focusing on developing structured products that combine
  equity derivatives with money market instruments to serve clients who
  want to invest in both the equity market and money market. The Company
  offers structured products exclusively to institutional clients and
  private funds who have a good understanding and knowledge of
  derivatives. The structured product that the Company provides is:

  Equity Linked Note (ELN): To serve the needs of the clients who prefer
  investment in short term money market with high yield and who can
  invest in equity market. At present, the Company provides various
  types of ELN with maximum term of 270 days, whose return is linked to
  the price of a single stock and TDEX or basket of stocks with good
  fundamental and high trading volume (Blue chip Stock) or Index.
  Examples of ELN the Company provides are ELN-Vanilla, ELN-Buffer,
  ELN-Up&Out, ELN-4U, and ELN-D&G.

  ThaiDEX SET50 ETF (TDEX)

The Company joined a group led by One Asset Management Limited and four
other leading securities companies as well as a foreign fund advisor
that won the right to launch Thailand’s first equity exchange traded
fund (Equity ETF) in the name of ThaiDEX SET50 ETF or TDEX. The Company
acts as Market Maker (MM), providing liquidity in the secondary market
and as Participating Dealer (PD), facilitating the creation and
redemption of TDEX in the primary market.

During the IPO period, August 21-29, 2007, Asset Under Management (AUM)
of TDEX was 1,011 million baht. By the end of 2007, AUM was 2,396
million baht, showing growth of 140% within four months. The average
trading value was around 100 million baht per day. TDEX exceeded the
2007 target.

In 2008, The Company expects AUM of TDEX to reach 8,000 million baht.
The Company believes it can achieve such target due to its full
capabilities, Thai market recovery and increasing popularity of TDEX.

(2) MARKET OVERVIEW AND COMPETITION

Market Overview

The year 2007 was another turbulent year for Thailand's stock market, but the market return has actually been impressive. During the year SET Index posted 26.2% gains compared to a decline of 4.8% during 2006. It is also interesting to note that most of the market gains occurred in the second half of the year and were mainly attributable to the rally in the energy sector. 

During the first half of 2007, the uncertain political situation, after the coup d’etat in September 2006 still capped the market upside. Moreover, the imposition of capital control by the Bank of Thailand, in December 2006, and the unclear picture of sensitive issues like the Foreign Business Act and the stance of the Thai government toward the openness of the country made foreign investors skeptical to invest in Thailand. At the end of June 2007 the SET Index closed at 776.79pts offering moderate 14.3% gain in 6 months. 

Thailand's market was much stronger in the second half, as the underperformance of the main index, compared to other regional stock markets that rallied sharply, triggered foreign investors to come back. At the same time, resilient demand for commodities and tight supply happened to drive oil prices to a record high of US$99.16/bbl on November 20, 2007. The rise in energy prices, while putting more pressure on Thai inflation, benefited the energy sector which is the largest sector in the Thai market. Meanwhile, the volatility in the market increased markedly since September 2007 as the US sub-prime crisis sparked turbulence in global equity flows. 

On the economic front, Thailand's GDP continued to grow at a solid pace in 2007. Although domestic demand remained relatively dismal as the uncertainty on the political front dampened private consumption and private investment, Thai exports grew impressively, benefiting from the resiliency of trading partners, especially those roaring countries in Asia like China and India. Thai GDP rose 4.2%, 4.3% and 4.9% in 1Q07, 2Q07 and 3Q07, respectively, and for those three quarters the external economy played the key role in contributing to the growth.

In 2007, daily average turnover was Bt17.4bn, slightly higher than Bt16.4bn in 2006. Meanwhile, foreign investors were net buyers of Bt55bn for the year. Market capitalization of SET stood at Bt6.64trn at year end, an increase of 30.7% compared to Bt5.08trn in 2006.

Stock Exchange of Thailand 

+--------------------------+--------+--------+--------+--------+-------+
|                          | 2003   | 2004   | 2005   | 2006   | 2007  |
+--------------------------+--------+--------+--------+--------+-------+
|   Total trading value*   | 4,6    | 5,0    | 4,0    | 3,9    | 4,27  |
|   (Baht million)         | 70,281 | 35,816 | 31,240 | 74,561 | 1,820 |
+--------------------------+--------+--------+--------+--------+-------+
|   Avg. daily trading     | 18,908 | 20,388 | 16,454 | 16,394 | 1     |
|   value* (Baht million)  |        |        |        |        | 7,436 |
+--------------------------+--------+--------+--------+--------+-------+
|   Total market           | 4,7    | 4,5    | 5,1    | 5,0    | 6,63  |
|   capitalization (Baht   | 89,857 | 21,894 | 05,113 | 78,705 | 6,069 |
|   million)               |        |        |        |        |       |
+--------------------------+--------+--------+--------+--------+-------+
|   SET Index (year-end)   | 772.2  | 668.1  | 713.7  | 679.8  | 858.1 |
+--------------------------+--------+--------+--------+--------+-------+
|   Dividend yield (%)     | 1.81   | 2.75   | 3.37   | 4.23   | 3.31  |
+--------------------------+--------+--------+--------+--------+-------+
|   P/E ratio (times)      | 13.7   | 9.4    | 9.4    | 8.1    | 12.6  |
+--------------------------+--------+--------+--------+--------+-------+
|   P/BV ratio (times)     | 2.71   | 2.0    | 1.91   | 1.65   | 2.0   |
+--------------------------+--------+--------+--------+--------+-------+
|   No. of listed          | 407    | 439    | 468    | 476    | 475   |
|   companies              |        |        |        |        |       |
+--------------------------+--------+--------+--------+--------+-------+

