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CONSOLIDATED BALANCE SHEETS

KGI SECURITIES CO. LTD. AND SUBSIDIARIES
December 31, 2010 and 2009
(Expressed in New Taiwan Thousand Dollars)


ASSETS
12/31/10

12/31/09

CURRENT ASSETS
 
¡@Cash and cash equivalents (Notes II and IV.1)
$12,507,042
$10,655,407
¡@Financial assets measured at fair value through profit or loss-current
    (Notes II, IV.2 and VI)
58,539,538
46,577,779
¡@Bonds purchased under resale agreements (Notes II and IV.3)
6,251,044
1,386,154
¡@Margin loans receivable-net (Note II)
36,509,216

28,635,036

   Refinancing Margin - 22,854
    Refinancing deposits receivable - 19,076
   Customers' margin accounts (Note IV.4)

32,015,235

31,687,186

   Futures commission merchant receivable

10,871

11,366

¡@Stock borrowing collateral price
225,627
77,081
¡@Stock borrowing margin
2,006,189
1,549,772
¡@Notes receivable-net (Note II)

-

1,667

¡@Accounts receivable-net (Note II)
2,545,589
1,669,686
   Prepayments

241,739

177,082

¡@Pledged assets-current (Note VI)
1,495,551
960,487
¡@Deferred income tax assets-current (Notes II, III and IV.26) 65,304 -
   Available-for-sale financial assets-current (Notes II, IV.5 and VI)

5,125,358

3,716,970

¡@Other current assets (Notes II, IV.5 and VI)
1,197,290
684,725
¡@¡@Total Current Assets
158,735,593
127,832,328
¡@ ¡@
FUNDS AND INVESTMENTS
¡@Long-term equity investments using the equity method (Notes II, and IV.5) - -
¡@Available-for-sale financial assets-non-current (Notes II, IV.6 and VI)
4,685,779
4,302,596
   Bonds investments for which no active market exist-non-current
    (Notes II and IV.7)
19,673 24,204
¡@¡@Total Funds and Investments
4,705,452
4,326,800
¡@ ¡@
PROPERTY AND EQUIPMENT-NET (NOTES II, IV.8 and VI)
¡@Land
2,535,791
2,541,684
¡@Buildings
1,024,482
1,030,546
¡@Equipment
2,919,044
2,879,976
¡@Prepayments for property and equipment
20,896
33,652
¡@Leasehold improvements
293,456
275,138
¡@Less: Accumulated depreciation
(2,564,711)
(2,349,182)
¡@¡@Property and Equipment- Net
4,228,958
4,411,814
¡@ ¡@
INTANGIBLE ASSETS
   Goodwill (Note II) 6,408,155 6,508,566
   Deferred pension costs (Notes II and IV.17) 4,055 6,473
   Other intangible assets (Note II) 2,961,489 3,277,020
¡@    Total Intangible Assets
9,373,699
9,792,059
¡@ ¡@
OTHER ASSETS
¡@Operation bond
1,743,900
2,023,900
¡@Settlement/clearance fund
757,601
844,236
¡@Guarantee deposits-out (Note VI)
314,817
496,798
¡@Deferred charges (Note II)
82,537
81,318
   Pledged assets-non-current (Note VI) - 23,882
¡@Leased assets-net (Notes II, IV.8 and VI)
333,033
335,074
   Deferred income tax assets-non-current (notes II, III and IV.26) - 116,004
¡@Accounts receivable overdue-net
94,405
98,470
   Cash and cash equivalents-collected for settlement of warrants

5

6

    Cash and cash equivalents-collected for underwriting payment of shares
151,848
41,529
   Others 377,260 345,075
¡@¡@Total Other Assets
3,855,406
4,406,292
¡@ ¡@ ¡@
DEBIT ITEMS FOR TRADE BROKERAGE-NET (Note IV.16) - -
DEBIT ITEMS FOR TRADE BROKERAGE-NET (Note I0) - -
¡@ ¡@
TOTAL ASSETS
$180,899,108
$150,769,293
(continue on next page)

CONSOLIDATED BALANCE SHEETS
KGI SECURITIES CO. LTD. AND SUBSIDIARIES
December 31, 2010 and 2009
(Expressed in New Taiwan Thousand Dollars)

