Indara Insurance Public Company Limited Review report and interim financial statements 31 March 2018

Transcription

1 Indara Insurance Public Company Limited Review report and interim financial statements 31 March 2018

2 Independent Auditor s Report on Review of Interim Financial Information To the Shareholders of Indara Insurance Public Company Limited I have reviewed the accompanying statement of financial position of Indara Insurance Public Company Limited as at 31 March 2018, the statements of comprehensive income, changes in owners equity and cash flows for the three-month period then ended as well as the condensed notes to the financial statements. Management is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard 34: Interim Financial Reporting. My responsibility is to express a conclusion on this interim financial information based on my review. Scope of Review I conducted my review in accordance with Thai Standard on Review Engagements 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion. Conclusion Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34: Interim Financial Reporting. Narissara Chaisuwan Certified Public Accountant (Thailand) No EY Office Limited Bangkok: 11 May 2018

3 Indara Insurance Public Company Limited Statement of financial position As at 31 March 2018 Note 31 March December 2017 (Unaudited (Audited) but reviewed) Assets Cash and cash equivalents 4 53,229,646 76,668,804 Premium receivables - net 5 86,282,263 86,704,175 Accrued investment income 3,090,487 3,256,071 Reinsurance assets - net 6 253,969, ,738,915 Reinsurance receivables - net 7 22,656,086 10,683,467 Investment assets Investments in securities - net 8 520,374, ,266,834 Loans 9 309, ,992 Properties foreclosed 620, ,000 Premises and equipment - net 10 29,192,487 29,558,328 Intangible assets - net 302, ,116 Deferred tax assets ,820,411 25,398,624 Other assets Claim receivables from litigants 16,443,391 15,042,808 Other receivables 12,443,463 16,913,464 Others 26,990,767 27,932,042 Total assets 1,052,725,086 1,053,118,640 The accompanying notes are an integral part of the financial statements.

4 Indara Insurance Public Company Limited Statement of financial position (continued) As at 31 March 2018 Note 31 March December 2017 (Unaudited (Audited) but reviewed) Liabilities and owners' equity Liabilities Insurance contract liabilities ,047, ,116,741 Due to reinsurers ,519, ,675,883 Employee benefit obligations 12,077,789 11,599,678 Other liabilities Other payables 22,644,962 17,617,642 Insurance premium received in advance 23,407,673 18,459,524 Accrued expenses 11,167,993 13,785,124 Accrued commission expenses 14,902,128 13,893,482 Others 4,748,020 2,603,829 Total liabilities 837,515, ,751,903 Owners' equity Share capital Registered, issued and paid-up 10,000,000 ordinary shares of Baht 10 each 100,000, ,000,000 Share premium 138,110, ,110,766 Retained earnings Appropriated - statutory reserve 10,000,000 10,000,000 Unappropriated (deficit) (32,901,412) (24,744,029) Total owners' equity 215,209, ,366,737 Total liabilities and owners' equity 1,052,725,086 1,053,118, The accompanying notes are an integral part of the financial statements. Directors

5 Indara Insurance Public Company Limited Statement of comprehensive income For the three-month period ended 31 March 2018 Note Profit or loss: Revenues Gross premium written 165,751, ,743,604 Less: Premium ceded to reinsurers (60,203,211) (68,014,434) Net premium written 105,548,157 98,729,170 Add (less): Unearned premium reserves (increase) decrease from prior period 9,521,570 (27,110,062) Earned premium net of reinsurance 115,069,727 71,619,108 Commission and brokerage income 20,905,540 22,438,718 Net investment revenues 2,798,898 2,548,963 Gains on investments 3,615,595 1,657,281 Fair value gain (loss) (6,334,376) 616,233 Other income 732,318 3,285,124 Total revenues 136,787, ,165,427 Expenses Gross claims 124,148,762 24,835,176 Less: Claim recovery from reinsurers (58,896,910) (7,279,891) Commission and brokerage expenses 26,573,037 26,680,082 Other underwriting expenses 34,806,360 36,719,679 Operating expenses 19,735,623 17,191,413 Total expenses 146,366,872 98,146,459 Profit (loss) before income tax expenses (9,579,170) 4,018,968 Income tax benefits (expenses) ,421,787 (1,128,863) Profit (loss) for the period (8,157,383) 2,890,105 Other comprehensive income: Other comprehensive income for the period - - Total comprehensive income for the period (loss) (8,157,383) 2,890,105 Earnings (loss) per share: 15 Basic earnings (loss) per share Profit (loss) for the period

