kgi investors 12

Your Vision Our Mission

Unity

Professionalism

Commitment

Accomplishment

2012

AnnualReport

12 LettertoShareholders OTCDerivativesBusiness

16 FinancialHighlights EquityExchangeTradedFund

18 () KGISecurities(Thailand)History DerivativeWarrantsBusiness

20 OurAccolades RiskManagement

22 Overview Research

26 44 BusinessOverview Subsidiary

BrokerageBusiness OneAssetManagementLimited

46 FuturesBusiness ManagementDiscussion&Analysis

60 ProprietaryTradingBusiness FinancialReport

InvestmentBankingBusiness IndependentAuditor'sReport

FixedIncomeBusiness Statementsoffinancialposition

PrivateRepoBusiness StatementsofcomprehensiveIncome

66 SellingAgentofUnitTrustBusiness BoardofDirectorsandManagementTeam

68 SecuritiesBorrowingandLendingBusiness KGIHeadquartersandBranchLocations

TableOfContents

12

2555

2555

4430.22

2555 0.23

2555

2555

2554

2555

81

():

()

2555

LettertoShareholders

2555

.

2556

2556

2556

2-3

1,500

2556

0.23

11 2556

102556

2555

1.531

2555

40

LettertoShareholders

13

Mr.FoongHockMengChairman

LettertoShareholders

14

LettertoShareholders

DearShareholders,

Despitechallengingconditions,2012wasanothersuccessful

yearforKGI.Ournetprofitfor2012wasBaht443million

andEPSwasBaht0.22.KGIsboardofdirectorshas

approvedadividendofBaht0.23persharefor2012and

thedividendwillbeproposedtotheAGMofshareholders

fortheirapprovalinApril.

Globaleconomyandmarkets

Theglobal developedeconomies facedsignificant

obstaclesbutmanagedtoavoidarecession.Inparticular,

theEuropeaneconomywasnegativelyaffectedby

governmentspendingcutswhichledtomassprotests

anduncertaintyoverthefutureoftheEurocurrency.In

Asia,Chinaseconomicgrowthslowedsignificantly

followingmanyyearsof rapidexpansion. In theUS,

economicrecoverycontinuedbutataslowpaceand

leavingunemploymentatanunacceptablyhighlevel.

Thailand

Although2012wasayearofrelativelyslowanduncertain

growthinmanyotherpartsoftheWorld, inThailand,

2012wasasignificantlybetteryearthantheprevious

one.Whilst2011endedwithseverefloodinginthecentral

partsofThailand,in2012mostsectorsreturnedtonormal

andoverall,Thailandachievedastronglevelofeconomic

growth.Thisgrowthwashelpedby reconstruction

spendingandbygovernmentstimulusmeasuresandtax

incentivessuchas the firstcar tax refundswhich

helpedcarsalesriseby81%toanalltimehigh.

KGISecurities(Thailand):BusinessUnits

StockBrokingremainsacorebusinessforKGISecurities

(Thailand)butonewhichisstill intenselycompetitive.

However,despiteallof thechallenges,wemanaged

tosecureanotherprofitableyear in2012.OurEquity

Derivativesbusinessunitisaninnovativemarketleader

inThailandandcontinuedtolaunchnewproductsand

offernewinvestmentopportunitiesforallourclientslast

year.TheProprietaryTradingbusinessunitmaintained

itsprofitableperformancewithdiversified, lower-risk

strategiesexecutedbyitshighlyexperiencedteamunder

constantriskmonitoring.IntheFixedIncomebusiness

unit,anunexpected interest ratecutbytheBankof

ThailandinOctoberhelpedtogeneratetradinggains

forourwellpositionedportfolio.OurAssetManagement

business,ONEAM,alsohadapositiveyearwithassets

undermanagementbenefitingfromboththeriseinthe

Thaiequitiesmarketandvalueaddedstockandsecurity

selection.

Outlookfor2013

Overall,theoutlookforThailandandforAsiain2013

ispositive,andweareoptimisticthatthisyearwillbe

anothergoodyearforThailandandforyourCompany.

Sofarthestartto2013hasbeenencouraging,withthe

equitymarketperformingwell in the first fewweeks

of thisyear.TheSET indexhascontinued to rise

steadily,passingthe1,500markat thebeginningof

February,andmarkettradingvolumehasalsoincreased

significantly.Asexperiencedequity investorswillwell

understand,stockmarketsareinherentlyvolatileandwe

realize that theunexpectedcanhappenand indeed

eventuallymust happen, butweare prepared for

volatilityandareconstructiveabouttheoutlookfor2013.

Dividend

KGIhasastrongrecordofdividendpaymentsandwe

intend tocontinue this tradition. Inorder to reward

shareholdersfortheircontinuedsupportofthecompany,

theboardofdirectorshas resolved topropose the

paymentofadividendofBaht0.23pershare.The

dividendwillbeproposedtoshareholdersattheAnnual

GeneralMeetingon11thApril2013andifapprovedis

expectedtobepaidtoshareholderson10thMay2013.

