4. Business Lines 

4.1 Types of Business

4.1.1 Securities Broker

KGI Securities (Thailand) Public Company Limited, a member of the Stock
Exchange of Thailand (SET Broker seat No. 13), provides broking services
to both local and foreign investors and to both individual and
institutional investors.

In 2011, the Company ranked No. 9^(th) in terms of brokerage market
share with an overall share of 4.53%. The Company's daily trading volume
breakdown by types of clients comprised of 65% for local retails
clients, 6% for local corporate clients, 8% for foreign clients, and 21%
for the Company’s portfolio.

The Company’s daily trading volume breakdown by type of accounts
comprises 70% for cash account and 30% for credit balance account. The
Company’s daily trading volume breakdown by types of trading order
channels comprised of 51% for traded through marketing officers and 49%
for internet trading.

The following table shows market share, a breakdown by type of clients,
type of accounts and types of trading order channels for the past 3
years.

  Unit : Million Baht

+----------------------------------+-----+----+-----+----+-----+----+
| Daily Trading Volume             | 2   | %  | 2   | %  | 2   | %  |
|                                  | 011 |    | 010 |    | 009 |    |
+----------------------------------+-----+----+-----+----+-----+----+
| Daily Trading Volume- SET*       | 29, |    | 29, |    | 17, | ** |
|                                  | 473 |    | 066 |    | 777 |    |
| Daily Trading Volume- The        |     |    |     |    |     | ** |
| Company *                        | 2,  |    | 2,  |    | 1,  |    |
|                                  | 944 |    | 857 |    | 381 |    |
| (including the Company’s         |     |    |     |    |     |    |
| portfolio)                       | 4.  |    | 4.  |    | 3.  |    |
|                                  | 53% |    | 65% |    | 88% |    |
| The Company’s market share %     |     |    |     |    |     |    |
|                                  | 9   |    | 4   |    | 9   |    |
| (excluding the Company’s         |     |    |     |    |     |    |
| portfolio)                       |     |    |     |    |     |    |
|                                  |     |    |     |    |     |    |
| Ranking                          |     |    |     |    |     |    |
+----------------------------------+-----+----+-----+----+-----+----+
| Breakdown by types of clients    | 186 | 6  | 155 | 5  | 84  | 6  |
|                                  |     |    |     |    |     |    |
| 1) Local corporate clients       | 1,  | 65 | 2,  | 75 | 900 | 65 |
|                                  | 911 |    | 150 |    |     |    |
| 2) Local retail clients          |     | 8  |     | 3  | 46  | 3  |
|                                  | 223 |    | 73  |    |     |    |
| 3) Foreign clients               |     |    |     |    |     |    |
+----------------------------------+-----+----+-----+----+-----+----+
| Total clients volume             | 2,  | 79 | 2,  | 83 | 1,  | 75 |
|                                  | 320 |    | 378 |    | 030 |    |
+----------------------------------+-----+----+-----+----+-----+----+
| 4) The Company’s portfolio       | 624 | 21 | 479 | 17 | 351 | 25 |
+----------------------------------+-----+----+-----+----+-----+----+
| Total                            | 2,  | 1  | 2,  | 1  | 1,  | 1  |
|                                  | 944 | 00 | 857 | 00 | 381 | 00 |
+----------------------------------+-----+----+-----+----+-----+----+
| Breakdown by types of accounts   | 1,  | 70 | 1,  | 74 | 916 | 89 |
|                                  | 614 |    | 766 |    |     |    |
| 1) Cash account                  |     | 30 |     | 26 | 114 | 11 |
|                                  | 706 |    | 612 |    |     |    |
| 2) Credit balance accounts       |     |    |     |    |     |    |
+----------------------------------+-----+----+-----+----+-----+----+
| Total                            | 2,  | 1  | 2,  | 1  | 1,  | 1  |
|                                  | 320 | 00 | 378 | 00 | 030 | 00 |
+----------------------------------+-----+----+-----+----+-----+----+
| Breakdown by types of trading    | 1,  | 51 | 1,  | 46 | 744 | 72 |
| order channels                   | 180 |    | 090 |    |     |    |
|                                  |     | 49 |     | 54 | 286 | 28 |
| 1) Trading via marketing         | 1,  |    | 1,  |    |     |    |
| officers                         | 140 |    | 288 |    |     |    |
|                                  |     |    |     |    |     |    |
| 2) Trading via internet trading  |     |    |     |    |     |    |
+----------------------------------+-----+----+-----+----+-----+----+
| Total                            | 2,  | 1  | 2,  | 1  | 1,  | 1  |
|                                  | 320 | 00 | 378 | 00 | 030 | 00 |
+----------------------------------+-----+----+-----+----+-----+----+

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

** Information for year 2009 Jan - Oct including the Company’s portfolio

Nov - Dec excluding the Company’s portfolio

Internet Trading (E-Business)

KGI Securities (Thailand), one of Thailand’s leading securities
companies, provides internet trading services and also Futures online
trading services. Clients can see real time information to follow price
movements 24 hours a day, 7 days a week, wherever they are. We provide
in-depth research for fundamental analysis and technical analysis. The
reports issued by its research institute can be used as decision making
tools for clients.

