1.  Risk Factors

Risk factors that can affect the company’s operation are as follows:

1.  Risks of external sources of funding.

At present the major source of funding comes from the Bank of Ayudhya.
The credit limit of 620 million baht comprises a bank overdraft, on call
promissory notes as short term loans of 520 million baht and long term
loans of 100 million baht. As at 31^(st) December 2006 the company
utilized 408.76 million baht from short term loans and 100 million baht
from long term loans.

The interest rates of short term loan is MOR of Bank of Ayudhya per
annum at 31^(st) December 2006 was 8.50%, which is close to the average
MOR of the top five banks which was 8.05% per annum. The interest rates
of long term loans is MLR +0.50 per annum. MLR of Bank of Ayudhya per
annum at 31^(st) December 2006 was 8.00%.

Because the company has been a good customer of the Bank of Ayudhya for
more than 20 years, the bank has always given continued financial
support. However, the company’s policy is to try to minimize that risk
by raising funds from the other sources. In 2006, the company issued
Bills of Exchange amounting to 100 million baht, sold to United
Securities Public Company Limited, The outstanding balance of Bills of
Exchange as at 31^(st) December 2006 in the amount 100 million will be
due in 2007.

2.  Risks of interest rates.

The majority of the company’s revenue comes from hire purchase financing
for motorcycles. Higher interest loan rates will directly affect the
company’s profits. In 2006, the company’s interest margin was about
32.17%. If the interest loan rates rise, the costs of funding will be
increased. While hire purchase interest rates are fixed for the period
of hire purchase contract, the company cannot forward those higher
interest expenses to its customers.

3.  Risks on the mismatch between sources of funding and the period of
    the hire purchase contract.

Because the major source of funding from the Bank of Ayudhya is an
on-call short term loan, and the average period of hire purchase
motorcycles contracts is around 27 months, there is a risk if the bank
recalls the principle of loan.

However the company has been a good customer of the Bank of Ayudhya for
more than 20 years, and the bank has always given continued financial
support. The company’s policy tries to match funding to minimize the
risk.

4.  Risk on Government regulations.

At present there are no rules or regulations from the Bank of Thailand
to control the hire purchase of motorcycle, except regulations from the
Office of Consumer Protection Board, Ministry of Commerce regulations to
protect consumers in hire purchase motorcycle contracts - such as to
limit interest rate for default customers. These charges cannot be more
than MOR plus 10% per annum of the Krung Thai Bank, etc.

Whenever the Government issues regulations to control the hire purchase
motorcycle business, it will affect the operation of the business in the
future. For example, to limit interest rates of hire purchase motorcycle
contracts or limit down payments, etc.

5.  Risks on non performing loans.

At present the hire purchase of motorcycles is not limited by rules or
special laws from the Government. Therefore, companies in the hire
purchase of motorcycles business can expand their business, limited only
by their own capacity. However, the risk will occur in the credit
approval process if there is not good internal control systems and a
high level of inaccuracy.

From our experience, and because the company is a member of The National
Credit Bureau Company Limited, the company sends historical payment data
of customers every month. The company can reduce non performing loans,
because if customer acquires loans from financial institutes there will
be a record. If the customer has a good record this will show up and the
payment will be easily approved. On the other hand if a bad record is
discovered then it will be rejected until overdue are cleared or the
account closed.

6.  Risks on losses on sales of repossessed motorcycles.

Repossessed motorcycles from non performing loan or doubtful accounts
are sold by auction within 10 days to used motorcycles’ dealers. The
major used motorcycle’ dealers come from Bangkok, surrounding provinces
and other parts of Thailand. These dealers have a close relationship
with the company and have continually attended auctions with the company
for more than 10 years. The price of repossessed motorcycles is
dependent on quality, age and favor of the used motorcycle. In the case
of the auction price not covering the debt, the company can reclaim the
loss from the debtor or guarantors. For other cases, and if the company
cannot received money from the customer or guarantors, it will record a
loss on the sale of repossessed motorcycles.

7.  Risks on the influence of the major shareholder.

Mr. Khanchai Boonpan, the major shareholder who is holding of 12.79
million shares or 28.42% of registered capital and completely issued and
paid-up capital of 45 million shares, is unable to control or influence
the company’s operations, and he cannot control the number of votes for
shareholders’ meeting because the significant votes must be three of
four votes from the shareholders’ meeting.

To balance the administrations power, the company was managed by three
of 10 directors from independent directors, which equals 30 percent of
all directors.

8.  Risks on new entrants and competition in the hire purchase finance
    of motorcycles.

To operate the hire purchase motorcycles business, it is not necessary
to use many materials or tools. It is easy to enter the business because
hire purchase motorcycles business can be established and expanded with
large amounts of capital. The difficulty is to succeed and continue
business.

Dealers are important advisors to induce clients to use our services.
Therefore, there is a risk if dealers do not suggest our services to
customers.

With the fast operation, complete information system, experience and
specialization in the business, the company can approve credit within an
hour, which satisfy dealers’ needs. The dealer can develop information
systems with the company to support business, and allow the company to
rapidly check and answer any questions, and to enable customers to clear
outstanding balances.