12. Other relevant information

  In 2011, The Company was the securities company offering the most DW
  in Thailand. The Company launched 114 DWs which were highly successful
  and got great response from investors, which total registered amount
  of all 114 DWs was around Baht 3,500 million.

  Other relevant information of Derivatives Warrant are as follows

  12.1. DW Issuer

1.  Company Rating

  TRIS Rating Co., Ltd. has affirmed The Company rating of KGI
  Securities (Thailand) PLC (KGI) at “BBB+” with “stable” outlook on 16
  June 2011. The rating reflects KGI’s capable management team with a
  proven track record, strong position in derivatives trading,
  sufficient liquidity and a stable source of revenue from fund
  management, One Asset Management Co., Ltd. (The Company also renders
  fund management services through its 98%-owned subsidiary). Find
  company rating announcement on www.kgieworld.co.th

  Rating Symbols and Definitions

  TRIS Rating uses eight letter rating symbols for announcing credit
  ratings. The rating range from AAA, the highest rating, to D, the
  lowest rating.

  .BBB The rating indicates a company or a debt instrument with moderate
  credit risk. The Company has adequate capacity to pay interest and
  repay principal on time, but is more vulnerable to adverse changes in
  business, economic or other external conditions and is more likely to
  have a weakened capacity to pay interest and repay principal than debt
  in higher-rated categories.

  The ratings from AA to C may be modified by the addition of a plus (+)
  or minus (-) sign to show relative standing within a rating category.

2.  Risk Management

 12.1.2.1 Objective of DW Issuing

  To provide new investment products to investors and to diversify The
  Company’s income.

 12.1.2.2 Hedging Strategy and Risk management

  1. Hedging Strategy

  To manage risk from DW issuing, The Company has hedging strategies
  such as

a)  Hedging Strategy of Underlying stock price

  For Call Warrant, The Company has higher risk if underlying stock
  price increases. The Company may loss from issuing Call Warrant. The
  Company will do hedging by buying underlying stock in proportion
  calculated from Net Delta Value. So the loss from DW issuing will be
  deducted by profit from the increasing underlying stock.

  For Put Warrant, The Company has higher risk if underlying stock price
  decreases. The Company may loss from issuing Call Warrant. The Company
  will do hedging by short selling underlying stock in proportion
  calculated from Net Delta Value. So the loss from DW issuing will be
  deducted by profit from the short selling underlying stock.

  b) Hedging Strategy for volatility of underlying stock

  For Call and Put Warrant, The Company has higher risk if volatility of
  underlying stock increases. The Company may loss from issuing Call or
  Put Warrant. The Company will do hedging through other products such
  as OTC Derivative, Derivative on related underlying stock or Options
  on TFEX. Those products may link on other underlying stocks or index
  that has same direction with underlying stock of DW.

  2. Risk Management

  In the regards that The Company’s as the DW issuer, The Company has
  Risk Management Committee. Scope of duties and responsibilities of the
  Risk Management Committee as follow

1)  Implement risk policies and procedures.

2)  Approve risk budgeting and risk limits to all Business Units.

3)  Approve new product programs, which specify the product
    characteristic, the risk control, and the work flow.

4)  Monitor all risks and exposures within The Company’s risk framework.

5)  Monitor credit profiles, credit quality, collateral, and
    counterparty risk for operation.

6)  Origination Pricing - assign to Investment Banking sub-committee.

7)  Grant credit limits to Business Units.

8)  Establish and maintain internal control discipline.

9)  Monitor local market risk, liquidity risk and funding.

10) Monitor IT security and operations.

11) Other matters as deemed necessary by the committee.

  In addition, to avoid violation of Chinese wall or for greater
  efficiency, The Company also established 5 sub-committees under the
  Risk Management Committee as follows:

  A) Credit Risk Sub-committee for Brokerage Business which is
  responsible for:

  1. To approve credit policy; collateral evaluation and management
  guidelines and others.

  2. To approve account opening policy.

  3. To list the qualified securities for credit balance and Stock
  Borrowing and Lending

  4. To deliberate on contents of any agreement made with clients or
  counterparties.

  B) Credit Risk Sub Committee for Fixed Income is responsible for
  approving the policy for investment and holding of financial
  securities with inherent credit risk in brokerage for Fixed Income
  business, investment in both government and corporate bond, and
  Re-Purchase Agreement transactions.

  C) Credit Risk Sub-Committee for Equity Derivatives is responsible for
  approving policy for investments or holding of financial securities
  with inherent credit risk in OTC derivatives market with
  counterparties and also approves the policy as well as procedure for
  securities borrowing and lending transactions.