The Company provides the foremost high quality services that are fast
and accurate. The Company also employs high technology enabling clients
to trade stock and derivatives trading via Smart phones and Tablet.
Investors are being updated with various important information, they can
trade, get updates on stock prices and check their portfolios anywhere
and anytime online. The commission rates for trading online are lower
than through a marketing representative.

Our company aims at providing services with a high level of customer
satisfaction. We continue to develop our internet trading services so
they become even more convenient, efficient and secure for our clients.
We also offer seminars and training for clients and investors. In these
seminars, clients learn to use the internet trading program to trade
both equity and derivatives products.

If you have any questions, need additional information or would like to
open an Internet Trading account with our company, please visit our
website : www.kgieworld.co.th or contact us at Hotline : 02 658 8555 or
email : CorporateSale@kgi.co.th

In 2012, the Company plans to enhance the Company’s website trading
support features for futures and options traders and further support the
growth of TFEX.

Account opening

Clients can open accounts with the Company as follows:

(1) Cash Accounts:

    1.  Cash account is the account that client can trade by deposit
        collateral of 15% of the amount at which clients may transact
        the purchase, with compliance to the regulations of the SET.
        Clients have to pay the purchasing within the third business day
        following the date of purchase and the Company has to pay to the
        clients for the selling securities within the third business day
        following the date of selling.

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

  (2) Credit Balance Account: Clients can borrow money from the Company
  to purchase the securities by deposit money and/or other assets for
  collateral at least 50% or any percent that the SET required.

Policy in accepting Clients

Clients are categorized as follow:

1.  Individuals (locals and foreigners).

2.  Juristic persons:

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

  - Foreign financial institutions.

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

  - Juristic persons registered abroad.

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

Account opening procedures

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

2. The credit risk officer will check the client’s background and
calculate an appropriate credit line for the client according to the
company’s criteria, which include the financial status, debt service
ability as well as debt service history. The company will consider
Credit Line of all accounts together.

3. The credit risk officer will propose the appropriate Credit Line to
the authorized person for approval

From 1^(st) January 2007, to considering the new account opening the
Company has to complete Know Your Customer and Customer Due Diligence:
KYC/CDD processes. Besides, the company had provided training to all
related department about the Fraud and Money laundering, including law
and regulation, policy and how to protect.

Besides, to encouraging the customer to acknowledge its acceptable
investment risk level for the making of suitability investment decision,
therefore the company has requested client to complete the questionnaire
on the Suitability Test from 1^(st) July 2011.

Credit balance account

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

Authority in approving credit line for trading accounts

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

4.1.2 Securities Dealer

The Proprietary Trading Department and Fixed Income Department are
responsible for stock, bond, and derivatives, futures and option,
selection and investment allocation according to the established policy,
while the Risk Management Department will closely track those
departments’ exposure to control the Company’s overall risks. The
Company’s Proprietary Trading team performed well in 2011.

KGI Securities (Thailand) based proprietary traders have years of
experience. Individual traders are encouraged to adopt diverse trading
strategies to suit their personal trading styles. However, to guard
against misjudgment that could arise from an emphasis in individualism,
all proprietary trading is conducted through a highly-efficient trading
platform and is overseen by a stringent risk control system. These
controls have engendered a strong culture of discipline among the
Company’s proprietary Trading and have eliminated the highest degree
possible, the potential for mistrades.

The Company pays serious attention to conflict of interests, and the
misuse of inside information. The Company regards such departments as
investors; therefore, such departments have no right to receive
information or research that differs from other clients of the Company.

4.1.3 Investment Advisory

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

4.1.4 Financial advisory and securities underwriting

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

In 2011, SET index was highly volatile due from the political
instability before the dissolution of parliament on May 9, 2011, as well
as the negative effect from the EU zone economic crisis. The index moved
from 949 points to peak at 1,113 point and closed at 1041 points during
the first half of 2011; thus there were 5 company listed on the stock
market.

After the result of the new election in July 2011, which one party won
the election with majority vote, the political situation became more
stable while there were increasing foreign fund flow into the stock
market and has caused the stock index to move in the upward direction to
close peak at 1,144 points. However, during Q3/2011, the concerns over
the EU economy have continued to impact the world stock market including
SET index which plunged down to bottom at 855 points. Nevertheless,
during the last quarter of 2011, due to flooding crisis, many companies
had postponed their listing plan although index gradually rebounded to
close at 1036 pts at the end of 2011. Thus; there were only 5 additional
companies listed on the stock market in the second half of 2011, or in
total 10 companies in 2011.

In 2011, the company was a lead underwriter of 1 IPO with the issue size
of Baht 600 Million, and was co-underwriter of 2 IPOs. The company also
performed financial advisor and lead underwriter roles of 4 IPOs in
pipelines which still on preparation process. In addition, the company
successfully performed financial advisor role for fund raising both debt
and equity for both listed and non listed company.