CorporateSocialResponsibilities

KGIbelievesingivingbacktosocietyandwerecognize

theimportanceofeducationandeducationalopportunities

forthedevelopmentofyoungpeopleandThaisociety

ingeneral.In2012KGIcontinueditssupportaproject

toprovideeducationopportunities todeservingThai

universitystudents.Theprogram, forwhichKGIhas

budgetedatBaht 1.5million per year, as of 31st

December2012,theCompanyprovided40scholarships

toneedyundergraduatestudents.

LettertoShareholders

15

Employees

KGIwouldliketotakethisopportunitytothankallKGIs

employeesfor theirhardworkanddedicationto the

Mr.WeiChangFangChiefOperatingOfficer

company throughout theyear, and to thankKGIs

shareholdersfortheircontinuingsupport.

Mr.FoongHockMeng

ChairmanoftheBoard

Mr.WeiChangFang

ChiefOperatingOfficer

LettertoShareholders

16

(:)

31

(inBahtmillionsexceptpersharedata)

AsoforfortheyearendedDecember31

2555/2012 2554/2011

OperatingResults ()

(Restated)

Totalincome 1,909 2,333

Totalexpenses 1,321 1,461

Profitbeforeincometax 588 872

* Netprofit* 443 593

PerShareData

() Pervaluepershare(Baht) 1.00 1.00

() Bookvaluepershare(Baht) 2.40 2.43

()* BasicEarningpershare(Baht)* 0.22 0.30

() Dividendpershare(Baht) 0.23 0.25

Financialposition

Totalassets 12,370 7,369

Totalliabilities 7,587 2,528

Issuedandfullypaid-upcapital 1,992 1,992

Equityattributabletoholdersoftheparent 4,781 4,838

KeyFinancialRatio

(%) Returnonequity(%) 9.21% 12.17%

(%) Returnonassets(%) 4.49% 6.40%

*

Note: *Profitattributabletoequityholdersoftheparent

FinancialHighlights

FinancialHighlights

17FinancialHighlights

2555-2554ComparisonoftheCompanysfinancialpositionfor2012-2011

2555-2554ComparisonoftheCompanysoperatingresultsfor2012-2011

2555 2554()

Year2012 Year2011(Restated)

1,909

1,321

443

2,333

1,461

593

Totalincome

Totalexpenses

ProfitattributabletoEquityholdersoftheparent

2555 2554()

Year2012 Year2011(Restated)

12,370

7,587

4,781

7,369

2,528

Totalassets

Totalliabilities

Equityattributabletoholdersoftheparent

4,838

(BahtMillions)

(BahtMillions)

18

()KGISecurities(Thailand)History

()KGISecurities(Thailand)History

2529 3

2530

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2532 S-ONE

2536

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2539

2540 ()

2541

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()

2544 ()()

KGI

2545

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(TFEX)

2552

2553

2555 12

(MOFOutrightPD)

19()KGISecurities(Thailand)History

1986 December TheCompanybeganitssecuritiesbusinessoperations.Inthebeginning,theCompanyhadthree

licenses;securitiesbroker,securitiesdealer,andinvestmentadvisory.

1987 May TheCompanybecameamemberoftheStockExchangeofThailand.

1988 February TheCompanychangeditsnametoSecuritiesOneCompanyLimited.

1989 December TheCompanybecamealistedcompanyintheStockExchangeofThailand,knownasS-ONE.

1993 May TheCompanyregisteredasapubliccompany.

1994 June TheCompanyobtainedSecuritiesRegistrarlicense.

1996 July TheCompanyobtainedanUnderwritinglicense.

1997 September TheCompanymadeatenderoffertoacquire100%ofFirstAsiaSecuritiesPublicCompanyLimited.

1998 April KGIGroupbecamethemajorshareholderoftheCompany.

1999 February TheCompanyobtainedaSecuritiesBorrowingandLendinglicense.

July TheCompanychangeditsnametoKGISecuritiesOnePublicCompanyLimited.

2001 May TheCompanychangeditsnametoKGISecurities(Thailand)PublicCompanyLimitedandchanged

securitiescodetoKGI.

September SECgrantedanapprovaltotheCompanytoactasaFinancialAdvisor.

2002 January SECauthorizedtheCompanytoactassellingagentformutualfunds.

2003 February SECgrantedanapprovaltotheCompanytooperateanOTCderivativesbusiness.

2005 October TheCompanyobtainedalicensetoconductFuturesBrokerageBusiness.

2006 September TheCompanywasoneofthefirstthreebrokerstobeappointedasamarketmakeroftheThailand

FuturesExchangePublicCompanyLimited(TFEX).

2009 January TheCompanymoveditsHeadOfficefromUnitedCenterBuildingonSilomRoadtoAsiaCentre

BuildingonSouthSathornRoad.

June TheCompanybecamethefirstsecuritiescompanyinThailandtolaunchDerivativeWarrants

2010 September TheCompanyhassignedanagreementwithMarketforAlternativeInvestment(MAI)toproduce

securitiesanalysis.

2012 August TheCompanyistheonlysecuritiescompanyamong12b