6 The accompanying notes are an integral part of the financial statements.

7 Indara Insurance Public Company Limited Statement of cash flows For the three-month period ended 31 March Cash flows from (used in) operating activities Direct premium written 166,992, ,099,073 Cash receive (paid) on reinsurance (38,211,678) 21,473,511 Interest income 2,234,271 1,839,881 Dividend income 730,211 78,391 Other income 2,808,774 2,552,412 Claims incurred on direct insurance (71,106,879) (66,710,934) Commission and brokerage expenses on direct insurance (24,974,826) (25,529,733) Other underwriting expenses (35,334,393) (37,220,040) Operating expenses (19,522,327) (16,677,788) Investments in securities (7,021,108) (1,013,437) Loans 58, ,165 Net cash provided from (used in) operating activities (23,346,172) 45,009,501 Cash flows from (used in) investing activities Purchases of equipment (92,986) (117,825) Disposals of equipment - 6,729 Net cash used in investing activities (92,986) (111,096) Net increase (decrease) in cash and cash equivalents (23,439,158) 44,898,405 Cash and cash equivalents at beginning of the period 76,668,804 48,135,151 Cash and cash equivalents at end of the period 53,229,646 93,033,556 The accompanying notes are an integral part of the financial statements.

8 Indara Insurance Public Company Limited Statement of changes in owners' equity For the three-month period ended 31 March 2018 Issued and Retained earnings paid-up Share Appropriated - Unappropriated share capital premium statutory reserve (deficit) Total Balance as at 1 January ,000, ,110,766 10,000,000 (32,909,163) 215,201,603 Profit for the period ,890,105 2,890,105 Other conprehensive income for the period Total comprehensive income for the period ,890,105 2,890,105 Balance as at 31 March ,000, ,110,766 10,000,000 (30,019,058) 218,091,708 Balance as at 1 January ,000, ,110,766 10,000,000 (24,744,029) 223,366,737 Loss for the period (8,157,383) (8,157,383) Other comprehensive income for the period Total comprehensive income for the period (loss) (8,157,383) (8,157,383) Balance as at 31 March ,000, ,110,766 10,000,000 (32,901,412) 215,209,354 The accompanying notes are an integral part of the financial statements.

9 Indara Insurance Public Company Limited Notes to interim financial statements For the three-month periods ended 31 March Corporate information Indara Insurance Public Company Limited ( the Company ) is a public company incorporated under Thai laws, domiciled in Thailand, and listed on the Stock Exchange of Thailand. On 16 June 2017, T.C.C. Land Company Limited, which is a limited company incorporated under Thai laws and domiciled in Thailand purchased the Company s ordinary shares, representing 67.82% of the issued and paid-up share capital, from T.C.C. Corporation Company Limited, which was the Company s former shareholder. As a result, T.C.C. Land Company Limited has become the parent Company. The Company is principally engaged in the provision of non-life insurance services. The Company s registered office is located at No. 364/29, Sri Ayuthaya Road, Phayathai Subdistrict, Ratchathewi District, Bangkok Basis for preparation of financial statements 2.1 Basis for preparation of interim financial statements These interim financial statements are prepared in accordance with Thai Accounting Standard 34: Interim Financial Reporting and the format of financial statements specified in the Notification of the Office of Insurance Commission ( OIC ) regarding criteria, procedures, conditions and terms for preparation and submission of financial statements and operating performance reports of non-life insurance companies dated 4 March 2016 whereby the Company chooses to present condensed interim financial statements. However, the Company presented each line item in the statements of financial position, comprehensive income, changes in owners equity and cash flows in the same full format as that used in its annual financial statements. These interim financial statements are intended to provide information additional to that included in the latest annual financial statements. Accordingly, the interim financial statements focus on new activities, events and circumstances so as not to duplicate information previously reported. These interim financial statements should therefore be read in conjunction with the latest annual financial statements. The interim financial statements in Thai language are the official statutory financial statements of the Company. The interim financial statements in English language have been translated from the financial statements in Thai language. 1