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

4.1.5 Securities Registrar

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

4.1.6 Fixed Income Business

The Company is a member of Bond Electronic Exchange (BEX) and Thai Bond
Market Association (ThaiBMA), provides trading fixed income securities
services to the Company’s clients. Investors can open an account for
fixed income trading together with opening an account for securities
trading. The Company has experienced staffs that are proficient in
providing services and advice that allow clients to make investment
decisions in their best interest.

In 2011, the Company was ranked No. 1 in bond outright among securities
dealers. In the meantime, it was ranked No. 3 in corporate bond trading
value among all dealers.

4.1.7 Private Repo Business

The Company, pioneered Private Repo to corporate and high net-worth
clients, providing a new alternative investment. The Company was ranked
No. 1 in terms of Repo volume among securities firms in 2011. Moreover,
it was the first and the only one to provide Repo agreement in Thai
version, approved by SEC, to offer clients with more convenience.
Currently, Private Repo market continuously showed grow at significant
pace and would further play an important role in developing bonds
market.

4.1.8 Selling Agent of Unit Trust Business

The Company received a selling agent of unit trust approval from SEC on
16 January 2002. As of 31 December 2011, the Company was appointed as a
selling agent of unit trust for 20 asset management firms. The client
coverage includes both institutional and individual investors. The
company has experienced professionals to provide appropriate advice and
smooth execution. Those professionals strictly assess client suitability
in order to meet investment objectives and risk appetite for the
clients’ best interest.

4.1.9 Futures Business

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

Currently, the Company provides trade on the following derivative
products:

● SET50 Index Futures

● SET50 Index Options

● Single Stock Futures

● Gold Futures

● Silver Futures

● Brent Crude Oil Futures

● Interest Rate Futures

Besides Futures retail brokerage business, the Company also trades
futures in Proprietary Trading and furthermore acted as a Market Maker
of SET50 Index Futures, SET50 Index Options, and Single Stock Futures in
Thailand Futures Exchange (TFEX) and Stock Exchange of Thailand. In
2011, the Company was ranked No. 5 with market share of 5.42% of TFEX
market.

4.1.10 Securities Borrowing and Lending (SBL)

The Company was the first broker to act as a principal and agent
assisting of clients who want to lend or borrow securities: 1.
Institutional Lenders, 2. Local and Foreign Institutional Borrowers, 3.
Retail Borrowers. This service will help increase liquidity and price
stability to the Thai capital market.

In 2011, the SET allowed securities in the SET100 Index to be available
for short-selling, effective from 4 January 2011, onwards. Previously,
short-selling could be done only with the securities in the SET50 Index,
ETF, and a component of ETF. Due to the enlargement of the scope of
securities and the volatile stock market, SBL became a widely-used among
investors. As a result, the short-sell volume in 2011 was Baht 113,423
million, showing growth of 116% from Baht 52,604 Baht in 2010.

A strong competition in SBL business was reflected in many promotional
campaigns from SBL providers in order to attract both retail and
institution clients. One of SBL promotional campaigns was 0% fee. KGI,
as the first SBL provider in Thailand, plans to expand its SBL business
as follows:

1.  Develop SBL system for Cash Account to provide alternative
    investment for KGI’s clients

2.  Expand client base, both foreign and local institutional clients who
    are increasingly interested in borrowing and lending Thai
    securities.

4.1.11 OTC Derivatives

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

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

1. OTC Equity Derivatives

  OTC Equity Derivatives products are tailor-made, and designed
  according to client’s request.

  In 2011, OTC Equity Derivatives gained popularity due to the volatile
  stock market. OTC Equity Derivatives was popular among local and
  foreign institutional clients including Private Fund, purposely to
  manage their risk and gain their return. The Company provides three
  types of OTC Equity Derivatives,

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

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

  3) Exotic Options, apart from the basic options and combination
  options, the Company has been launching more complex derivatives, such
  as Asian Call Spread Options and Digital Call Options, Auto Redemption
  Options, Forward Start Options, and Himalaya Options and will innovate
  more and more to match clients’ risk and return profiles in the
  future.

  In 2012, the Company views the market is still volatile from both
  internal and external factors including downtrend interest rate, so
  the Company expects OTC Equity Derivatives will maintain its
  popularity. The Company formed a partnership with KGI group and
  reputed foreign banks in the area of OTC Equity Derivatives on foreign
  equity underlying covering markets; Hong Kong, Japan, Singapore,
  Australia, USA, and Europe. The Company will regularly organize
  training/seminars to ensure that our clients thoroughly understand the
  products before investing in equity derivatives with us and that our
  equity derivatives products would help reduce risk and/or enhance
  return of clients’ portfolios.

2. Structured Products

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

  Equity Linked Note (ELN): To serve the needs of the clients who prefer
  investment in short term money market with high yield and who can
  invest in equity market. At present, the Company provides various
  types of ELN with maximum term of 270 days, whose return is linked to
  the price of a single stock and TDEX , 1DIV or basket of stocks with
  good fundamental and high trading volume (Blue chip Stock) or Index.
  Examples of ELN the Company provides are ELN-Vanilla, ELN-Buffer,
  ELN-Up&Out, ELN-4U, ELN-StepUP, ELN-KO, and ELN-Accumulator.

