Cgs 06 by Brother Roger

General Information Companyâ&#x20AC;&#x2122;s Name, Location, Type of Business, and Registered Capital Name Address

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Registration Number Type of Business

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Registered Capital Paid-up Capital Type of shares

: : :

Adkinson Securities Public Company Limited 132 Sindhorn Tower 1, 2nd, 3rd and 9th Floors, Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone 0-2205-7000 Fax 0-2205-7171 Homepage www.asl.co.th and www.AdkinsonOnline.com Bor. Mor. Jor. 304 The Company, Broker Number 3, is a member of the Stock Exchange of Thailand. The Company obtained a permit number 51/2517 from the Ministry of Finance to engage in the securities business as follows : 1. Securities brokerage 2. Securities trading 3. Investment advisory service 4. Investment unit underwriting Baht 4,916,510,880.00 Baht 4,195,895,720.00 419,589,572 common shares at par value of 10.00 baht per share (On March 9, 2007, the company changed the registered par value from 10 baht to 1 baht.)

Juristic Entities in which the Company Holds Equity Stake of 10.0 % or more Name

Address

Registration Number

Apex Securities Company Limited (Formerly known as IB Securities Company Limited) 132 Sindhorn Tower I, 2nd Floor, Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Telephone 0-2256-7888 Fax 0-2689-6219 Homepage www.apexsec.com 948/2517

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Type of Business

Registered Capital Paid-up Capital Type of Shares

: : :

Number of Shares Held Investment Value

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The Company, Broker Number 10, is a member of the Stock Exchange of Thailand. The Company engages in the securities business as follows: 1. Securities brokerage 2. Debt securities trading 3. Investment advisory service 4. Financial advisory service 5. Securities underwriting Baht 482,050,400.00 Baht 482,050,400.00 48,205,040 common shares at par value of 10.00 baht per share 48,204,818 common shares (as of December 31, 2006) Baht 514,580,481.73 (as of December 31, 2006)

References

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Share Registrar

Debt-holders Representative Auditor

: :

Legal Counsel Financial Consultants Consultants or Managers under Management Contracts

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Thailand Securities Depository Company Limited 62 Stock Exchange of Thailand Building 4th, 7th Floors, Ratchadapisek Road Klongtoey, Bangkok 10110 Telephone 0-2229-2800 Fax 0-2359-1259 None Mr. Winid Silamongkol, CPA Number 3378 and/or Mr. Thirdthong Thepmangkorn, CPA Number 3787 and/or Mr. Narong Luktharn, CPA Number 4700 of KPMG Phoomchai Audit Ltd. Empire Tower, 22nd Floor, 195 South Sathorn Road, Bangkok 10120 Tel. 0-2677-2000 Fax 0-2677-2222 None None

None

Summary of Financial Information Summary of Consolidated Financial Statements

Total assets Total Liabilities Issued and fully paid up capital Total shareholdersâ&#x20AC;&#x2122; equity Securities business income Total income Gross profit Net profit (loss)

2006 2005 4,501,937,068 4,413,388,333 370,304,288 735,162,345 4,195,895,720 3,223,107,490 4,131,632,780 3,678,225,988 363,957,429 605,418,715 370,383,041 614,484,746 340,999,742 584,354,544 (683,562,042) (244,169,946)

(Unit : Baht) 2004 4,565,262,663 587,735,475 3,223,107,490 3,977,527,188 821,632,347 824,085,841 793,230,362 352,046

Key Financial Ratios Profitability Ratio Gross profit (%) Net profit (loss) (%) Return on equity (%) Return on investment (%) Efficiency Ratio Return on assets (%) Asset turnover (times) Financial Ratio Liquid assets to borrowing (times) Earning assets to borrowing (times) Liquid assets to total assets ratio (%) Earning assets to total assets ratio (%) Debts to equity (times) Dividend payout (%) Other Ratios Securities investment to total assets (%) Net capital ratio - NCR (%)

2006 93.69 (184.56) (17.51) (10.84)

2005 96.52 (39.74) (6.38) 7.84

(Unit : Baht) 2004 96.54 0.04 0.01 (0.58)

(15.33) 0.08

(5.44) 0.14

0.01 0.17

* * 68.27 80.89 0.09 -

* * 60.72 71.62 0.20 -

* * 61.77 63.18 0.15 -

29.89 402.67

29.15 316.10

23.42 669.69

(0.76) 0.00 11.41

0.01 0.00 12.34

Note: *These ratios cannot be calculated as the Company is debt free

Per Share** Net profit (loss) (Baht) Dividends (Baht) Book value (Baht)

(1.65) 0.00 9.85

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Profitability Ratio Growth rate Total assets (%) Total liabilities (%) Securities business income (%) Operating expenses (%) Net profit (loss) (%)

2006

2005

2004

2.01 (49.63) (39.88) 22.23 (179.95)

(3.33) 25.08 (26.32) 6.45 (69,457.40)

(8.32) (69.18) (7.41) 4.02 (99.47)

Note : * weighted average method

Nature of Business History and Major Developments In 1966, the Company was registered under the name of “Adkinson Enterprise Company Limited.” The Company became a member of the Stock Exchange of Thailand (SET) and was assigned as “Broker Number 3” in 1974. In 1979, the Company changed its name to “Adkinson Securities Company Limited.” In 1991, the company received approval from the SET to list its common shares in the Stock Exchange of Thailand, which were later approved as listed securities in 1993. In 1994, the Company converted to a public company and raised its registered capital from Baht 200 million to Baht 600 million, consisting of 60 million common shares at Baht 10.00 par value. In 1997, in accordance with the Company’s expansion plan, the Company amended the Articles of Association to accommodate more foreign investments by raising foreign holding limit from 25.0 percent to 49.0 percent and increased its registered capital from Baht 600 million to Baht 890 million. In 1998, the Company decreased registered capital from Baht 890 million to Baht 600 million in a later time, in order to increase its registered and paid-up capital from Baht 600 million to Baht 1,020 million in 1998, by offering these new shares to Quantum Emerging Growth Partners C.V. (QEG), which was equivalent to 23.04 percent of paidup capital.

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In 1999, the Company increased its registered capital from Baht 1,020 million to Baht 1,785 million and paid-up capital to Baht 1,275 million. The Company reserved the unpaid portion of its capital for two tranches of warrant issues, Warrant Tranche 1 and Warrant Tranche 2, which expired on 14 December 2001 and December 14, 2002 respectively. There were 20.50 million units of warrants exercised on Tranche 1 and 2 with a conversion value of Baht 301.89 million. In 2001, QEG sold its entire investment in the Company through the SET, resulting in a change of the Company’s shareholder structure. As of 31 December 2001, the Techaratanachai family became a major shareholder with a total shareholding of 10.72 percent of the Company’s total paid-up capital. The Board of Directors (the Board) also made a resolution to establish 2 new subsidiary companies in which the Company would hold 99.99 percent stake each. They are : 1) TCN Online Co., Ltd. engaging in computer network and internet service businesses with the registered and paid-up capital of Baht 50 million. Its registered and paid-up capital increased to Baht 200 million in 2002. It closed business operation on October 31, 2003 and registered its closure on February 15, 2005. 2) Siam FN Co., Ltd. providing news and information about economy, finance and investment through electronic system with the registered

and paid-up capital of Baht 20 million. However, its business operation was halted and then closed on October 31, 2003. It registered the closure on June 18, 2004, when the Company received the approval from Ministry of Finance to establish TCN Online Co., Ltd. subsidiary company, Siam FN Co., Ltd. with the registered capital of Baht 20 million (closed on October 16, 2003 and registered closure on October 13, 2004) in replacement of Siam FN Co., Ltd. The Company also amended its objectives from 13 clauses to 27 clauses, so that the Company could expand to operate in other businesses related to securities and financial businesses. In 2002, the Company, through an Extraordinary Shareholder Meeting, resolved to increase its registered capital from Baht 1,597.77 million to Baht 2,414.16 million by the issuance of additional 81,638.583 common shares at Baht 10.00 par value. The objective for the capital increase was to acquire Indosuez W.I Carr Securities (Thailand) Limited at 99.99% paid-up capital on April 22, 2002, or at an investment of Baht 276.72 million. The Company changed its name to “IB Securities Co., Ltd.” and later to “Apex Securities Co., Ltd.”. On April 1, 2005, the Extraordinary Shareholder Meeting unanimously approved the proposal of the Board to consolidate the said company to the Company by acquiring its assets, liabilities and all obligations at book value as of the date of business consolidation. This aimed to eliminate the overlapping business operation and to increase the Company’s business strength, competencies and competitiveness. Currently, the above-mentioned consolidation had been completed. In 2002, the Extraordinary Shareholder Meeting also had come to the resolution to issue 100,412,772 warrants to existing shareholders for each of Tranche 3 and 4 warrants. The offer ratio was 2 existing shares for 1 unit of Tranche 3 warrant and 1 unit of Tranche 4 warrant at the offer price of Baht 0 each. The expiration periods for Tranche 3 and 4 warrants are 1 and 3 years

respectively. Warrants in both tranches have the same exercise ratio at 1 warrant for 1 common share at the exercise price of Baht 10.00, with exercise date on January 16, 2004 and January 16, 2006 for warrants in Tranche 3 and Tranche 4, respectively. The resolution also included approval for the Company’s registered capital to be increased to Baht 4,916.51 million in order to accommodate shares of warrant exercise. In 2003, the Board appointed Mrs. Apar Kewkacha as Executive Chairperson replacing the late Mr. Kritha Techaratanachai. The Board also appointed Mr. Udom Vichayabhai, an independent director and audit committee member, as Chairperson in lieu of Mr. Narong Chulajata, who resigned to be Chairperson of Apex Securities Co., Ltd. In 2004, the Company registered the paid-up capital increase from Baht 2,232.20 million to Baht 3,223.10 million, following the exercise of warrants Tranche 3 to ordinary shares, which had increased capital by 99,090,636 million shares on January 16, 2004. In addition, the Meeting resolved to amend and make changes in the Company’s Articles of Association as follows: - the repurchase of the Company’s shares - a clause change to “for legally binding the Company, the chairperson or executive chairperson or president, either one signs with the Company’s seal affixed; or two of the other directors cosign with the Company’s seal affixed.” - a change on the Company’s seal In the same year, the Extraordinary Shareholder Meeting had come to the resolution to use the legal reserves of Baht 36,824,800 and the premium on share capital of some Baht 54,511,886.37 to eliminate the Company’s retained loss of Baht 91,336,686.37 as at May 31, 2004. In 2005, Changes in Company’s Director Structure as follows. - Dr. Somchai Ruechupan resigned from directorship

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- Mr. Udom Vichayabhai and Dr. Salya Charuchinda were elected as directors. - General Wattana Sanphanich and Pol. General Somchai Vanichsenee were elected as non-authorized directors and elected as independent directors - Ms. Titima Thanakornyothin was elected as authorized directors - General Supit Wora-Uthai and Mr. Vanchai Honghern were resigned from directorships - Mr. Dej Namsirikul and Mr. Surabhon Kwunchaithunya were elected as directors replacing directors who resigned. On January 23, 2006, the Company registered an increase in paid up capital to Baht 4,195,895,720 , due to the exercise of warrants Tranche 4 to 97,278,823 shares at Baht 10 per share on January 16, 2006, which injected Baht 972,788,230 additional capital. On January 31, 2006, the Board Meeting had come to acknowledge the resignation of 1) Mr. Somsak Mundaeng from independent director and audit committee member. 2) Mrs. Salya Charuchinda, Ph.D. from director of the Company, and 3) Ms. Titima Thanakornyothin From Director of the company, effective from February 1 , 2006. The Meeting also unanimously appointed Mrs. Louise Diskul Na Ayudhaya And Mr. Prayoon Chindapradist, Prof. as authorized directors and Mr. Pin Kewkacha to be directors of the Company, replacing director who resigned. On March 8, 2006, the Board Meeting had come to the acknowledgement of the resignation from the chairperson and the chairperson of Audit Committee of Mr. Udom Vichayabhai and Mr. Methi Pamaranond, respectively. The Board unanimously elected Prayoon Chindapradist, Prof as the chairperson of the Company, Mr. Udom Vichayabhai as first vice chairperson and independent director, Mr.

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Surabhon Kwunchaithunya as independent director and chairperson of Audit Committee. On March 23, 2006, the Board Meeting approved the appointment of Mrs. Louise Diskul Na Ayudhaya (Ms. Louise Taechaubol) as executive director of the Company and to hold the position of director and executive vice president. On April 27, 2006, 2006 Annual General Shareholder Meeting acknowledged the resignation from directorship of three directors, namely Mr. Udom Vichayabhai, Mr. Methi Pamaranond, and Ms. Amara Techaratanachai and elected Mr. Thomas V. DeMaio, Jr. and Mr. Claudius Grossmann as directors replacing directors who resigned. The Meeting also unanimously elected Mrs. Sunjutha Witchawut and Mr. Nanthaphan Mahuttanatan as non-authorized directors and Mr. Att Asavanund as authorized director and elected one additional director, namely Mr. Sadawut Taechaubol as authorized director and held the position of chief executive officer and acting president. Moreover, the Meeting appointed Mrs. Apar Kewkacha to hold the position of the first vice chairperson and elected M.L. Dispanadda Diskul as director replacing Mr. Udom Vichayabhai who resigned. On May 30, 2006, the Board Meeting appointed Mr. Surabhon Kwunchaithunya as authorized director replacing the position of chairperson of the audit committee and appointed Mr. Dej Namsirikul, the second vice chairperson as independent director and audit committee and appointed Mr. Nanthaphan Mahuttanatan as independent director and audit committee member, and also elected Pol. Gen. Somchai Vanichsenee as chairperson of the audit committee. Moreover, the Board Meeting resolved to ratify the closure of Chantaburi branch office.

On June 27, 2006, the Board Meeting unanimously appointed Mr. Surabhon Kwunchaithunya as vice chief executive officer. On July 4, 2006, the Board Meeting approved the closure of operations on the Ground floor at the head office and 18 branch offices; they were 1) Rachadapisek 2) Sathorn 3) Maesai 4) Chareon Muang, Chiang Mai 5) Lomsak 6) Sakol Nakhon 7) Yasothorn 8) Kao Samui 9) Krabi 10) Patong, Phuket 11) Nakhonbal, Ubolrachthani 12) Chuti Anusorn, Had Yai 13) Rama IV 14) Nondaburi 15) Sivadol 16) Asoke 17) Chacheng Sao, and 18) Pracha Samran, Khonkan. All businesses and staff were transferred to nearby branch offices. On August 29, 2006, the Board Meeting acknowledged the resignation from authorized director of Mr. Att Asavanund, but still to be non-authorized director of the Company. On September 26, 2006, the Board Meeting approved the merger of three branch offices: 1) Chainat branch was merged with Nakhonsawan branch, 2) Lampoon branch was merged with Ched Yod branch in Chiang Mai, and 3) Sriracha branch was merged with Pattaya branch. On October 31, 2006, the Board Meeting approved the closure of operations of Supanburi branch and all businesses were transferred to Saraburi branch. On November 28, 2006, the Board Meeting acknowledged the resignation from directorship of Mr. Claudius Grossmann and appointed Mr. Chau-Chi Wong as director of the Company replacing the director who resigned. On December 21, 2006, the Board Meeting acknowledged the SECâ&#x20AC;&#x2122;s approval of the appointment of Mr. Dej Namsirikul, the second vice chairperson and audit committee member, Gen. Wattana Sanphanich, the third vice chairperson, Pol.Gen.Somchai Vanichsenee,

On March 7, 2007, the Extraordinary Shareholder Meeting unanimously approved the transfer of legal reserve of Baht 17,602 a premium on share capital Baht 813,653,862 to eliminate total retained loss of the Company of Baht 901,665,291. As a result, the net loss of the Company declined to Baht 87,993,827. The Meeting also approved the change in the par value from Baht 10 per share to Baht 1 per share by issuing 10 new shares at a par value of Baht 10, aiming at increasing liquidity of securities trading of the Company. The Company has already registered the change in the par value with the Ministry of Commerce on March 9, 2007. As of March 30, 2007, the Board Meeting approved the merger of 4 branch offices : 1) Huai Kaew branch was merged with Chang Pheuk brach, 2) Roi Et was branch merged with Surin branch, 3) Mae Sot branch was merged with Nakhon Sawan branch, and 4) Mahachi branch was merged with Bangkae branch.

Types of Businesses Business Group Adkinson Securities Public Company Limited obtained four licenses from the Ministry of Finance to operate the following businesses: 1. Securities brokerage 2. Securities trading 3. Investment advisory service 4. Investment unit underwriting As of Dec 31, 2006 the Company had 38 branches, 23 redundant branches were merged or closed in 2006 and 4 of which was closed in 2007 according to improve operational efficiencies. Apex Securities Co., Ltd. started its operations on June 5, 2002. It operated in the following five businesses:

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1. 2. 3. 4. 5.

Securities brokerage Debt securities trading Investment advisory service Financial advisory service Securities underwriting

SEC to temporarily stop securities brokerage, debt securities trading, investment advisory, and securities underwriting businesses since January 16, 2006.

Associated Company None

As of March 20, 2002, the Shareholdersâ&#x20AC;&#x2122; Meeting approved the acquisition of the ordinary shares of no less than 99.99 percent of the paid-up capital of Indosuez W.I. Carr Securities (Thailand) Limited, whose name later changed to IB Securities Company Limited and Apex Securities Company Limited, respectively. Apex Securities Co., Ltd. has received the approval from the SET to temporarily stop securities brokerage business since July 11, 2005 and received the approval from the

Policy on Securities Business and Its Subsidiary Apex Securities Co., Ltd. has been approved by the SET and the SEC from July 11, 2005 and January 16, 2006 onwards respectively to temporarily stop securities business operations, as a result Adkinson Securities Public Company Limited is only the company, which operates securities business.

2006 2005 2004 Million % of total % of total Million % of total Million Baht income income Baht income Baht Brokerage fees 488.00 131.76 81.49 804.33 97.60 500.73 - The Company 488.00 131.76 64.84 501.64 60.87 398.44 - Apex Securities Co., Ltd.* 16.65 302.69 36.73 102.29 Fees and service income 0.82 0.22 0.46 11.07 1.34 2.86 - The Company 0.82 0.22 0.09 0.48 0.06 0.54 - Apex Securities Co., Ltd. 0.37 10.59 1.28 2.32 Gain (loss) on trading in securities (276.97) (74.78) 1.75 (58.52) (7.10) 10.77 Interest and dividends 134.38 36.28 13.27 52.73 6.40 81.55 Interest on margin loans 17.73 4.79 1.55 12.03 1.46 9.51 Other income 6.42 1.73 1.48 2.45 0.30 9.06 Total income 370.38 100.00 614.48 100.00 824.09 100.00 Note: - *Apex Securities Co., Ltd. temporarily suspended its operation in securities brokerage business on July 11, 2005. The Company holds 99.99 percent equity stake in Apex Securities Co., Ltd. - Please find additional information on investment policy in assets for business operations topic and changes in revenue structure in management discussion and analysis topic.

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Primary Business Adkinson Securities Public Company Limited is member number 3 of the Stock Exchange of Thailand. The Company obtained licenses from the Ministry of Finance to engage in securities brokerage, securities trading, investment advisory, and investment unit underwriting businesses. Apex Securities Company Limited is member number 10 of the Stock Exchange of Thailand. The company obtained licenses from the Ministry of Finance to engage in securities brokerage, debt securities trading, investment advisory, financial advisory and securities underwriting businesses. The Company has consolidated the business of Apex Securities Company Limited to the company. Apex Securities Co., Ltd. has received the approval from the SET to temporarily stop securities brokerage business

Table of Securities Trading Value and Market Shares Trading Value MAI (mil. baht) SET (mil. baht) Total The Company - Trading value (mil. baht) - Market share (%) Apex Securities - Trading value (mil. baht) - Market share (%)

since July 11, 2005 and received the approval from the SEC to temporarily stop securities brokerage, debt securities trading, investment advisory, and securities underwriting businesses since January 16, 2006.

Business Operations A) Securities Brokerage The Company provides securities brokerage services to local and foreign individuals, corporate, financial institutions, funds and asset management companies. Also, the Company provides the internet trading services to serve clientsâ&#x20AC;&#x2122; needs. It is the Company policy to promote and expand the client base in the securities market with emphasis on proper evalution of incoming clients. Currently, the Company provides 3 types of securities trading accounts as follows: cash account, cash balance account, and credit balance account.

2005 2006 2004 27,413.75 35,940.95 34,220.73 3,956,262.03 4,031,240.02 5,024,399.25 3,983,675.78 4,067,180.98 5,058,619.98 203,765.76 2.56

162,227.89 1.99

202,452.58 2.00

0 0

41,828.141 0.51

123,893.15 1.22

Note: 1 Temporarily suspended securities brokerage business on July 11, 2005

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Proportion of Domestic and Foreign Clients In 2006, the Company’s proportions of domestic and foreign clients are as follows:

Clients Proportion The Company - The company’s account - Domestic - Foreign Total

Number of Clients Numbers %

Policies on Accepting Clients and Approving Credit Line The Company’s actively promotes and expands client’s base in the securities market with emphasis on proper evaluation of each client in accordance with the rules and regulations set by the SET and the SEC. In addition, the Company stricltty follows the anti-money laundering and actively monitor suspicious behavior t o prevent any illegal acts. The Company has set up the appropriate policies in accordance with the KYC/CDD policies set by the SET and the SET, regarding client’s credit approval process. Marketing representatives are required to be familiar with client’s investment objectives, financial status, investment limitation prior to the making investment decisions. The Company categorizes its clients as follows: 1. General clients: Thai nationals, the Company prescribed that the clients have to open trading accounts in pursuant to the Company’s account opening and approval of credit procedures. All documents for account opening are also gathered and submitted to

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14,307 542 14,849

96.35 3.65 100.00

Trading Value Amount (Btm) % 3,862.09 191,165.37 8,738.30 203,765.76

1.89 93.82 4.29 100.00

related parties for further process. Clients are required to do the fund transfer through Automatic Transfer System (ATS). 2. Foreign individuals: Foreign individuals who reside in Thailand. The Company has strictly considered the types of accounts that clients can be used for securities trading. The Company requires clients to have cash account or cash balance account for trading transactions. Cash must be deposited in the cash balance accounts, or deposited in account/s with local commercial banks specified by the Company. Clients are required to authorize funds withdrawal rights to the Company from their accounts. Moreover, the clients are allowed to open other types of accounts in accordance with the company’s strict credit regulations, considerations and approval. 3. Thai juristic entities: Thai juristic entities including institutions. The Company has set up the regulations of account opening and approval of credit line by considering factors

such as clients’ stability, financial standing, financial statement, and creditability. 4. Foreign juristic entities: Foreign juristic entities including institutions: The Company has set up the regulations of account

opening and approval of credit line by considering factors including the clients’ stability, financial standing, financial statement, creditability, supporting documents, and payment method.

The Company has appointed the authorized persons and credit committee to approve securities credit lines as follows: Credit Line Not exceeding 2 mil. baht Not exceeding 5 mil. baht Not exceeding 10 mil. baht Not exceeding 20 mil. baht Not exceeding 40 mil. baht Not exceeding 60 mil. baht Not exceeding 100 mil. baht Not exceeding 200 mil. baht Exceeding 200 mil. baht

The Credit Committee consists of: 1. One Executive Director 2. Two First Executive Vice Presidents 3. Five Heads of the Securities Business Divisions 4. One VP of the Risk Management Group A credit line is deemed “approved” when at least half of the attending committee members give their approval. At least 80% of the committee members of the credit committee are required to present for the approval of a credit line exceeding Baht 60 million. At least 40% of the committee members of the credit committee are required to present for the approval of credit line not exceeding Baht 60 million. In any credit committee meeting, there must be present at least one committee member representing the accounting & finance division, or one representing the risk management department.

Authorized Officers Managers – Securities Business Div./Branch Office Vice President – Securities Business Div. of HQ Executive VP – Securities Business Div. Head of Securities Business Div. Cosign of at least 2 Heads of Securities Bus Div. Credit Committee Credit Committee’s assessment to President Credit Committee’s assessment to Executive Chairperson Credit Committee’s assessment to Executive Board

Policy on Marginable Securities The Company’s marketing officers are required to analyze and assess the financial standings of their respective clients in order to seek the appropriate credit lines to be approved by the Head of Securities Business Division. Margin loan clients are required to trade with approved credit line only on marginable securities with the initial margin rate as set by the Company. The Company does not allow clients to trade in securities whose investment risks are high. The initial margin working group, consisting of at least one representative from the investment advisory division, the securities business division and the risk management department, decides on a set of securities that margin loan clients can trade on and the initial margin rate to which clients are entitled.

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Policy on Margin Loans and the Acceptance of Collateral

is under repayment agreement. Full allowances were made for all doubtful amounts.

To facilitate its clients’ purchasing power, the Company has begun providing margin lending service since 2002. The policy on credit line approval is as follows: 1. The clients must be individual investors. 2. The clients are required to pledge their collateral before their first trading in the form of cash or listed securities of no less than Baht 250,000 (valuation of collateral in the form of listed securities uses market value of securities) and no less than Baht 500,000 for foreign clients. 3. Credit lines: 3.1 The minimum amount for each credit line is not less than Baht 500,000 (not less than Baht 1,000,000 for foreign clients) 3.2 The maximum amount for each credit line must not exceed Baht 80,000,000 4. Risk control: 4.1 Margin Call is required when the collateral value is at or less than 35.0 percent (the SET requirement plus 5% for foreign clients) of the client’s securities in the account. 4.2 Force sale will be executed when the collateral value is at or less than 25.0 percent of the client’s securities in the account.