10 2.2 New and revised financial reporting standards (a) Financial reporting standards that became effective in the current year During the period, the Company have adopted the revised financial reporting standards and interpretations (revised 2017 ) which are effective for fiscal years beginning on or after 1 January These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes and clarifications directed towards disclosures in the notes to financial statements. The adoption of these financial reporting standards does not have any significant impact on the Company s financial statements. (b) Financial reporting standard that will become effective in the future During the period, the Federation of Accounting Professions issued the financial reporting standard TFRS 15 Revenue from Contracts with Customers, which is effective for fiscal years beginning on or after 1 January Key principles of this standard are summarized below. TFRS 15 Revenue from Contracts with Customers TFRS 15 supersedes TAS 11 Construction Contracts and TAS 18 Revenue, together with related Interpretations. Entities are to apply this standard to all contracts with customers unless those contracts fall within the scope of other standards. The standard establishes a five-step model to account for revenue arising from contracts with customers, with revenue being recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model. The management of the Company believes that this financial reporting standard will not have any significant impact to the Company s financial statements when it is initially applied. 3. Significant accounting policies The interim financial statements are prepared using the same accounting policies and methods of computation as those were used for the financial statements for the year ended 31 December

11 4. Cash and cash equivalents 31 March December 2017 Deposits at banks with no fixed maturity date 33,229,646 56,668,804 Deposits at banks with fixed maturity date 20,000,000 20,000,000 Total cash and cash equivalents 53,229,646 76,668,804 As at 31 March 2018 and 31 December 2017, deposits at banks carried interests at the rates between 0.10 and 1.35 percent per annum and between 0.13 and 1.40 percent per annum, respectively. 5. Premium receivables As at 31 March 2018 and 31 December 2017, the balances of premium receivables from direct insurance are classified by overdue periods in accordance with the Premium Collection Law as follows: 31 March December 2017 Not yet due 61,240,398 62,118,544 Not over 30 days 11,189,754 11,913,445 Over 31 days to 60 days 5,776,969 2,054,704 Over 61 days to 90 days 1,113, ,642 Over 91 days to 1 year 6,892,983 10,286,221 Over 1 year 7,145,815 7,246,676 Total 93,359,740 94,352,232 Less: Allowance for doubtful accounts (7,077,477) (7,648,057) Premium receivables - net 86,282,263 86,704,175 For premium receivables due form agents and brokers, the Company has stipulated the collection guidelines in accordance with the Premium Collection Law whereby the Company has taken legal proceedings with agents and brokers on a case by case basis for overdue premiums. 6. Reinsurance assets 31 March December 2017 Insurance reserves refundable from reinsurers: Claim reserves 127,467, ,572,860 Unearned premium reserves 126,621, ,284,858 Total 254,088, ,857,718 Less: Allowance for impairment (118,803) (118,803) Reinsurance assets - net 253,969, ,738,915 3

12 7. Reinsurance receivables 31 March December 2017 Amounts due from reinsurance 47,051,257 44,490,337 Amounts deposited on reinsurance 16,386,897 6,975,198 Total 63,438,154 51,465,535 Less: Allowance for impairment (40,782,068) (40,782,068) Reinsurance receivables - net 22,656,086 10,683, Investments in securities 8.1 Classified by type of investments 31 March December 2017 Cost/ Cost/ Amortised cost Fair value Amortised cost Fair value Trading investments Government and state enterprise securities 72,011,522 72,182, ,910, ,991,216 Private sector debt securities 193,380, ,850, ,758, ,654,293 Equity securities 123,347, ,252, ,627, ,532,365 Total 388,739, ,285, ,296, ,177,874 Add: Unrealised gain 8,054,242-14,388,618 - Less: Allowance for impairment (507,354) - (507,354) - Trading investments - net 396,285, ,285, ,177, ,177,874 Held-to-maturity investments Private sector debt securities 829, ,720 Deposits at financial institutions which matured over 3 months 123,600, ,600,000 Total 124,429, ,429,720 Less: Allowance for impairment (829,720) (829,720) Held-to-maturity investments - net 123,600, ,600,000 General investments Equity securities 489, ,020 Less: Allowance for impairment (60) (60) General investments - net 488, ,960 Investments in securities - net 520,374, ,266,834 As at 31 March 2018 and 31 December 2017, The Company sets aside allowance for impairment in full amount of investments in private sector debt securities including notes and debentures totaling Baht 1 million which were issued by certain companies that have repayment problems. 4