  In 2011, the Company formed a partnership with reputed domestic banks
  to issue Structured Products to fulfill need of bank-base clients who
  need higher return than interest from deposit.

  In 2012, the Company will continue to develop new types of Structured
  Products that attractive and serve the needs of our value clients.

  4.1.12 Equity Exchange Traded Fund (Equity ETF)

The Company joined a group led by One Asset Management Limited (98%
owned by the Company) and four other leading securities companies as
well as a foreign fund advisor that won the right to launch Thailand’s
first equity exchange traded fund (Equity ETF) in the name of ThaiDEX
SET50 ETF or TDEX since 2007. The Company acts as Market Maker (MM),
providing liquidity in the secondary market and as Participating Dealer
(PD), facilitating the creation and redemption of TDEX in the primary
market. As of 31 December 2011, Asset Under Management (AUM) of TDEX was
Baht 2,239 million, showing growth of 122% from Baht 1,011 million at
inception in August 2007.

In 2009, the Company joined a group led by One Asset Management Limited
and five other leading securities companies to launch Thailand’s third
equity ETF in the name of ThaiDEX FTSE SET Large Cap ETF or TFTSE. On
August 2009, Asset Under Management (AUM) of TFTSE was Baht 166 million.

Later, in 2010, the Company acted as Participating Dealer (PD) for
Thailand’s first ETF on foreign ETF in the name of W.I.S.E. KTAM-CSI300
China Tracker or CHINA managed by Krungthai Asset Management Public
Company Limited. During the IPO period, November 8-12, 2010, Asset Under
Management (AUM) of CHINA was Baht 390 million. CHINA may invest in
W.I.S.E. – CSI300 China Tracker fund, seeking to replicate the return of
CSI300 Index.

In 2011, with a positive overall in SET Index highest closed at a
15-year high, the Company coordinated with One Asset Management Limited
to launch ThaiDEX SET High Dividend ETF (1DIV). The Company acted both
as Market Maker (MM) and Participating Dealer (PD). Within the same
year, TFEX trading volume reached a historical high, particularly in
Gold Futures trading; therefore, the Company joined and acted as
Participating Dealer (PD) for 3 gold ETFs, including GLD, BCHAY and
GOLD99

In 2012, after Thailand Futures Exchange (TFEX) has broaden the variety
of products, such as Silver Futures and Oil Futures, the Company plans
to study the possibility of joining with One Asset Management Limited to
launch a commodity ETF, such as Silver ETF and Oil ETF, and Sector ETF
to provide investment alternatives for investors. The Company also plans
to list Thailand’s ETF in foreign countries such as Taiwan, Hong Kong,
Singapore and Japan. The Company believes it can achieve such target due
to its capabilities, Thai market recovery and increasing popularity of
TDEX, CHINA, 1DIV, GLD, BCHAY and GOLD99.

  4.1.13 Derivative Warrants (DW)

More than 5 years, the Company has been developing its infrastructure
and workforce and expects to launch Derivative Warrants (DW).

In 2009, the Company was the first securities company in Thailand
launching DW. The first DW to be launched by the Company was PTT13CA on
June 2009. Within the same year, the Company launched other 2 DWs,
KBAN13CA and PTTE13CA.

Later, in 2010, the Company issued 21 new DWs, which were highly
successful and get great response from investors at IPO period and
trading on the exchange, which total registered amount of all 21 DWs was
around Baht 1,200 million.

In 2011, the Company was the securities company offering the most DWs in
Thailand. In this year, the Company also first issued Put DW. The total
number of issued DW in 2011 was 114 DWs, divided into 87 Call DWs and 27
Put DWs. The total registered amount of all 114 DWs was approximately
Baht 3,500 million. Therefore, since 2009, the Company has already
launched 138 DWs in total.

DW issued by The Company

  ------------------------------------------------------------------------
         Name of DW                 First Trading Date   Maturity Date
  ------ -------------------------- -------------------- -----------------
  1      PTT13CA                    9 July 2009          18 December 2009