Policy on ceasing revenue recognition

As of December 31, 2006, the Company had Baht 486.18 million outstanding margin loans. The margin loans were well distributed in terms of clients and securities traded. The Company does not allow its clients to trade exceeding their credit lines. In addition, the Company had receivables transferred from cash accounts and unpaid margin loan receivables totaling Baht 127.08 million. Part of these unpaid debts is under legal process whereas the remaining

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The Company recognizes interest income from its securities business receivables on an accrual basis. The company will cease recognition of interest income whenever uncertainty in collecting principal and interest arises. Any of the following cases is considered as “uncertainty in collecting principal and interest”. 1. Debtor whose collateral value is lower than the amount owed. 2. Debtor whose installment payment is sched uled at every 3 months, but has defaulted on principal and interest payment for more than 3 months. 3. Debtor whose installment payment is sched uled at a period longer than 3 months except when there is convincing evidence that re payment will be made to the Company. 4. Financial institution debtor whose operational status is in doubt. 5. Other debtor whose interest payment is 3 months overdue.

Control and Monitoring of Clients’ Trading Accounts The Company has set guidelines on monitoring and risk controlling the trading accounts of clients. Credit lines are reviewed regularly to ensure their suitability by taking into consideration the clients’ status and securities assets. Credit line increases are considered based on the clients’ past trading records, payment histories and pledged securities. Reductions of credit lines are applied on clients with late payment or with records of bouncing checks.

For clients who default on payment as scheduled, the settlement department will inform the marketing officer in charge of those default accounts to force-sell the clientsâ&#x20AC;&#x2122; unsettled securities the day after the payment due date. In case the sale proceeds are insufficient, the settlement department and marketing officer will contact the clients to make necessary payments for the difference. If they fail to pay in the given period, a payment notice will be sent to them once again to remind of payment within the scheduled date. If the clients again fails to make payment or settlement seems unlikely, the cases will be forwarded to the Companyâ&#x20AC;&#x2122;s lawyers for further legal proceedings. For debtors under repayment schedule, the settlement and marketing officers will jointly oversee the payments by the schedule agreements. Should there be any breach of the agreement and failed follow-up, the legal proceeding will be brought against the debtor.

Policy on provisions for doubtful accounts and bad debts The Company has the policy for provisioning doubtful accounts by evaluating the status of each client. The evaluation includes risk appraisal and collateral valuation. The Company will make provisions for doubtful accounts whenever the value of the collateral is not enough to cover the amounts owed or when the debtor is determined unable to fully repay principal and interest. The company has classified debts pursuant to the SECâ&#x20AC;&#x2122;s announcement No. Gor.Thor. 33/2543, dated August 25, 2000, and Gor.Thor. 5/2544, dated February 15, 2001 regarding the accounting for troubled debtors of securities companies as follows; 1. Bad debt refers to: 1.1.Debt accrued by debtor whom the Company had claimed but not been repaid and the Company had written off according to the Taxation Code.

1.2. Debt where the Company makes an agreement to revoke. 2. Doubtful debt refers to the amount owed exceeding the value of the collateral, which falls into the following categories: 2.1. Ordinary debtor, trouble financial institution debtor and other debtor, whose collateral is lower in value than the amount owed. 2.2. Debtor whose installment is scheduled at every 3 months but defaults on principal and interest payment for more than 3 months. 2.3. Debtor whose installment is scheduled at a period longer than 3 months except when there is convincing evidence that repayment will be made to the Company. 2.4. For the benefit according to the statement in (2.2), if the amount of interest payment according to the agreement is significantly lower than the calculated amount, the debtor is considered liable for the interest payment of such month. 3. A substandard debt refers to the amount owed, which could be covered by the collateral mentioned in (2.). The company has the policy to write off bad debt whenever it is found and set the provision for the doubtful accounts at no less than 100% of doubtful debt and total substandard debts less collateral value. As of December 31, 2006, the Company and Apex Securities Co., Ltd. recorded provisions for doubtful accounts of Baht 106.81 million and Baht 2.76 million, respectively.

B) Securities Trading Activities The Company has the policy on engaging in trading activities both in equity and debt securities for short-term trading and long-term investment purposes in tandem with its annual investment plan, strategies, and investment lines.

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Securities Investment Policy The Company has prescribed an investment policy, including rules and practices on securities investment in order to manage its investment the most benefit for the company, base on transparency investment management, effective internal control, and risk management.

A. Investment policy 1. Allocate the company’s capital to generate income and support the funding needs of operations such as in margin lending and working capital. Fund allocation for investment in securities for trading and investment purposes must be pursuant to the investment line approved by the Board annually. 2. Invest in equity and debt securities as well as other financial instruments allowed by the regulators which are traded or non-traded in the securities exchanges. 3. Make securities investment that most benefit the Company in terms of rate of return, liquidity and investment risks. 4. Diversify securities investment into various securities and economic sectors, with limit of enterprise exposure. 5. Monitor investments made to ensure the objectives being met; and make appropriate adjustments in relation to changing investment climates. 6. Have the systems in place that prevents conflicts of interest procedures in accordance with the guidelines set by the SEC. 7. Report investment performance to the Board at least twice a year.

B. Investment practice and approval authority The Company has set investment rules and practice as guidance in managing its securities investment portfolio. The policy details the objectives, definitions, investment criteria including allotments of investment funds, supporting systems, and operating and managing authorities. The Investment Committee consists of the Executive

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Chairperson as the Investment Chairperson, Head of Investment Advisory Division as the committee member and Investment Manager, and no less than 3 committee members designated by the Investment Chairperson. The Investment Committee is responsible for prescribing the investment guideline for the company’s account, and overseeing its investment portfolio to comply with the Company’s annual investment line and investment policy. The Investment Manager is the main responsible person for executing investment decision.

Policy on Investment Risk Management The Investment Committee manages risks from investing and trading in equity and debts securities in the contexts of policy, rules, practice, and approval authority. The emphasis is on mitigating risks and achieving appropriate returns. Securities investments are considered and made with supports of research and analysis. Moreover, the Investment Committee is to present for the Board’s approval if there is any deviation from the set policies . Reports on investment performance are presented to the Board once a month. The Company’s investment is classified as follows: 1. Investment in debt securities The company has set rules and guidelines to prevent or mitigate various risks such as credit risk, liquidity risk, market risk and counterparty risk. 2. Investment in equity securities The Company has set clear objectives and targets of investment, in order to comply with the investment policy stipulated by the Board of Directors. The Company has diversified investment in securities to various industries and long-term investment is found on the securities with good business fundamentals. In addition, the Company invests in securities via asset management companies. Due to the market and liquidity risk of the

investment in securities, the Company routinely monitors its investment portfolio by monitoring price movements and presenting performance reports to the Board of Executive Directors. As of December 31, 2006, the Company had a securities investment portfolio totaling Baht 831.71 million, or a decrease of Baht 35.17 million from 2005 (this investment amount was adjusted by provisions for impairment and reflected the fair value). The Company incurred losses of securities trading amounting to Baht 276.97 million in 2006, compared to a profit of Baht 12.92 million in 2005. The profit from securities investment was derived from Baht 61.66 million profit from short-term investment, Baht 269.69 million loss from long-term investment and Baht 68.94 million loss from securities revaluation.

Policy on Provisioning for Investment in Securities The Company has set the criteria for provisioning as follows: 1. Provision for listed securities trading is set at the difference between cost and fair value of the securities at the end of accounting period. 2. Provision for investment in securities other than listed securities is set at the higher of cost over net book value or NAV at the end of accounting period.

Provisions for securities impairment of investment are derived from the evaluation of the difference between cost and book value of both listed and non-listed securities, including analysis of trend and performance of each company invested and the market value of such securities. The Company has recorded loss from impairment of securities based on the said criteria.

Policy on Investments in Subsidiaries The Company’s emphasis is to invest in the businesses that will help generate income and profit and/ or reduce operating costs and expenses to the overall Company. The investment ratio will be based on the decision made by the Board on a case-by-case basis. The subsidiaries’ operations are independently run and managed under the responsibilities of the respective subsidiaries’ board. The Company will state the policy directions and follow-up on business developments through the proposed business plan and annual budgeting as well as through reporting of monthly operating performance to the Company’s Board. At present, the Company has only one subsidiary, Apex Securities Co., Ltd, which received the approval from the SEC to cease securities businesses, i.e. securities brokerage, debt securities trading, investment advisory and securities underwriting since January 16, 2006 onwards. The Company is waiting to sell securities business licenses or seeking new partners.

As of December 31, 2006, Apex Securities Co., Ltd. had the following net assets in addition to licenses to engage in securities brokerage, underwriting and investment advisory businesses: Type Cash and cash equivalent Short-term loan for large companies Intangible assets-Net Other assets-Net Deductible - Other liabilities Total

Net Value (Baht Million) 12.7 422.0 1.0 20.9 (0.5) 456.1

023

As of December 31, 2006, the Company had investments in Apex Securities Co., Ltd. – at an investment amount of Baht 517.10 million under equity method, representing 10.47 percent of the Company’s total assets. At present, the Company has no intentions to invest in other subsidiaries but will consider if an appropriate opportunity arises.

- Advising on business merger and acquisition. - Acting as a financial advisor for initial public offerings and SET listing. - Acting as a financial advisor for the related transactions of the listed company and its subsidiaries or affiliates.

C) Investment Advisory Service

E) Securities Underwriting

Investment advisory services made to clients with a security trading account is a part of the normal brokerage activities. However if a service is made and a fee charged is to the public who is not a security trading client, then this type of service is classified under investment advisory services which requires an SEC approval, according to the Ministerial Regulations announced February 2002 prior to commencing the service. In 2006, the Company generated fees income for the advisory service rendered to Adkinson Growth Fund which is managed by M F C Asset Management Plc. The Company also acted as the advisor of IB Premiere Open Funds, which is managed by PrimaVest Asset Management Co., Ltd.

Apex Securities Co., Ltd., the Company’s subsidiary, has been approved by the SEC to temporarily stop securities underwriting business operations since December, 2006, whereas the Company has no such license to operate the securities underwriting business. After the Company’s restructuring in 2006, the Company plans to expand the range of financial products, in addition to the current activity of being an authorized dealer for the selling of unit trusts. to become a complete financial services provider and better satisfy client’s needs. Therefore the company intends to file for a request of a securities underwriting license which aims to generate incremental future revenues.

D) Financial Advisory Services

Other Subsidiaries’ Businesses

Apex Securities Co., Ltd. has no longer engaged in the activities of financial advisory due to a licesne expiration as of November 2, 2005 As a result of changes in the Company’s structure during 2006, the Company has the policy to expand efficient financial services to clients. Therefore, the Company has established an Investment Banking (IB) Division with the aim of providing financial advisory service to meets its customers’ needs. The IB department has been the member of the Investment Banking Club since January 23, 2007 and is under the SET approval process for Financial Advisory sevices. The Company will act as the financial advisor in the criteria specified by the SEC, consisting of the following services: - Advising on financing or funding sources both equity and debt instruments. - Advising on company and financial restructuring. - Advising on debt restructuring.

024

None

Market Conditions The Stock Market of Thailand in 2006 was a volatile year largely due to the impact of the December 18 unremunerated reserve restriction on foreign investments to protect the currency appreciation against the US dollar. The consequence of this policy initiated an unprecedented circuit breaker causing a 10 minute halt to the trading session on December 19. The intraday trading session declined by as much as 108.41 points or 14.84%. Although the decision was quickly reverse, the ambiguity of governmental leadership lingered resulting in on and the year ending close of 679.84 was a 4.75% decline or a 5.079 trillion market capital reduction, compared to a positive 6.83% return in 2005. The 2006 daily market turnover also declined to 16,394 from 16,601 billion in 2005

Market turnover classified by investors group

Year 2006 January February March April May June July August September October November December Total Year 2005

By Monthly

(unit: million baht)

Institutional Investors -24,038 -3,980 -251 -2,298 12,731 7,704 -9,229 -4,061 -1,356 -6,226 5,394 13,914 -11,695 -51,412

Foreign Investors 74,817 19,145 -297 18,456 -34,385 -13,048 9,676 9,389 11,118 18,241 2,578 -31,910 83,778 118,650

The 2006 net foreign buying value declined to 83.79 billion from 118.65 billion in 2005 despite the significant increase in trading activity in December 2006. Overall the foreign investors and held a net buy position while the local and institutional investor held a net sales position. The domestic uncertain political factors continues to hamper economic growth and investor confidence while.

Local investors -50,779 -15,165 548 -16,158 21,654 5,344 -447 -5,328 -9,762 -12,015 -7,971 17,996 -72,082 -67,238

The BoT Gross Domestic Product 2007 forecast was revised downward from 4.5 â&#x20AC;&#x201C; 5.0 to 4.0 â&#x20AC;&#x201C; 4.5 due to slowing investments, government spending and consumer consumption. The outlook for the SET remains slightly positive with a target of 729 bp and a daily trading value of 16 18 billion baht. In 2006, there were 584 listed securities, 476 listed companies and 12 newly listed companies

025

comparing to 48 newly llisted companies in 2005. The Market for Alternatives Investment (MAI) in 2006 consisted of 44 listed securities, 42 listed companies and 6 newly listed companies compared to 14 newly listed companies in 2005. The SET has targeted for 64 newly listed companies listed in 2007 to provide more alternatives for investors. The privatization of state enterprises, which is likely to increase the number of shares in the SET in the future e.g. TOT, the Metropolitan Waterworks Authority (Thailand), etc, will largely depends on the readiness of each state The brokerage commission fee structure is under adjustments as it is currently fixed at the minimum rate of 0.25% over three years after which it will be charged at the progressive rate over two years prior to industry liberalization in 2012. Also, the SET announced the reduction of brokerage fee internet trading resulting in an increase in trading activity as well as increased competition amongst brokerage firms. The ultimate result of the liberalization will be increase competition for market share amongst financial services provider and a reduction in amount of brokerage firms. In 2006, the company increased it market share and ranking from 1.99% to 2.56% and 24th to 19th respectively through an increase trading volume of 25.60% compared to a 2.05% decline in 2005 (excluding Apex Securities). The increase was largely due to an rejuvenated strategy in providing financial services with an additional instrument in unit trusts in institutional and retail investors. In 2006, the Company reduced the number of branch offices to 42 from 65 branch offices. The reduction complimented with a variety of new financial instruments and a continuous technological innovation will certainly provide a more efficient competitive platform in improving client services.

026

Segments of Clientele The majority of the Company’s clients are retail individuals including domestic and foreign investors. The Company’s revenue stream is not singularly depended any single segment of customers nor any groups of the company’s marketing executives.

Source of Funds The Company and Apex Securities Co., Ltd. are mostly self-financed.

Lending to Parties Related to the Management or Major Shareholder None

Ability to Maintain Net Liquid Capital Ratio (NCR) According to the SEC’s rules and regulation, securities companies are required to maintain NCR at more than 7.0% of general liabilities. As of December 31, 2006, the Company had maintained NCR at 402.67%.

Risk Factor Risk on Volatility of the Trading Value The volatility of the economy, shaken investor confidence, an uncertain outlook of political, monetary policy and capital markets factors will have a direct effect on the daily trading transactions which will have a direct effect on the Company’s brokerage revenue. In preparation, the Company has diversified and implement new financial services includeing financial advisory, securities underwriting, derivatives and unit trust

services to improve it competitive stance. The Company will improve continue improve research and information services as well as provide a secure, reliable and up-todate information technology trading platform for our clients

Default Risks As of December 31, 2006 the Company recorded a total debt of 127.08 million baht which had been reserved for after a full deduction of collateral value. While the Company recorded margin loans of Baht 486.18 million baht, none of which was extended over the approved credit line. The Company has set clear and strict guidelines in addordance with the rules and regulations set by the SET in regards to client account openings, credit approval, credit adjustments and the annual credit approval. In the case of a default, the all trading activity of the respective account will be propitiated until the issue is resolved.

Risk on Loss of Clients and Client Base Expansion In order to minimize risk, marketing executives are required to assess client’s financial status and debt payment capability. The Company also established criterion for credit line approval as well as guidelines for the annual credit review and adjustments. In case of default, the Company will prohibit security transactions until a settlement is made. The settlement department and the marketing executives will jointly process the matter with the respective clients. If the obligation is not satisfied within a specified timeframe, the Company will take legal action as specified laws under the SEC. Most of the Company’s clients are retail investors including local and foreign investors. Although the Company’s trading revenue does not depending on any single client, the Company has established corporate strategies to mitigate potential risks as follows:

1. The Company has its securities business divisions to specifically serve and support individual clients and juristic entities. Its staff consists of professional and experienced marketing executives and security traders to provide financial services to clients that are customized to each clients needs. The Company has continually improved research and information publications and provides a variety of training and seminars to the general investors to increase investor’s awareness of the overall market conditions. 2. The Company plans to agressively expand the clients’ base, especially in high net worth clients, local and foreign institutional investors. Furthermore, the Company sees high potentials of expanding the clients’ base in the existing branch offices of the provincial areas. 3. The Company has improved its IT services with modern and efficient systems to serve the business expansion of the company, particularly in expanding trading channels through the inernet trading. In addition, the company expects that numbers of internet based clients will increase due to the reduction of the commission fee of the internet trading.

Personnel Risk The Company provides training continuously to enhance personnel development, offering attractive compensation and other benefits such as incentives, salary and welfare, bonus, etc. to its personnel in accordance with the current market condition. The Company also recruits and screens new potential employees to improve human capital and to support the ongoing business expansion.

027

Risk on Company’s securities investment Changes in prices and interest rates of securities in the investment portfolio can result in the decline of investment value. To minimize risk, the Company’s investment committee has set clear investment guidelines in securities with strong fundamentals and low risks. The company closely monitors and adjusts othe portfolio to the ever changing market conditions to maximize return for investors.

to focus on increasing internet trading market share through continuously investing in information infrastructure, especially in developing systems used for executing orders through high-speed internet, and providing assistance service teams to support marketing executives and investors. Moreover, the company has invested in the newly completed cyber trading zone for investors as part of enhancing our client service quality.

Risk management Risk on liberalization of brokerage fee The Stock Exchange of Thailand (SET) and the Securities Exchange and Commission (SEC) have announced the regulation of changing the brokerage fee for normal trading, effective from January 1, 2007 onwards. The revised commission rate over the next five years is detailed below: Phase 1: From January 1, 2007 to December 31, 2009. The commission fee is charged at no less than 0.25% of total traded value. Phase 2: From January 1, 2010 to December 31, 2011. The commission fee will be charged at regressive rate by daily trading value. Starting from January 1, 2012 onwards, securities companies will be allowed to freely negotiate the brokerage fees. As of March 1, 2007, the Stock Exchange of Thailand set the commission fee for internet trading at 0.15% of total trading value in the cash balance and/or the credit balance accounts excluding institutional investors. The commission fee is charged of no less than 0.20% of total trading value for all other accounts. The above regulation, effective from January 1, 2007 onwards will have a direct impact on the Company’s operating revenue. As a result the Company has set policies

028

Facing these market risks, the Company plans to maintain high standards in organizational development, management efficiencies, expanding new businesses, and enhance client relationships to be prepared for any future obstacles and to always be moving forward.

Shareholders and Management Issuance of Underlying Securities (NVDR) As of December 31, 2006, Thai NVDR Company Limited had issued 17,956,001 units of Non-voting Depository Receipts or 4.28% of the Company’s paid up capital, which are regarded as the common shares of the Company. (Further information can be obtained from www.set.or.th). NVDR holders do not have voting rights in any shareholders’ meeting. The only voting right eligible to NVDR holder is the right to vote for delisting of the underlying securities from the SET. If a large number of the Company’s shares were converted into NVDRs, the eligible shares with voting right will decrease in number. This will increase the voting power of the remaining shareholders as the resolutions of the meeting are drawn from the majority votes of the attending shareholders and proxy holders.

Shareholders On the book closing date as of February 15, 2007, the top 10 major shareholders were as follows: Shareholder No. of shares % Stake 1. Mr. Amnaj Kewkacha 25,319,915 6.03 2. Mr. Litt Kewkacha 20,877,000 4.98 3. MERRILL LYNCH, PIERCE, FENNER & SMITH INC. 20,826,800 4.96 4. Thai NVDR Co., Ltd. 15,553,951 3.71 5. Ms. Chatsuda Denjanirad 15,026,100 3.58 6. Mr. Bee Taechaubol 13,220,000 3.15 7. Mrs. Pongphan Bulapak 11,298,400 2.69 8. Mr.Ben Tachaubol 10,650,000 2.54 9. Mr.Vichan Choteudompun 6,660,000 1.59 10. Mr. Apichaya Purananda 5,900,000 1.41 The periodically updated list of major shareholders is displayed in the Company’s website, www.AdkinsonOnline.com and www.asl.co.th prior to the annual shareholders’ meeting. As of February 15, 2007, the members of Kewkacha (Kewpaisal) family held 47,936,702 shares as follows: Shareholders 1. Mr. Amnaj Kewkacha 2. Mr. Litt Kewkacha 3. Mr. Kittikorn Kewkacha 4. Mr. Dech Kewkacha 5. Mrs. Siriporn Kewpaisal 6. Mr. Narong Kewpaisal 7. Ms. Sopida Kewpaisal 8. Mr. Pin Kewkacha 9. Ms. Jarukorn Kewpaisal Total

No. of Shares 25,319,915 20,877,000 829,800 788,200 57,000 22,600 40,000 2,000 187 47,936,702

% Stake 6.03 4.98 0.20 0.19 0.01 0.01 0.00 0.00 0.00 11.42

As of February 15, 2007, the members of Taechaubol family held 24,210,000 shares as follows: Shareholders 1. Mr. Bee Taechaubol 2. Mrs. Orapin Taechaubol 3. Mr. Ben Taechaubol Total

No. of Shares 13,220,000 340,000 10,650,000 24,210,000

% Stake 3.15 0.08 2.54 5.77

029

Dividend Policy

Commitment on Shares Issuance in the Future

In 1991, the Company offered new common shares to the public by issuing a prospectus dated March 8, 1991, and the Company’s dividend policy was declared on page 7 of the prospectus as follows: “Under normal business conditions, it is the policy of the Board to pay dividend of at least 60% of the net profit after tax.” This dividend policy remains unchanged.

The company has no further commitment for shares issuance in the future after warrants holders of Tranche 4 exercised rights to convert their warrants to 97,278,823 common shares or generating a cash amount of Baht 972,788,230 On January 16, 2006.

Board of Directors Adkinson Securities PLC. As of December 31, 2006, the Company structure consisted of the Board of Directors, Executive Board and Audit Committee, the memberships of which are as follows: Name 1. Mr. Prayoon Chindapradist, Prof 2. Mr. Apar Kewkacha 3. Mr. Dej Namsirikul 4. Gen. Wattana Sanphanich 5. Pol. Gen. Somchai Vanichsenee 6. Mr. Nanthaphan Mahuttanatan 7. Mr. Sadawut Taechaubol

8. Mr. Pin Kewkacha 9. Mrs. Sunjutha Witchawut 10. Mr. Att Asavanund 11. Mrs. Louise Diskul Na Ayudhaya (Ms. Louise Taechaubol)

Director Director Director Director

12. Mr. Chau-Chi Wong/1 13. M.L. Dispanadda Diskul/2 14. Mr. Surabhon Kwunchiathunya/2

Director Director Director Director Director Secretary

15. Mr. Thomas V.DeMaio, Jr./2 16. Mr. Kashpol Chulajata

030

Board of Directors Chairperson First Vice Chairperson Independent Director & the 2nd Vice Chairperson Independent Director & the 3rd Vice Chairperson Independent Director Independent Director Director

Exec. Board

Audit Committee

Member

Chairperson Member Chief Executive Officer and Acting President

Director and Executive Vice President

Vice Cheif Executive Officer

under the process of SEC’s approval

As of March 30, 2007. Directors have been resigned from directorships. The Company is in process of acquiring replacement directors.

Note: - In the Board Meeting No. 1/2006, on January 31, 2006, the Board acknowledged the resignation of 1) Mr. Somsak Mundaeng from independent director and audit committee member, 2) Mrs. Salya Charuchinda, Ph.D. from director of the Company, and 3) Ms. Titima Thanakornyothin from director of the Company, effective from February 1, 2006. The Meeting also unanimously appointed Mrs. Louise Diskul Na Ayudhaya and Mr. Prayoon Chindapradist, Prof. as authorized directors and Mr. Pin Kewkacha to be directors of the Company, replacing directors who resigned. - The resolution of Board Meeting No. 3/2006, on March 8, 2006, the Board o Acknowledged the resignation of Mr. Udom Vichayabhai from being chairperson but retained his position as independent director, which was his position before appointing him as Chairperson. o Unanimously elected Mr. Prayoon Chindapradist, Prof., to be chairperson of the Company and Mr. Udom Vichayabhai to be vice chairperson, effective March 8, 2006. The Board appointed Mr. Udom Vichayabhai as the first vice chairperson and Mr. Dej Namsirikul as the second vice chairperson and Gen. Wattana Sanpanich as the third vice chairperson. o Acknowledged the resignation of Mr. Methi Pamaranond from the chairperson of the Audit Committee but retained as audit committee member and unanimously appointed Mr. Surabhon Kwunchaithunya as independent

director and chairperson of audit committee, effective from March 8, 2006 onwards. o Unanimously appointed Mr. Pin Kewkacha as authorized director of the Company. - In the Board Meeting No.4/2006, on March 23, 2006, the Board approved the appointment of Mrs. Louise Diskul Na Ayudhaya to be the executive director of the Company, and to take the position of director and executive vice president - In the Annual Shareholder Meeting for the year 2006 on April 27, 2006, the meeting o Acknowledged the resignation from directorship of Mr. Udom Vichayabhai, Mr. Methi Pamaranond and Ms. Amara Techaratanachai. o Unanimously elected the director who retired by rotation, namely Mrs. Apar Kewkacha and Mrs. Louise Diskul Na Ayudhaya to be the directors for another term and elected Mr. Thomas V. DeMaio, Jr. and Mr. Claudius Grossmann as the directors replacing Mr. Methi Pamaranond and Ms. Amara Techaratanachai respectively. o Unanimously elected Mrs. Sunjutha Witchawut and Mr. Nanthaphan Mahuttanatan to be non-authorized directors and Mr. Att Asavanund to be the authorized director. o Unanimously elected one additional director, Mr. Sadawut Taechaubol to be the authorized director and hold the position of chief executive officer and acting president. o Unanimously appointed Mrs. Apar Kewkacha to be the first vice chairperson.