13 8.2 Investments subject to restriction As at 31 March 2018 and 31 December 2017, the Company placed deposits at financial institutions amounting to Baht 2.0 million and Baht 2.2 million, respectively, as bail bond in cases which insured drivers have been charged with criminal offence and as securities against the issuance of bank guarantee by the bank on behalf of the Company. In addition, the Company placed its securities with the Registrar as described in Note 17 to the interim financial statements. 9. Loans As at 31 March 2018 and 31 December 2017, the balances of loans are aged by principal as follows: Personal guarantee loans 31 March December 2017 Interest Interest Outstanding period Principal receivable Total Principal receivable Total Not yet due 309, , , ,992 Total loans 309, , , ,992 Loans provided to employees are in accordance with the employee welfare plan whereby the credit line is 15 times of an employee s salary but not to exceed Baht 120,000 for personal guarantee loans. The interest rate charged on the loans shall not be lower than one-year fixed deposit rate plus 2 percent per annum. 10. Premises and equipment Furniture, fixtures and Motor Land Buildings equipment vehicles Total Net book value as at 1 January ,285,100 6,880,962 1,738, ,530 29,558,328 Additions during the period - at cost ,986-92,986 Disposals during the period - at net book value - - (2,045) - (2,045) Depreciation charges for the period - (15,911) (281,171) (159,700) (456,782) Net book value as at 31 March ,285,100 6,865,051 1,548, ,830 29,192,487 5

14 11. Deferred tax assets and income taxes 11.1 Deferred tax assets As at 31 March 2018 and 31 December 2017, the components of deferred tax assets arose from tax effects of the following temporally differences: Changes in deferred tax assets and liabilities for the three-month 31 March 31 December periods ended 31 March Deferred tax assets (liabilities) arose from: Allowances for doubtful accounts and impairment 1,435,190 1,549,306 (114,116) (104,670) Allowance for impairment on investments 267, ,427 - (8,186) Unrealised gains on revaluation of trading investments (1,610,848) (2,877,724) 1,266,876 (123,246) Premium reserves 4,776,280 7,226,113 (2,449,833) 1,561,935 Claim reserves 17,331,189 13,962,314 3,368,875 (3,040,907) Incurred but not yet reported claim reserves 2,205,615 2,951,252 (745,637) 498,935 Provisions for employee benefits 2,415,558 2,319,936 95,622 87,276 Deferred tax assets 26,820,411 25,398,624 Changes in deferred tax assets or liabilities that are recognised in profit or loss 1,421,787 (1,128,863) 11.2 Income taxes Income tax benefits (expenses) for the three-month periods ended 31 March 2018 and 2017 are made up as follows: For the three-month periods ended 31 March Current income taxes: Interim corporate income tax charge - - Deferred income taxes: Deferred income taxes relating to origination and reversal of temporary differences 1,421,787 (1,128,863) Income tax benefits (expenses) reported in profit or loss 1,421,787 (1,128,863) 6

15 Reconciliations between income tax benefits (expenses) and the product of accounting profit (loss) for the three-month periods ended 31 March 2018 and 2017 and the applicable tax rate are as follows: For the three-month periods ended 31 March Accounting profit (loss) before income taxes (9,579,170) 4,018,968 Applicable tax rate 20% 20% Amounts of income taxes at the applicable tax rate 1,915,834 (803,794) Tax losses for the periods that were not recognised as deferred tax assets (473,579) (321,561) Net tax effect on tax-exempted revenues and non-tax deductible expenses (20,468) (3,508) Income tax benefits (expenses) reported in profit or loss 1,421,787 (1,128,863) 12. Insurance contract liabilities 31 March 2018 Insurance contract liabilities Liabilities on reinsurance Net Claim reserves Claims incurred and reported 218,226,904 (110,061,614) 108,165,290 Claims incurred but not yet reported 28,315,051 (17,286,972) 11,028,079 Premium reserves Unearned premium reserves 338,505,842 (126,621,229) 211,884,613 Total 585,047,797 (253,969,815) 331,077,982 Insurance contract liabilities 31 December 2017 Liabilities on reinsurance Net Claim reserves Claims incurred and reported 185,807,116 (96,591,736) 89,215,380 Claims incurred but not reported 34,618,584 (19,862,321) 14,756,263 Premium reserves Unearned premium reserves 357,691,041 (136,284,858) 221,406,183 Total 578,116,741 (252,738,915) 325,377,826 7

