Assets used for business

  5.1 Fixed assets of the Company and its subsidiaries

  A. Assets used in the Company’s business are as follows:

+------------------------+------------+-------------+----------------+
| Description            | Net book   | Ownership   | Collate        |
|                        | value      |             | ral/obligation |
| (As of December        | (Baht)     |             |                |
| 31^(st) 2004)          |            |             |                |
+------------------------+------------+-------------+----------------+
| 1.  Land (Supanburi    | 1,820,000  | Company’s   | None           |
|     branch)            |            | asset       |                |
+------------------------+------------+-------------+----------------+
| 2.  Building           | 1,523,033  | Company’s   | None           |
|     (Supanburi branch) |            | asset       |                |
+------------------------+------------+-------------+----------------+
| 3.  Office furniture   | 35,058,338 | Company’s   | None           |
|                        |            | asset       |                |
+------------------------+------------+-------------+----------------+
| 4.  Office equipment   | 53,904,760 | Company’s   | None           |
|                        |            | asset       |                |
+------------------------+------------+-------------+----------------+
| 5.  Vehicles           | 22,743,175 | Company’s   | None           |
|                        |            | asset       |                |
+------------------------+------------+-------------+----------------+
| 6.  Work in progress   | 1,761,114  | Company’s   | None           |
|                        |            | asset       |                |
+------------------------+------------+-------------+----------------+
| Total                  | 1          |             |                |
|                        | 16,810,420 |             |                |
+------------------------+------------+-------------+----------------+

  B. Assets used by subsidiaries were as follows:

+------------------------+------------+-------------+-----------------+
| Description            | Net book   | Ownership   | Collat          |
|                        | value      |             | eral/obligation |
| (As of December        | (Baht)     |             |                 |
| 31^(st) 2004)          |            |             |                 |
+------------------------+------------+-------------+-----------------+
| 1.  Building           | 4,135,224  | S           | None            |
|     Renovation         |            | ubsidiary’s |                 |
|                        |            | asset       |                 |
+------------------------+------------+-------------+-----------------+
| 2.  Office furniture   | 904,914    | S           | None            |
|                        |            | ubsidiary’s |                 |
|                        |            | asset       |                 |
+------------------------+------------+-------------+-----------------+
| 3.  Office equipment   | 4,785,436  | S           | None            |
|                        |            | ubsidiary’s |                 |
|                        |            | asset       |                 |
+------------------------+------------+-------------+-----------------+
| 4.  Vehicles           | 2,856,390  | S           | None            |
|                        |            | ubsidiary’s |                 |
|                        |            | asset       |                 |
+------------------------+------------+-------------+-----------------+
| Total                  | 12,681,964 |             |                 |
+------------------------+------------+-------------+-----------------+

  5.2 Rental property

  The Company rents the following space to operate business at its head
  office and branches.

+----------------+------------------------+----------------------------+
| Branch         | Lessor                 | Remaining period of lease  |
|                |                        |                            |
|                |                        | as at 31 December 2004     |
+----------------+------------------------+----------------------------+
| 1. Head office | United Center Co.,     | 1 years 1 month            |
|                | Ltd.                   |                            |
+----------------+------------------------+----------------------------+
| 2. Chiang Mai  | Pornping Pavilion Co., | 1 month                    |
|                | Ltd.                   |                            |
+----------------+------------------------+----------------------------+
| 3. Nakorn      | K.R.Shopping Center    | 1 years 11 months          |
| Ratchasima     | Co.,Ltd.               |                            |
+----------------+------------------------+----------------------------+
| 4. Samutsakorn | A.T. Asset Co., Ltd.   | 2 years 6 months           |
+----------------+------------------------+----------------------------+
| 5. Nakorn      | Individual             | 8 months                   |
| Sawan          |                        |                            |
+----------------+------------------------+----------------------------+
| 6. Pin Klao    | Central Pattana Co.,   | 2 years 9 months           |
|                | Ltd.                   |                            |
+----------------+------------------------+----------------------------+
| 7. Nakhon      | Individual             | 6 months                   |
| Pathom         |                        |                            |
+----------------+------------------------+----------------------------+
| 8. Chiang Rai  | Individual             | 8 months                   |
+----------------+------------------------+----------------------------+
| 9. Petchaburi  | Individual             | 8 months                   |
+----------------+------------------------+----------------------------+
| 10. Surawongse | Alliance Co., Ltd.     | 3 years                    |
+----------------+------------------------+----------------------------+
| 11. Yaowaraj   | Yawawong Co., Ltd.     | Renewal of lease under     |
|                |                        | negotiation                |
+----------------+------------------------+----------------------------+
| 12. Had Yai    | Lee Garden Hotel Co.,  | 3 years                    |
|                | Ltd.                   |                            |
+----------------+------------------------+----------------------------+
| 13. Udonthani  | Individual             | 2 months                   |
+----------------+------------------------+----------------------------+
| 14. Silom      | Silom Building and     | 9 months                   |
|                | Service Co., Ltd.      |                            |
+----------------+------------------------+----------------------------+
| 15.            | Thai Hua Rubber Public | Renewal of lease under     |
| Ratchadaphisek | Co.,Ltd.               | negotiation                |
+----------------+------------------------+----------------------------+
| 16.            | Na-Nakorn Estate       | 8 months                   |
| Changwattana   | Co.,Ltd.               |                            |
+----------------+------------------------+----------------------------+
| 17. Pakchong   | Individual             | 2 years 8 months           |
+----------------+------------------------+----------------------------+

  5.3 Loans for securities trading in credit balance accounts

  As of 31 December 2004, the Company’s loans for securities trading in
  credit balance accounts amounted to Baht 1,431million. The policy
  regarding loans for securities trading in credit balance accounts are
  as follows:

  (A) Policy on margin securities

  The Company’s policy on managing its credit balance account was as
  follows:

  1. The Company produces a list of marginable securities that have good
  fundamentals and high liquidity in the market. The Company will
  specify the initial margin of each security and review the list of
  marginable securities at least once a month. However, the margin of
  each security will not be lower than the margin specified by the SEC
  or SET. The Company announces the list of marginable securities on a
  regular basis. Clients will be informed whenever there is a change.