  2      KBAN13CA                   27 August 2009       19 February 2010

  3      PTTE13CA                   5 November 2009      30 April 2010

  4      PTT13CB                    21 January 2010      26 November 2010

  5      BANP13CA                   31 March 2010        3 December 2010

  6      KBAN13CB                   30 June 2010         25 February 2011

  7      PTTE13CB                   30 June 2010         25 February 2011

  8      BANP13CB                   5 August 2010        30 December 2010

  9      IVL13CA                    16 August 2010       28 December 2010

  10     PTT13CC                    16 August 2010       28 December 2010

  11     PS13CA                     16 August 2010       30 December 2010

  12     TCAP13CA                   16 August 2010       30 December 2010

  13     ADVA13CA                   16 August 2010       17 February 2011

  14     PTTC13CA                   16 August 2010       17 February 2011

  15     SCC13CA                    16 August 2010       3 March 2011

  16     TTA13CA                    16 August 2010       3 March 2011

  17     PTT13CD                    22 November 2010     9 May 2011

  18     IVL13CB                    23 November 2010     28 April 2011

  19     BAY13CA                    24 November 2010     7 April 2011

  20     TOP13CA                    25 November 2010     7 April 2011

  21     TCAP13CB                   26 November 2010     29 April 2011

  22     BANP13CC                   29 November 2010     28 April 2011

  23     KTB13CA                    30 November 2010     24 March 2011

  24     TTA13CB                    30 December 2010     23 August 2011

  25     STA13CA                    18 January 2011      2 June 2011

  26     CPAL13CA                   19 January 2011      6 June 2011

  27     TRUE13CA                   20 January 2011      24 June 2011

  28     SCC13CB                    21 January 2011      8 June 2011

  29     IRPC13CA                   24 January 2011      27 June 2011

  30     BTS13CA                    25 January 2011      13 June 2011

  31     TMB13CA                    26 January 2011      20 June 2011

  32     PTTC13CB                   27 January 2011      6 July 2011

  33     ADVA13CB                   28 January 2011      21 June 2011

  34     KBAN13CC                   31 January 2011      28 June 2011

  35     PTTA13CA                   1 February 2011      14 July 2011

  36     LH13CA                     2 February 2011      22 June 2011

  37     PTTE13CC                   3 February 2011      5 July 2011

  38     KTB13CB                    18 March 2011        22 September 2011

  39     BBL13CA                    21 March 2011        29 September 2011

  40     TOP13CB                    22 March 2011        6 October 2011

  41     IVL13CC                    25 March 2011        21 September 2011

  42     ESSO13CA                   19 April 2011        15 September 2011

  43     BANP13CD                   20 April 2011        5 October 2011

  44     TCAP13CC                   20 April 2011        7 October 2011

  45     TISC13CA                   20 April 2011        20 October 2011

  46     BGH13CA                    21 April 2011        17 October 2011

  47     DTAC13CA                   21 April 2011        19 October 2011

  48     CPF13CA                    21 April 2011        25 October 2011

  49     BAY13CB                    22 April 2011        18 October 2011

  50     STA13CB                    22 April 2011        26 October 2011

  51     THAI13CA                   22 April 2011        1 November 2011

  52     PS13CB                     25 April 2011        27 October 2011

  53     SCB13CA                    25 April 2011        31 October 2011

  54     PTT13CE                    25 April 2011        2 November 2011

  55     CPAL13CB                   31 May 2011          22 December 2011

  56     SCC13CC                    31 May 2011          22 December 2011

  57     BTS13CB                    1 June 2011          23 December 2011

  58     TMB13CB                    1 June 2011          23 December 2011

  59     ADVA13CC                   2 June 2011          26 December 2011

  60     LH13CB                     2 June 2011          26 December 2011

  61     TRUE13CB                   3 June 2011          27 December 2011

  62     IRPC13CB                   3 June 2011          27 December 2011

  63     BEC13CA                    21 June 2011         20 December 2011

  64     HMPR13CA                   21 June 2011         20 December 2011

  65     MINT13CA                   21 June 2011         21 December 2011

  66     TUF13CA                    21 June 2011         21 December 2011

  67     PTTC13CC                   22 June 2011         14 October 2011

  68     PTTA13CB                   22 June 2011         14 October 2011

  69     KBAN13CD                   22 June 2011         22 December 2011

  70     PTTE13CD                   22 June 2011         22 December 2011

  71     IVL13PA                    23 June 2011         21 September 2011

  72     AOT13CA                    4 August 2011        28 December 2011

  73     BCP13CA                    4 August 2011        28 December 2011

  74     BLA13CA                    4 August 2011        28 December 2011

  75     GLOW13CA                   4 August 2011        28 December 2011

  76     CPN13CA                    5 August 2011        29 December 2011

  77     SSI13CA                    5 August 2011        29 December 2011

  78     EGCO13CA                   5 August 2011        29 December 2011

  79     TPIP13CA                   5 August 2011        29 December 2011

  80     ESSO13PA                   8 August 2011        30 December 2011

  81     TOP13PA                    8 August 2011        30 December 2011

  82     IVL13CD                    1 September 2011     4 May 2012

  83     ESSO13CB                   1 September 2011     4 May 2012

  84     TOP13CC                    1 September 2011     4 May 2012

  85     PTTA13CC                   5 September 2011     10 October 2011

  86     PTTC13CD                   5 September 2011     10 October 2011

  87     BLA13CB                    5 September 2011     28 March 2012

  88     AOT13CB                    5 September 2011     28 March 2012

