Indara Insurance Public Company Limited Review report and interim financial statements 30 September 2017

Transcription

1 Indara Insurance Public Company Limited Review report and interim financial statements 30 September 2017

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 30 September 2017, the statements of comprehensive income for the three-month and nine-month periods then ended, the statements of changes in owners equity and cash flows for the nine-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. Rachada Yongsawadvanich Certified Public Accountant (Thailand) No EY Office Limited Bangkok: 9 November 2017

3 Indara Insurance Public Company Limited Statements of financial position As at 30 September 2017 and 31 December 2016 Note 30 September December 2016 (Unaudited (Audited) but reviewed) Assets Cash and cash equivalents 4 83,280,140 48,135,151 Premium receivables - net 5 86,829,078 67,344,595 Accrued investment income 3,292,455 3,815,725 Reinsurance assets - net 6 259,630, ,635,696 Reinsurance receivables - net 7 11,726,458 39,629,321 Investment assets Investments in securities - net 8 500,894, ,072,044 Loans 9 428, ,561 Properties foreclosed 530, ,000 Premises and equipment - net 10 29,630,356 31,148,968 Intangible assets - net 333, ,631 Deferred tax assets ,229,963 25,569,908 Other assets Claim receivables from litigants 14,872,435 14,230,643 Other receivables 10,402,343 7,075,326 Others 34,805,077 24,456,375 Total assets 1,066,885, ,032,944 The accompanying notes are an integral part of the financial statements.

4 Indara Insurance Public Company Limited Statements of financial position (continued) As at 30 September 2017 and 31 December 2016 Note 30 September December 2016 (Unaudited (Audited) but reviewed) Liabilities and owners' equity Liabilities Insurance contract liabilities ,744, ,235,621 Due to reinsurers ,492, ,891,737 Employee benefit obligations 10,360,120 9,050,975 Other liabilities Other payables 22,521,059 16,573,035 Insurance premium received in advance 29,140,923 13,266,790 Accrued expenses 10,370,660 14,366,343 Accrued commission expenses 12,282,859 10,226,174 Others 5,237,002 3,220,666 Total liabilities 860,149, ,831,341 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) (41,375,119) (32,909,163) Total owners' equity 206,735, ,201,603 Total liabilities and owners' equity 1,066,885, ,032, The accompanying notes are an integral part of the financial statements. Directors

5 Indara Insurance Public Company Limited Statements of comprehensive income For the three-month periods ended 30 September 2017 and 2016 Note Profit or loss: Revenues Gross premium written 219,226, ,356,958 Less: Premiums ceded to reinsurers (76,106,113) (74,699,388) Net premium written 143,120,143 91,657,570 Less: Unearned premium reserves increased from prior period (40,022,470) (27,688,100) Earned premium net of reinsurance 103,097,673 63,969,470 Commission and brokerage income 27,283,582 32,117,110 Net investment revenues 2,882,458 2,336,070 Gains on investments 1,195,975 3,826,453 Fair value gains (losses) 6,171,359 (5,033,762) Other income 3,513,632 3,202,270 Total revenues 144,144, ,417,611 Expenses Gross claims 82,363,931 49,508,501 Less: Claim recovery from reinsurers (38,081,701) (27,662,405) Commission and brokerage expenses 48,206,405 39,390,216 Other underwriting expenses 39,694,049 32,729,746 Operating expenses 18,385,944 16,761,750 Total expenses 150,568, ,727,808 Loss before income tax expenses (6,423,949) (10,310,197) Income tax benefits ,413,032 1,963,374 Losses for the periods (4,010,917) (8,346,823) Other comprehensive income (loss): Other comprehensive income for the periods - - Total comprehensive loss for the periods (4,010,917) (8,346,823) Earnings per share: 15 Basic earnings per share Losses for the periods The accompanying notes are an integral part of the financial statements.