16 12.1 Claim reserves For the three-month period ended 31 March 2018 For the year ended 31 December 2017 Beginning balance 220,425, ,927,329 Claims incurred during the period 130,452, ,112,315 Changes in assumptions and loss reserve (4,902,950) (5,096,650) Claims paid during the period (99,433,091) (308,517,294) Ending balance 246,541, ,425,700 As at 31 March 2018 and 31 December 2017, the Company, which is a reinsurer under the reinsurance contracts, has claim reserves under such contracts totaling Baht 35.7 million and Baht 9.3 million, respectively Unearned premium reserves For the three-month period ended 31 March 2018 For the year ended 31 December 2017 Beginning balance 357,691, ,308,292 Premium written during the period 165,751, ,039,130 Premium earned during the period (184,936,567) (694,656,381) Ending balance 338,505, ,691, Due to reinsurers 31 March December 2017 Amounts withheld on reinsurance 136,557, ,973,309 Amounts due to reinsurers 26,962,030 33,702,574 Total due to reinsurers 163,519, ,675,883 8

17 14. Segment information Operating segment information is reported in a manner consistent with the internal reports that are regularly reviewed by the Chief Operating Decision Maker in order to make decisions about the allocation of resources to the segment and assess its performance. The Chief Operating Decision Maker has been identified as Chief Executive Officer. For management purposes, the Company is organised into business units based on its products, which consisted of Fire, Marine and transportation, Motor, and Miscellaneous insurance. No operating segments have been aggregated to form the above reportable operating segments. The Chief Operating Decision Maker monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and assessing performance. Segment performance is measured based on operating profit or loss, total assets and total liabilities and on a basis consistent with that used to measure operating profit or loss in the financial statements. The basis of accounting for any transactions between reportable segments is consistent with that for third party transactions. 9

18 The following tables present revenue and profit information regarding the Company s operating segments for the three-month periods ended 31 March 2018 and For the three-month period ended 31 March 2018 Marine and Personal Fire transportation Motor accident Miscellaneous Total Underwriting revenue Premium written Direct premium written 4,694,362 1,452, ,576,524 1,659,145 23,240, ,622,845 Inward premium written 73, (2,264) 4,057,264 4,128,523 Total premium written 4,767,885 1,452, ,576,524 1,656,881 27,297, ,751,368 Less: Premium ceded (3,480,954) (1,163,934) (39,245,872) (1,732,028) (14,580,423) (60,203,211) Net premium written 1,286, ,323 91,330,652 (75,147) 12,717, ,548,157 Add (less): Unearned premium reserves (increased) decreased from prior period 10,229, ,670 1,528,334 1,699,969 (4,093,943) 9,521,570 Net earned premium 11,516, ,993 92,858,986 1,624,822 8,623, ,069,727 Commission and brokerage income 899, ,434 13,852, ,666 5,375,485 20,905,540 Total underwriting revenue 12,416, , ,711,157 2,077,488 13,998, ,975,267 Underwriting expenses Claim and loss adjustment expenses 1,281,447 59,165 57,462,190 2,246,731 4,202,319 65,251,852 Commission and brokerage expenses 928, ,160 20,382, ,567 4,779,206 26,573,037 Other underwriting expenses 462, ,480 25,864, ,901 1,250,952 28,360,932 Contributions to Road Accident Victims Protection Co., Ltd ,137, ,137,144 Contributions to the Office of Insurance Commission 484,868 Contributions to the General Insurance Fund 404,057 Contributions to the Victims Compensation Fund 419,359 Operating expenses 19,735,623 Total underwriting expenses 146,366,872 Loss from underwriting (10,391,605) Net investment revenues 2,798,898 Gains on investments 3,615,595 Fair value loss (6,334,376) Other income 732,318 Loss before income tax expenses (9,579,170) Income tax benefits 1,421,787 Loss for the period (8,157,383) 10