031

o Unanimously elected M.L.Dispanadda Diskul to be the director replacing Mr. Udom Vichayabhai, who resigned. - In the Board Meeting No.7/2006, on May 30, 2006, the Board o Unanimously appointed Mr. Surabhon Kwunchaithunya to be the authorized director replacing the position of audit committee chairperson. o Unanimously appointed Mr. Dej Namsirikul, the second vice chairperson to be the independent director and the audit committee member of the Company. o Unanimously appointed Mr. Nanthaphan Mahuttanatan to be the independent director and the audit committee member of the Company. o Unanimously elected Pol. Gen. Somchai Vanichsenee to be the chairperson of audit committee of the Company.

- In the Board Meeting No.8/2006, on June 27 2006, the Board unanimously appointed Mr. Surabhon Kwunchaithunya to be vice chief executive officer of the Company. - In the Board Meeting No.14/2006, on November 28, 2006, the Board acknowledged the resignation from directorship of Mr. Claudius Grossmann and unanimously appointed Mr. Chau-Chi Wong to be the director of the Company replacing Mr. Claudius Grossmann. - In the Board Meeting No.15/2006, on December 21, 2006, the Board acknowledged the SEC’s approval of the appointment of Mr. Dej Namsirikul, the second vice chairperson and audit committee member, Gen. Wattana Sanphanich, the third vice chairperson, Pol. Gen. Somchai Vanichsenee, the chairperson of audit committee and Mr. Nanthaphan Mahuttanatan, the audit committee member to be the independent director.

In 2006, there were 12 normal and 3 extraordinary meetings of the Board, 15 meetings in total. The term of office and the attendance were summarized as follows: Attendance/No. of meeting Name Terms Normal Extraordinary Total Meeting Meeting Mr. Methi Pamaranond April 2003-April 2006 4/4 1/1 5/5 Mrs. Apar Kewkacha May 03 (Jul. 03) – Apr. 09 11/12 3/3 14/15 Mr. Somsak Mundaeng Oct. 03 (Nov. 06) – Jan. 06 1/1 0/0 1/1 Ms. Amara Techaratanachai Oct. 03 (Dec. 03) – Apr. 06 4/4 1/1 5/5 Mrs. Salya Charuchinda, Ph.D. Apr. 05 – Jan. 06 1/1 0/0 1/1 Mr. Udom Vichayabhai Apr. 05 – Apr. 06 4/4 1/1 5/5 Gen. Wattana Sanphanich Apr. 05 (May 05) – Apr. 08 11/12 3/3 14/15

032

Name

Terms

Pol. Gen. Somchai Vanichsenee Ms. Titima Thanakornyothin Mr. Dej Namsirikul Mr. Surabhon Kwunchaithunya Mr. Prayoon Chindapradist, Prof. Mrs. Louise Diskul Na Ayudhaya Mr. Pin Kewkacha Mr. Claudius Grossmann M.L. Dispanadda Diskul Mr. Sadawut Taechaubol Mrs. Sunjutha Witchawut Mr. Nanthaphan Mahuttanatan Mr. Thomas V. DeMaio Mr. Att Asavanund Mr. Chau-Chi wong/1

Apr. 05 (May 05) – Apr. 08 Apr. 05 (Jan. 06) – Jan. 06 Oct. 05 (Jan. 06) – Apr. 07 Oct. 05 (Jan. 06) – Apr.07 Jan. 06 (Feb. 06) – Apr. 08 Jan 06 (Feb. 06) – Apr. 09 Jan. 06 (Jun. 06) – Apr. 08 Apr. 06 (May 06) – Nov. 06 Apr. 06 (May 06) – Jan. 07 Apr. 06 (May 06) – Apr. 09 Apr. 06 (May 06) – Apr. 09 Apr. 06 (May 06) – Apr. 09 Apr. 06 (May 06) – Mar 07 Apr. 06 (May 06) – Apr. 09 Nov. 06 – Apr. 09

Attendance/No. of meeting Normal Extraordinary Total Meeting Meeting 14/15 11/12 3/3 1/1 0/0 1/1 3/3 15/15 12/12 15/15 12/12 3/3 3/3 14/14 11/11 14/14 11/11 3/3 6/7 1/1 7/8 0/1 3/7 3/6 5/8 4/7 1/1 8/8 1/1 7/7 1/1 7/8 6/7 7/8 6/7 1/1 5/8 1/1 4/7 0/0 4/5 4/5 0/0 0/0 0/0

under the process of SEC’s approval

Details of Director’s terms were summarized as follows: o Mr. Methi Pamaranond was elected to be the director for another term on April 2003 and resigned from directorship after his full term on April 2006 o Mrs. Apar Kewkacha elected as the director replacing the late director on May 2003 and was approved by the SEC on July 2003. She was also elected to be the director for another term on April 2006. o Mr. Somsak Mundaeng was elected to be the director replacing the director who resigned on October 2003 and was approved by the SEC on November 2003. He resigned from directorship on January 2006. o Ms. Amara Techaratanachai was elected as the director replacing the director who resigned on October 2003 and was approved by the SEC on December 2003. She resigned from directorship after her full term on April 2006.

o Mrs. Salya Charuchinda, Ph.D. was elected to be the director for another term on April 2005 and resigned from directorship on January 2006. o Mr. Udom Vichayabhai was elected to be the director for another term on April 2005 and resigned from directorship on April 2006. o General Wattana Sanphanich was elected to be the new director on April 2005 and was approved by the SEC on May 2005. o Pol. Gen. Somchai Vanichsenee was elected to be the new director on April 2005 and was approved by the SEC on May 2005. o Ms. Titima Thanakornyothin was elected to be the new director on April 2005 and was approved by the SEC on January 2006 and resigned from directorship on January 2006.

033

o Mr. Dej Namsirikul was elected to be the director replacing the director who resigned on October 2005 and was approved by the SEC on January 2006. o Mr. Surabhon Kwunchaithunya was elected to be the director replacing the director who resigned on October 2005 and was approved by the SEC on January 2006. o Mr. Prayoon Chindapradist, Prof. was elected to be the director replacing the director who resigned on January 2006 and was approved by the SEC on February 2006. o Mrs. Louise Diskul Na Ayudhaya (Louise Taechaubol) was elected to be the director replacing the director who resigned on January 2006 and was approved by the SEC on February 2006. She was also elected as the director for another term on April 2006. o Mr. Pin Kewkacha was elected to be the director replacing the director who resigned on January 2006 and was approved by the SEC on June 2006. o Mr. Claudius Grossmann was elected to be the director replacing the director who held his office to full term and resigned on April 2006 and was approved by the SEC on June 2006 and he also resigned from directorship on November 2006. o M.L. Dispanadda Diskul was elected to be the director replacing the director who resigned on April 2006 and was approved by the SEC on May 2006. o Mr. Sadawut Taechaubol was elected to be the new director on April 2006 and was approved by the SEC on May 2006. o Mrs. Sunjutha Witchawut was elected to be the new director on April 2006 and was approved by the SEC on May 2006. o Mr. Nanthaphan Mahuttanatan was elected to be the new director on April 2006 and was approved by the SEC on May 2006. o Mr. Thomas V. DeMaio, Jr. was elected to be the director replacing the director who held his office to full term and resigned on April 2006 and was approved by the SEC on June 2006. o Mr. Att Asavanund was elected to be the new director on April 2006 and was approved by the SEC on August 2006.

034

o Mr. Chau-Chi Wong was elected to be the director replacing the director who resigned on November 2006 and is under the SEC’s approval. Authorized Directors In the Board meeting No.11/2006 on August 29, 2006, the Board unanimously approved the amendment of the list of authorized directors who can sign on behalf of the Company stating that “either Prayoon Chindapradist, Pro., chairperson or Mr. Sadawut Taechaubol, executive chairperson signs with the Company’s seal affixed, or two of the following four directors: Mr. Pin Kewkacha, Mr. Surabhon Kwunchaithunya, M.L. Dispanadda Diskul and Mrs. Louise Diskul Na Ayudhaya cosign with the Company’s seal affixed.”

Scope of Authority The Board Meeting No.15/2006 held on December 21, 2006 adopted the authorities and duties of the board, executive board, audit committee and president as follows:

1. Authorities and Duties of the Board of Directors 1. Set the Company’s policy, mission and objectives in accordance with the Public Company Act, rules and regulations by the SEC, SET and external supervisory units, and the resolutions of the shareholders’ meeting. 2. Approve the Company’s annual corporate plan and budgets. 3. Appoint the executive board to manage the Company. 4. Determine a list of authorized signatory directors. 5. Appoint persons to replace directors resigning before the terms expired. 6. Appoint, remove, and terminate the

employment of the executive chairperson and president, as well as approve their salaries, remunerations or other benefits. 7. Approve the budget on employee’s salaries, bonuses, and other benefits. 8. Approve the Company’s financial and assets transactions. 9. Perform other duties in achieving the Company’s policy, mission and objectives. 10. Hold board meetings.

2. Authorities and Duties of the Executive Board 1. Manage and oversee the Company’s operationand administration in accordance with the board’s resolution on policy, mission, objectives, and annual corporate plan and budget. 2. Appoint, remove individuals or juristic persons to be the advisor of the executive board providing the advisory service to benefit the Company’s operations. Also, approve the remuneration to such persons. 3. Execute the assignments from the board. 4. Hold executive board meetings. In case of urgent necessity and for the Company’s benefit, the executive chairperson shall have the authority to consider with discretion in proceeding and approving the matters within the authority of the executive board or the matters not specified herein; and shall report those actions to the executive board.

3. Authorities and Duties of the Audit Committee As of December 31, 2006, the audit committee consists of three independent directors, namely Pol. Gen. Somchai Vanichsenee, the chairperson of audit committee, Mr. Dej Namsirikul, and Mr. Nanthaphan Mahuttanatan, audit committee members, and Mr. Wichai

Baiprasert, first executive vice president of the audit and compliance division acts as the secretary of audit committee. The Board meeting No. 14/1999 held on December, 16 1999 defined the audit committee’s scope of duties and responsibilities as follows: 1. Review financial reports to ensure their accuracy and adequacy. 2. Review the internal control systems and audit functions to ensure their appropriateness and effectiveness. 3. Review the Company’s operations and activities to ensure their compliance with the Securities Company Act, SET regulations and other applicable laws. 4. Consider and propose auditors as well as their remunerations. 5. Review information disclosures of the Company’s related transactions or any transactions in conflicts of interest to ensure their accuracy and completeness. 6. Prepares and disclose the audit committee reports in the annual reports which must be signed by the chairperson of audit committee. 7. Perform any deeds assigned by the board, provided that the committee accepts such assignments.

4. Authorities and Duties of the President 1. Manage and oversees the Company’s operation in accordance with the Public Company Act, rules and regulations by the SEC, SET, external supervisory units, the resolutions by the board of directors and the executive board in relation to policy, objectives, and annual corporate plan and budget. 2. Propose the annual corporate plan and budgets to the executive board.

035

3. Recruit, appoint, remove, transfer and terminate employment of the executive vice president or the equivalent positions, as well as approving their salaries, remuneration and other benefits. 4. Control, supervise, manage, direct, rule, and assign duties to all levels of employees. 5.Have the job description in place. 6.Manage other matters not specified above.

shall appoint a replacement to perform the president’s duties. In addition, in the Board Meeting No.9/2004 on August 31, 2004, the Board voted to approve the authorities of the president and the executive board in relation to the financial and asset transactions of the Company as follows:

In the event that the president is absent or is unable to perform his/her duties, the executive chairperson

Approval NO.

Transactions

President

Executive Board

To deposit, loan or invest in commercial or debt instruments, bills issued or avalled by financial institutions, or bills issued by listed or non-listed companies or avalled by financial institutions with maturity no more than one year that are approved by the Executive Board. In case the company has excess liquidity and can generate revenue higher than interest income from bank deposits of each transaction of not more than…

Baht 300 million

Baht 500 million

To borrow money from external individuals or juristic persons within the limit of each transaction of not more than…

Baht 200 million

Baht 300 million

To purchase materials, durable articles, assets, or other procurement not specified in the budget approved by the Board of each transaction of amount not more than … (in case an item has already been approved, it can be carried out further)

Baht 3 million

Baht 10 million

To sell unused or unproductive assets, or assets where there is maintenance cost if retained, must not be less than book value of each transaction of not more than…

Baht 2 million

Baht 10 million

036

Approval NO.

Transactions

President

Executive Board

To handle assets write-off, i.e. impaired assets write-off or account receivables write-off, and etc. has a net book value of each transaction of not more than…

Baht 1 million

Baht 3 million

To donates money, things or assets with the total book value of each transaction of not more than …

Baht 100,000

Baht 300,000

The investment in securities is subject to the policies and procedures of investment of the Company

Any authorities other than transactions mentioned above will be approved by the Board. The said authorities must also comply with the rules and conditions set by the SEC, SET and other external supervisory units.

List of the Management As of December 31, 2006, managements of the Company are as follows:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Name Mr. Sadawut Taechaubol Mr. Surabhon Kwunchaithunya Mrs. Louise Diskul Na Ayudhaya Mr. Asanee Chalungsut Mrs. Atchara Visasvora Mr. Vanchai Honghern Ms. Luxamee Kongvatanasest Mr. Tanti Paripontpochanapisuti Mr. Vichai Baiprasert Mr. Somchai Patcharapisutsin Ms. Suvinun Chavaphansiriporn Mrs. Porntip Kruwongpaiboon Ms. Piyachat Sanguandekul Ms. Nitaya Ketkaew

Position Chief Executive Office (CEO) and Acting President Vice Chief Executive Officer Director and Executive Vice President Chief Operations Officer SEVP– Securities Business 1 SEVP – Securities Business 3 SEVP - Accounting and Finance First EVP – Securities Business 2 First EVP – Internal Audit and Compliance First EVP – Information Technology First EVP – Securities Business 5 EVP – Institutional Equity EVP – Securities Operations First SVP – Accounting and Finance

037

Selection of Directors The Company has yet to appoint the committee to select suitable persons for substitute or additional directors. According to the Company’s Articles of Association, a shareholder has one vote per one share held in order to comply with the Public Company Act B.E. 2535. The selection of directors in Articles 21-27 of Section 5 of the Company’s Articles of Association can be summarized as follows: 1. The board has to consist of at least 5 but not more than 15 directors. 2. The directors’ qualifications are as follows: o Must be natural person and sui juris. o Must not be bankrupt or incapable. o Have never been imprisoned for the charges concerning illegal assets possession. o Have never been punished, fired or removed from position as a civil servant or government officer for the charges of fraudulent practices. 3. The selection of directors is done in the shareholders’ meeting following the regulations below. o Each shareholder has one vote per one share held. o The candidates may be voted individually or in groups at a time depending on the decision of shareholders’ meeting. In each voting session, shareholders have to exercise all their existing votes without breaking down to vote for different candidates or groups of candidates. o The candidate who gets the highest votes shall be selected to be director; the ones with respectively lower votes shall also be selected in case of multiple vacancies. o In case of equal votes, the chairperson of the meeting shall have an additional deciding vote.

038

4. Besides serving a complete term, a director will leave his or her position when: o He or she dies; o He or she resigns from the position; o He or she lacks qualifications or has qualifications prohibited by the Public Company Act; o The shareholders’ meeting resolved to remove him or her from the position by votes totaling more than three quarters of the number of shareholders who attend with voting rights who attend, and by no less than half of shares held by the number of shareholders who attend with voting rights. o The court orders his or her removal. 5. In case when a director position is vacant due to reasons other than completion of the term, the board may select a person who has qualifications as stated in the laws to be the substitute director. Should that vacancy has less than 2 months remaining in the term, the board may select none for substitution. The substitute director shall be in the position for only the remaining time left in the term of the director he or she replaces. On the appointment of independent director, the Board shall consider the qualifications in line with the SET guidelines on “qualifications of independent director” that he or she is: 1. Not a worker, employee, or consultant who receives salary or other benefits from the Company, the company’s subsidiaries, affiliates, or related companies. 2. Holding shares of no more than 0.5 % of paidup capital of the Company, its subsidiaries, affiliates, or related companies. The share holding also includes those shares held by the director’s related parties. 3. Capable to oversee for the equal interests of all shareholders.

4. Capable to ensure no conflicts of interest between the Company and the management, major shareholders or other companies which share the same group of management or major shareholders. 5. Capable to attend the Board meetings and contribute to the decision making of important matters of the Company.

Directors and Management Remuneration Monetary Remuneration Adkinson Securities PLC.

Directorsâ&#x20AC;&#x2122; Remuneration - The Company remunerates directors and audit committee members by paying monthly meeting allowance (no pension). The rates of monthly allowances were approved by the General Shareholder Meeting in 2006 as follows:

Position

Monthly Remuneration (Baht) 50,000 40,000 30,000 20,000 15,000

Chairperson Vice Chairperson Director Chairperson of Audit Committee Audit committee member

- In 2006, twenty one directors received remuneration in meeting allowance (no pension) amounting to Baht 5.03 million. Six members of the Audit Committee received the remuneration totaling Baht 0.57 million with the following details:

Mr. Prayoon Chindapradist, Prof Mr. Udom Vichayabhai Mrs. Apar Kewkacha Mr. Dej Namsirikul

Board of directors (Position) Chairperson Vice Chairperson Vice Chairperson Vice Chairperson

Gen. Wattana Sanphanich Pol. Gen. Somchai Vanichsenee

Vice Chairperson Director

470,000 360,000

Mr. Surabhon Kwunchaithunya

Director

360,000

Mr. Methi Pamaranond

Director

120,000

Mr. Somsak Mundaeng

Director

30,000

Name

Remuneration (Baht) 500,000 180,000 440,000 470,000

Audit Committee (Position)

Remuneration (Baht)

Audit Committee Member

105,000

Chairperson of Audit Committee Audit Committee Member Audit Committee Member Audit Committee Member

215,000 60,000 70,000 15,000

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Name

Mr. Nanthaphan Mahuttanatan Mr. Sadawut Taechaubol Mr. Pin Kewkacha Mrs. Sunjutha Witchawut M.L. Dispanadda Diskul Mr. Att Asavanund Mrs. Louise Diskul Na Ayudhaya Mr. Thomas V. DeMaio, Jr. Mr. Claudius Grossmann Mrs. Salya Charuchinda, Ph.D. Ms. Amara Techaratanachai Ms. Titima Thanakornyothin Total

Board of directors (Position) Director

Remuneration (Baht)

Audit Committee (Position)

Remuneration (Baht)

210,000

Audit Committee Member

105,000

Director Director Director Director Director Director Director Director Director Director Director

210,000 210,000 210,000 210,000 150,000 330,000 210,000 180,000 30,000 120,000 30,000 5,030,000

570,000

- In 2006, directors who resigned during the year are as follows:

Director Mr. Somsak Mundaeng Mrs. Salya Charuchinda, Ph.D. Ms. Titima Thanakornyothin Mr. Udom Vichayabhai Mr. Methi Pamaranond Ms. Amara Techaratanachai Mr. Claudius Grossmann

Resignation Date February 1, 2006 February 1, 2006 February 1, 2006 April 27, 2006 April 27, 2006 April 27, 2006 November 28, 2006

Remuneration for Executive Directors and Management - In 2006, the remuneration for 7 executive directors and 22 executive managements (including the executive directors who resigned during the year) paid as salary, bonus and indemnity (excluding meeting allowance paid to the above-mentioned executive directors) amounted to Baht 61.57 million. - Executive Directors and management who resigned during the year are as follows:

040

Executive Director/Management Mrs. Apar Kewkacha Mrs. Salya Charuchinda, Ph.D. Ms. Amara Techaratanachai Mr. Amarej Singnarong Ms. Titima Thanakornyothin Mr. Boonchai Ratanapamaneekul

Resignation Date April 27, 2006 May 1, 2006 May 1, 2006 July 1, 2006 September 25, 2006 September 25, 2006

Apex Securities Co., Ltd. Directors’ Remuneration -

In 2006, 3 directors received remuneration paid in meeting allowance (no pension) amounted to Baht 0.45 million. The Company’s director who resigned during the year is as follows: Director

Mr. Narong Chulajata Other Remuneration Prof. Prayoon Chindapradist, the Chairperson received a consulting fee for services provided to the board of directors during January and February 2007. In the Board meeting No.7/2006, on May 30, 2006, the Board unanimously approved the remuneration for Prof. Prayoon Chindapradist, the Chairperson in order to compensate and retaliate his duties as acting executive chairperson and acting president during May 2006 in the amount of Baht 250,000. The Board also approved the extra remuneration for Prof. Prayoon Chindapradist, the Chairperson in June 2006 amounting to Baht 250,000 as he was continuing to transfer all duties and responsibilities to the executive chairperson. In addition, Prof. Prayoon Chindapradist, the Chairperson has been using his own car as the company car while the Company compensates all expenses such as petrol, maintenance and wear and tear in the amount of Baht 50,000 per month beginning June 2007.

Resignation date January 16, 2006

Provident Funds Adkinson Securities PLC. In the Board meeting No.18/2002 on October 22, 2002, it was resolved to set up a provident fund, and the Company had registered its provident fund according to the Provident Reserve Funds Act B.E. 2530 and the Amendment Act B.E. 2542. The Company’s provident fund was officially established on December 25, 2002. As of November 1, 2006, the Company changed the asset management company from Finansa Asset Management Company Limited to ING Fund (Thailand) Company Limited, which manages the Company’s provident fund in the name of “ING Sawasdikarnmunkong 1 Registered Provident Fund.” According to the Fund’s regulations under the approval of Board’s resolution No 18/2002, the Company shall contribute to the Fund with the amount equivalent to its staff’s contributions, and each staff shall contribute to the Fund the amount calculated on the percentage of salary as follows:

041

Working Period

% of Salary

Not over 3 years Over 3 years but not over 5 years Over 5 years up

3 4 5

As of December 31 2006, the Company’s contribution was Baht 8.32 million.

- Mr. Sadawut Taechaubol, the Chief Executive Officer and Acting President, is the father of Mrs. Louise Diskul Na Ayudhaya, director and Executive Vice President. - Mrs. Louise Diskul Na Ayudhaya, director and Executive Vice President, is the sister-in-law of M.L. Dispanadda Diskul, former director.

Auditors’ Remuneration 1. Audit Fee The Company and its subsidiaries paid Baht 2.10 million fee for the financial audit of the latest accounting periods to the auditor of the Company. 2. Non-Audit Fee - None -

Family Relationship among the Management - Mrs. Apar Kewkacha, the First Vice Chairperson, is the spouse of Mr. Pin Kewkacha, the Company’s director.

Illegal Charge Records of the Management None

Execution of Contracts in Which Directors Have Direct or Indirect Interest in 2006 None

Shareholding of Directors and Management in Subsidiary As of December 31, 2006, the Company’s directors and management held shares of Apex Securities Co., Ltd., its subsidiary as follows: Director/Management Gen. Wattana Sanphanich Pol. Gen. Somchai Vanichsenee Mr. Pin Kewkacha Mrs. Apar Kewkacha Mr. Vanchai Honghern Ms. Luxamee Kongvatanasest Mr. Tanti Paripontpochanapisuti Mr. Vichai Baiprasert Mr. Somchai Patcharapisutsin

042

Number of shares 0 10 10 35 1 1 1 1 1

Increase (Decrease) (10) 0 0 (50) 0 0 0 0 1

Corporate Governance Policy on Corporate Governance The Board strongly believes corporate governance is a highly important in strengthening the Company’s organizational effectiveness, operational managements, sustainable business growth, as it will prove beneficial to the shareholders in the long run. Therefore, the Board has the policy to support and encourage continuous practices of good governance throughout the whole organization under the key principles of integrity, transparency, avoidance of conflict of interests, information disclosure, best interests of clients, shareholders and the Company, and social responsibilities as follows:

Shareholders: Rights & Equity 1. The Board oversees and ensures every shareholder has the following basic rights: 1.1 To receive or transfer shares unless the transfer causes the Company to exceed the number of Non-Thai shareholders quota of 49% of total number of shares outstanding. 1.2 To obtain accurate, complete and timely information. 1.3 To attend the meeting and to vote in the shareholders’ meeting. 1.4 To propose, appoint or demote directors and to approve the appointment of independent auditors. 1.5 To make the decision on changes in the Company’s important policy. 1.6 To obtain profits from operations. 2. Every shareholder shall receive the notice of the meeting and adequate information specifying the date, time, place and agenda including concerned matters in advance.