  89     DTAC13CB                   5 September 2011     28 March 2012

  90     CPF13PA                    5 September 2011     29 March 2012

  91     BH13CA                     5 September 2011     29 March 2012

  92     DELT13CA                   5 September 2011     29 March 2012

  93     KK13CA                     5 September 2011     29 March 2012

  94     HMPR13CB                   5 September 2011     2 April 2012

  95     BANP13CE                   5 September 2011     2 April 2012

  96     BGH13CB                    5 September 2011     2 April 2012

  97     IVL13PB                    5 September 2011     4 May 2012

  98     BBL13CB                    5 September 2011     4 May 2012

  99     BBL13PA                    5 September 2011     4 May 2012

  100    KTB13CC                    5 September 2011     4 May 2012

  101    BANP13PA                   4 October 2011       30 December 2011

  102    PTT13PA                    4 October 2011       30 December 2011

  103    SCC13PA                    4 October 2011       30 December 2011

  104    KBAN13PA                   4 October 2011       30 December 2011

  105    SCB13PA                    4 October 2011       30 December 2011

  106    ADVA13PA                   4 October 2011       30 December 2011

  107    DTAC13PA                   4 October 2011       30 December 2011

  108    BAY13CC                    17 October 2011      10 May 2012

  109    THAI13CB                   17 October 2011      14 May 2012

  110    STA13CC                    17 October 2011      16 May 2012

  111    PS13CC                     17 October 2011      18 May 2012

  112    PTT13CF                    17 October 2011      24 May 2012

  113    CPF13CB                    17 October 2011      29 May 2012

  114    SCB13CB                    17 October 2011      5 June 2012

  115    PTTG13CA                   7 November 2011      7 June 2012

  116    PTTG13PA                   30 November 2011     7 June 2012

  117    BAY13PA                    8 December 2011      6 July 2012

  118    BLA13PA                    8 December 2011      6 July 2012

  119    IRPC13PA                   8 December 2011      6 July 2012

  120    KTB13PA                    8 December 2011      6 July 2012

  121    PTTE13PA                   8 December 2011      6 July 2012

  122    KBAN13PB                   9 December 2011      11 July 2012

  123    PTT13PB                    9 December 2011      15 August 2012

  124    SCB13PB                    9 December 2011      16 August 2012

  125    TOP13PB                    9 December 2011      16 August 2012

  126    KBAN13CE                   9 December 2011      11 July 2012

  127    SCC13PB                    13 December 2011     13 July 2012

  128    TPIP13CB                   13 December 2011     16 August 2012

  129    TRUE13CC                   13 December 2011     21 August 2012

  130    PTTE13CE                   13 December 2011     13 July 2012

  131    SCC13CD                    13 December 2011     13 July 2012

  132    ADVA13PB                   14 December 2011     18 July 2012

  133    BANP13PB                   14 December 2011     18 July 2012

  134    DTAC13PB                   14 December 2011     18 July 2012

  135    ADVA13CD                   14 December 2011     18 July 2012

  136    IRPC13CC                   14 December 2011     18 July 2012

  137    KK13CB                     28 December 2011     29 October 2012

  138    SSI13CB                    28 December 2011     29 October 2012
  ------------------------------------------------------------------------

As of December 31, 2011, the Company had launched 138 DWs in total. One
of 138 DWs was expired in 2009, and other 9 DWs were expired in 2010.
Later on, 80 DWs were expired in 2011. As a result, at the beginning of
2012, the total number of DWs trading on SET are 48 DWs as shown in the
above table.

DW is new investment product in Thailand. Since 2009, the Company has
planed to educate about DW for brokerage employees, local institutional
clients, including, local & foreign retail clients as shown in the table
below. The DW education was provided through many channels such as
Settrade’s Blog (both Thai & English version), newspapers, interviews
and print media, in order to enhance knowledge and build confidence in
DW investment. The Company plans to road show to local and foreign
institutional investors to publicize new financial products and attract
new clients to invest in Thai Capital Market. The Company launched the
first website in Thailand, www.thaiwarrant.com (both Thai & English
version). This website provides information of all DW in Thailand which
is useful for investors who are interested in DW.

4.2 MARKET OVERVIEW AND COMPETITION

(A) The Company’s Marketing Project in 2011

1.  The Company launched new products to be another alternative
    investments for its clients and investors such as launching ThaiDEX
    SET High Dividend ETF (1DIV), launching new114 DWs, and etc.

2.  The Company is continually developing its website,
    www.kgieworld.co.th and www.thaiwarrant.com to provide information
    to all clients and investors. The Company always updates information
    and news to ensure its is useful to clients and investors such as
    research papers, news, special activities, and seminars.

3.  The Company held marketing campaign “Win a Condo with KGI” for
    retail clients who trade securities and derivatives with the Company
    during 1^(st) November 2011 – 31^(st) January 2012. Clients will
    receive one entry for the triple prizes for every Baht 8,000 in
    accumulated commission. First, clients will receive a Central cash
    voucher (Bangkok and Perimeter areas) or Tesco Lotus cash voucher
    (Other province areas) valued at Baht 200 immediately. Second,
    clients will be entered to win an iPad 2 or PTT cash voucher valued
    at Baht 20,000 each. Third, clients have the chance to win a Casa
    Condo near BTS. However, there was a flooding crisis in Thailand,
    therefore, the Company postponed the campaign to be on 1^(st)
    February 2012 – 30^(th) April 2012.

4.  The Company joined to open booths in many events and activities such
    as opening booth at seminar at SET or university and etc.