6 Indara Insurance Public Company Limited Statements of comprehensive income For the nine-month periods ended 30 September 2017 and 2016 Note Profit or loss: Revenues Gross premium written 577,571, ,700,276 Less: Premiums ceded to reinsurers (217,147,330) (258,226,281) Net premium written 360,423, ,473,995 Less: Unearned premium reserves increased from prior period (100,858,209) (29,273,835) Earned premium net of reinsurance 259,565, ,200,160 Commission and brokerage income 76,286, ,482,093 Net investment revenues 8,458,543 8,229,293 Gains (losses) on investments 3,857,469 (520,471) Fair value gains 5,988,618 6,720,666 Other income 10,239,903 10,977,124 Total revenues 364,396, ,088,865 Expenses Gross claims 197,088, ,398,826 Less: Claim recovery from reinsurers (97,259,949) (122,657,641) Commission and brokerage expenses 105,280,307 83,005,085 Other underwriting expenses 117,215,710 97,018,275 Operating expenses 54,411,379 50,223,181 Total expenses 376,736, ,987,726 Loss before income tax expenses (12,339,456) (13,898,861) Income tax benefits ,873,500 7,148,853 Losses for the periods (8,465,956) (6,750,008) Other comprehensive income (loss): Other comprehensive income for the periods - - Total comprehensive loss for the periods (8,465,956) (6,750,008) Earnings per share: 15 Basic earnings per share Loss for the periods The accompanying notes are an integral part of the financial statements.

7 Indara Insurance Public Company Limited Statements of cash flows For the nine-month periods ended 30 September 2017 and Cash flows from (used in) operating activities Direct premium written 528,963, ,710,222 Cash received (paid) on reinsurance 42,211,668 (147,768,466) Interest income 6,381,315 5,788,935 Dividend income 2,600,498 2,338,977 Other income 8,959,659 8,116,532 Losses incurred on direct insurance (221,469,141) (210,473,678) Commission and brokerage expenses on direct insurance (81,141,111) (61,303,135) Other underwriting expenses (120,515,160) (98,767,875) Operating expenses (55,809,986) (50,768,748) Investments in securities (75,517,591) 148,835,018 Loans (97,525) (119,768) Net cash provided by operating activities 34,566,162 7,588,014 Cash flows from (used in) investing activities Purchases of equipment (223,229) (701,806) Disposals of equipment 802,056 49,240 Net cash from (used in) investing activities 578,827 (652,566) Net increase in cash and cash equivalents 35,144,989 6,935,448 Cash and cash equivalents at beginning of the periods 48,135,151 36,478,375 Cash and cash equivalents at end of the periods 83,280,140 43,413,823 The accompanying notes are an integral part of the financial statements.

8 Indara Insurance Public Company Limited Statements of changes in owners' equity For the nine-month periods ended 30 September 2017 and 2016 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 (40,917,988) 207,192,778 Loss for the period (6,750,008) (6,750,008) Other conprehensive income for the period Total comprehensive loss for the period (6,750,008) (6,750,008) Balance as at 30 September ,000, ,110,766 10,000,000 (47,667,996) 200,442,770 Balance as at 1 January ,000, ,110,766 10,000,000 (32,909,163) 215,201,603 Loss for the period (8,465,956) (8,465,956) Other conprehensive income for the period Total comprehensive loss for the period (8,465,956) (8,465,956) Balance as at 30 September ,000, ,110,766 10,000,000 (41,375,119) 206,735,647 The accompanying notes are an integral part of the financial statements.