Note : * Year 2003-2005: not included MAI, Year 2006-2007 : included
both SET & MAI

As for new listings, the political stalemate in the country resulted in
a very discouraging environment for IPOs in the first half of 2007.
However, as foreign funds flow drove the SET Index to increase sharply
in the second half more IPOs were seen. For 2007, only 12 companies,
including the Market for Alternative Investment (MAI), were listed in
the Thai equity market.

IPO stocks in 2007

  -------------------- ----------------------- --------------------------
  Stock                First trading date      IPO size (Baht million)

  MBAX                 29 Jan 07               175

  UNIQ                 30 Mar 07               293

  RASA                 12 Apr 07               130

  UBIS                 9 May 07                79

  DTAC                 22 Jun 07               8,880

  TYM                  9 Aug 07                300

  TNDT                 28 Sep 07               62

  MILL                 6 Nov 07                290

  BWG                  14 Nov 07               240

  MJD                  27 Nov 07               940

  BGT                  11 Dec 07               94

  SIMAT                12 Dec 07               71
  -------------------- ----------------------- --------------------------

In terms of the distribution of market share, extremely high competition
in Thai equity business resulted in very close market share among the
top brokerage companies. Most of the top 10 market share was foreign
companies, or local companies having foreign affiliate. Meanwhile, the
sum of market share of the top 10 brokers fell from 51.6% in 2006 to
49.3% in 2007.

Top 10 securities brokers (2007)

  -------- --------------------------------- ---------- -----------------
  Rank     Company Name                      Name       Market Shares (%)

  1        Kim Eng Securities (Thailand)     KIMENG     8.10
           Plc.                                         

  2        Asia Plus Securities Plc          ASP        5.74

  3        Phatra Securities Plc.            PHATRA     5.63

  4        Credit Suisse (Thailand) Ltd.     CS         5.23

  5        SCB Securities Plc                SCBS       5.04

  6        UBS Securities (Thailand) Ltd.    UBS        4.70

  7        KGI Securities (Thailand) Plc     KGI        4.18

  8        Bualuang Securities Plc.          BLS        3.68

  9        BFIT Securities Plc.              BFITSEC    3.51

  10       Ayudhaya Securities Ltd.          AYS        3.50

           Others                                       50.69

           Total                                        100.00
  -------- --------------------------------- ---------- -----------------

Industry trend in 2008

Thailand's stock market should see a lot of turbulence in 2008 as
foreign equity flows should remain volatile on higher US recession risk.
Recent US economic data showed that the problems in the financial
markets have diffused somewhat to the real economy. However, the
resolved political issues in Thailand, with the new elected government
coming on board in 1Q08, should lead to Thailand's market outperforming
regional peers.

In the second half of 2008, Thailand's market should perform strongly,
as market consensus expects the US economy to bottom out in mid 2008.
The significant US interest rate cut should support the downside of the
US economy and potential recovery in the second half should trigger
foreign investors to come back to emerging Asia which remains resilient,
led by China and India.

For industry-specific issues, competition among brokerage companies
should persist. The increasing trend of foreign and local institution
players in the Thai market should result in foreign brokers dominating
top market share.

(3) Funding for Products and Services

(A) Source of funds

If the Company requires new funds, the Company’s policy is to try to
procure the cheapest source of funds available, and to match the
duration of any loan to its needs. As far as possible, the Company will
not depend upon one source of funds.

(B) Subordinated Loans from Subsidiary

The Company has subordinated loans amounting to Baht 2,045 million from
an overseas subsidiary company. These are unsecured, interest free Baht
loans with an original maturity in September 2008. During the current
year, the Company and the subsidiary company agreed to extend the
maturity date to 21 March 2009.

During the year 2006, the Company received the interim dividends from
this overseas subsidiary company amounting to Baht 325 million, and
offset this against the amount borrowed from the subsidiary. In
addition, during the current year, the Company also made partial loan
payment of Baht 20 million. As at 31 December 2007, the outstanding
balance of the subordinated loans is thus Baht 1,700 million.

(C) Net capital adequacy ratio

The Office of Securities and Exchange Commission requires that all
securities companies should maintain a Net Liquid Capital Rule (NCR)
ratio of at least 7% of total liabilities. Currently, the Company’s NCR
ratio exceeds the SEC’s requirement. As of 31 December 2007, the
Company’s NCR was 188.58%.

(D) Liquidity management policy

The Company analyses its cash flow needs on a daily basis and tries to
match its funding and investment in money market instruments to its
needs as forecasted.