  5. The Company co-operated with MAI to produce research paper for
  medium and small listed companies in MAI and continue conduct
  marketing activities for investors.

  6. Held seminar and training

  6.1 Since the Company was the securities firm in Thailand offering the
  most Derivative Warrants (DWs). In 2011, the Company launched 114 DWs,
  and the Company emphasizes on educating about DWs for the Company’s
  employees and investors.

  6.2 The Company held seminars to educate clients and investors on
  topics such as Internet Trading, Securities Fundamental and Technical
  Analysis. The seminars not only educated the clients and investors,
  they also expanded the Company’s customer base.

  6.3 The Company held seminars to educate clients and investors
  regarding new products, such as Silver Futures, Oil Futures, ThaiDEX
  SET High Dividend ETF or 1DIV and Gold ETF.

(B) Market Overview and Competition in 2011

In the year 2011, the Thai stock market posed significantly high
volatility due mainly to the economic and financial turmoil in European
economies which led to a fluctuation in foreign equity funds flow. In
Thailand, there was also a general election in July 2011 leading to the
change in political pole from Democrats Party to Puea Thai Party.
However, overall political backdrops were stable for the year and most
of market turbulence was due to external issues.

The SET Index had sharp corrections in the first and the third quarter
of 2011, as the public debt problem and continued sovereign rating
downgrades left countries like Greece, Portugal, Italy and also Spain in
tough conditions. Countries like Greece and Portugal needed to request
financial aids from European authorities and IMF, while the fund raising
in Italy and Spain was painfully difficult. During those periods,
foreign investors pulled out from Asian and Thai stocks leading to the
downfall of markets.

Meanwhile, the market was able to recover moderately in the fourth
quarter, as the European authorities, having seen the degree of crisis,
were more aggressive in cutting interest rate and providing ample
liquidity to the financial and banking system. Huge amount borrowing
facilities with low interest rate were offered to the commercial banks
so that liquidity squeeze disappeared. In addition, since October 2011,
the US economic indicators improved noticeably and raised investors’
hope that US economy could help offset the impact from European weakness
for the year 2012.

For the whole 2011, the SET showed a high volatility and finally closed
almost unchanged from the end of 2010. The SET index closed at
1,025.32pts, easing by 7.44pts or 0.72%, comparable to an increase of
298.22pts or 40.59% in SET Index in the year 2010.

On the Thai political front, the general election was held on July 4,
2011. Puea Thai Party won the majority and set up the new coalition
government having 300 seats out of total 500 seats. Thailand also has
the first female Prime Minister Ms. Yingluck Shinawatra. Meanwhile, we
can say that political stress in 2011 was much less than 2010 and 2009
when there were a number of street protests.

On the economic issues, Thai economic performance was moderately
positive in the first half of 2011. However, starting in September 2011,
Thailand was hit by the worst floods in 50 years. A lot of industrial
parks, business areas and also residential properties were strongly hit,
leading to a serious supply chain disruption in the fourth quarter. As a
result, most economists expect 2011 GDP to grow by only 1.5-2.0%.
However, due to the rebuilding demand and higher infrastructure
investment for long-term water management, Thai GDP is likely to grow
3.5-4.0% in 2012.

In 2011, the daily average market turnover (SET and MAI) stood at
Bt29.5bn, increasing by 1.4% from Bt29.1bn in 2010. Foreign investors
reported a modest net selling position of Bt1.7bn in 2011, following
their net buying of Bt81.4bn during 2010. The market capitalization rose
to Bt8.41trn at the end of 2011, up 0.9%, from Bt8.33trn at the end of
2010.

Stock Exchange of Thailand

+--------------------------------+------------+-----------+-----------+
|                                | 2011       | 2010      | 2009      |
+--------------------------------+------------+-----------+-----------+
|   Total trading value (Baht    | 7,191,481  | 7,033,947 | 4,355,318 |
|   million)*                    |            |           |           |
+--------------------------------+------------+-----------+-----------+
|   Average daily trading value  | 29,473     | 29,066    | 17,777    |
|   (Baht million)*              |            |           |           |
+--------------------------------+------------+-----------+-----------+
|   Total market capitalization  | 8,407,696  | 8,334,684 | 5,873,101 |
|   (Baht million)               |            |           |           |
+--------------------------------+------------+-----------+-----------+
|   SET Index (year-end)         | 1,025.32   | 1,032.76  | 734.54    |
+--------------------------------+------------+-----------+-----------+
|   Dividend yield (%)           | 3.7        | 2.9       | 3.7       |
+--------------------------------+------------+-----------+-----------+
|   P/E ratio (times)            | 12.1       | 15.4      | 25.6      |
+--------------------------------+------------+-----------+-----------+
|   P/BV ratio (times)           | 1.9        | 2.0       | 1.6       |
+--------------------------------+------------+-----------+-----------+
|   No. of listed companies      | 472        | 475       | 475       |
+--------------------------------+------------+-----------+-----------+

*including MAI

As for new listings, there were 10 new companies listed in Thailand’s
stock markets (both SET and MAI) in 2011, compared to 11 new listings in
2010.