9 Indara Insurance Public Company Limited Table of contents for notes to interim financial statements For the three-month and nine-month periods ended 30 September 2017 and 2016 Note Contents Page 1. Corporate information Basis for preparation of financial statements Significant accounting policies Cash and cash equivalents Premium receivables Reinsurance assets Reinsurance receivables Investments in securities Loans Premises and equipment Deferred tax assets and income taxes Insurance contract liabilities Due to reinsurers Segment information Earnings per share Related party transactions Assets placed with the Registrar Commitments and contingent liabilities Fair value of financial instruments Approval of interim financial statements... 19

10 Indara Insurance Public Company Limited Notes to interim financial statements For the three-month and nine-month periods ended 30 September 2017 and 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 purchased 6,782,495 ordinary shares of the Company, representing percent of the issued and paid-up share capital, from T.C.C. Corporation Company Limited, which was the Company s existing shareholder and parent company. As a result, T.C.C. Land Company Limited has become the parent company since then. 2. 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 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

11 2.2 New and revised financial reporting standards During the period, the Company adopted new and revised financial reporting standards and interpretations (revised 2016) including new accounting treatment guidance, 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 directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any impact on these financial statements. 3. Significant accounting policies The interim financial statements are prepared using the same accounting policies and methods of computation as those used for the financial statements for the year ended 31 December 2016, except for the adoption of new and revised financial reporting standards as described in Note 2.2 to the interim financial statements. 4. Cash and cash equivalents 30 September December 2016 Deposits at banks with no fixed maturity date 83,280,140 48,135,151 Cash and cash equivalents 83,280,140 48,135,151 2

12 5. Premium receivables As at 30 September 2017 and 31 December 2016, the balances of premium receivables are classified by overdue periods in accordance with the Premium Collection Law as follows: From direct insurance 30 September December 2016 Not yet due 65,457,738 52,140,493 Not over 30 days 6,585,179 7,251,264 Over 31 days to 60 days 6,898,112 7,329,926 Over 61 days to 90 days 4,552, ,912 Over 91 days to 1 year 3,672, ,386 Over 1 year 6,935,332 7,072,637 Total 94,101,452 75,169,618 Less: Allowance for doubtful accounts (7,272,374) (7,825,023) Premium receivables - net 86,829,078 67,344,595 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 30 September December 2016 Insurance reserves refundable from reinsurers: Loss reserves 118,407, ,787,114 Unearned premium reserves 141,360, ,005,495 Total 259,767, ,792,609 Less: Allowance for impairment (137,049) (156,913) Reinsurance assets - net 259,630, ,635,696 3

13 7. Reinsurance receivables 30 September December 2016 Amounts due from reinsurance 45,460,695 71,900,600 Amounts deposited on reinsurance 7,047,831 8,510,789 Total 52,508,526 80,411,389 Less: Allowance for impairment (40,782,068) (40,782,068) Reinsurance receivables - net 11,726,458 39,629, Investments in securities 8.1 Classified by type of investments 30 September December 2016 Cost/ Cost/ Amortised cost Fair value Amortised cost Fair value Trading investments Government and state enterprise securities 66,928,143 66,652,012 70,447,817 70,507,254 Private sector debt securities 147,809, ,742, ,930, ,639,812 Equity securities 109,760, ,447,471 78,794,292 80,036,018 Warrants 466, , Total 324,964, ,373, ,172, ,183,084 Add: Unrealised gains 8,916,518-2,927,901 - Less: Allowance for impairment (507,354) - (1,917,392) - Trading investments - net 333,373, ,373, ,183, ,183,084 Held-to-maturity investments Private sector debt securities 1,011,984 1,235,175 Deposits at financial institutions which matured over 3 months 166,600, ,400,000 Total 167,611, ,635,175 Less: Allowance for impairment (1,011,984) (1,235,175) Held-to-maturity investments - net 166,600, ,400,000 General investments Equity securities 921, ,020 Less: Allowance for impairment (60) (60) General investments - net 920, ,960 Investments in securities - net 500,894, ,072,044 4

14 As at 30 September 2017 and 31 December 2016, investments in private sector debt securities included notes and debentures totaling Baht 1 million issued by certain companies that have repayment problems. The Company sets aside allowance for impairment on these investments in full. 8.2 Investments subject to restriction As at 30 September 2017 and 31 December 2016, deposits at financial institutions amounting to Baht 0.6 million and Baht 0.4 million, respectively, were placed as securities as required in the normal course of business of the Company. In addition, the Company placed its assets with the Registrar as described in Note 17 to the interim financial statements. 9. Loans As at 30 September 2017 and 31 December 2016, the balances of loans are aged by principal as follows: Personal guarantee loans 30 September December 2016 Interest Interest Outstanding period Principal receivable Total Principal receivable Total Not yet due 428, , , ,561 Total loans 428, , , ,561 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. 5