LIABILITIES AND SHAREHOLDERS' EQUITY
12/31/10

12/31/09

CURRENT LIABILITIES    
¡@Short-term borrowings (Notes IV.9 and VI)
$17,019,906
$9,316,149
   Commercial papers payable-net (Note IV.10)

17,428,448

4,296,665

¡@Bonds sold under repurchase agreements (Notes II and IV.11)
33,130,778
29,065,551
¡@Financial liabilities measured at fair value through profit or loss-current
   (Notes II and IV.12)
5,905,942
6,580,357
¡@Deposits for short sales 2,831,662
3,765,846
¡@Short sales proceeds payable 3,332,805
4,386,709
   Securities lending refundable deposits 6,289,744

3,311,332

    Futures customers' equity 11,467,336

12,316,049

   Notes payable 30,924

18,215

¡@Accounts payable 10,227,505
1,757,897
¡@Amounts received in advance 1,435
2,458
¡@Amounts collected for other parties 215,286
245,454
¡@Other payable (Notes II and IV.22) 4,839,528
4,590,044
¡@Income tax payable (Notes II, III and IV.26) 2,152,859
2,254,190
   Deferred income tax liabilities-current (Notes II, III and IV.26) -

3,601

    Current portion of long-term liabilities  (Note 14) -

-

    Current portion of long-term borrowings (Note IV.13) -

6,188,000

¡@Other financial liabilities-current (Note II) 2,671,128
2,464,795
¡@¡@Total Current Liabilities 117,545,316
90,563,312
¡@ ¡@
LONG-TERM LIABILITIES
¡@ Long-term borrowings (Note IV.14) 300,000 640,600
¡@ ¡@ ¡@
OTHER LIABILITIES
¡@
¡@
¡@Reserve for default losses (Note IV.15) 379,565
355,399
¡@Reserve for trading losses (Note IV.16) 144,451

110,555

¡@Deposits received 12,763
13,447
   Accrued pension liabilities-non-current (Notes II and IV.17) 586,202

527,519

¡@Deferred income tax liabilities-non-current (Notes II, III and IV.26) 93,897

-

¡@Deferred income tax liabilities-non-current (Notes 2 and 27) ¡@

-

¡@Reserve for bad debts (Note IV.18) 51,954

51,954

    Collected for underwriting payment of shares

12

40,628

¡@Others 51,477
6,063
¡@¡@Total Other Liabilities 1,320,321
1,105,565
¡@ ¡@ ¡@
CREDIT ITEMS FOR TRADE BROKERAGE-NET (Note IV.19) 10,949,038

11,204,165

¡@ ¡@ ¡@
¡@¡@Total Liabilities 130,114,675
103,513,642
¡@ ¡@ ¡@
SHAREHOLDERS' EQUITY ¡@
¡@
¡@Common stock (Note IV.20) 32,072,362
32,072,362
¡@Capital reserve (Notes II, IV.20 and IV.21) ¡@ ¡@
       Capital reserve-additional paid-in capital common stock 2,603,148 2,602,528
       Capital reserve-treasury stock transactions 29,553 2,517
     Capital reserve-surplus from business combination 46,273 46,273
       Capital reserve-employee stock option 87,025 87,000
    Retained earnings (Note IV.22) ¡@ ¡@
¡@    Legal reserve 2,315,256
2,084,701
¡@    Special reserve 5,335,044
6,748,649
¡@    Unappropriated earnings 5,229,027
2,322,459
    Other items in shareholders' equity ¡@ ¡@
¡@    Translation adjustments (Note II) (835,464)

(63,046)

      Net loss not recognized as pension costs (Notes II and IV.17) (141,933)

(112,222)

¡@    Treasury stock (Notes II and IV.23) (621,604)
(844,811)
¡@    Unrealized gains/(losses) on financial instruments
        (Notes II, IV.5 and IV.6)
1,498,213

(548,610)

         Equity attributable to shareholders of the parent company 47,616,900
44,397,800
¡@ ¡@ ¡@
Minority Interests (Note II) 3,167,533 2,857,851
Total Shareholders' Equity 50,784,433 47,255,651
¡@ ¡@ ¡@
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ¡@¡@ $180,899,108
$150,769,293