3. The Company shall arrange the shareholders meeting at the appropriate time and place for shareholders to attend the meeting conveniently. 4. All directors are required to attend the shareholders meeting to clarify or answer questions to shareholders. 5. The shareholders shall have an opportunity to propose the additional matter in the agenda or ask questions, request for clarification and express opinions appropriately according to the meeting agenda, as a resulf, the Board should not add any agenda without noticing the shareholders in advance. 6. The shareholders shall acknowledge rules and regulations and voting procedures of the meeting. The Company shall post all agenda on its web site in advance prior to sending documents to the shareholders so that they have adequate time to prepare for the meeting. 7. The Board’s opinions shall be provided in each agenda and the minutes of the meeting is recorded correctly and completely so that the shareholders and concerned persons are able to verify such meeting. 8. Each share has equal rights. The shareholders have the rights to vote according to the number of shares hold. In addition, they shall have equal rights to obtain news and information about the Company. 9. In the shareholders meeting, all shareholders who are executives, non-executives and foreign shareholders shall be treated equally and fairly. 10. All directors and senior executives of the Company are required to disclose their relationship – both direct and indirect ways – with the major shareholders or the third parties who have connected transactions with the Company.

043

Rights of Stakeholders The Board serves to assure equal treatments and the below rights to all groups of stakeholders - clients, shareholders, investors, creditors, partners, management, employees, independent auditors, public sector, society and other concerned entities: 1. Acknowledge the rights of stakeholders according to the specified law and encourage the cooperation between the Company and its stakeholders for sustainable business growth. 2. Realize the interest of all stakeholder groups equally. 3. Treat every employee equally and fairly with appropriate remuneration. 4. Be responsible to the client with clear and fair practices according to the rules and regulations in dealing with clients. 5. Set up a system and a responsible unit to deal with the clients’ complaints in careful and fair manners. 6. Keep clients’ information confidential. 7. Observe the conditions specified in the contract made with clients. 8. Operate fairly under the with code of conduct. 9. Be responsible to the society and the public. 10. The shareholders whom may have conflict of interest with a voting agenda shall be prohibited from his/her voting rights; except voting on the director election. 11. Disclose important information fairly and timely to all related parties in accordance with the SET’s procedures.

Information Disclosure and Transparency 1. Provide accurate information with transparency and disclose consistently. 2. Assign specific persons or departments to diclsoe information to shareholders, investors, analysts, mass media or supervisory units.

044

3. Details of information which shall be disclosed consistently are: o General information and type of business o Financial statements and operating performances and researches o List and shares proportion of major shareholders and executives o Risk factors of business o Policy on directors and senior executives’ remuneration o Directors’ qualification information o Connected transactions o Code of ethics and practices 4. Prepare financial statements or financial information to show financial status and operating performance as required by law and disclose other information in a complete, accurate, sufficient and timely manner in order that shareholders and stakeholders are informed accordingly. 5. Arrange to have financial statements audited by independent external auditor. 6. Facilitate analysts, investment advisors, brokerage firms, credit rating institutions, mass media and external supervisory units, and etc. in the best interest of investors. 7. Disclose policies on corporate governance and operating performance following the policy in the annual report and the Company’s web site and also announce them at the head office and all branches. 8. Disclose roles and duties of all committees, the number of meetings and attendances, directors’ opinion including a policy on directors’ and senior executives’ remuneration in the annual report and the Company’ s web site.

The Shareholder Meeting The Board realizes the importance of shareholders’ meeting and has the policy to have every member of the Board especially the chairperson of audit committee to attend every meeting. The Chairperson of the Board whom is also the chairperson of the meeting shall give every shareholder an opportunity to express his/her opinions or ask questions according to the agenda of the meeting, and answers questions of the shareholders to meet their satisfaction. The questions and answers including the important opinions have also been recorded in the minutes of meeting. In addition, the Board has the policy to treat every shareholder equally for attending the meeting, making a decision, obtaining accurate and sufficient information in timely manner. The shareholders can choose any specified proxy form to facilitate their vote. A copy of the minutes of the Board meeting shall be submitted to the shareholders together with the invitation letter to the meeting and posted on the Company’s website for no less than 14 days before the shareholders’ meeting date.

Leadership and Vision The Board’s duties and responsibilities are to direct its policy; to approve the Company’s business strategy, objectives, corporate plan and budget, risk management of the Company; and to oversee effective and transparent implementation by the management. In addition, the Board sees the importance of good corporate governance that emphasizes on good internal control and effective risk management by regularly following up in the Board meetings. Thus, it is pivotal that the Board comprises of directors who have leadership and vision, as well as capability to make independent decisions for the highest benefits of the Company and the shareholders. Moreover, the Board encourages regular selfevaluation by considering the results, problems and

obstacles of improvement. The Board’s performance is evaluated on an overall or a specific case basis, not focusing on any individual director. The Company has three main committees; namely the board, the executive board and the audit committee whose authorities, duties and responsibilities of each committee are clearly defined. Such authorities and duties shall include the authority to approve financial transactions. The purpose of these separations is to be in accordance with the principles of good governance as well as being efficient and transparent management who are prepared to be audited at all times.

Conflicts of Interest The Board has set clear guidelines to prevent conflicts of interest as follows: 1. Having a well-structured organization chart and its functional units as well as the composition of various committees. 2. Encourage the management and all employees to adhere to the working principles of integrity, professional ethics, no self-interest beyond responsibilities to the Company, client confidentiality, and no usage of inside information for own interest. 3. In the case that conflicts of interest or the Company’s interest not aligning with various interests of each stakeholder occurs, the Board and management shall consider the case carefully, honestly, reasonably, and independently for the best benefit of the Company, with the resulting decision disclosed to the shareholders. 4. In the cases where conflicts of interest or related transactions become an issue, the related directors must disclose such information to the meeting immediately and shall not have the right to attend nor vote for that agenda.

045

5. Directors, executives and all staff should avoid any transactions that lead to conflicts of interest resulting from dealing with related persons of the Company such as clients, competitors, or using information, or taking the opportunity of being directors or staff for exploitation or competition with the company or performing other jobs other than the Company’s tasks which would affect his/her duties. 6. Directors, executives and all staff should avoid holding shares in the business of its competitors that might affect their duties or responsibilities. In the case that such person holds shares before taking the position or staff or before the Company operates that business or inherited those shares, the person must report to his/her related supervisors and send a copy of the report to the audit and compliance division every time.

Business Ethics Since business ethics is essential to the Company in order to achieve business targets and success with an efficient operation systems, the Board has set a code of conduct for employees to follow and use as guidance to perform with honesty and integrity for the Company, clients, shareholders, and all stakeholder groups. In addition, the Company has established a set of punitive courses for those who breaches the code; and the audit and compliance division to oversee the matter regularly.

Balance of Directors (as of December 31, 2006) The Board consists of at least 5 directors but not more than 15 directors, who have skills, experiences, knowledge and independent judgment to share in the Board

046

meeting. In addition, the directors must have the qualifications according to the specified law. In addition, at least 4 members or one third of the Board members shall be independent directors. The appointment of the Board is subject to preset agenda with transparent and clear nomination of wellprofiled directors. The Company shall disclose the profile of all directors in detail, including any changes made to the public through the Company’s website, internal media and also at every branch office.

Aggregation or Segregation of Positions To achieve independence of the chairperson of the board and to segregate authorities and duties of policy makings and daily management, the chairperson of the board is not the same person as the chairperson of the executive board. The chairperson must not take managerial position of the Company nor has any direct or indirect conflict of interest on the Company’s financing, investment and management functions. In order to be mutually balance, the Board has clearly set roles, duties and authorities of the Board, the Executive Board and the President in written to prevent any overlapping in authorities.. Hence, the Board has defined the Company’s policy, whereas the Executive Board has overseen the Company’s management.

Remuneration for Directors and Management The Company has set the remuneration for directors in performing their duties in the meetings clearly and transparently. Such remuneration is approved by the shareholder meeting. In case directors are assigned to perform more roles and have more responsibilities such as being members of the sub-committee, they shall be rewarded accordingly. Regarding the remuneration for the management, the company has not formed a sub-

committee to set standard remuneration, but the Board has delegated the executive board to consider the remuneration for the management according to the performance of the Company, and the performance and responsibility of each management member. The remuneration of the executive chairperson is approved by the Board. Hence, the Board has the policy to disclose information of directors’ and executives’ remuneration in the annual report and the web site of the Company.

The Board Meeting 1. The Board schedules normal meetings on the last Tuesday of every month so that the directors can allocate their time to attend the meeting conveniently. Moreover, the Board may hold extra meeting when necessary. In every normal meeting the Board will follow up on the progress of the issues from the previous meeting and on operating performances of the Company and subsidiaries. 2. In the Board Meeting, directors must consist of no less than a half of the total number of directors. 3. The chairperson will approve the proposed agenda as advised by the executive chairperson and will consider other matters in the agenda proposed by any director of the meeting. Hence, each director is independent to propose other matters in the agenda. 4. The chairperson shall give sufficient time to the management to propose the matter or search for supporting documents in order to carry out a proper discussion. 5. The Board shall notify the Chief Executive Officer to invite senior executives to attend

the Board meeting in order to directly provide additional information on the issues. In addition, the Board members can have an opportunity to meet with the Company’s senior executives. 6. The Board may ask for additional information from the Chief Executive Officer or other assigned executives or request for independent opinions from the external consultant. 7. The management shall be responsible for giving proper information, advice and services to the Board in timely manner. 8. The Board has a policy for non-executive directors to hold a meeting at least twice a year to discuss various problems without the management. The result of the meeting will be reported to the Chief Executive Officer as well. 9. The secretary of the Board shall send an invitation letter together with the agenda and supporting documents of item to every director in advance of no less than 7 days so that directors have adequate time to study information before the meeting. 10. In every Board meeting, the secretary shall keep record of the minutes of the meeting for future reference.

Sub-Committee Besides the aforementioned executive board and audit committee, the Board can appoint an investment committee to assess and manage the Company’s securities investment for highest returns adhering to the policy directions. The committee shall be independent from those of marketing and other departments.

047

048

Internal Control and Audit and Financial Report

The Board’s reporting

The Company has given serious attention on the internal control system at the managerial and operational levels, focusing on the adequacy and appropriateness of the system to prevent any damages that may occur to the Company’s financials and business operations. The Company has set up the policy on internal control and audit as follows: 1. The management is assigned to prepare the accurate, complete and timely financial report, consisting of quarterly and annual reports. 2. The Company has set up the efficient internal control and audit system to ensure that the Company follows the related standards and laws under the investigation of internal auditor and the review of the audit committee. 1. The Company has clearly defined in written the responsibilities and authorities of the management. 2. The Company continuously monitors and audited the use of the Company’s assets to avoid any damages or exploitation. 3. The Company segregates duties in order to have an appropriate system of check and balance. 4. The Company gives importance to advice or suggestions made by independent auditors and regulatory bodies in helping the Company to further improve its operations practices. 5. The Board has an audit and compliance division reported directly to the audit committee to ensure the independence of the said division that can check and balance efficiently. 6. The Board has the policy to recruit the reputable external auditors approved by the SEC in order to audit, advice and rectify the weaknesses or errors of the internal control system of the Company.

The report of the Board has been prepared to specify responsibilities of the Board on the consolidated financial statements of the Company and its subsidiaries and other important matters according to the standard practices suggested by the SET along with the audit report as shown in the annual report. In addition, the audit committee will review the quality of financial reports and internal control system, as well as the disclosure of important information in the notes to the financial statements with a discussion with the compliance division and the external auditor in order to provide the accurate and complete financial reports of the Company.

Investor Relation The Board sees the importance of accurate, complete, and transparent disclosure of the Company’s financial and non-financial information including those which may impact the Company to investors and relevant parties in a timely manner and by means set by the SET. The Company shall disclose such information through various channels such as through reports to the SET, and through its own websites, www.AdkinsonOnline.com and www.asl.co.th. To disseminate accurate and reliable information as well as to eliminate rumors or misleading information, the Company has assigned the executive chairperson to be responsible for answering any questions and clarifying any information of the Company to investors and relevant parties. Investors can contact such person by telephone at number 0-2205-7000 ext. 1007, or at e-mail address : secretary@asl.co.th. In addition, the Company has assigned the audit and compliance division as the center to respond to clients’ complaints where clients can contact by telephone at number 0-2205-7000 ext. 1300-11.

Supervision on Use of Inside Information The Board realizes the importance of preventing the use of inside information of the Company and clients for one’s own benefits. A policy has been setup to keep confidential information known only to relevant persons. The Board resolved at the meeting No. 20/2002 on December 24, 2002 to make the announcement on “the security of the confidential information, which has not been disclosed to general investors”. Directors, the management and every employee shall be aware of the practices, sanction and the procedures to deal with those who violate such announcement. In addition, the Company has issued regulations, standards and guidance on the management and personnel ethics, the measures for security and confidentiality of information of the clients, internal organizations and personnel of the Company (Chinese wall) and the securities trading by directors, management and personnel, including the standard and guidelines in the securities transactions in the watch list and restricted list, to the directors, the management and all personnel. The Company has designated the audit and compliance division to oversee the management, personnel and all divisions to perform their duties in accordance with the relevant laws and regulations. In case where a breach is found, the audit and compliance division shall report immediately to the audit committee and the president to consider the appropriate measure. As the Company and its subsidiary are engaged in securities activities, it is the policy of the Company to have both companies strictly prevents falsifications and misuse of inside information in such a way that is

considered wrongful or against the laws and relevant rules and regulations. If a director, management or personnel of the Company use the inside information or those obtained in duties for one’s own benefit, the Company shall regard it as a serious offense, and such individual shall be severely penalized.

Internal Control The audit committee shall oversee and review the accuracy and adequacy of the Company’s internal control, risk management, financial reporting, information disclosure, and to review the functions and develop an efficient working system of the audit and compliance division. In addition, the Committee is assigned to jointly convene with the Company’s management and external auditors to assess and lay out corrective measures. The audit committee’s meeting is held at least once every quarter. In 2006, there were nine audit committee meetings. In the Board meeting No. 2/2007 on February 27, 2007, which the audit committee also attended, the Board assessed the internal control system based on the information, reports and explanations given by the management in five major areas, i.e., the organization and operating environment, risk management, management operational control, information and communication system, and monitoring system. The result was satisfactory that the Company had already achieved an appropriate level of operational readiness, and had in place an appropriate and sufficient internal control system in the areas concerned.

049

050

Related Transactions Opinions of the audit committee on the Companyâ&#x20AC;&#x2122;s related transactions are as follows. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

Individuals / Relationship Juristic Entities Brother of the executive Mr. Sarasit Wiseswara Brother of the executive Mr. Dissatat Wiseswara Mrs. Cha-On Hong Hern Sister of the executive Mrs. Dara Hong Hern Mr. Litti Kewkacha Son of the director Mr. Amnaj Kewkacha Son of the director Mr. Thana Kewkacha Miss Pimporn Vanichsenee Daughter of the Chairperson of audit committee Mr. Bee Taechaubol Son of the Chief Executive Officer Mr. Sadawut Taechaubol Chief Executive Officer and Acting President Mr. Ben Taechaubol Son of the Chief Executive Officer Mrs. Louise Diskul Na Ayudhaya The Executive Member (Louise Taechaubol) Mr. Santidis Diskul Brother of the former director Miss Vorapat Vichayabhai Daughter of the former director Mr. Sirote Vichayabhai Son of the former director The International Engineering PLC. Related transactions between the Phuket Fantasy Tour Co., Ltd. Company and the company which has Safari World Plc. the co-directors

Type Of Transaction

Brokerage fee

Air ticket expense Gift expense Staff party expense

Note : The value of related transactions excluded the value added tax

Transaction Value (Baht) 2005 2006 598.33 783.50 933.72 1,876.26 192,625.63 32,835.41 261.80 77.00 748.00 510.00 100,862.51 82,399.27 - 101,687.07 10,615.50 77,167.43

Notes

Normal trading account

Opinion of the Audit Committee

The fees paid are the same as market rate and the rate charged to general clients

- 2,255,835.77 7,191.25 950.00 6,785.57 4,237.50 - 1,293,849.25 - 111,066.30 741,630.00 131,634.00 The air ticket for executives and The price is not higher than the rate charged to general staff who performed duties clients through such companies 1,573,910.0 2,630,787.00 The appropriate price is estimated following the market price - 9,462,573.00

2,333,588.21 16,490,842.86

The Audit Committee Report The Audit Committee consists of three independent directors - Pol. Gen. Somchai Vanichsenee as the chairperson of the committee, Mr. Dej Namsirikul, and Mr. Nanthaphan Mahuttanatan as an audit committee members and Mr. Vichai Biprasert, first executive vice president of audit and compliance division as the secretary of audit committee. In 2006, the Audit Committee performed their duties as enacted by the Charter of Audit Committee and held nine meetings. The followings are the scope of work of the Committee. 1. Reviewing the works performed by the audit and compliance division, approving the audit plan, audit reports and follow-ups, as well as evaluating and making recommendations to improve the efficiency of the internal audit function. 2. Reviewing and assessing the relevance of the Company’s internal control system by jointly evaluating with the internal and external auditors. The assessment did not find the Company inadequate in its internal control system and risk management. 3. Reviewing the Company’s operation to ensure compliance with the regulations of the SEC, SET and other relevant laws of the Company’s business. 4. Jointly reviewing and approving the quarterly and annual financial statements with the internal and external auditors before presenting them to the Board of Directors. The Committee agreed with the external auditors that the financial statements of the year 2006 were prepared in accordance with the Generally Accepted Accounting Standards and adequately disclosed significant transactions in the notes accompanying the financial statements. 5. Proposing to the Board of Directors to appoint Mr. Niti Jungnitnirundr and/or and/or Mrs. Nachalee Boonyakarnkul and/or Mr. Permsak Jerajakwattana and/or Mr. Suphamit Techamontrikul of Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. to act as the auditors of the Company for the year 2007. In addition, the Committee had considered the remuneration for the auditing service to be approved in the Shareholders’ Meeting. 6. Attending meetings, discussing and exchanging opinions with the management of the Company and the external auditors to acknowledge remarks and exchange ideas. In 2006, the Audit Committee was of the opinion that the directors and management of the Company strictly observed good corporate governance in carrying out their duties, and that the Company had adequate and appropriate internal control system and risk management covering the management and staff levels for business operation. The Committee was also of the opinion that the management was determined to administer the organization under the prescribed code of ethics, oversee operations in compliance with the laws and regulations consistently, present the audit report of the audit and compliance division to the Audit Committee directly, and to monitor corrective actions periodically to ensure that they comply with recommendations. In addition, KPMG Phoomchai Audit Ltd., the current auditor of the Company, reported that no important error was found. The operations were performed according to the specified procedures with the efficient internal control system. In the Board meeting No.2/2007 on February 27, 2007, the Board considered sufficiency of the internal control system approved by the Audit Committee based on the information, reports and explanations given by the management in five major areas, i.e., the organization and operating environment, risk management, management operational control, information and communication system, and monitoring system. The Board was of the opinion that the Company had in place an appropriate and sufficient internal control system in the areas concerned.

(Pol. Gen. Somchai Vanichsenee) Chairperson of the Audit Committee March 6, 2007

051

Management Discussion and Analysis Operating Results In the accounting cycle of 2006, the investment in the securities market had been affected by the political uncertainty, world oil price, interest rate, inflation, and exchange rate factors. In addition, the BOT’s capital control measure had significantly contributed to market volatility. Especially, in the second half of 2006, the SET index recorded the lowest and highest levels at 587.92 and 787.55 points respectively. As of December 2006, the index closed at 679.84 points, decreased by 33.89 points at the end of 2005 with the average daily turnover of Baht 16,393.73 million, down from Baht 16,600.74 million in 2005. Due to the SEC’s policy to liberalize securities business licenses and securities brokerage commission

rates over the next five years, securities brokers that mainly rely on brokerage fee will be negatively affected. From the impact of the said factors, in 2006, the Company had restructured its business operations in accordance with such changes by focusing on the policy to expand major clients’ base, as the result of an increase in its market share from 2.01 percent in January 2006 to 2.78 percent in December 2006. Moreover, the Company had reduced operational costs based on profitability of each branch, as the result the Company had consolidated and closed 23 branches in total. Nevertheless, the Company believes that the branch consolidation or closure would bring long term benefits to the Company’s cost management. At year-end 2006, the Company had the policy to expand business of investment banking division in order to increase its incomes.

2006 Operating Performance classified by businesses is as follows: Adkinson Securities PLC.* Apex Securities Co.,Ltd. 2006 2005 2004 2006 2005 2004 Brokerage fee - 102,292,783 302,692,266 487,999,731 500,728,567 804,325,521 Fee and service income - 2,324,529 10,588,335 815,365 2,859,230 11,071,795 Gain (Loss) on trading in securities (276,968,055) 10,766,945 (58,528,046) - (2,149,632) (242,154) Interest and dividend 134,377,600 81,551,040 52,732,549 16,077,652 4,365,334 1,902,209 Interest on margin loans 492,128 29 17,732,788 9,512,933 12,030,528 49,915 Total securities business income 363,957,429 605,418,715 821,632,347 16,077,681 106,882,929 315,432,784 Note : * consolidated financial figures of the Company and its subsidiary.

052

1. Total securities business revenues: In 2006, total revenue of Baht 363.96 million decreased from the prior year by Baht 241.46 million or 39.88 percent as a result of the following: 1.1 Brokerage fee registered Baht 488 million, which decreased by Baht 12.73 million or only 2.54 percent year-on-year, as the result of the decrease in trading value of the Company and its subsidiary from Baht 204,056 million in 2005 to Baht 203,766 million in 2006, or a decrease of 0.14 percent according to the overall market, which total trading value of the SET decreased from Baht 4,067,181 million in 2005 to Baht 3,983,676 in 2006 or 2.05 percent. 1.2 Fee and service income registered Baht 0.82 million, which declined from the prior year by Baht 2.04 million or 71.48 percent, mostly attributed to the temporary suspended business of a subsidiary resulting in a drop in financial advisory and securities underwriting fees. 1.3 Loss on securities trading recorded Baht 276.97 million in 2006 or an increase in loss of Baht 287.74 million in the prior year, which reported a gain of Baht 10.77 million, mostly attributed from the selling of long-term securities investment which invested since 2003. 1.4 Interest and dividend incomes were Baht 134.38 million, an increase of Baht 52.83 million or 64.78 percent year-onyear attributed to higher interest. The Company managed its investments based on the prevailing interest rate yields.

1.5 Interest on margin loans was Baht 17.73 million, which rose from the prior year of Baht 8.22 million or 86.41 percent as loans from credit balance and interest rate increased in tandem with the market. 2. Total Expenses increased year-on-year by Baht 195.29 million or 22.74 percent to Baht 1,053.95 million due to: 2.1 Personnel expense decreased from Baht 441.32 million in 2005 to Baht 393.40 million in 2006, a decline of Baht 47.92 million or 10.86 percent year-on-year owing to: o A drop in bonus of Baht 53.43 million. The Company paid bonus in the amount of Baht 19.56 million in 2006, compared to Baht 72.99 million in the previous year. o A decline in salary expense of Baht 10.63 million was because the Company has managed its compensation and restructured its personnel appropriately and efficiently. o An increase in fringe benefits expense of Baht 12.21 million as a result of arranging the staff party on the occasion of the 30th anniversary of the Company, and employee uniform expenses. 2.2 Tax expense was Baht 5.03 million in 2006, compared to Baht 3.14 million in 2005 or increased by baht 1.89 million or 60.40 percent. The increase in tax expense was the result of higher specific business tax as the Companyâ&#x20AC;&#x2122;s interest income rose. 2.3 Information and communication expenses decreased from Baht 47.56 million in 2005 to Baht 38.61 million, or a decrease of Baht 8.95 million or 18.80 percent due to the Companyâ&#x20AC;&#x2122;s consolidation and closure of 23

053

branch offices resulting in lower such expense. 2.4 Branch consolidation expense was Baht 65.73 million. This was because the Company had consoled and closed 23 branch offices this year. 2.5 Loss on impairment in investment was Baht 195.29 million. This resulted from the allowance for impairment in investment in debt instruments invested in 2005. 2.6 Other expenses decreased from Baht 93.10 million in 2005 to Baht 76.30 million in 2006, or a decrease of Baht 16.80 million or 18.04 percent due to cost control according to business operations of the Company. 3. Net loss in 2006 registered Baht 683.56 million, compared to Baht 244.17 million in 2005. The significant reason resulted from a decrease in total income arisen from losses on sales of long-term investment which has invested since 2003. Whereas, an increase in total expenses was due to the damages incurred from the Companyâ&#x20AC;&#x2122;s consolidation or closure of branches and allowance for impairment in investment in debt instruments which has invested since 2005. 4. Financial Ratios 4.1 Gross profit margin in 2006 was 93.69 percent, compared to 96.52 percent in 2005. This was because the Company had booked the payment to the investor protection fund which paid in early 2005 as 2006 expenses. 4.2 Net profit margin (loss) in 2006 was (184.56) percent of total income, compared to (39.74) percent of total income in 2005, due mainly to a decrease in total income recorded and an increase in the recorded net loss.

054

4.3 Return on equity in 2006 was (17.51) percent, compared to (6.38) percent in 2004, consequent to the reported net loss in 2006 higher than the reported net loss in 2005. 4.4 In 2006, return on investment in securities was (10.84) percent, compared to 7.84 percent in 2005. This was because the Company recorded a loss on sales of long-term investment in securities which has invested since 2003.