IPO Stocks in 2011

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

  1. VTE             9-Mar-11                 32.00

  2. LHBANK          10-May-11                2,020.34

  3. KBS             27-May-11                1,365.00

  Stock              First trading date       IPO size (Baht million)

  4. UIC             3-Jun-11                 99.84

  5. COLOR           14-Jun-11                86.70

  6. QTC             28-Jul-11                100.00

  7. APCS            29-Sep-11                408.75

  8. APCO            4-Nov-11                 140.00

  9. HYDRO           15-Dec-11                101.70

  10. CHOW           21-Dec-11                600.00
  ------------------ ------------------------ ---------------------------

Source: SET and MAI

Competition among Thai Broker

The competition in Thai brokerage business in 2011 remained intense, as
the industry is heading to the fill liberalization of commission rate at
the beginning of 2012. Meanwhile, foreign investors participated a lot
in Thai stocks during the year, both on the buying and selling side
given a large scale of volatility in the market. That has been why about
half of top 10 brokers in 2011 were foreign investors-based. Meanwhile,
the sum of the market share of the top 10 brokers was close to that in
2010. The ratio of top 10 market shares to total was 55.24%, compared to
55.43% in 2010.

Top 10 securities brokers (2011)

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

  1      Maybank Kim Eng Securities (Thailand) Public  MBKET      11.86
         Company Limited                                          

  2      Finansia Syrus Securities Public Company      FSS        5.17
         Limited                                                  

  3      Country Group Securities Public Company       CGS        5.14
         Limited                                                  

  4      Credit Suisse Securities (Thailand) Limited   CS         4.93

  5      Asia Plus Securities Public Company Limited   ASP        4.83

  6      UBS Securities (Thailand) Limited             UBS        4.81

  7      Bualuang Securities Public Company Limited    BLS        4.78

  8      Phatra Securities Public Company Limited      PHATRA     4.76

  9      KGI Securities (Thailand) Public Company      KGI        4.53
         Limited                                                  

  10     Thanachart Securities Public Company Limited  TNS        4.43

         The sum of market share of the top 10 brokers            55.24

         Others                                                   44.76

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

*including MAI

Industry trend in 2012

Thailand has entered the commission liberalization at the beginning of
2012, which implies that the competition on the service, research
quality and other non-price promotions would be intense. The recent
consolidation i.e, the merger and acquisition of mid-to-small brokers
was a sign for competition. It has also been witnessed in the past few
years that the traditional brokerage business had smaller proportion in
total revenue of brokers as more new business like Proprietary Trading
and Equity Derivatives have been playing more important roles than in
the past.

On the Thailand's stock market outlook in 2012, it has a good chance
that the market has a moderate downside in the first half of 2012 as the
benchmark index stays at a relatively high level above 1,000pts, while
the external factors remain negative especially in Europe. Further
credit rating downgrades and stress in European banking system possibly
lead to another round of foreign equity selling into Asian and Thai
market.

However, the environment of low interest rate around the world and the
signal from major central banks that they are ready to act more
aggressively if situations worsen imply that the downside of SET Index
should be limited. In the second half of the year, the market situation
should be better after the European problem reaches the bottom and Thai
economy fully recovers from the recent floods crisis.

4.3 Funding for Products and Services

4.3.1 Source of funds

  If the Company requires new funds, the Company’s policy is to try to
  procure the cheapest source of funds available and will not depend
  upon one source of funds. The Company analyses its cash flow needs on
  a daily basis and tries to match its funding and investment in money
  market instruments to its needs as forecasted.

  The primary objectives of the Company’s capital management are to
  maintain the Company’s ability to continue as a going concern and to
  maintain net capital in accordance with the rules laid down by the
  Office of the Securities and Exchange Commission.

2.  Subordinated Loans from Subsidiary

  As at 31 December 2011, the Company has subordinated loans which are
  unsecured, interest-free, Baht loans from the overseas subsidiary
  companies as following:

  a) Subordinated loan amounting to Baht 1,600 million from an overseas
  subsidiary with the maturity date in September 2012. However, during
  the current year, the Company and the subsidiary agreed to extend the
  maturity date to 21 March 2013. (2010: the Company had subordinated
  loan of Baht 1,600 million).

  b) Subordinated loan amounting to Baht 599 million from another
  overseas subsidiary. This subordinated loan is maturing in August
  2014. (2010: nil)

  The Board of Directors’ Meeting of the Company held on 23 February
  2012 approved the extension of the maturity date of the subordinated
  loans amounting to Baht 1,600 million from 21 March 2013 to 21
  September 2013.

4.3.3 Net Capital Rule and Net Capital Ratio (NCR)

The Company has policy to reserve Net Capital Rule and Net Capital Ratio
(NCR) higher than SEC’s regulation which specified that the Net Capital
Rule and Ratio must not be lower than Baht 25 million and 7% of
liabilities and guarantees. As of 31 December 2011, the Company has Net
Capital Rule of Baht 4,059 million and Net Capital Ratio (NCR) of 328%.