19 For the three-month period ended 31 March 2017 Marine and Personal Fire transportation Motor accident Miscellaneous Total Underwriting revenue Premium written Direct premium written 5,005,733 1,538, ,362,633 1,240,876 20,375, ,524,145 Inward premium written 370, ,919 1,219,459 Total premium written 5,376,273 1,538, ,362,633 1,240,876 21,224, ,743,604 Less: Premium ceded (3,924,415) (1,197,074) (41,175,100) (886,549) (20,831,296) (68,014,434) Net premium written 1,451, ,881 96,187, , ,571 98,729,170 Add (less): Unearned premium reserves (increased) decreased from prior period 8,821, ,726 (39,152,370) 680,731 2,397,404 (27,110,062) Net earned premium 10,273, ,607 57,035,163 1,035,058 2,790,975 71,619,108 Commission and brokerage income 825, ,756 15,087, ,742 5,760,967 22,438,718 Total underwriting revenue 11,098, ,363 72,122,228 1,432,800 8,551,942 94,057,826 Underwriting expenses Claim and loss adjustment expenses 733,054 91,531 13,513, ,824 2,223,645 17,555,285 Commission and brokerage expenses 1,167, ,155 21,275, ,575 3,841,276 26,680,082 Other underwriting expenses 424, ,200 27,083, ,910 1,794,459 29,519,232 Contributions to Road Accident Victims Protection Co., Ltd ,815, ,815,342 Contributions to the Office of Insurance Commission 496,442 Contributions to the General Insurance Fund 413,941 Contributions to the Victims Compensation Fund 474,722 Operating expenses 17,191,413 Total underwriting expenses 98,146,459 Loss from underwriting (4,088,633) Net investment revenues 2,548,963 Gains on investments 1,657,281 Fair value gain 616,233 Other income 3,285,124 Profit before income tax expenses 4,018,968 Income tax expenses (1,128,863) Profit for the period 2,890,105 During the three-month periods ended 31 March 2018 and 2017, the Company had premiums written through insurance brokers with premium written from each broker of more than 10% of total premiums written, contributing 52% and 49%, respectively, of total premiums written in each period. 11

20 The following table presents the Company s operating segmental assets and liabilities as at 31 March 2018 and 31 December Assets of insurance segment Total assets of Assets of Marine and insurance investments Unallocated Fire transportation Motor Miscellaneous segment segment assets Total Assets As at 31 March ,359,845 2,239, ,230, ,398, ,228, ,684, ,812,651 1,052,725,086 As at 31 December ,871, , ,149, ,563, ,554, ,634, ,929,631 1,053,118,640 Liabilities As at 31 March ,596,770 2,128, ,375, ,675, ,775,990-96,739, ,515,732 As at 31 December ,973,999 1,880, ,518, ,615, ,988,477-94,763, ,751, Earnings (loss) per share Basic earnings (loss) per share is calculated by dividing profit (loss) for the period by the weighted average number of ordinary shares in issue during the period. 16. Related party transactions 16.1 Nature of relationship In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. The relationship between the Company and its related parties are summarised below. Name of related parties Type of business Relationship with the Company T.C.C. Corporation Co., Ltd. Holding company 67.82% of shares held in the Company until 16 June 2017 T.C.C. Land Co., Ltd. Holding company 67.82% of shares held in the Company since 16 June 2017 South East Capital Co., Ltd. Automobile - Renting & Leasing Having common shareholder Southeast Insurance Plc. Non-life insurance Having common shareholder Southeast Life Insurance Plc. Life insurance Having common shareholder Siam Food Products Plc. Produce and distribute food Having common shareholder 12