Financial Status Assets As of December 31, 2006, total assets of the Company and its subsidiary amounted to Baht 4,501.94 million, which increased by Baht 88.55 million or 2.01 percent. The changes in assets can be summarized as follows: 1. Liquid assets: The Company had maintained high liquidity with Baht 2,252.77 million worth of cash and cash equivalent, an increase of Baht 207.32 million or 10.14 percent year-on-year. The liquid assets to total assets ratio increased from 60.72 percent in 2005 to 68.27 percent in 2006, while net liquid capital ratio (NCR) registered 402.67 percent in 2006, increased from 316.10 percent in 2005. The net liquid capital ratio was much higher than the minimum NCR (7 percent) required by the SEC. This was because the Company had the policy on efficient and appropriate management of assets in tandem with the market. 2. Investments in securities in 2005 amounted to Baht 831.71 million, a decrease of Baht 35.17 million

or 4.06 percent year-on-year. As of December 31, 2006, the Company’s investment classified by type of securities, provisions due to revaluation, and

Type

2006 Amount

provisions for the impairment of investment were as follows:

2005 Amount

2004 Amount

Current investment - listed securities 490.16 63.91 7.20 - Government securities - Bill of exchange 199.00 230.00 100.00 - Unit trust 50.00 Total 689.16 293.91 157.20 Adjustment to market price (70.27) (1.33) (5.89) Discount on bills (0.71) (5.28) (1.91) Allowance for impairment of investment (195.29) Total current investment-net 422.89 287.30 149.40 Long – term investment- listed securities 325.72 781.50 748.31 - Government securities 102.57 103.42 104.24 - Debt securities 20.00 20.00 20.00 - Unit trust 179.11 58.77 10.66 - Equity securities 28.93 28.93 28.93 Adjustment to market price 23.73 (140.45) (79.93) Allowance for impairment of investment (271.24) (272.59) (272.59) Total long – term investment - net 408.82 579.58 559.62 Total 831.71 866.88 709.02 As of December 31, 2006, the net current investment in 2006 was Baht 422.89 million, compared to Baht 287.30 million in 2005 or an increase of Baht 135.59 million or 47.19 percent. This was because the Company had the policy to increase the investment in listed securities for trading by focusing on growth stocks in order to generate income to the Company. Moreover, the Company had set the allowance for impairment of investment in debt instruments (bill of exchange) that has invested since 2005 in the amount of Baht 195.29 million.

(Unit : Million Baht) Compare between 2005&2006 Increase % (Decrease) 426.25 666.93 (31.00) (13.48) 395.25 134.48 68.94 5,187.37 (4.57) (86.52) (192.29) (100.00) 135.59 47.19 (455.78) (58.32) (0.85) (0.82) 120.34 204.76 164.18 116.90 (1.35) (0.50) (170.76) (29.46) (35.17) (4.06)

The net long-term investment in 2005 was Baht 579.58 million in 2005 to Baht 408.82 million in 2006 or a decrease of Baht 170.76 million or 29.46 percent, attributed to sales of long-term securities investment that has invested since 2003. The objective was to bring those amounts for further investment with higher returns. In 2006 the allowance for impairment of investment was slight decrease from 2005. In 2006, there was no additional record of allowance for impairment in long term investment, which had been recorded in 2005 at Baht 271.24 million, as the same amount was deemed

055

appropriate, after evaluating the decrease in value of the investment in listed and non-listed securities in comparison with their cost and book values, including operating performance, trend analysis and market value of such securities and the overall investment climate. The Company has designated the investment committee to oversee investment in securities of the Company’s account, and to prescribe the investment guidelines for investment. Besides, the Company has set the allowance for revaluation of assets in accordance with the Thai accounting standards (TAS) and the SEC’s announcements. 1. Net securities business receivables amounted to Baht 786.47 million in 2005, which increased by Baht 93.25 million or by 13.45 percent year-on-year. This resulted from the increase in margin loans receivables as the Company has efficiently managed its financial

system by giving more loans together with strict control on the receivables. In relation to the policy on allowance for doubtful accounts, the Company will analyze each debtor’s current status on the expected uncollectible amounts, in pursuance to relevant SEC’s announcement. In 2006, although, the number of defaulted debtors increased from 42 to 45, the uncollectible amount has decreased from Baht 132.20 million to 127.08 Baht million, and the net debt amount has decreased from Baht 108.28 million in 2005 to Baht 106.81 million. This was the result of the enforcement of strict control and collection program. Furthermore, the Company continues to receive payment through debt installments from debtors, and has conservatively set the allowance for doubtful accounts based on the whole amount of the doubtful accounts. The details of the allowance for doubtful of the Company are as follows:

Allowance for doubtful accounts of Adkinson Securities Public Company Limited Allowance Debts Collateral Net Debts for doubtful Amount (Million (Million (Million (Million Number Result of collection Period of Overdue Baht) Baht) Baht) Baht) Cash accounts 1- 3 months 5 0.17 0.17 0.17 follow-up and under installment > 3 < = 6 months 2 0.01 0.01 0.01 follow-up > 6 < = 12 months 7 0.15 0.15 0.15 follow-up and under installment > 12 < = 24 months 8 0.17 0.17 0.17 follow-up and under installment More than 24 months 18 9.49 9.49 9.49 follow-up, under installment and under litigations Sub-Total 40 9.99 9.99 9.99 Other receivables More than 24 months 5 117.09 23.21 96.82 96.82 follow-up, under installment and under litigations Total 45 127.08 23.21 106.81 106.81

056

Period of Overdue Cash accounts 1- 3 months >3 < = 6 months >6 < = 12 months > 12 < = 24 months More than 24 months Sub-Total Other receivables More than 24 months Total

Debts Amount (Million Baht)

Collateral (Million Baht)

Net Debts (Million Baht)

Allowance for doubtful (Million Baht)

2 10 12

0.009 2.75 2.76

2 14

0.0072 2.77

0.0043 0.0043

0.0029 2.76

Number

Result of collection

Follow-up/repayment Follow-up/repayment

1. Net premises and equipment amounted to Baht 297.90 million, a decrease of Baht 136.13 million or 31.36 percent year-on-year, due to the Company’s consolidation of 23 branch offices resulting in no longer using of leasehold improvement and furniture and sales of office equipment of branches in which were consolidated and closed. Moreover, the Company had sold unnecessary vehicles.

made less investment in property, plant and equipment and intangible assets. Beside, the company received fund from selling long term securities investment which invested since 2003. In 2006, the Company registered net cash provided by financing activities of baht 969.82 million, increased by Baht 971.76 million from the amount at the end of 2005 as a result of receiving money from the exercise of warrant Tranche 4 of Baht 972.79 million.

Liquidity

Sources of funds

As of December 31, 2006, the Cash Flow Statement of the Company and its subsidiaries exhibited that net cash outflow from operating activities was Baht 913.57 million, compared with Baht 39.69 million cash outflow registered in 2005. The change in operating cash flow position was mostly due to normal change in securities trading accounts such as securities business receivables and payables. Net cash provided by investing activities was Baht 151.06 million in 2006, up from the amount at the end of 2005 of Baht 129.89 million as the company had

At the end of 2006, the Company’s shareholders’ equity amounted to Baht 4,131.63 million, which increased by Baht 453.41 million or 12.33 percent year-on-year as the Company had increased its paid-up capital of Baht 972.79 million for the exercise of warrant Tranche 4 in the amount of Baht 97,278,823 shares at Baht 10 per share. In 2006, the Company registered revaluation gain on investments of Baht 23.73 million, while revaluation loss on investments of Baht 140.45 million. In addition, the Company’s retained loss in 2006 was Baht 901.67 million, compared to Baht 218.10 million in 2005 as a result of

057

the increase in shareholders’ equity of Baht 453.41 million from 2005. The Company’s net liquid capital ratio (NCR) was 402.67 percent in 2006, up from 316.10 percent in 2005,

due to higher liquidity fund. The NCR was considered very high, when compared to the minimum NCR required by the SEC at 7 percent.

Net liquid capital ratios (NCR) of the Company and Apex Securities Co., Ltd. can be summarized as follows:

Adkinson Securities PLC. - Net liquid capital (Million Baht) - Liabilities (Million Baht) - Net liquid capital ratio (NCR) Apex Securities Co., Ltd. - Net liquid capital (Million Baht) - Liabilities (Million Baht) - Net liquid capital ratio (NCR)

2006

2005

2004

2,997.54 744.42 402.67%

2,225.27 703.97 316.10%

2,531.72 378.05 669.69%

318.26 3.21 9,905.61%

444.38 316.17 140.55%

Key Factors Affecting the Company’s Future Operations and Financial Performance The Stock Exchange of Thailand’s (SET) trading value volatility is one of factors that have impacted the securities brokerage revenue. The overall market has also been affected by investors’ confidence in economic and political stability, direction of the SET, operating performances, and transparency of listed companies. The Company has improved the trading system’s efficiency as part of our Client Relationship Management strategy to captivate a greater market share to generate higher revenue. In addition, the Company has expanded its revenue base to other types of securities business to reduce the reliance of revenue obtained from any single business line. Default risks and errors that may arise from securities trading have effected the Company’s financial status and operating results. Therefore, the Company has

058

set up a system of credit approval, evaluation and revision of clients’ repayment capability and following up on delinquencies in case of clients’ default. The movement of securities prices has affected the performance of the Company’s investment in securities. The Company has formed an investment committee to define clear investment guidelines and procedures to better comprehend market volatility and lower investment return volatility. With regards to the risk of the commission liberalization, the SET has announced the regulations of brokerage fee, effective from January 1, 2007 and its additional announcement from March 1, 2007, which has impacted the Company’s brokerage revenue and overall business strategy. In order to mitigate the financial risk and to increase the profitability, the Company has reorganized its structure, increased the profitability by increasing the revenue, managed financial liquidity, controlled expenditures, and developed new transactions and marketing channels.

To handle risks of new transactions, the Company has provided securities borrowing and lending services to increase future revenue stream. The Company also plans to be an active participant in the Set50 Index Futures (TFEX) market. Realizing the risk of such new transactions, the Company has prepared efficient internal controls and personnel development programs.

The Company also actively participated in the capital market development programs by providing training to interested clients and investors continuously throughout the year 2006 such as SET visit, Ruampol Khon Rak Hoon, E-Finance Thai, Thai investors’ day seminars and Money Channel seminar in Udonthani province.

Corporate Role and Social Responsibility The company is conscious of its social responsibility to contribute towards the improvement of the community’s well-being as well as the nation’s prosperity. Over the past years, the Company has participated in the promotion and development of Thai youths to assist in preparation of developing into the country’s future contributors. The Company donated 40 computer sets to students in schools such as Sansai, Ban-Tham, Ban Somluang, Ban Padaeng, and the Motri Wittaya schools, located in the third education area in Chiang Rai. The Company also donated clothing to students at Pracharat Sammaci school in Rayong, and schools under the Thairat Witthaya foundation such as Ban Namron school in Nakhon Si Thamarat and Ban Tai Romyen in Suratthani. In addition, the Company encourages social activities in support of various organizations and foundations such as donating funds through the Rajaprajanugroh Foundation under the Royal Patronage to help victims from flooding, donating computer sets to the Office of Wat Suankaew in Nondhaburi and coordinating with ITV under the project, namely “Ruammue Ruamjai Tan Pai Nao with ITV” by donating clothing 800 people in the mountain range of Phuphan covering 15 Ampurs in Sakol Nakhon, Kalasin and Mukdaharn provinces.

059

List of Directors and Management (as of December 31, 2006)

Name & Position Mr. Prayoon Chindapradist, Prof.* Chairperson

Mrs. Apar Kewkacha 1st Vice Chairperson

Age (Years) 79

Mr. Dej Namsirikul Independent Director and 2nd Vice Chairperson

General Wattana Sanphanich Independent Director and 3rd Vice Chairperson

Education Higher Diploma in Accountancy (Equivalent to Masterâ&#x20AC;&#x2122;s Degree), Thammasat University Training - DAP - DCP B.A. (Political Science), Ramkhamhaeng University Training - Chairman 2000 - DAP - DCP - Finance High School, Assumption Bangrak

- National Defense College - Master of Political Science, Ramkhamhaeng University Training - DAP

Pol. General Somchai Vanichsenee Independent Director and Audit Committee

060

- Master of Public Administration, Chulalongkorn University - Bachelor of Public

Stake (%)

Work Experience Period

Position

Business

2006-Present Chairperson 2005-Present Chairperson of Audit Committee 2004-Present Chairperson of Audit Committee 2002-2004 Advisory director 1993-Present Chairperson of the University Promotion Committee 2006-Present First Vice Chairperson 2003-2006 Chief Executive Officer 2007-Present Chief Executive Officer 2005-2006 Director 2004-2005 Chief Executive Officer 1999-2003 Managing Director

Adkinson Securities PLC. International Engineering Plc. Asian Insulators Plc. TMB Bank Plc.

2006-Present Independent Director and Second Vice Chairperson 1987-2002 Director 1987-2002 Director 1979-Present Chairperson 2006-Present Independent Director and Third Vice Chairperson 2005-2005 Independent Director 2003-2005 Vice Chairman 2000-Present - Senator (Karnchanaburi Province) - Vice Chairman of Military Committee - Vice Chairman of Committee for Independent Organizations - Member of Extraordinary Committee for amendment of senatorâ&#x20AC;&#x2122;s regulations 1991-Present Independent Director 2005-present Independent Director and Audit Committee 2003-present Director 2000-2002 Deputy Commissioner-

Adkinson Securities PLC.

Burapha University Adkinson Securities PLC. Safari World Plc.

Thai Textile Plc. United Flourmill Plc. Dast Alloysteel Co., Ltd. Adkinson Securities PLC.

Apex Securities Co., Ltd. Parliament

Safari World Plc. Adkinson Securities PLC. Apex Securities Co., Ltd. Royal Thai Police

Name & Position

Age (Years)

Pol. General Somchai Vanichsenee (Continued)

Mr. Sadawut Taechaubol * Chief Executive Officer and Acting president

Mr. Nanthaphan Mahuttanatan Independent Director and Audit Committee

Mrs. Louise Diskul Na Ayudhaya * (Louise Taechaubol) Director

Mr. Pin Kewkacha * Director

Education

Stake (%)

Work Experience Position

Business

Chief Executive Officer and Acting President Non-Authorized Director Consultant to President of House of Representatives (Mr. Utai Pimjaichon) Independent Director and Audit Committee Managing Director and Executive Director Managing Director

Adkinson Securities PLC.

Director Marketing Representative Assistant Marketing Executive Assistant Property Manager

Adkinson Securities PLC. SCB Securities Co., Ltd. Global Estate, Sydney, Australia Country State, Sydney, Australia

Director President Executive Director

Adkinson Securities PLC. Safari World Plc.

Director Executive Director

Phuket Fantasea Plc.

Period

Administration Police Cadet Academy Training - DAP - DCP - Audit Committee 2006-Present Honorary MBA, Kensington University, 2002-2003 California, USA 2001-2005 BA (Political Science), Ramkhamhaeng University 2006-Present MBA (International Banking and Finance), 2001-Present University of Birmingham, England 2001-2003 Bachelor of Engineering (Electronic and Electrical Engineering), King Mongkutâ&#x20AC;&#x2122;s Institute of Technology Lad krabang. Training - DAP - Audit Committee 2006-Present MBA (Finance and 2005-2005 Marketing), Sasin 2001-2002 Graduate Institute of Business Administration 1999-2000 of Chulalongkorn University Training - DAP B.A. (Political Science), 0.000 2006-Present Ramkhamhaeng 5% 2004-Present 2003-2003 University 2001-2003 Training 2003-Present - DAP 1996-2003 - DCP

General

Property Planner PCL

Adkinson Securities PLC. S Realty PCL S.A. Media PCL

061

Name & Position

Mrs. Sunjutha Witchawut Director

Age (Years) 46

Education

MBA, University of the Thai Chamber of Commerce

Stake (%)

Work Experience Period

Position

2006-Present Director 2006-Present Consultant to Managing Director 2006-Present President 2006-Present Executive Chairperson 1999-Present Managing Director

Mr. Att Asavanund Director

Mr. Chau-Chi Wong Director

062

MBA (Finance and Marketing), Sasin Graduate Institute of Business Administration B.A. (Economics), University of Illinois, Chicago, USA, Training - DAP Master in Public Policy,J.F. Kennedy School of Government, Cambridge, MA, USA MBA , Sasin Graduate Institute of Business Administration of Chulalongkorn University

M.L. Dispanadda Diskul*/1

Mr.Thomas V. DeMaio,Jr./1

Bachelor of Business Administration University of Missouri, USA

Mr. Asanee Chalungsut Chief Operations Officer

Ms. Nitaya Ketkaew First SVP â&#x20AC;&#x201C; Accounting and Finance

Master in AccountingChulalongkorn University Training - DAP MBA (Finance and Economics), Loyola University at Chicago, IL, USA

2006-Present 2006-Present 2002-2006 2000-2002

Director Senior Vice President Head of Investment Banking Fund Manager

2001-Present Founder and Managing Partner 1998-2001 Manager and Regional Head 2006-Present Director 2005-2006 Corporate Marketing Manager

Business Adkinson Securities PLC. Muang Thai Insurance company limited International Engineering PLC. Blisstel PLC. Harmony Holding PCL

Adkinson Securities PLC. Dragon One Intelvision Securities PCL IFCT Nomura Jafco Capital

Chi Capital, Hong Kong BNP Paribas, Hong Kong

Adkinson Securities PLC. Doi Tung Development Project Mae Fah Luang Foundation Fund Manager 2002-2003 Ladawan Capital Co.,Ltd. 1998-2002 Investment Banking Analyst Merrill Lynch Phatra 2006-Present Director Adkinson Securities PLC. 2005-2006 Director, Head of Trading Chi Capital-Hong Kong 2001-2005 Managing Director Ritchi Capital-Hong Kong Portfolio Manager 1999-2001 Ritchi Capital ManageIndependent Trader mentCaneva, Illinois, USA Chicago, Illinois, USA 2006-Present Chief Operations Officer Adkinson Securities PLC. Senior Vice President 2003-2006 UOB (Thai) Plc. 1997-2003 Vice President Citibank N.A. Thailand

2006-Present First SVP â&#x20AC;&#x201C; Accounting and Adkinson Securities PLC. Finance 2005-2005 Financial Analyst Portalnet Co, Ltd 1998-2002 Financial Analyst Ultra Care, Inc.

Name & Position

Mr. Surabhon Kwunchaithunya*/1 Vice Chief Executive Officer

Ms. Luxamee Kongvatanasest SEVP – Accounting and Finance Mr. Vanchai Honghern SEVP – Securities Business 3

Age (Years)

Mrs. Atchara Visasvora SEVP – Securities Business 1

Mr. Tanti Paripontpochanapisuti First EVP – Securities Business 2 Mr. Vichai Biprasert First EVP – Internal Audit and Compliance

Education Training - DAP MBA (Finance), University of Washington BSIE, University of Washington, U.S.A.Associate in Science, Centralia College, U.S.A. Training - DAP - DCP - Securitization, Fannie Mae of U.S.A. - Finance and Banking, HSBC - Investment Banking, Wardley, Hong Kong M.S. in Accounting, Thammasat university

B.A., St. Vincent College, U.S.A. Training - DAP - DCP

MBA (Finance),Chulalongkorn University

MA (Economics),University of Detroit, U.S.A. B.A. (Accounting),Ramkhamhaeng University

Stake (%)

Work Experience Period

Position

Business

2006-Present 2004-Present

Vice Chief Executive Officer Chairperson of Audit Committee Chairperson of Audit Committee Managing Director

Adkinson Securities PLC. Prinsiri Plc.

Senior Executive Vice President Executive Vice President Assistant Vice President Senior Executive Vice President Director & Executive Vice President Senior Executive Vice President Deputy Managing Director Assistant Managing Director Senior Executive Vice President Senior Vice President, Institutional Clients Marketing Vice President First Executive Vice President Executive Vice President Manager First Executive Vice President Executive Vice President Executive Officer Vice President, Audit Vice President, Audit

Adkinson Securities PLC.

2003-Present 1997-2002

2005-Present 2003-2005 1999-2003 2005-Present 2004-2005 2003-2004 2003-2003 1999-2003 2003-Present 1999-2003 1992-1999 2006-Present 2004-2006 1993-2003 2006-Present 2003-2006 2002-2003 2001-2002 1996-2001

Tycoons Worldwide Group Plc. Secondary Mortgage Corporation

Adkinson Securities PLC.

Merrill Lynch Phatra Adkinson Securities PLC. Seamico Securities Plc. One Securities Plc. Adkinson Securities PLC.

Senakij Co., Ltd. Adkinson Securities PLC.

UOB Securities Co., Ltd.

063

Name & Position Mr. Somchai Patcharapisutsin First EVP – Information Technology

Age (Years) 43

Education M.S.Songkhla Nakalin University

Stake (%)

Work Experience Period 2006-Present 2004-2006 2002-2004

2000-2002 Ms. Suvinun Chavaphansiriporn First EVP – Securities Business 5

MBA, Kasetsart University

2006-Present 2005-2006 2004-2005 2004-2004 2003-2004 2002-2003

Mrs. Porntip Kruwongpaiboon EVP – Institutional Equity

Ms. Piyachat Sanguandekul EVP

MBA (Finance), MPA, National Institute of Development Administration

MBA,National Institute of Development Administration

1991-2002 2005-Present 2004-2005 2002-2004 1998-2002 2005-Present 2004-2005 2002-2004 1998-2002

064

Position

Business

Adkinson Securities PLC. First Executive Vice President Executive Vice President Vice President, Information Technology Senior Manager, Computer System Development Adkinson Securities PLC. First Executive Vice President Siam City Securities Executive Vice President Co.,Ltd. Senior Vice President, Business Development Ayudhya Securities Co., Ltd. Senior Vice President, Business Development Bank of Asia Plc. Vice President, Telemarketing Phillip Securities (ThaiVice President, Financial land) Plc. Advisory Kim Eng Securities Plc. Branch Manager Adkinson Securities PLC. Executive Vice President Vice President, Institutional Apex Securities Co., Ltd. Clients State Enterprise Policy Financial/Accounting Office Consultant Assistant Financial Manager Thai President Foods Plc. Adkinson Securities PLC. Executive Vice President Apex Securities Co., Ltd. Executive Vice President Vice President, Securities Operation Adkinson Securities PLC. Assistant Vice President, Securities Operation

/1 /2

As of March 30, 2007. Directors have been resigned from directorships. The Company is in process of acquiring replacement directors. under the process of SECâ&#x20AC;&#x2122;s approval.

Note: * Signatory Directors - Mrs. Apar Kewkacha, the first vice chairperson, is the spouse of Mr. Pin Kewkacha, the companyâ&#x20AC;&#x2122;s director. - Mr. Sadawut Taechaubol, the chief executive officer and acting president, is the father of Mrs. Louise Diskul Na Ayudhaya, director and executive vice president. - Mrs. Louise Diskul Na Ayudhaya, director and Executive Vice President, is the sister-in-law of M.L. Dispanadda Diskul, former director. - DAP course is Director Accreditation Program by Thai Institute of Directors Association (IOD). - DCP course is Directors Certification Program by Thai Institute of Directors Association (IOD). - Finance course is Finance for Non-Finance Directors by Thai Institute of Directors Association (IOD). Directors and Management of Adkinson Securities PLC. (as of December 31, 2006) Name/Company Adkinson Securities PLC. Mr. Prayoon Chindapradist, Prof. A Mrs. Apar Kewkacha B Mr. Dej Namsirikul B/C/E General Wattana Sanphanich B/C Pol. General Somchai Vanichsenee C/D Mr. Sadawut Taechaubol G/I Mr. Nanthaphan Mahuttanatan C/E Mrs. Louise Diskul Na Ayudhaya(Ms. Louise Taechaubol) F/M Mr. Pin Kewkacha F Mrs. Sunjutha Witchawut F Mr. Att Asavanund F Mr. Chau-Chi Wong /2 (F) M.L. Dispanadda Diskul/1

Mr. Thomas V.DeMaio/1 Mr. Asanee Chalungsut Ms. Nitaya Ketkaew Mr. Surabhon Kwunchaithunya/1 Ms. Luxamee Kongvatanasest Mr. Vanchai Honghern

F K N F/H K K

065

Name/Company Mrs. Atchara Visasvora Mr. Tanti Paripontpochanapisuti Mr. Vichai Biprasert Mr. Somchai Patcharapisutsin Ms. Suvinun Chavaphansiriporn Mrs. Porntip Kruwongpaiboon Ms. Piyachat Sanguandekul

Adkinson Securities PLC. K L L L L M M

As of March 30, 2007. Directors have been resigned from directorships. The Company is in process of acquiring replacement directors.

under the process of SECâ&#x20AC;&#x2122;s approval.

Directors and Management of Apex Securities Co., Ltd. (as of December 31, 2006) Name/Company Mr. Sutin Samarnrak Mr. Boonthin Pinsuwan Remarks A = Chairperson B = Vice Chairperson C = Independent Director D = Chairperson of Audit Committee E = Audit committee member F = Director G = Chief Executive Officer H = Vice Chief Executive Officer I = Acting President J = First Senior Executive Vice President K = Senior Executive Vice President L = First Executive Vice President M = Executive Vice President N = First Senior Vice President

066

Apex Securities co, Ltd. F F

Responsibility Statement from the Board of Directors On the Financial Report The Board of Directors affirms the accuracy disclosed information in the consolidated annual report of Adkinson Public Company Limited and subsidiary companies. The financial information is in accordance with the Generally Accepted Accounting Principles with all pertinent information contained in the notes to the financial statements. The Board has established an efficient internal control system to ensure the accuracy, completeness, adequacy and promptness of the information disclosed. To ensure transparency and protect against any possible conflict of interest, the Board has formed an Audit Committee comprising of independent directors to ensure the quality of the consolidated financial report and the internal control policies. The opinion of the Audit Committee is present in this annual report. It is the opinion of the Board of Directors that the internal control policies of the Company is adequate and efficient in establishing and maintaining accuracy and credibility in the information present in the consolidated financial statements of the Company and subsidiary companies for the fiscal year ending on December 31, 2006.