  D) Investment Banking Sub-committee is responsible for approving
  underwriting deals and other investment banking businesses.

  E) Information Technology Security Sub-Committee is responsible for
  reviewing and approving policies relating to Information Technology
  security.

  12.1.2.3. Scope of duties and responsibilities of the Risk Management
  Committee

  Scope of duties and responsibilities of the Risk Management Committee
  are as stated in 12.1.2.2. no. 2.

  12.1.2.4. Supervision to comply regulation to maintain position and
  liquidity of DW Issuing

  Net Capital Rule and Net Capital Ratio (NCR)

  The Company’s policy is to manage its Net Capital and Net Capital
  Ratio (NCR) in accordance with the SEC’s regulations for securities
  companies with derivatives businesses. These companies are required to
  maintain a minimum Net Capital of Baht 25 million, whilst their Net
  Capital Ratio must be at least 7% of general liabilities and
  guarantees. Furthermore, the SEC requires that securities companies
  must report to the SEC if their Net Capital is equal to or less than
  1.5 times the minimum requirement. The Thailand Clearing House (TCH)
  also requires that securities companies inform them if their Net
  Capital is equal to or less than 3 times the minimum requirement. The
  Company has specified the Finance and Accounting Department and the
  Risk Management Department to supervise the Company’s Net Capital
  levels and to report any actual or potential breaches to the Company’s
  risk management committee.

1.  DW Issued by The Company for the last 3 years

  Please see table of DW issued by the Company in the 3 previous year
  no. 4.1.13 Derivatives Warrants, Page 23

  12.1.4 Conflict of interest of DW issuing

  In accordance to the Company and its affiliated have conducted its
  business and/or perform other duties as per its approval, including
  but not limited to investment advisory, financial advisory and/or
  proprietary trading in which conflict of interest concerning the
  issuance of DW might have been caused. For the purpose of fair
  treatment and the prevention of any investment's
  advantage/disadvantage gain or lose by the Company and Clients.
  Therefore, the Company has determined a procedure on the prevention of
  conflict of interest emphasizing especially on insider trading. Under
  such procedure, any Department who perform its duties as investment
  advisory, financial advisory and proprietary trading will by
  presumably possess equivalent status as that of the normal Clients.
  Aforementioned Department will have no right to receive information or
  research paper which differs to other Clients of the Company.

  12.2. Guarantor of DW and associated contracts of DW Issuer (if any)

  - None -

  12.3 Underlying Company information (from Underlying Company’s website
  as of 31 December 2011)

  1. ADVANCED INFO SERVICE PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.ais.co.th

2.  AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.airportthai.co.th

3.  BANPU PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.banpu.com

4.  BANK OF AYUDHYA PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.krungsri.com

5.  BANGKOK BANK PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.bangkokbank.com

6.  BANGKOK DUSIT MEDICAL SERVICES PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.bangkokhospital.com

7.  BUMRUNGRAD HOSPITAL PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.bumrungrad.com

8.  BANGKOK LIFE ASSURANCE PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.bla.co.th

9.  CHAROEN POKPHAND FOODS PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.cpfworldwide.com

10. DELTA ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITEDD

  Please refer to Thai version for full detail.

  For more information on www.deltathailand.com

11. TOTAL ACCESS COMMUNICATION PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.dtac.co.th

12. ESSO (THAILAND) PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.esso.co.th

13. HOME PRODUCT CENTER PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.homepro.co.th

14. IRPC PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.irpc.co.th

15. INDORAMA VENTURES PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.indoramaventures.com

16. KASIKORNBANK PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.kasikornbankgroup.com

17. KIATNAKIN BANK PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.kiatnakin.co.th

18. KRUNG THAI BANK PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.ktb.co.th

19. PRUKSA REAL ESTATE PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.pruksa.com

20. PTT PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.pttplc.com

21. PTT EXPLORATION AND PRODUCTION PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.pttep.com

22. PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.pttgcgroup.com

23. THE SIAM COMMERCIAL BANK PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.scb.co.th

24. THE SIAM CEMENT PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.scg.co.th

25. SAHAVIRIYA STEEL INDUSTRIES PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.ssi-steel.com

26. SRI TRANG AGRO-INDUSTRY PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.sritranggroup.com

27. THAI AIRWAYS INTERNATIONAL PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.thaiairways.com

28. THAI OIL PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.thaioilgroup.com

29. TPI POLENE PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.tpipolene.co.th

30. TRUE CORPORATION PUBLIC COMPANY LIMITED

  Please refer to Thai version for full detail.

  For more information on www.truecorp.co.th