  2. The Company has a very strict plan in controlling and managing
  loans and has a system that alerts the company when cash or other
  assets are required from a client to meet the collateral requirement.
  Therefore, the Company believes that the risk from providing loans for
  trading can be minimized. Examples of such risk-control policy
  include:

1.  The Company calculates the purchasing power from the excess equity
    of that account;

2.  Clients are not allowed to buy securities with a value greater than
    their purchasing power;

3.  Clients are not allowed to sell the securities which they do not
    possess; and

4.  In the case where there is a change in securities included in the
    marginable securities list, and a client owns securities removed
    from the list, the Company will transfer those securities out of the
    credit balance accounts. If after the transfer, the client’s assets
    are reduced to a point where the Company has to call for additional
    collateral, the client must deposit cash or other assets with the
    Company in order to meet the minimum requirement.

  (B) Policy on revenue recognition

  Interest is recognized over the term of the loans based on the amount
  of principal outstanding. No accrual has been made for certain loans
  which, under Notification No. Kor. Thor. 33/2543 dated 25 August 2000,
  and updated by Notification No. Kor. Thor. 5/2544 dated 15 February
  2001 of the SEC, are not qualified for recognition of interest on an
  accrual basis.

  (C) Policy on type of acceptable collateral

  The types of asset to be accepted as collateral when calculating the
  purchasing power in credit balance accounts are:

  1.Cash; and

  2.Securities allowed by the Company to be bought or sold in credit
  balance accounts.

  (D) Policy on control and collection of debts

  In the case where there is bad debt from credit balance accounts, the
  Company has a policy to control and follow up on the debts by carrying
  out the procedures below:

1.  Operations department will inform the head of the legal division
    about the default.

2.  Legal division will then collect all the documents relating to the
    default and conduct investigations.

3.  Legal division will then negotiate with the defaulting client
    regarding the repayment to the Company:

    1.  In a case where the defaulting client agrees to repay, legal
        division will prepare the repayment agreement to be signed by
        the defaulting client.

    2.  In a case where the negotiation fails, legal division will issue
        legal notice of demand to the defaulting client.

4.  In a case where the legal division has issued a legal notice and
    there is still no repayment made by the defaulting client, the legal
    division will prosecute the case in the courts.

  (E) Policy on provision for doubtful accounts

  The Company provides for doubtful debts based on a review of the
  debtor’s ability to make repayment, taking into consideration recovery
  risk and the value of the collateral. Such debt classifications and
  provisions are made in accordance with the guidelines laid down in
  Notification No. Kor. Thor. 33/2543 dated 25 August 2000, updated by
  Notification No. Kor. Thor. 5/2544 dated 15 February 2001 of the SEC,
  and consideration of other relevant factors.

  5.4 Investments in debt and equity securities

  The Company’s net investments in debt and equity securities increased
  from Baht1,158 million at the end of 2003 to Baht 2,166million at the
  end of 2004. Short term investment totaled Baht1,328 million and long
  term investment totaled Baht 839 million.

(A) Investment policy 

  The Company reviewed its investment policy periodically. The relevant
  departments would propose investment policies to the risk management
  committee for consideration and approval.

 (B) Risk management of investments

  The Company’s risk management committee followed up and reviewed risk
  of investments (see detail in Scope of duties and responsibilities of
  the risk management committee).

(C) Policy on provision for reduction in investment value

  The Company has policies regarding provision for reduction in
  investment value as follows:

  1) Investments in securities held for trading are shown at fair value.
  Gains or losses arising from changes in the carrying value of
  securities are included in determining earnings.

2) Investments in available-for-sale securities are determined at fair
value. Changes in the carrying amount of securities are recorded as
separate items in the shareholders’ equity until securities are sold,
the changes are then included in determining earnings.

3) Investments in debt securities both due within one year or expected
to be held-to-maturities are determined at cost after amortization.

4) Investments in non-marketable equity securities, which the Company
classifies as other investments, are valued at cost net from allowance
for loss on diminution in value (if any).

5) Investments in subsidiary companies and associated companies are
accounted for under the equity method.

Fair value of marketable securities is based on the latest bid price of
the last working day of the year as quoted on the Stock Exchange of
Thailand and other factors. Fair value of government bonds, state
enterprise securities, and private debt instruments is determined based
on yield rate quoted by the Thai Bond Dealing Center. The fair value of
unit trust is valued at net asset value.

Losses on impairment of investments (if any) are included in determining
earnings. Allowance for losses on the impairment of other investments is
based on the net book value of ordinary shares and other relevant
factors.

  The weighted average method is used for computation of the cost of
  investments.

5.5 Investment in subsidiary companies

  As of 31 December 2004, the Company’s investment in subsidiary
  companies were Baht3,123 million. (details as per note of financial
  statements no 7: Investments in subsidiary companies under equity
  method).

  The Company’s policy is to maximize value for its shareholders and its
  investments in subsidiaries are made with that objective in mind. The
  Company will send representatives to the board of directors of the
  subsidiaries to ensure that the Company’s interests are protected.

6.  Intangible Assets

  As of December 2004, the Company’s intangible assets were Baht 68.96
  million, consisting of deferred underwriting license fee Baht 15.83
  million, computer software Baht 4.75 million, and goodwill of Baht
  48.38 million.