(Mr. Sadawut Taechaubol) Chief Executive Officer

(Mrs. Louise Diskul Na Ayudhaya) Director & Executive Vice President

067

Audit Report of Certified Public Accountant To the Shareholders of Adkinson Securities Public Company Limited

I have audited the accompanying consolidated and separate balance sheets as at 31 December 2006 and 2005, and the related statements of income, changes in shareholdersâ&#x20AC;&#x2122; equity and cash flows for the years then ended of Adkinson Securities Public Company Limited and its subsidiary, and Adkinson Securities Public Company Limited, respectively. The Companyâ&#x20AC;&#x2122;s management is responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial position as at 31 December 2006 and 2005 and the results of operations and cash flows for the years then ended of Adkinson Securities Public Company Limited and its subsidiary, and of Adkinson Securities Public Company Limited, respectively, in accordance with generally accepted accounting principles. Without qualifying my opinion, I draw attention to Note 7 to the financial statements. The investment in subsidiary as presented in the separate financial statements as at 31 December 2006 amounted approximately Baht 517.1 million (2005 : Baht 516.4 million) which compares with an underlying net tangible asset value of Baht 456.1 million (2005 : Baht 443.9 million). The difference of Baht 61.0 million (2005 : Baht 72.5 million) represents the value of goodwill attaching to the subsidiaryâ&#x20AC;&#x2122;s securities licences. The Company is in the process of trying to find a suitable buyer for the investment in the subsidiary which holds such securities licences. The sale value of the investment, and the effect on the financial statements of any difference between the sale value and the carrying value of the investment, cannot presently be determined.

(Winid Silamongkol) Certified Public Accountant Registration No. 3378 KPMG Phoomchai Audit Ltd. Bangkok 21 February 2007

068

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

Assets

Note

Consolidated 2006 2005

The Company 2006 2005 (in Baht)

Cash and cash equivalents

4.1

Long-term deposits at financial institutions

4.2

104,440,000

5,017,800

104,440,000

5,017,800

Investments in debt and equity securities - net

4.3

831,711,834

866,878,205

831,711,834

866,878,205

Investment in subsidiary company

4.4

517,102,891

516,352,566

Receivable from Clearing House

2,252,768,369 2,045,451,833 2,240,026,280 1,724,640,561

71,678,494

178,613,751

71,678,494

178,613,751

786,466,051

693,214,797

786,461,766

693,210,513

Securities business receivables - net

4.5

Advance to related party

5.3

Property, plant and equipment - net

4.7

297,900,317

434,032,867

297,900,317

434,032,867

Intangible assets - net

4.8

83,008,201

101,754,947

21,002,464

27,939,885

4.9, 5.3

73,963,802

83,424,133

68,512,686

68,076,379

Other assets - net Total assets

5,000,000

4,501,937,068 4,413,388,333 4,938,836,732 4,519,762,527

Liabilities and shareholders' equity Liabilities Payable to Clearing House Securities business payables Payable to subsidiary for acquisition of assets 5.3 Short-term loan from subsidiary 4.10, 5.3 Other liabilities 4.11, 5.3 Total liabilities Shareholders’ equity Share capital - ordinary shares, Baht 10 par value Authorised share capital Issued and paid-up share capital Premium on share capital Revaluation surplus (deficit) in investments Legal reserve Deficit Shareholders’ equity - net

1,638,691 319,696,418 48,969,179 370,304,288

78,652,401 550,506,422 106,003,522 735,162,345

1,638,691 78,652,401 319,696,418 550,506,422 109,739,101 422,000,000 63,868,843 102,638,615 807,203,952 841,536,539

4.13, 10 4,916,510,880 4,916,510,880 4,916,510,880 4,916,510,880 4,195,895,720 3,223,107,490 4,195,895,720 3,223,107,490 4.14, 10 813,653,862 813,653,862 813,653,862 813,653,862 4.3.3, 4.14 23,730,887 (140,449,717) 23,730,887 (140,449,717) 4.14, 10 17,602 17,602 17,602 17,602 10 (901,665,291) (218,103,249) (901,665,291) (218,103,249) 4,131,632,780 3,678,225,988 4,131,632,780 3,678,225,988

Total liabilities and shareholders’ equity

4,501,937,068 4,413,388,333 4,938,836,732 4,519,762,527

* The accompanying notes are an integral part of these financial statements. Adkinson Securities Public Company Limited Annual Report 2006

069

Consolidated 2006 2005

Note

The Company 2006 2005 (in Baht)

Income Brokerage fees from securities business Fees and service income Gain (loss) on securities trading Interest and dividends Interest on margin loans Share of gain in subsidiary Other income Total income Expenses Expenses on borrowing Fee and service expenses Reversal of allowance for doubtful accounts Share of loss in subsidiary Operating expenses - Personnel expenses - Premises and equipment expenses - Taxes and duties - Directorsâ&#x20AC;&#x2122; remunerations - Information and communication expenses - Branch amalgamation expenses - Loss on impairment of investments - Other expenses Total expenses

5.3 4.15 4.16 5.3 5.3

5.3

989,182 21,968,505 (1,566,265) -

5.3 4.17

393,397,958 252,106,657 5,032,653 5.1 6,085,000 38,613,572 8 65,727,457 195,287,945 4.18, 5.3 76,302,419 1,053,945,083

Net loss Loss per share Basic Diluted

487,999,731 815,365 (276,968,055) 134,377,600 17,732,788 6,425,612 370,383,041

(683,562,042)

Adkinson Securities Public Company Limited Annual Report 2006

505,470 20,558,701 (7,178,131) -

16,423,977 19,923,643 (1,465,596) -

402,962 14,094,207 (8,036,559) 72,754,770

441,316,356 393,122,700 253,290,684 251,957,207 3,137,496 4,948,136 6,365,000 5,600,000 47,556,357 38,613,572 65,727,457 195,287,945 93,102,759 63,447,007 858,654,692 1,053,586,048

350,461,083 207,476,579 2,875,918 4,125,000 38,591,589 65,253,739 747,999,288

(244,169,946) (683,562,042) (244,169,946)

4.19

* The accompanying notes are an integral part of these financial statements.

070

500,728,567 487,999,731 398,435,783 2,859,230 815,365 534,701 10,766,945 (276,968,055) 12,916,577 81,551,040 133,734,742 78,407,075 9,512,933 17,732,760 9,463,018 750,325 9,066,031 5,959,138 4,072,188 614,484,746 370,024,006 503,829,342

(1.65) (1.65)

(0.76) (0.60)

(1.65) (1.65)

(0.76) (0.60)

Note Balance at 1 January 2005 Change during the year Revaluation deficit in investments Legal reserve Net loss Balance at 31 December 2005 Change during the year Revaluation surplus in investments Net loss Increase in share capital Balance at 31 December 2006

4.14 4.14

4.14

The company Revaluation surplus (deficit) Legal in investments reserve (in Baht)

Issued and paid-up share capital

Premium on share capital

3,223,107,490

813,653,862

(85,318,463)

3,223,107,490

813,653,862

(55,131,254) (140,449,717)

972,788,230 4,195,895,720

813,653,862

164,180,604 23,730,887

Shareholders' equity - net

26,084,299

3,977,527,188

17,602 17,602

(17,602) (244,169,946) (218,103,249)

(55,131,254) (244,169,946) 3,678,225,988

17,602

(683,562,042) (901,665,291)

164,180,604 (683,562,042) 972,788,230 4,131,632,780

Financial Statements

Adkinson Securities Public Company Limited Annual Report 2006

* The accompanying notes are an integral part of these financial statements.

Retained earnings (deficit)

071

072 Adkinson Securities Public Company Limited Annual Report 2006

4.14 4.14

4.14

Issued and paid-up share capital

Premium on share capital

The Company Revaluation surplus (deficit) Legal in investments reserve (in Baht)

3,223,107,490

813,653,862

(85,318,463)

3,223,107,490

813,653,862

(55,131,254) (140,449,717)

972,788,230 4,195,895,720

813,653,862

164,180,604 23,730,887

* The accompanying notes are an integral part of these financial statements.

Retained earnings (deficit)

Shareholders' equity - net

26,084,299

3,977,527,188

17,602 17,602

(17,602) (244,169,946) (218,103,249)

(55,131,254) (244,169,946) 3,678,225,988

17,602

(683,562,042) (901,665,291)

164,180,604 (683,562,042) 972,788,230 4,131,632,780

Adkinson Securities Public Company Limited and its Subsidiary

Financial Statements

Statements of cash flows For the years ended 31 December 2006 and 2005

Consolidated 2006 2005

The Company 2006 2005 (in Baht)

Cash flows from operating activities Net Loss

(683,562,042)

(244,169,946)

(683,562,042)

(244,169,946)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation and amortisation 149,460,857 137,547,526 137,651,533 107,366,321 Interest income (118,162,097) (51,136,767) (117,519,240) (47,992,801) Interest expense 505,470 15,434,795 402,962 Reversal of allowance for doubtful accounts (1,606,353) (8,107,552) (1,465,596) (8,144,209) Unrealised loss on revaluation of securities 68,941,680 818,626 68,941,680 818,626 Loss (gain) on sales of short-term and long-term investments 208,026,375 (11,585,567) 208,026,375 (13,735,200) Share of loss (profit) in subsidiary (750,325) 72,754,770 Written - off of income tax 719,842 978,982 978,982 Branch amalgamation expenses 65,727,457 65,727,457 Loss on impairment of investments 195,287,945 195,287,945 Loss on impairment of property, plant and equipment and intangible asset 7,783,579 Loss (gain) on disposal and written - off property, plant and equipment 8,999,444 1,174,586 8,999,444 (1,176,405) Loss before changes in operating assets and liabilities (106,166,892) (166,191,063) (103,227,974) (132,896,900) Decrease (increase) in operating assets Long-term deposits at financial institutions Receivable from Clearing House Securities business receivables Cash paid from purchases current investments Cash received from sales current investments Other assets Cash received from income tax refunded Income tax paid

(99,422,200) 106,935,257 (91,644,901) (1,972,235,515) 1,638,651,552 (13,287,444) 6,296,706 (397,423)

95,255,278 (99,422,200) 7,907,289 106,935,257 80,387,335 (91,785,658) (528,815,676) (1,972,235,515) 342,141,842 1,638,651,552 3,392,710 (14,367,410) 7,428,304 (8,004,130) (342,881)

95,255,278 (16,632,607) (85,382,390) (438,017,223) 249,915,499 (12,107,145) 7,428,304 (7,888,631)

Increase (decrease) in operating liabilities Payable to Clearing House Securities business payables Other liabilities Net cash used in operating activities

(77,013,710) (230,810,004) (74,473,403) (913,567,977)

(4,424,514) (77,013,710) 130,196,960 (230,810,004) 1,034,169 (71,792,994) (39,691,496) (915,411,537)

32,541,419 280,690,668 (32,972,936) (60,066,664)

* The accompanying notes are an integral part of these financial statements. Adkinson Securities Public Company Limited Annual Report 2006

073

Consolidated 2006 2005

The Company 2006 2005 (in Baht)

Cash flows from investing activities Interest recevied Dividend received Loan to subsidiary Cash paid for purchase of long-term investments Cash received from sales of long-term investments Cash received from liquidation of subsidiary Net cash paid for purchases of property, plant and equipment and intangible assets Cash received from sales of property, plant and equipment Net cash provided by (used in) investing activities

14,315,925 1,884,878 14,315,925 151,064,073 (129,888,210) 148,566,551

Cash flows from financing activities Interest paid Repayment of borrowing from financial institution Increase in short-term loan from subsidiary Cash received from increase in share capital Net cash provided by (used in) financing activities

(126,845) (2,840,945) 972,788,230 969,820,440

Net increase (decrease) in cash and cash equivalents

207,316,536 (171,521,684)

515,385,719 155,732,769

Cash and cash equivalents at beginning of year

2,045,451,833

1,724,640,561 1,568,907,792

Cash and cash equivalents at end of year

116,322,858 16,215,502 (250,200,000) 314,598,076 -

53,775,831 (34,278,000) 14,536,736 -

(60,188,288)

(165,807,655)

113,825,336 16,215,502 (250,200,000) 314,598,076 -

(60,188,288) (165,271,189)

(378,492) (126,845) (1,563,486) (2,840,945) 312,410,265 972,788,230 (1,941,978) 1,282,230,705

2,216,973,517

51,676,911 69,896,986 149,864,303 (34,278,000) 14,536,736 129,835,521

1,377,768 217,639,036

(276,117) (1,563,486) (1,839,603)

2,252,768,369 2,045,451,833 2,240,026,280 1,724,640,561

Supplemental disclosures of cash flow information Non-cash transactions 1. In 2006, the Company and subsidiary acquired investments, fixed assets and intangible assets totalling Baht 73.4 million (2005 : Baht 188.5 million) of which Baht 60.2 million (2005 : Baht 165.8 million) was made by cash payments, Baht 13.2 million (2005 : Baht 10.6 million) were made by finance lease and hire-purchase agreements and Baht 0.003 million was outstanding as liabilities as at 31 December 2006 (2005 : Baht 12.1 million). 2. In 2006, the Company had short-term loan from subsidiary amounting to Baht 422.1 million of which the net cash received from loan amounted to Baht 312.4 million due to offsetting with outstanding balance of payable to such subsidiary for acquisition of assets amounting to Baht 109.7 million.

* The accompanying notes are an integral part of these financial statements.

074

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

Note

Contents

General information

Basis of preparation of the financial statements

Significant accounting policies

Details of significant accounts

Additional information

Segment information

Transfer of the business

The amalgamation of branches

New and revised accounting standards net yet adopted

10.

Events after the balance sheet date

11.

Reclassification of accounts

Adkinson Securities Public Company Limited Annual Report 2006

075

These notes form an integral part of the financial statements. The financial statements were authorised for issue by the directors on 21 February 2007.

General information Adkinson Securities Public Company Limited, the “Company”, is incorporated in Thailand and has its registered office at 132, Sindhorn Tower 1, 2 nd Floor, Wireless Road, Lumpini, Pathumwan, Bangkok 10330. The Company was listed on the Stock Exchange of Thailand in 1993. The principal activities of the Company are securities brokerage, securities trading business and investment advisory services for which the Company was granted a license No. 51/2517 from the Ministry of Finance on 29 May 1974. Details of the Company’s subsidiary are as follows:

APEX Securities Co., Ltd.

Type of business

Country of incorporation

Securities business

Thailand

Ownership interest 2006 2005 (%) 99.99 99.99

The Company recorded the excess of investments over the net assets of subsidiary as at the date of acquisition as goodwill under “Intangible Assets” in the consolidated balance sheets, and amortisation is charged to the statement of income using the straight-line method over the period of 10 years.

Basis of preparation of the financial statements The financial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation of the financial statements has been prepared for the convenience of readers not conversant with the Thai language. The financial statements are prepared in accordance with Thai Accounting Standards (“TAS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”), applicable rules and regulations of the Office of the Securities and Exchange Commission, dated 29 June 2006 Re: “The Format of Financial Statements for Securities Company” and with generally accepted accounting principles in Thailand. The financial statements are presented in Thai Baht. They are prepared on the historical cost basic except as disclosed in other notes to financial statements. The preparation of financial statements in conformity with TAS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

076

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

Significant accounting policies

3.1

Basis of consolidation The consolidated financial statements relate to the Company and its subsidiary. Significant intra-group transactions between the Company and its subsidiary are eliminated on consolidation. Subsidiary Subsidiary is the company controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities. The financial statements of subsidiary are included in the consolidated financial statements from the date that control commences until the date that control ceases.

3.2

Revenue and expense recognition Revenue recognition Brokerage income from securities business is recognised on an accruals basis. Fees and service income is recognised on an accruals basis. Gains or losses on trading in securities are recognised as income or expenses on trading date. Interest income is recognised in the statement of income as it accrues except in cases where customersâ&#x20AC;&#x2122; default of principal and interest are in arrears for more than three months, in which case interest income will be recognised on a cash basis in accordance with the announcement of the Securities and Exchange Commission Re: "Accounting for Non-Performing Loans of Securities Business Receivables". Dividend income is recognised in the statement of income on the date the entityâ&#x20AC;&#x2122;s right to receive payments is established, which in the case of quoted securities is usually the ex-dividend date. Discount received on notes purchased is recognised as income by the straight-line method over the period to maturity. Expense recognition Expenses are charged to the statement of income in the period in which they are incurred. Operating leases Payments made under operating leases are recognised in the statement of income on a straight line basis over the term of the lease. Lease incentives received are recognised in the statement of income as an integral part of the total lease payments made. Contingent rentals are charged to the statement of income in the accounting period in which they are incurred.

Adkinson Securities Public Company Limited Annual Report 2006

077

Finance costs Interest expense and similar costs are charged to the statement of income in the period in which they are incurred. The interest component of finance lease payments is recognised in the statement of income using the effective interest rate method. 3.3

Cash and cash equivalents Cash and cash equivalents comprise cash balances, call deposits and highly liquid short-term investments.

3.4

Long-term deposits at financial institutions Long-term deposits at financial institutions represent fixed deposit accounts, certificates of deposit and promissory notes with original maturities over 3 months, and deposit accounts with obligations.

3.5

Investments in debt and equity securities Debt securities and marketable equity securities held for trading are stated at fair value, with any resultant gain or loss recognised in the statement of income. Debt securities that the Company and subsidiary intend and are able to hold to maturity are stated at amortised cost less impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the period to maturity. Debt securities and marketable equity securities other than those securities held for trading or intended to be held to maturity, are classified as being available-for-sale and are stated at fair value, with any resultant gains or losses being recognised directly in equity. The exceptions are impairment losses, which are recognised in the statement of income. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the statement of income. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the statement of income. Equity securities which are not marketable are stated at cost less impairment losses. The fair value of financial instruments classified as held-for-trading and available-for-sale is determined as the quoted bid price at the balance sheet dates. Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognised in the statement of income. If that the Company and subsidiary dispose of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment.

078

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

3.6

Investment in subsidiary Investment in subsidiary in the separate financial statements of the Company is accounted for using the equity method.

3.7

Securities business receivables and allowance for doubtful accounts Securities business receivables represent the receivables from securities trading business which are in the process of collection in the normal course of business. The allowance for doubtful accounts is an estimate of those amounts which may be uncollectible determined by analysis of current status of individual receivables coupled with consideration of the Announcement of the Securities and Exchange Commission Re: "Accounting for Non-Performing Loans of Securities Business Receivables".

3.8

Property, plant and equipment Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Leased assets Leases in terms of which the Company substantially assumes all the risk and rewards of ownership are classified as finance leases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the statement of income. Depreciation Depreciation is charged to the statement of income on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows: Property Leasehold improvement Furniture and office equipment Vehicles

20 years 5 years or over the term of lease term 3 - 10 years 5 years

No depreciation is provided on freehold land or assets under construction.

3.9

Intangible assets Goodwill Goodwill represents the excess of the cost of acquisition over the fair value of the Groupâ&#x20AC;&#x2122;s share of the identifiable net assets acquired.

Adkinson Securities Public Company Limited Annual Report 2006

079

Goodwill is stated at cost less accumulated amortisation and impairment losses. Goodwill arising on acquisition of shares in subsidiary in the Company’s separate financial statements is included in investments. The gain or loss on disposal of an entity includes the unamortised balance of goodwill relating to the entity disposed of. Other intangible assets Other intangible assets that are acquired by the Company and subsidiary are stated at cost less accumulated amortisation and impairment losses. Amortisation Amortisation is charged to the statement of income on a straight-line basis from the date that intangible assets are available for use over the estimated useful lives of the assets. Goodwill and other intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows: Goodwill Leasehold right Deferred charge - Securities license Computer software 3.10

10 years Over the period of the lease term Over the period of license 5 –10 years

Properties foreclosed Properties foreclosed are recorded at their fair value net of allowance for impairment losses.

3.11

Impairment The carrying amounts of the Company’s and subsidiary’ assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and as and when indicators of impairment are identified. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment losses is recognised in the statement of income. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the statement of income even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in the statement of income is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the statement of income.

080

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

Calculation of recoverable amount The recoverable amount of the investments in held-to-maturity securities and receivables carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate. Receivables with a short duration are not discounted. The recoverable amount of other assets is the greater of the assetâ&#x20AC;&#x2122;s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversal of impairment An impairment loss in respect of a held-to-maturity security carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. An impairment loss in respect of an investment in an equity instrument classified asavailable-for-sale is not reversed through the statement of income. If the fair value of a debt instrument classified is available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the statement of income, the impairment loss shall be reversed, with the amount of the reversal recognised in the statement of income. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. However, an impairment loss in respect of goodwill is not reversed. An impairment loss is reversed only to the extent that the assetâ&#x20AC;&#x2122;s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 3.12

Interest-bearing liabilities Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of income over the period of the borrowings on an effective interest basis.

3.13

Financial instruments Financial assets and financial liabilities carried on the balance sheets include cash and cash equivalents, investments, loans, receivable from and payable to Clearing House, securities business receivables and payables, borrowings and other liabilities. The accounting policies on recognition and measurement of these items are disclosed in the respective accounting policies.

Adkinson Securities Public Company Limited Annual Report 2006

081

3.14

Provision A provision is recognised in the balance sheet when the Company and subsidiary have a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

3.15

Income tax Income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

3.16

Offsetting Financial assets and liabilities are offset and the net amount is reported in the balance sheet when the Company has a legal, enforceable right to set off the recognised amounts and the transactions are intended to be settled on a net basis.

Details of significant accounts

4.1

Cash and cash equivalents 2006

Consolidated 2005

The Company 2006 2005 (in Baht)

520,000 Cash Current and savings deposits accounts 644,763,917 Promissory notes with maturities not 1,710,000,000 over 3 months 2,355,283,917 Total cash and cash equivalents Less deposits for customersâ&#x20AC;&#x2122; account (102,515,548) Cash and cash equivalents

4.2

2,252,768,369

730,000 899,121,893

520,000 628,389,170

720,000 574,753,674

1,250,000,000 2,149,851,893 (104,400,060)

1,710,000,000 2,338,899,170 (98,872,890)

1,250,000,000 1,825,473,674 (100,833,113)

2,045,451,833

2,240,026,280

1,724,640,561

Long-term deposits at financial institutions 2006

Consolidated 2005

2006

The Company 2005

(in Baht) Fixed deposits with maturities over 3 months Deposits pledged as collateral Total long- term deposits at financial institutions

100,000,000 4,440,000

5,017,800

100,000,000 4,440,000

5,017,800

104,440,000

5,017,800

104,440,000

5,017,800

As at 31 December 2006, the Companyâ&#x20AC;&#x2122;s fixed deposits amounting to Baht 4.4 million (2005 : 5.0 million) were pledged as collateral with banks for the facility line used in operations.

082

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

4.3

Investments in debt and equity securities

4.3.1

Cost and fair value

Consolidated 2006 Cost/amortised cost value

2005 Fair value

Cost/amortised cost value

Fair value

(in Baht) 1. Current investments Securities for trading Equity securities: Listed securities Less allowance for revaluation Total equity securities - net Total securities for trading - net

490,157,959 (70,270,711) 419,887,248 419,887,248

419,887,248 419,887,248 419,887,248

63,911,554 (1,329,030) 62,582,524 62,582,524

62,582,524 62,582,524 62,582,524

Debt instruments maturity within 1 yea 199,000,000 Bill of exchange (195,287,945) Less allowance for loss on impairment (712,055) Less discount on bills Total debt instruments maturity 3,000,000 within 1 year - net

3,000,000 -

230,000,000 (5,284,110)

224,715,890 -

3,000,000

224,715,890

Current investments - net

422,887,248

287,298,414

2. Long - term investments Available - for - sale securities Equity securities: Unit trusts Listed securities Add (l ess) allowance for revaluation Less allowance for loss on impairment Total equity securities - net

179,106,918 325,720,587 26,922,588 (230,134,287) 301,615,806

179,903,186 121,712,620 301,615,806

58,770,568 781,499,972 (135,624,190) (231,490,423) 473,155,927

58,688,057 414,467,870 473,155,927

102,568,402 (3,191,701) 99,376,701

99,376,701 99,376,701

103,417,319 (4,825,528) 98,591,791

98,591,791 98,591,791

400,922,507

400,992,507

571,747,718

Debt Instruments: Government bonds L ess allowance for revaluation Total debt instruments- net Total available- for- sale securities- net General investments Equity securities Debenture Less allowance for loss on impairment Total general investments - net

28,936,448 20,000,000 (41,104,369) 7,832,079

28,936,442 20,000,000 (41,104,369) 7,832,073

Long- term investments - net

408,824,586

579,579,791

Total investments in debts and equity securities - net

831,711,834

866,878,205

Adkinson Securities Public Company Limited Annual Report 2006

083

The Company 2006 Cost/amortised cost value

2005 Cost/amortised cost value

Fair value

(in Baht) 1. Current investments Securities for trading Equity securities: Listed securities Less allowance for revaluation Total equity securities - net Total securities for trading - net

419,887,248 419,887,248 419,887,248

63,911,554 (1,329,030) 62,582,524 62,582,524

62,582,524 62,582,524 62,582,524

Debt instruments maturity within 1 year Bill of exchange 199,000,000 Less allowance for loss on impairment (195,287,945) Less discount on bills (712,055) Total debt instruments maturity 3,000,000 within 1 year - net

3,000,000 -

230,000,000 (5,284,110)

224,715,890 -

3,000,000

224,715,890

Current investments - net

422,887,248

287,298,414

179,106,918 325,720,587 26,922,588 (230,134,287) 301,615,806

179,903,186 121,712,620 301,615,806

58,770,568 781,499,972 (135,624,190) (231,490,423) 473,155,927

58,688,057 414,467,870 473,155,927

102,568,402 (3,191,701) 99,376,701

99,376,701 99,376,701

103,417,319 (4,825,528) 98,591,791

98,591,791 98,591,791

400,992,507

571,747,718

084

490,157,959 (70,270,711) 419,887,248 419,887,248

28,936,448 (21,104,369)

28,936,442 (21,104,369)

7,832,079

7,832,073

Long- term investments - net

408,824,586

579,579,791

Total investments in debts and equity securities - net

831,711,834

866,878,205

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

4.3.2

Investments in debt instruments by remaining period

Within 1 year

Available-for-sale debt instruments Held-to-maturity debt instruments Total

3,000,000

99,376,701 -

3,000,000

99,376,701

Within 1 year

Available-for-sale debt instruments Held-to-maturity debt instruments Total

4.3.3

Consolidated and The Company 2006 2 - 5 years Over 5 years (in Baht)

Total

99,376,701 3,000,000 102,376,701

Consolidated and The Company 2005 2 - 5 years Over 5 years (in Baht)

Total

224,715,890

49,272,912 -

49,318,879 -

98,591,791 224,715,890

224,715,890

49,272,912

49,318,879

323,307,681

Unrealised gain (loss) arising from the revaluation of investments in shareholdersâ&#x20AC;&#x2122; equity Consolidated 2006

The Company 2005 2006

2005 (in Baht)

Balance beginning of year Change during the year

4.4

(140,449,717)

(85,318,463)

(140,449,717)

(85,318,463)

- from revaluation of investments

164,180,604

(55,131,254)

164,180,604

(55,131,254)

Balance at end of year

23,730,887

(140,449,717)

23,730,887

(140,449,717)

Investment in subsidiary company As at 31 December 2006 and 2005, the Company had investment in subsidiary as follows:

APEX Securities Co., Ltd.