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CONSOLIDATED STATEMENTS OF INCOME
KGI SECURITIES CO., LTD.
For the Years Ended December 31, 2010 and 2009
(Expressed In New Taiwan Thousand Dollars except for Earnings Per Share )

2010

2009

REVENUES (NOTE II)
¡@Brokerage handling fee revenue (Note IV.24)
$9,961,629
$6,320,066
¡@Revenue from underwriting business
509,590
131,379
¡@Gains on disposal of trading securities-dealing-net
1,349,052
872,979
   Gains on disposal of trading securities-underwriting-net

159,433

93,780

   Gains on disposal of trading securities-hedging-net

467,183

642,006

¡@Revenue from providing agency service for stock affairs
7,605
6,148
¡@Interest income
3,089,282
1,938,295
    Dividend income 345,223 142,669
¡@Gains on valuation of trading securities-dealing-net
229,904
723,858
   Gains on valuation of trading securities-underwriting-net - 76,968
    Gains on valuation of trading securities-hedging-net - 118,634
    Gains on valuation of trading securities-underwriting-net (Note 2) ¡@ -
    Gains on valuation of liability for purchase of government bonds - 362
    Gains on covering of borrowed securities and bonds with resale agreements 33,746 -
   Gains on valuation of borrowed securities and bonds with resale agreements 7,777 -
¡@Gains on warrants issued
474,850
-
¡@Futures consulting fees (Note V)
-

-

¡@Gains on derivative financial product-futures
178,092

387,620

   Gains on derivative financial product-GTSM - -
    Futures consulting fees

-

278

¡@Other operating income
600,353
553,774
¡@Non-operating revenues and profits
1,160,404
683,560
¡@    Total Revenues
18,574,123
12,692,376
¡@ ¡@
COSTS AND EXPENSES (Note II)
¡@Brokerage handling fee expense (Note IV.25)
764,090
443,128
¡@Dealing handling fee expense (note IV.25)
70,519
93,289
¡@Refinancing handling fee expense
379
370
    Losses on disposal of trading securities-dealing-net - -
    Losses on disposal of trading securities-hedging-net - -
¡@Interest expenses
303,574
234,753
    Losses on valuation of trading securities-dealing-net - -
    Losses on valuation of trading securities-underwriting-net 99,687 -
    Losses on valuation of trading securities-hedging-net

18,828

-

   Losses on valuation of liability for purchase of government bonds

362

-

¡@Losses on covering of borrowed securities and bonds
    with resale agreements
-
72,085
   Losses on valuation of borrowed securities and bonds
    with resale agreements
- 20,756
   Losses on trading of borrowed securities 3,448 1,174
    Losses on valuation of liability for purchase of government bonds (Note 2) ¡@ -
¡@Warrants issuing expenses
48,591
27,395
   Losses on warrants issued - 63,380
    Futures commission expenses 120,642 56,001
¡@Settlement and clearing service expenditure
139,937
73,711
   Loss on derivative financial product-futures - -
    Loss on derivative financial product-GTSM 193,594 871,995
¡@Operating expenses (Notes II, IV.17 and IV.22)
11,358,122
7,275,324
¡@Other operating costs
48,099
19,215
¡@Non-operating expenses and losses
784,806
527,837
¡@    Total Costs and Expenses
13,954,678
9,780,413
¡@ ¡@
INCOME BEFORE INCOME TAX EXPENSES FROM CONTINUING UNITS
4,619,445
2,911,963
INCOME TAX EXPENSES (Notes II, III and IV.26)
(1,007,134)
(488,333)
NET INCOME
$3,612,311
$2,463,630
¡@ ¡@
ATTRIBUTABLE TO ¡@ ¡@
   Shareholders of parent company (Note IV.27)
$3,121,774
$2,305,552
   Minority interests (Note IV.27) 490,537 158,078
   Net Income (Note IV.27) 3,612,311 2,463,630
¡@ ¡@ ¡@
EARNINGS PER SHARE  (Notes III and IV.27)
¡@
    Net income attributable to shareholders of the parent company
$1.00
$0.85





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