21 16.2 Significant related party transactions During the three-month periods ended 31 March 2018 and 2017, the Company had significant business transactions with its related parties. Such transactions, which have been concluded on commercial terms and bases agreed upon in the ordinary course of business between the Company and those parties are as follows: (Unit: Thousand Baht) For the three-month periods ended 31 March Pricing Policy Siam Food Products Plc. Premium written 1 - Premium rates depending on type of insurance Southeast Insurance Plc. Inward premium written (1) 2, Depending on type of insurance and reinsurance contracts Commission and brokerage As stated in the agreement expenses Premium ceded to reinsurers 1, Depending on type of insurance and reinsurance contracts Commission and brokerage income As stated in the agreement Southeast Life Insurance Plc. Life insurance premium expenses 1,170 1,172 As stated in the agreement Southeast Capital Co., Ltd. Car rental expenses As stated in the agreement (1) Presented as a part of Gross premium written in the statement of comprehensive income Outstanding balances As at 31 March 2018 and 31 December 2017, the Company had the following significant balances with its related companies. (Unit: Thousand Baht) 31 March December 2017 Southeast Insurance Plc. Amounts due from reinsurers 2,

22 16.4 Directors and key management s benefits During the three-month periods ended 31 March 2018 and 2017, the Company had employee benefit expenses incurred on its directors and key management as below. (Unit: Thousand Baht) For the three-month periods ended 31 March Short-term employee benefits 9,198 8,439 Post-employment benefits Total 9,533 8, Assets placed with the Registrar As at 31 March 2018 and 31 December 2017, the Company has the following assets placed as guarantee securities and insurance reserves with the Registrar in accordance with the Non-life Insurance Act. (Unit: Million Baht) 31 March December 2017 Cost Fair value Cost Fair value Placed as guarantee securities Deposits with financial institutions Placed as insurance reserves Deposits with financial institutions Total Commitments and contingent liabilities 18.1 Operating lease commitments The Company has entered into several lease agreements in respect of the lease of office building, computer equipment and its related services. As at 31 March 2018 and 31 December 2017, future minimum lease payments required under these operating lease contracts were as follows: (Unit: Million Baht) Payable within 31 March December 2017 Within 1 year Over 1 year but not over 5 years Total

23 18.2 Bank guarantees As at 31 March 2018 and 31 December 2017, there were outstanding bank guarantees of Baht 0.1 million issued by a bank on behalf of the Company in respect of certain performance bonds as required in the normal course of business of the Company Litigation As at 31 March 2018 and 31 December 2017, the Company had litigation cases being claimed for a total compensation of approximately Baht 53.4 and Baht 66.3 million, respectively, for being the insurer. The maximum sum insured of all policies under the litigation cases totaled Baht 59.1 million and Baht 58.6 million, respectively. The outcome of those litigation cases have yet been finalised. However, the Company already considered and set aside provision for losses that may be arisen amounting to approximately Baht 12.3 million and Baht 11.6 million, respectively, based on reports of independent surveyors and in accordance with the coverage stipulated in the insurance policies. The Company s management believes that the amounts of provision set aside are adequate and should the Company loose these cases, the amount of additional loss net of recovery from reinsurance, in excess of that already recorded by the Company (if any) will not be material to the Company s financial statements. 19. Fair value of financial instruments As of 31 March 2018 and 31 December 2017, the Company had the following assets that were measured at fair value using different levels of inputs as follows: 31 March December 2017 Level 1 Level 2 Total Level 1 Level 2 Total Trading investments Government and state enterprise securities - 72,182,974 72,182, ,991, ,991,216 Private sector debt securities - 194,850, ,850, ,654, ,654,293 Equity securities 127,199,936 2,053, ,252, ,486,630 2,045, ,532,365 15

24 The Company determined fair value of financial instruments by the following methods. (a) (b) (c) Investments in debt securities are presented at fair value by using the yield curve as announced by the Thai Bond Market Association. Investment in marketable equity securities has been presented at fair value by using market price. Investment in units trust has been presented at fair value by using market price and investments in units trust that are not trade on the Stock Exchange of Thailand is presented by using the net asset value per unit as announced by the asset management company. During the period, there were no transfers within the fair value hierarchy. 20. Approval of interim financial statements These interim financial statements were authorised for issue by the Company s Board of Directors on 11 May