Ownership interest 2006 2005 (%) 99.99 99.99

Paid-up share capital 2006 2005 482.05

482.05

The Company Cost method Equity method 2006 2005 2006 2005 (In Million Baht) 654.9 654.9 517.1 516.4

2006 -

Dividend 2005 69.9

On 1 April 2005, a resolution was passed by the extraordinary shareholdersâ&#x20AC;&#x2122; meeting approving to transfer the business of APEX Securities Company Limited to the Company by purchasing assets, liabilities and commitments (see note 7).

Adkinson Securities Public Company Limited Annual Report 2006

085

4.5

Securities business receivables 2006

Consolidated 2005

2006

The Company 2005

(in Baht) 280,014,437 486,183,549

465,177,981 204,109,421

280,014,437 486,183,549

465,177,981 204,109,421

125,141,733 1,449,071 2,842,999 895,631,789 410,836

114,773,235 8,134,121 11,775,850 803,970,608 427,116

125,141,733 1,240,720 692,934 893,273,373 -

114,773,235 7,920,771 9,506,308 801,487,716 -

(109,576,574)

(111,182,927)

(106,811,607)

(108,277,203)

786,461,766

693,210,513

Customers’ accounts Margin loans Other receivables - Receivables under litigation - Installment receivables - Pass due and other receivables Total securities business receivables Add accrued interest receivable Less allowance for doubtful accounts Securities business receivables - net

786,466,051

693,214,797

Customers’ accounts are classified as normal receivables with term of payment within 3 days from trading date. As at 31 December 2006, the Company and subsidiary have ceased to recognise the interest income from securities business receivables amounting to Baht 129.8 million (2005 : Baht 135.1 million) for the consolidated financial statements, and Baht 127.1 million (2005 : Baht 132.2 million) for the Company’s financial statements, of which the allowance for doubtful accounts was fully set up for doubtful status in accordance with the announcement of the Office of the Securities and Exchange Commission’s regarding the accounting preparation for sub-standard receivables of securities companies as follows:

Provision

Doubtful of loss Special mention Total

Provision

Doubtful of loss Special mention Total

086

Adkinson Securities Public Company Limited Annual Report 2006

Value of debt

Consolidated 2006 Allowance for doubtfulaccounts set up (in Baht)

109,576,574 20,268,064

(109,576,574)

129,844,638

Value of debt

Consolidated 2005 Allowance for doubtful accounts set up (in Baht)

111,182,927 23,927,395 135,110,322

(111,182,927)

Financial Statements

The Company 2006 Value Allo wance for of debt doubtfulaccounts set up (in Baht)

Provision

106,811,607 20,263,780

Doubtful of loss Special mention

127,075,387

Total

The Company 2005 Value Allowance for of debt doubtful accounts set up (In Baht)

Provision

108,277,203 23,923,111

Doubtful of loss Special mention

(108,277,203)

132,200,314

Total

4.6

(106,811,607)

Allowance for doubtful accounts

Consolidated 2006 2005

The Company 2005 2006 (in Baht)

Balance at beginning of year Allowance for doubtful accounts Reversal of allowance for doubtful accounts Balance at end of year

111,182,927 -

119,290,479 36,657

108,277,203 -

116,421,412 -

(1,606,353)

(8,144,209)

(1,465,596)

(8,144,209)

109,576,574

111,182,927

106,811,607

108,277,203

Adkinson Securities Public Company Limited Annual Report 2006

087

088 Adkinson Securities Public Company Limited Annual Report 2006

4.7

Property, plant and equipment Consolidated For the year ended 31December 2006 (in Baht)

Book value

Changes in cost during the year

as at

Beginning

1 January 2006

balance

Property

30,293,000

Plant

Changes in accumulated depreciation during the year

Transfer

Disposals/

Ending

Beginning

Additions

in / (out)

write-off

balance

30,293,000

10,936,487

19,572,300

8,635,813

980,682

Ending

Beginning

Depreciation

write-off

balance

359,000,591

543,722,299

51,945,608

10,223,369

(105,035,488)

500,855,788

169,550,855

118,858,504

(34,988,012)

253,421,347

31,123,678

46,839,271

13,191,120

(12,611,349)

47,419,042

15,715,593

10,938,109

(4,415,226)

22,238,476

2,679,111

7,544,258

(10,223,369)

9,616,495

Book value

Allowance for impairment during the year

Disposals/

Ending

as at

Increase

Decrease

balance

30,293,000

9,955,805

15,170,854

48,922,542

31 December2006

Leasehold improvement and furniture and office equipment Vehicles Work in progress

Total

434,032,867

643,105,981 72,680,986

(117,646,837) 598,140,130

193,902,261 130,777,295 (39,403,238)

(49,129,901)

14,963,495

232,470,946 25,180,566

285,276,318

15,170,854

14,963,495

297,900,317

48,922,542 (49,129,901)

The Company and subsidiary recorded depreciation in the consolidated statement of income for the year ended 31 December 2006 amounting to Baht 130,777,295.

Consolidated For the year ended 31 December 2005 (in Baht)

Book value

Changes in cost during the year

as at

Beginning

1 January 2005

balance

Property

30,293,000

Plant

11,915,129

Changes in accumulated depreciation during the year

Transfer

Disposals/

Ending

Beginning

Additions

in / (out)

write-off

balance

30,293,000

19,572,300

7,657,171

978,642

(259,281,525)

543,722,299

310,902,530

108,175,973

(249,527,649)

169,550,854

(1,226,378)

46,839,271

18,446,049

9,495,920

(12,226,376)

15,715,593

Depreciation

Book value

Allowance for impairment during the year

Disposals/

Ending

Beginning

write-off

balance

Ending Increase

Decrease

as at

balance

31 December 2005

30,293,000

8,635,813

10,936,487

Leasehold improvement and furniture and office equipment

292,926,339

624,809,787 155,701,345

Vehicles

30,545,918

48,991,967

10,073,682

Work in progress

12,762 ,330

12,409,473

Total

378,442,716 736,429,384 178,184,500

22,492,692 (22,492,692)

(271,507,903)

2,679,111

643,105,981 337,005,750 118,650,535 (261,754,025) 193,902,260

20,980,918

1,721,313

(7,531,377)

15,170,854

359,000,591

31,123,678

2,679,111

20,980,918

1,721,313

(7,531,377)

15,170,854

434,032,867

Financial Statements

The Company and subsidiary recorded depreciation in the consolidated statement of income for the year ended 31 December 2005 amounting to Baht 118,650,535.

Adkinson Securities Public Company Limited Annual Report 2006

089

090 Adkinson Securities Public Company Limited Annual Report 2006

The Company For the year ended 31 December 2006 (in Baht)

Book value

Property Plant

Changes in cost during the year

as at

Beginning

1 January 2006

balance

30,293,000

Changes in accumulated depreciation during the year

Transfer

Disposals/

Ending

Beginning

Additions

in / (out)

write -off

balance

30,293,000

10,936,487

19,572,300

359,000,591

543,722,299

51,945,608

10,223,369

31,123,678

46,839,271

13,191,120

2,679,111

Depreciation

19,572,300

8,635,813

980,682

(105,035,488)

500,855,788

169,550,855

118,858,504

(12,611,349)

47,419,042

15,715,593

10,938,109

Ending

Beginning

write -off

balance

9,616,495

Book value

Allowance for impairment during the year

Disposals/

Ending

as at

Decrease

balance

30 June 2006

30,293,000

9,955,805

Increase

Leasehold improvement and furniture and office equipment Vehicles Work in progress

Total

7,544,258 (10,223,369)

434,032,867 643,105,981 72,680,986

(117,646,837) 598,140,130

(34,988,012)

253,421,347

(4,415,226)

22,238,476

193,902,261 130,777,295 (39,403,238)

285,276,318

15,170,854

48,922,542

(49,129,901)

14,963,495

15,170,854

48,922,542 (49,129,901)

The Company recorded depreciation in the statement of income for the year ended 31 December 2006 amounting to Baht 130,777,295.

14,963,495

232,470,946 25,180,566 -

297,900,317

The Company For the year ended 31 December 2005 (in Baht)

Book value as at 1 January 2005

Changes in cost during the year Beginning

Changes in accumulate d depreciation during the year

Transfer

Disposals/

Ending

Beginning balance

balance

Additions

in / (out)

write -off

balance

Depreciation

Ending

Beginning

write -off

balance

Increase

Decrease

30,293,000

10,936,487

17,369,860

( 2,199,006)

Property

30,293,000

Plant

11,915,129

19,572,300

7,657,171

978,642

19,970,283

(157,900,888)

543,722,299

230,512,676

94,216,398

(155,178,220)

169,550,854

(2,014,500)

46,839,271

11,353,126

6,376,965

(2,014,498 )

15,715,593

Book value

Allowance for impairment during the year

Disposals/

8,635,813

Ending

as at

balance 31 December 2005

Leasehold improvement and furniture and office equipment Vehicles Work in progress

Total

247,079,003

494,961,539 186,691,365

5,713,112

17,066,238

31,787,533

12,762 , 330

12,762,330

12,409 , 473 (22,492,692 )

307,762,574 574,655,407 230,888,371 (2,522,409)

(159,915,388)

2,679,111

643,105,981 249,522,973 101,572,005 (157,192,718)

15,170,854

359,000,591

31,123,678

2,679,111

193,902,260

17,369,860

(2,199,006)

15,170,854

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

The Company recorded depreciation in the statement of income for the year ended 31 December 2005 amounting to Baht 101,572,005.

434,032,867

091

As of 31 December 2006, the Company had various hire-purchase and finance lease agreements for vehicles with local leasing companies with the fair value amounting to approximately Baht 22.2 million (2005 : Baht 11.5 million) as at the initial date of the lease agreements. The agreements are for the periods of 2 to 4 years. As at 31 December 2006, the carrying amount of leased assets was Baht 15.5 million. (2005 : Baht 8.1 million)

4.8

Intangible assets - net

Consolidated For the year ended 31 December 2006 (in Baht) Remaining period

Beginning balance

Additions

Transfers in (out)

Leasehold right- net 4 - 11 years Deferred charge - Securities license - net 1 years Computer software -net 1 - 6 years Goodwill - net 5 years Computer software in progress -

7,346,148

362,448 21,565,467 72,404,717

421,345 -

76,167

279,785

101,754,947

701,130

Intangible assets - net

Amortisation

(85,060)

(871,709)

6,389,379

94,797 -

(1,528,172) -

(255,504) (5,275,119) (11,432,312)

15,278,318 60,972,405

(94,797)

261,155

(1,613,232)

(17,834,644)

83,008,201

Allowance for impairment

Ending balance

Allowance for impairment

Ending balance

Disposals/ write-off

106,944

Consolidated For the year ended 31 December 2005 (in Baht) Remaining period

Beginning balance

Leasehold right- net 5 - 12 years Deferred charge - Securities license - net 7 years Computer software -net 1 - 7 years Goodwill - net 6 years Computer software in progress -

8,055,370

168,421

413,943 17,080,796 83,837,029 7,294,664

Intangible assets - net

Transfers in (out)

Disposals/ write-off

7,175,418 -

10,248,377 -

(1,159,265) -

3,029,880

(10,248,377)

(1,159,265)

(18,079,044)

(6,062,265)

Additions

116,681,802 10,373,719

Amortisation (877,643) (51,495) (5,717,594) (11,432,312)

(6,062,265) -

7,346,148 362,448 21,565,467 72,404,717 76,167 101,754,947

The Company and subsidiary recorded amortisation amounting to Baht 17,834,644 for the year ended 31 December 2006 (2005 : Baht 18,079,044).

092

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

The Company For the year ended 31 December 2006 (in Baht) Remaining period

Beginning balance

Additions

6,940,853 20,922,865

421,346

76,167

279,785

27,939,885

701,131

Leasehold right- net 4 - 10 years Computer software - net 1 - 4 years Computer software in progress Intangible assets - net

Ending

Transfers in (out)

Disposals/ write-off

Amortisation

Allowance for impairment

balance

94,797 (94,797)

(85,060) (1,528,172)

(838,865) (5,186,455)

6,016,928 14,724,381

261,155

(1,613,232)

(6,025,320)

21,002,464

The Company For the year ended 31 December 2005

(in Baht)

L easehold right -net Computer software - net Computer software in progress Intangible assets - net

Remaining period

Beginning balance

5 - 11 years 1 - 4 years

7,617,231 5,358,326

Ending

Transfers in (out)

Amortisation

Allowance for impairment

balance

168,421 9,447,732

10,248,377

(844,799) (4,131,570)

20,922,865

7,294,664

3,029,880

(10,248,377)

76,167

20,270,221

12,646,033

(4,976,369)

27,939,885

Additions

6,940,853

The Company recorded amortisation amounting to Baht 6,025,320 for the year ended 31 December 2006 (2005 : Baht 4,976,369).

4.9

Other assets - net 2006

Consolidated 2005

The Company 2006 2005 (in Baht)

Prepaid income tax Prepaid expenses Properties foreclosed - net Clearing fund Advances Deposits Accrued income Others

7,592,252 3,547,765 22,026,779 12,676,634 1,107,149 19,820,429 4,967,547 2,225,247

8,029,172 3,285,005 22,026,779 12,241,805 8,174,851 24,662,911 3,740,690 1,262,920

7,537,710 3,422,765 22,026,779 8,591,035 641,203 19,664,952 4,675,424 1,952,818

7,194,829 3,285,005 22,026,779 7,960,065 803,615 24,319,720 1,593,902 892,464

Total other assets - net

73,963,802

83,424,133

68,512,686

68,076,379

Adkinson Securities Public Company Limited Annual Report 2006

093

4.10

Short-term loan from subsidiary As at 31 December 2006 and 2005, short-term loan from subsidiary classified by the remaining period of maturity within one year was as follows: The Company

2006

Short-term loan from subsidiary (Promissory note - at call)

4.11

2005

Interest rate

Amount

Interest rate

Amount

(% per annum)

(in Baht)

(% per annum)

(in Baht)

3.75

422,000,000

Other liabilities 2006

Consolidated 2005

The Company 2006 2005 (in Baht)

Accrued bonuses Accrued marketing incentive Accrued profit sharing from branch management Withholding tax payable Value-added tax payable Other payables Other accrued expenses Accrued interest expenses Others Total other liabilities

470,563 6,168,105

53,380,880 5,073,981

470,563 6,168,105

53,380,880 5,049,172

2,341,400 7,520,411 2,822,489 14,142,338 15,421,319 63,110 19,444

1,440,600 3,573,494 1,844,877 21,045,109 19,231,119 126,978 286,484

2,341,400 7,518,671 2,822,489 14,097,230 14,952,614 15,497,771

1,440,600 3,496,379 1,120,902 20,998,963 16,973,730 126,845 51,144

48,969,179

106,003,522

63,868,843

102,638,615

Finance lease liabilities Finance lease liabilities are payable as follows: Consolidated and the Company

Within one year After one year but within five years Total

Principal

2006 Interest

2005 Interest

Payments

2,704,716

463,340

3,168,056

3,031,831

1,254,677

4,286,508

471,121

23,219

494,340

2,409,717

486,559

2,896,276

3,175,837

486,559

3,662,396

5,441,548

1,741,236

7,182,784

Payments Principal (in Baht)

As at 31 December 2006, the Company recorded finance lease liabilities - net of approximately Baht 3.2 million (2005 : Baht 5.4 million) in the account of other payables under other liabilities in the balance sheet.

094

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

4.12

Disclosure of financial instruments Credit risk Credit risk is the potential financial loss resulting from the failure of a customer to settle its contractual obligations to the Company as and when they fall due. The Company has policies and procedures in place and the exposure to credit risk is monitored as the Company will deal with only creditworthy counterparties and obtain sufficient collateral or other security where appropriate. The exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. Liquidity risk The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate to finance the Companyâ&#x20AC;&#x2122;s operations and to mitigate the effects of fluctuations in cash flows. Interest rate risk Interest rate risk is the risk incurred from the movement of the market interest rate which affects the value of financial assets and liabilities. The following schedules show the remaining period before contract maturity or repricing dates, whichever are earlier.

Consolidated Outstanding as at 31 December 2006 ( in million Baht) Interest rate

Financial assets Cash and cash equivalents Long-term deposits at financial institutions Investments in debt and equity securities - net Securities business receivables - net

Earlier of remaining period before contract maturity or repricing date

based on market rate

Less than 1 year

1-5 years

468.5

1,710.0

104.4

3.0

486.2

Interest rate (% p.a.)

Over 5 years

Non-interest bearing

Total

Floating rate

Fixed rate

74.3

2,252.8

0.25 - 4.375

4.70 - 4.95

10 4.4

3.00 - 5.125

99.4

729.3

831.7

4.625 - 9.50

300.3

786.5

6.00 - 6.50

Adkinson Securities Public Company Limited Annual Report 2006

095

Consolidated Outstanding as at 31 December 2005 (in million Baht) Interest rate based on market rate Financial assets Cash and cash equivalents Long-term deposits at financial institutions Investments in debt and equity securities - net Securities business receivables - net

Earlier of remainingperiod beforecontract maturity or repricing date

Interest rate (% p.a.)

Less than 1 year

1 -5 years

Over 5 years

1,250.0

482.3

5.0

224.8

49.3

313.2

204.1

0.4

Non-interest bearing

Total

Floating rate

Fixed rate

2,045.5

2.75

0.50-3.93

5.0

0.25

543.5

866.9

4.625-6.00

488.7

693.2

4.75

The Company Outstanding as at 31 December 2006 (in million Baht) Interest rate based on market rate Financial assets Cash and cash equivalents Long-term deposits at financial institutions Investments in debt and equity s ecurities - net Securities business receivables - net Financial liabilities Short – term loan from subsidiary

096

Adkinson Securities Public Company Limited Annual Report 2006

Earlier of remaining period before contract maturity or repricing date Less than 1 year

1-5 years

Over 5 years

Interest rate (% p.a.) Non-interest bearing

1,710.0

70.9

104.4

3.0

99.4

422.0

459.1

486.2

Total 2,240.0

Floating rate

Fixed rate

0.25 – 0.50 4.70 – 4.95

104.4

3.00 – 5.125

729.3

831.7

4.625 – 9.50

300.3

786.5

422.0

6.00 – 6.50

3.75

Financial Statements

The Company Outstanding as at 31 December 2005 (in million Baht) Interest rate

Financial assets Cash and cash equivalents Long-term deposits at financial institutions Investmentsin debt and equity securities - net Securities business receivables - net Loan to subsidiary

Earlier of remainingperiod beforecontract maturity or reprising date Over 5 years

Total

Floating rate

Fixed rate

474.6

1,724.6

0.50-3.93

5.0

0.25

49.3

543.5

866.9

4.625-6.00

489.1

693.2

4.75

Less than 1 year

1-5 years

1,250.0

5.0

224.8

204.1

Interest rate (% p.a.) Non-interest bearing

based on market rate

Fair values of financial instruments Fair value Fair value is the estimated value that the Company and subsidiary could receive from selling its financial assets or the estimated cost for redeeming its financial liabilities based on market values, or estimated values that can be derived from using general market principles of calculation. The Company and subsidiary take into account its current circumstances and the costs that would be incurred to exchange or settle the underlying financial instruments. Most of the financial assets as at 31 December 2006 and 2005 have fair values approximate their carrying values in the balance sheets. Cash and cash equivalents, the carrying amounts in the balance sheets of cash and deposits at financial institutions which have remaining maturities of less than 3 months bearing interest at floating rates, approximate their fair value. Fair value for fixed rate instruments with remaining maturities greater than 3 months is estimated by using a discounted cash flow calculation applying interest rates currently being offered on similar instruments. Receivable from and payable to Clearing House (assets and liabilities), the carrying amounts in the balance sheets approximate their fair value as they are short-term assets and liabilities. For loans and borrowings, the carrying amounts in the balance sheets approximate their fair value as they are short-term assets and liabilities.

Adkinson Securities Public Company Limited Annual Report 2006

097

4.13

Share capital and warrants 2006

Par value (in Baht)

Number

Authorised At 1 January - ordinary shares At 31 December - ordinary shares

491,651,088

Issued and paid up At 1 January - ordinary shares Issue of new shares At 31 December - ordinary shares

10 10

2005 Baht Number (Shares / Baht)

4,916,510,880

491,651,088

Baht

4,916,510,880

491,651,088 4,916,510,880 491,651,088 4,916,510,880

322,310,749 97,278,823

3,223,107,490 972,788,230

419,589,572 4,195,895,720

322,310,749 -

3,223,107,490 -

322,310,749 3,223,107,490

A resolution was passed by the extraordinary meeting of shareholders held on 22 July 2002 approving the issuance of the 3rd Tranche Warrants of 100,412,772 units and the 4th Tranche Warrants of 100,412,772 units to the Companyâ&#x20AC;&#x2122;s shareholders whose names were on the list as of 2 August 2002. The conversion ratio was 2 existing ordinary shares for 1 unit of the 3rd Tranche Warrant and 1 unit of the 4th Tranche Warrant at no value price. The shareholders would receive warrants when the Office of Securities and Exchange Commission approve the Company to issue and offer the 3rd Tranche and 4th Tranche warrants. Details of 3rd Tranche and 4th Tranche Warrants are as follows: Type/Name

Type/Name

Number of warrants to be issued - 3 tranche th Number of warrants to be issued - 4 tranche rd Offering price - 3 tranche th Offering price - 4 tranche rd Exercise ratio - 3 tranche th Exercise ratio - 4 tranche rd Exercise price - 3 tranche th Exercise price - 4 tranche rd Term of warrant - 3 tranche th Term of warrant - 4 tranche rd

Wa rrant exercising period - 3 tranche th Warrant exercising period - 4 tranche

: : : : : : : : : : : :

The 3 Tranche Warrants for new ordinary shares of Adkinson Securities Public Company Limited. th The 4 Tranche Warrants for new ordinary shares of Adkinson Securities Public Company Limited. 100,412,772 Units 100,412,772 Units No offering price No offering price 1 unit warrant : 1 ordinary share 1 unit warrant : 1 ordinary share Baht 10 per 1 ordinary share Baht 10 per 1 ordinary share 1 year from the issued date indicated in warrants 3 year s from the issued date indicated in warrants On 16 January 2004 On 16 January 2006

Warrants for new ordinary shares of the 3rd and the 4th tranche were listed securities and started trading in the Stock Exchange of Thailand on 27 January 2003.

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Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

On 16 January 2004, warrants of the 3 rdtranche of 100,412,772 units were due to be exercised. There were 99,090,636 warrants exercised for 99,090,636 ordinary shares at Baht 10 per unit, amounting in total to Baht 990,906,360. As a result, the Company had paid-up share capital increasing from Baht 2,232,201,130 to Baht 3,223,107,490. The Company registered the increase in paid-up share capital with the Ministry of Commerce on 28 January 2004, and with the Stock Exchange of Thailand on 2 February 2004. A resolution was passed by the extraordinary shareholders’ meeting held on 14 July 2004 approving the utilisation of the legal reserve of Baht 36,824,800 to be offset against from the Company’s deficit as at 31 May 2004 of Baht 91,336,687. In addition, a resolution was passed approving the utilisation of the premium on share capital of Baht 54,511,887 to offset against the Company’s remaining deficit after deducting of legal reserve as described above. On 16 January 2006, warrants of the 4 thtranche of 100,412,772 units were due to be exercised. There were 97,278,823 warrants exercised for 97,278,823 ordinary shares at Baht 10 per unit, amounting in total to Baht 972,788,230. As a result, the Company had paid-up share capital increasing from Baht 3,223,107,490 to Baht 4,195,895,720. The Company registered the increase in paid-up share capital with the Ministry of Commerce on 23 January 2006 and with the Stock Exchange of Thailand on 26 January 2006. 4.14

Reserves Share premium The share premium account is set up under the provisions of Section 51 of the Public Companies Act B.E. 2535, which requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available for dividend distribution. Revaluation surplus (deficit) on investments The revaluation surplus (deficit) on investments includes the cumulative net change in the fair value of available-for-sale investments until the investment is derecognised. Legal reserve The legal reserve is set up under the provisions of Section 116 of the Public Companies Act B.E. 2535. Section 116 requires that a company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution. The legal reserve is set up under the provisions of Civil and Commercial code, which requires that a subsidiary company shall allocate not less than 5% of its net profit to a reserve account (“legal reserve”) upon each dividend declaration, until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.

Adkinson Securities Public Company Limited Annual Report 2006

099

4.15

Fees and service income Consolidated 2006 2005

The Company 2006 2005 (in Baht)

4.16

Underwriting fee Investment advisory fee Financial advisory fee Others

248,177 567,188 -

291,945 801,497 640,000 1,125,788

248,177 567,188 -

69,695 465,006 -

Total fees and service income

815,365

2,859,230

815,365

534,701

Gain (loss) on trading in securities Consolidated 2006 2005

The Company 2006 2005 (in Baht)

Gain on trading in current investments Gain (loss) on trading in long-term investments L oss from revaluation of securities Total gain (loss) on trading in securities

4.17

61,662,441 (269,688,816)

31,916 13,446,736

61,662,441 (269,688,816)

288,467 13,446,736

(68,941,680)

(2,711,707)

(68,941,680)

(818,626)

(276,968,055)

10,766,945

(276,968,055)

12,916,577

Personnel expenses Consolidated

2006

The Company

2005

2006

2005

273,587,173 8,343,280 111,192,247 393,122,700

269,203,147 6,645,082 74,612,854 350,461,083

(in Baht) 273,675,131 Wages and salaries 8,343,280 Contribution to defined contribution plans 111,379,547 Other Total 393,397,958

356,154,927 5,857,068 79,304,361 441,316,356

(number of employees) Number of employees as at 31 December

725

863

723

850

This account included bonuses for staff and executive board of directors amounting totalling Baht 19.6 million in 2006 (2005:Baht 73.0 million) which was approved by the Board of Directors meeting on 14 December 2006 and 31 January 2006, respectively.

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Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

The Company and subsidiary have established contributory plans provident funds for its employees. Membership to the funds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 3% to 5% of their basic salaries and by the Company and its subsidiary from 3% to 5% of the employeesâ&#x20AC;&#x2122; basic salaries. The provident funds are registered with the Ministry of Finance as juristic entities and are managed by a licensed Fund Manager.

4.18

Other expenses Consolidated 2006 2005

The Company 2006 2005 (in Baht)

Professional and other fees Entertainment expenses Gasoline and travelling expenses Stationery and office supplies Advertising and promotion expenses Amortisation goodwill Others Total other expenses

4.19

22,394,712 1,496,129 6,659,695 7,705,411 3,248,137 11,432,312 23,366,023

18,743,862 8,898,961 13,228,975 9,269,657 6,633,631 11,432,312 24,895,361

22,191,061 1,496,129 6,657,635 7,704,639 3,240,517 22,157,026

17,342,189 7,226,197 10,962,372 8,052,357 6,509,702 15,160,922

76,302,419

93,102,759

63,447,007

65,253,739

Loss per share Basic loss per share The calculation of basic loss per share for the years ended 31 December 2006 and 2005 was based on loss attributable to the ordinary shareholders and the weighted average number of shares outstanding during the years, calculated as follows: Loss attributable to ordinary shareholders (basic)

Consolidated 2006

The Company

2005

2006

2005

(in Baht) Net loss for the year Loss attributable to ordinary shareholders (basic)

(683,562,042)

(244,169,946)

(683,562,042)

(244,169,946)

(683,562,042)

(244,169,946)

(683,562,042)

(244,169,946)

Weighted average number of ordinary shares (basic)

Consolidated 2006

The Company

2005

2006

2005

322,310,749 -

322,310,749 91,415,442

322,310,749 -

322,310,749

413,726,191

322,310,749

(Shares) 322,310,749 Issued ordinary shares at 1 January Effect of shares issued during the year 91,415,442 Weighted average number of ordinary shares at 31 December (basic) 413,726,191

Adkinson Securities Public Company Limited Annual Report 2006

101

Diluted loss per share The calculation of diluted loss per share for the years ended 31 December 2006 and 2005 was based on profit loss attributable to the ordinary shareholders (after adjusting the effects of all transactions relating to dilutive potential ordinary shares) and the total average number of shares outstanding during the years plus the weighted average number of ordinary shares to be issued for conversion of all dilutive potential ordinary shares into ordinary shares, calculated as follows: Loss attributable to ordinary shareholders (diluted)

Consolidated 2006

The Company

2005

2006

2005

(244,169,946)

(683,562,042)

(244,169,946)

(683,562,042)

(244,169,946)

(in Baht) (683,562,042) Loss attributable to ordinary shareholders Loss attributable to ordinary shareholders (diluted) (683,562,042)

Weighted average number of ordinary shares (diluted) Consolidated 2006

The Company

2005

2006

2005

(Shares) Weighted average number of ordinary shares (basic) Effect of warrants on issue Weighted average number of ordinary shares (diluted)

Additional information

5.1

Directors’ remuneration

413,726,191

322,310,749 87,315,453

413,726,191

322,310,749 87,315,453

413,726,191

409,626,202

413,726,191

409,626,202

Directors’ remuneration represents the benefits paid to the Company’s directors in accordance with Section 90 of the Public Companies Limited Act B.E.2535, excluding salaries and related benefits payable to directors who hold executive positions. Directors’ remuneration for the year 2006 was approved by the ordinary shareholders’ meeting of the Company held on 27 April 2006 and the ordinary shareholders’ meeting of a subsidiary held on 30 March 2006.

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Financial Statements

5.2

Commitments As at 31 December 2006 and 2005, the Company and subsidiary had commitments as follows :

Consolidated and the Company 2006 2005 (in million Baht)

5.2.1 Capital and other commitments 5.2.2 Operating lease commitments Within one year After one year but within five years After five years Total

5.2.3

0.2

6.0

49.7 72.4 25.6

116.9 33.7

147.7

205.9

55.3

Others The Board of Directors’ meeting No.1/2546 held on 28 January 2003, passed a resolution to approve to transfer 1 million shares of APEX Securities Co., Ltd., a subsidiary 99.99% owned by the Company, to the former Chairman of the Executive Board and President with no payment, and also approve the sale of 3 million ordinary shares of APEX Securities Co., Ltd at Baht 10 per share to the executives of such company upon the condition that the management of APEX Securities Co.,Ltd.has to develop such company to be qualified for being a listed company as prescribed by the Stock Exchange of Thailand (“SET”). In addition, they have to apply to SET in order that SET will consider and allow the Company’s ordinary shares to be traded as a listed company in SET within the period of two years. According to the Board of Directors’ meeting No. 7/2547 held on 29 June 2004, during the year 2004 certain executives and management of APEX Securities Co., Ltd. resigned, gave up and cancelled the right to purchase 3.85 million ordinary shares and certain remaining executives still held the right to purchase the common shares of such subsidiary totalling 0.15 million shares upon the same terms and conditions. As at 31 December 2006 and 2005, the Company had no remaining commitment in respect to these purchase rights relating to the transfer of business of APEX Securities Co., Ltd. as over the prescribed period of two years stipulated in the conditions had lapsed.

5.3

Balances and transactions with related parties Related parties are those parties linked to the Group and Company by common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market prices exist, at contractually agreed prices.

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103

The pricing policies for particular types of transactions are explained further below:

Pricing policies At market price which is the same rate as general client At agreed price whichapproximates market value At agreed price whichapproximates market value At agreed pricewhich approximates market value

Brokerage fee Interest income Interest expense Expenses

Balances with related parties as at 31 December 2006 and 2005 were as follows:

Consolidated 2006

The Company 2006

2005

(in thousand Baht) Advance Safari World Public Co., Ltd.

5,000

Other accounts receivable - sales of assets Phuket Fantasy Co., Ltd. Safari World Public Co., Ltd.

15 4

Total

Payable for acquisition of assets APEX Securities Co., Ltd

109,739

422,000

15,435

Short â&#x20AC;&#x201C; term loan APEX Securities Co., Ltd Promissory note (interest at the rate 3.75% p.a) Accrued interest expense APEX Securities Co., Ltd

As at 31 December 2005, an advance to Safari World Public Co., Ltd. of Baht 5 million represented an advance for the Companyâ&#x20AC;&#x2122;s staff party, which will be held at Safari World in February 2006. Significant transactions with related parties for the years ended 31 December 2006 and 2005 were as follows: Consolidated 2006 2005

The Company 2006 2005

(in thousand Baht)

Brokerage fee Related persons International Engineering Public Co., Ltd Phuket Fantasy Tour Co., Ltd.

104

Adkinson Securities Public Company Limited Annual Report 2006

2,861 1,294 111 4,266

2,861

1,294 111 4,266

1 19 1 19

Financial Statements

2006

Consolidated 2005

The Company 2006 2005

(in thousand Baht)

Interest income APEX Securities Co., Ltd.

1 1,221

Dividend received APEX Securities Co., Ltd.

69,897 1

Interest expense APEX Securities Co., Ltd.

15,435

Share of gain (loss) in subsidiary APEX Securities Co., Ltd.

750

(72,755)

Other expenses Phuket Fantasy Co., Ltd. - Car Rental Phuket Fantasy Tour Co., Ltd. - Air ticke t Safari World Public Co., Ltd. - Car Rental - Gift for customers - Staff party expenses

Total

14 132

742

2,631 9,462 12,225

423 1,574 2,753

14 132

742

2,631 9,462 12,225

423 1,574 2,753

Gift for customers and staff party expenses were paid to Safari World Public Co., Ltd. for the arrangement of purchasing customer gifts from abroad and organising a staff party for the Company.

Segment information Management considers that the Company and subsidiary operate in a single line of business, namely the securities business, and have, therefore only one major business segment. In addition, management considers that the Company and subsidiary operate in a single geographic area, namely in Thailand, and have, therefore only one major geographic segment.

Transfer of the business On 1 April 2005, a resolution was passed by the extraordinary shareholders’ meeting 1/2548 approving the transfer of the business of APEX Securities Company Limited (“the subsidiary”) to the Company by purchasing the assets, liabilities and commitments under the agreement to transfer and to be transferred of the business of the subsidiary dated 31 May 2005. The Company commenced the transfer of the assets, liabilities and commitments on 1 July, 2005. As prescribed in the agreement, the Company would pay compensation for the business transfer to the subsidiary at the book value of the subsidiary as at the transfer date after the Company has completed the transfer of assets, liabilities and commitments and after the subsidiary notifies the completeness of such transfer of assets to the Company.

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105

The book value of the subsidiary at the transferring date consisted of the following:

Investments in unit trusts Property, plant and equipment– net (partially) Intangible assets – net (partially) Other expenses advanced by subsidiary (partially) Total

(in million Baht) 48.1 54.5 2.8 4.3 109.7

As at 31 December 2005, the Company recorded such transactions as “Payable to Subsidiary for Acquisition of Assets” under liabilities in the balance sheet and the Company paid the total amount of compensation for the business transfer to the subsidiary on 10 January 2006. As at 31 December 2006, in addition to holding licenses of securities brokerage, securities underwriting and investment advisory services, the subsidiary had net assets as follows:

Cash and cash equivalents Short – term loan to parent company Intangible assets- net Other assets- net Less other liabilities Total

(in million Baht) 12.7 422.0 1.0 20.9 (0.5) 456.1

As at 31 December 2006, the investment in subsidiary amounted to Baht 517.1 million (2005 : Baht 516.4 million) which compares with an underlying net tangible asset value of Baht 456.1 million (2005 : Baht 443.9 million). The difference of Baht 61.0 million (2005 : Baht 72.5 million) represents the value of goodwill attaching to the subsidiary’s securities licences. The Company is in the process of trying to find a suitable buyer for the investment in the subsidiary which holds such securities licences. The sale value of the investment, and the effect on the financial statements of any difference between the sale value and the carrying value of the investment, cannot presently be determined.

The amalgamation of branches On 4 July 2006, 26 September 2006 and 31 October 2006, the Board of Directors’ meetings considered the restructuring by the amalgamation of branches and unanimously approved to cease the operation of 23 branches. The Company estimated expenses incurred in the amalgamation of branches of approximately totalling Baht 65.7 million, which were presented separately in the statement of income for the year ended 31 December 2006.

New and revised accounting standards not yet adopted On 11 October 2006, the Federation of Accounting Professions (FAP) announced that the Thai Accounting Standard No. 44 (TAS No. 44) “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” is to be revised. FAP announcement No. 26/2006 requires a parent company which has investments in a subsidiary company, an entity under joint control, or an

106

Adkinson Securities Public Company Limited Annual Report 2006

Financial Statements

associate company, which is not classified as a “held for sale” investment, to record such investment in accordance with either the cost method or with the recognition and measurement basis for financial instruments (when an announcement is made), instead of the equity method currently used. This revision to TAS No. 44 is applicable to financial statements covering periods beginning on or after 1 January 2007, with early adoption encouraged. The Company proposes to adopt the change in accounting treatment for its investments in subsidiary company for the Company’s 2007 financial statements. The change in accounting treatment will be applied retrospectively and the Company’s 2006 financial statements, which will be included in the Company’s 2007 financial statements for comparative purposes, will be restated accordingly. The effect of the change on the Company’s financial statements has not presently been determined by management. The consolidated financial statements of the Company and its subsidiary will not be affected by the change.

10.

Event after the balance sheet date Arising from the Board of Directors’ meeting No.1/2007 held on 30 January 2007, resolutions will be proposed in the extraordinary shareholders’ meeting No.1/2007 to be held on 7 March 2007 to consider the following : 1. To approve the utilisation of the Company’s deficit of Baht 901,665,291 as of 31 December 2006 to be offset by legal reserve and the premium on share capital as of 31 December 2006 of Baht 17,602 and Baht 813,653,863, respectively of which the remaining deficit will be Baht 87,993,826. 2. To approve the change in par value from Baht 10 per share to Baht 1 per share of which the Company’s authorised share capital will be 4,916,510,880 shares and issued and paid-up share capital will be 4,195,895,720 shares.

11.

Reclassification of accounts Certain accounts in the 2005 financial statements have been reclassified to conform with the presentation in the 2006 financial statements.

Adkinson Securities Public Company Limited Annual Report 2006

107

Branch Offices as of December 31, 2006 No. 1

Bangkok and Vicinity Lardprao

Manager: Mr. Sunan Suwanrat Bangkae

Manager: Mr. Paiboon Adungvitayakorn Ngamwongwan

VP: Mr. Ittiphon Aramkul Samrong

Manager: Mr. Kantham Chutirakkul Pinklao

9 10 11 12 13 14

108

Branch Offices

Manager: Mr. Pairat Somnuekkwangdee Paknam Manager: Mr. Kitti Khunwattana The North Chang Phuek – Chiang Mai Vice President, Upper Northern Region: Mrs. Sirinuan Sura Manager 2: Ms. Vilawan Hopattaraput Manager 3: Mr. Anuchit Triyakul Manager 4: Ms. Sunanta Praputpittaya Ched Yod-Chiang Mai Manager 1: Mr.Panurat Sawasdee Manager 2: Mr.Kitti Chaivipartsatorn Chang Klan-Chiang Mai Manager: Ms. Kanokwan Wongpanich Thanalai-Chiang Rai Manager: Ms.Pornpan Chaitip Saree Gate-Chiang Rai VP: Ms. Anaya Sombatsiri Lampang Manager: Ms. Phatcharee Butthura Nakhon Sawan Manager: Mr. Thongchai Wanthong Huai Kaeo – Chiang Mai Vice President, Upper Northern Region Manager: Ms.Sirinuan Sura

Location 1693 Central Plaza Building (Lardprao) 7th Floor, Paholyothin Rd., Ladyao, Chatuchak, Bangkok 10900 Tel. 0-2937-1292-8, 0-2937-1298 275 The Mall Building (Bangkae) 6th Floor, Petkasem Rd., North Bangkae, Bangkae, Bangkok 10160 Tel. 0-2454-9088-4 Fax. 0-2454-9095 30/39-50 The Mall Building (Ngamwongwan) 12th Floor, Ngamwongwan Rd., Bangkhen, Muang, Nonthaburi 11000 Tel. 0-2550-0522-7 Fax. 0-2550-0529 1293 Carrefour Building (Samrong) 2nd Floor, Moo 4 Sukhumvit Rd., Theparak, Muang, Samutprakarn 10270 Tel. 0-2380-0333 Fax. 0-2757-7100 7/129-221 Room No. 2601, Central Pinklao Department Store, 6th Floor, Boromrajachonnanee Road, Arunamarin, Bangkoknoi, Bangkok 10700 Tel. 0-2884-7034-8, 0-2884-7051 Fax. 0-2884-7053 50/6-7 West Klongtaked Road, Paknam, Muang, Samuthprakarn 10270 Tel. 0-2707-7837-41 Fax. 0-2707-7910 275/4 Chang Phuek Rd., Chang Phuek, Muang, Chiang Mai 50300 Tel. 0-5341-0955-9 Fax. 0-5322-7297

162/5-8 Super Highway Road, Chang Phuek, Muang, Chiang Mai 50300 Tel. 0-522-3988 Fax. 0-5322-3378 470 Chang Klan Road, Chang Klan, Muang, Chiang Mai 50100 Tel. 0-5320-5175-80 Fax. 0-5320-4604 673/1 Thanarai Rd., Viang, Muang, Chiang Rai 57000 Tel. 0-5374-0480-3 Fax. 0-5374-0484 591/5-1 Phaholyothin Road, Wiang, Muang, Chiang Rai 57000 Tel. 0-5360-0828-32 Fax. 0-5360-0833 500/1-3 Prasanmaitee, Sob Tui, Muang, Lampang 52100 Tel. 0-5423-1740-8 Fax. 0-5423-1749 51 Matulee Rd., Paknampoll, Muang, Nakhon Sawan 60000 Tel. 0-5622-7241-5 Fax. 0-5622-9899 50/147-157 Hill Side Plaza & Condotel Building, 4th Floor, Huai Kaeo, Chang Phuek Rd., Muang, Chiang Mai 50300

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Branch Offices Mae Sot Manager: Mr.Waraporn Chantikul Phitsanulok Vice President, Lower Northern Region: Ms. Pornthip Punnaraj Phayao Manager: Mr. Suchart Namwong The South Juldis - Hadyai Ms. Siriporn Kasidetpong Manager: Nakhon Si Thamarat Vice President, Southern Region 1: Mr. Chawalit Treewong Trang Manager: Ms.Pittaya Kongsheepa Muang â&#x20AC;&#x201C; Phuket Vice President, Southern Region 2: Mr. Thrinn Pattaranukrom Toongsong Manager: Mr. Kanob Senakoon Suratthani Manager: Mr. Thananon Kingpotan Songkla Manager: Ms. Sasithorn Meekul Chumporn Manager: Mr. Pichai Shinwittayakul The Northeast Surin Vice President, Lower Northeast Region: Mr. Saroj Luethai Sisaket Manager: Ms. Jitsawan Somboonsri Udonthani Vice President: Mr.Kiartisak Komolsiriwattana Prachasamosorn-Khonkaen Manager: Mr. Somsak Piromchai Nakornratchasima Manager: Ms. Suranya Chamnikul Chayangkoon-Ubon Ratchathani Manager: Mr. Nuttapong Panjaworayan Buriram

Location 227/24 Intarakeri, Mae Sot, Mae Sot, Tak 63110 Tel. 0-5554-2987-8, 0-554-3125-6 Fax. 0-5554-2969 228/28-30 Baromtrilokkanard Rd.,Nai Muang, Muang Phitsanulok 65000 Tel. 0-5523-1981-7 Fax. 0-5523-1980 68/1 Don Sa Nam Rd., Viang, Muang, Phayao 56000 Tel. 0-5441-0901-3 Fax. 0-5441-0905 200 Chuladis Hat Yai Plaza Shopping Complex, 4th Floor, Nipatuthit 3 Rd., Hat Yai, Songkhla 90110 Tel. 0-7435-4699-708 Fax. 0-7423-0167 60, 64, 66,68 Soi Wandeekositkhullaporn, Pattanakarnkukwang, Nai Muang, Muang, Nakhon Si Thammarat 80000 Tel. 0-7543-2021-30, 0-7543-2032-3 Fax. 0-7543-2031 59/5-7 Huaiyod Rd., Tubtieng, Muang, Trang 92000 Tel. 0-7521-6000-6 Fax. 0-7521-6007 154/14-16 Phangnga Rd., Taladyai, Muang, Phuket 83000 Tel. 0-7623-2482-90 Fax. 0-7623-2491 164/2-3 Moo 8, Chamai, Toongsong, Nakorn Si Thammarat 80110 Tel. 0-7567-6042-5 Fax. 0-7542-1165 21/1-2, 2nd Floor, Chonkasem Road, Sri Chai Ya Road, Talad, Muang, Suratthani 84000 Tel. 0-7721-0700, 0-7728-3123 Fax. 0-7728-9889 467 Saiburi Road, Bo Yang, Muang, Songkla 90000 Tel. 0-7443-7500, 0-7443-6666 1/9 Taweesinka Road, Tatapao, Muang, Chumporn 86000 Tel. 0-7751-2114, 0-7751-2123 Fax. 0-7751-2122 328/1-2-3 Tedsaban 1 Rd., Nai Muang, Muang, Surin 32000 Tel. 0-4453-5033-44 Fax. 0-4453-5045 1036, 1036/1-4 Wanlooksue Road, Muangtai, Muang, Sisaket 33000 Tel. 0-4564-3674 Fax. 0-4562-0867 232/6 Udon Phone Tech Building 2nd Floor, Udondussadee Rd., Markhaeng, Muang, Udonthani 41000 Tel. 0-4223-0501-15 Fax. 0-4223-0515 1/21-23 Prachasamosorn, Nai Muang, Muang, Khonkaen 40000 Tel. 0-4333-8444 Fax. 0-4333-8525 166/1-2 Chompol Rd., Nai Muang, Muang, Nakornratchasima 30000 Tel. 0-4426-9802-11 Fax. 0-4424-8990 473/1 Chayangkul, Nai Muang, Muang, Ubon Ratchathani 34000 Tel. 0-4535-5125-8 Fax. 0-4528-4016 8/47-48 Palad Muang, Nai Muang, Muang, Buriram 31000 Tel. 0-4462-5608-8, 0-4460-1948-2 Fax. 0-4460-1953

Manager: Ms.Jaruwan Nakdee

109

No. 33

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110

Branch Offices Roiet Manager: Mr.Suraphong Inchannarong The Central Region Petchaburi Manager: Mr. Chaiyong Jarusutiprapa Nakhonpathom Manager: Mr. Ponwee Keardpoca Kanchanaburi Manager: Mr. Chuchai Vareetipkajorn Saraburi Manager: Mr. Suchai Tachasawatvit Mahachai Manager: Mr.Prapas Chan-inn Banpong Manager: Ms.Kanyarat Patchararak The East Rayong Manager: Mr. Archa Aroon Pattaya Vice President: Ms.Chintana Tarasak Chaichana-Chonburi Manager: Mr. Kittisak Jutaganon

Location 95 Suriyadejbumrung Rd., Nai Muang, Muang, Roiet 45000 Tel. 0-4352-0680-8 Fax. 0-4352-0689 555 Moo 1 Petkasem Rd., Raisom, Muang, Petchaburi 76000 Tel. 0-3241-1745-50 Fax. 0-3241-1744 216/2 Moo 8 Petkasem Rd., Prapatone, Muang, Nakhonpathom 73000 Tel. 0-3427-2800-6 Fax. 0-3427-2807 321 Sangchuto Rd., Bannua, Muang, Kanchanaburi 71000 Tel. 0-3462-4908-9 Fax. 0-3462-4910 591/19 Paholyothin Rd., Pakpure, Muang, Saraburi 18000 Tel. 0-3631-8481-7 Fax. 0-3631-8488 923/412-413 Sethakij Road 1, Mahachai, Muang, Samuthsakorn 74000 Tel. 0-3481-1457-61, 0-3442-4135-8 Fax. 0-3442-3005 99/49-50 Songpol Road, Banpong, Banpong, Ratchaburi 70110 Tel. 0-3230-1201-8, 0-3222-3456, 0-3222-3007-8 Fax. 0-3230-1209 115 Star Plaza Building, 1st Floor, Soi Soonkankasai 5, Sukhumvit Rd., Cheong-nern, Muang, Rayong 21000 Tel. 0-3886-1153-9 Fax. 0-3886-1160 223/34-35 Moo 9, Nongprue, Banglamung, Chonburi 20260 Tel. 0-3842-2333, 0-3842-3326-7, 0-3837-1430-3 Fax. 0-3837-1434 838/6 Chaichana Rd, Bang Prasoi, Muang, Chonburi 2000 Tel. 0-3879-2556-70 Fax. 0-3879-2569