15 10. Premises and equipment Furniture, fixtures and Motor Land Buildings equipment vehicles Total Net book value as at 1 January ,285,100 6,955,267 2,459,810 1,448,791 31,148,968 Additions during the period - at cost , ,229 Disposals during the period - at net book value - - (58) (133,094) (133,152) Depreciation charges for the period - (58,370) (1,047,855) (502,464) (1,608,689) Net book value as at 30 September ,285,100 6,896,897 1,635, ,233 29,630, Deferred tax assets and income taxes 11.1 Deferred tax assets As at 30 September 2017 and 31 December 2016, the components of deferred tax assets arose from tax effects of the following temporally differences: 30 September December 2016 Deferred tax assets (liabilities) arose from: Allowance for doubtful accounts 1,474,181 1,584,711 Allowance for impairment on investments 303, ,514 Unrealised gains on revaluation of trading investments (1,783,304) (585,580) Premium reserves 13,031,150 5,575,501 Loss reserves 12,073,267 12,873,699 Reserves for losses incurred but not yet reported 3,058,777 3,680,868 Employee benefit obligations 2,072,024 1,810,195 Deferred tax assets 30,229,963 25,569,908 6

16 11.2 Income taxes Income tax benefits (expenses) for the three-month and nine-month periods ended 30 September 2017 and 2016 are made up as follows: For the three-month periods ended 30 September For the nine-month periods ended 30 September Current income taxes: Interim corporate income tax charge (786,555) - (786,555) - Deferred income taxes: Deferred income taxes relating to origination and reversal of temporary differences 3,199,587 1,963,374 4,660,055 7,148,853 Income tax benefits reported in profit or loss 2,413,032 1,963,374 3,873,500 7,148,853 Reconciliations between income tax benefits (expenses) and the product of accounting losses for the three-month and nine-month periods ended 30 September 2017 and 2016 and the applicable tax rate are as follows: For the three-month periods ended 30 September For the nine-month periods ended 30 September Accounting losses before income taxes (6,423,949) (10,310,197) (12,339,456) (13,898,861) Applicable tax rate 20% 20% 20% 20% Amounts of income taxes at the applicable tax rate 1,284,790 2,062,039 2,467,891 2,779,772 Tax effects on: Loss brought forward not recognised for deferred tax assets in prior periods but utilised during the periods 1,128,269 (96,410) 1,406,150 3,922,069 Tax-exempted revenues and non-tax deductible expenses (27) (2,255) (541) 447,012 Income tax benefits reported in profit or loss 2,413,032 1,963,374 3,873,500 7,148,853 7

17 12. Insurance contract liabilities Insurance contract liabilities 30 September 2017 Liabilities on reinsurance Net Loss reserves and outstanding claims Claims incurred and reported 183,581,224 (102,922,099) 80,659,125 Claims incurred but not yet reported 30,641,884 (15,347,997) 15,293,887 Premium reserves Unearned premium reserves 375,521,676 (141,360,670) 234,161,006 Total 589,744,784 (259,630,766) 330,114, December 2016 Insurance contract liabilities Liabilities on reinsurance Net Loss reserves Claims incurred and reported 203,399,931 (121,507,143) 81,892,788 Claims incurred but not reported 40,527,398 (22,123,058) 18,404,340 Premium reserves Unearned premium reserves 301,308,292 (168,005,495) 133,302,797 Total 545,235,621 (311,635,696) 233,599, Loss reserves For the nine-month period ended 30 September 2017 For the year ended 31 December 2016 Beginning balances 243,927, ,245,473 Claims incurred during the periods 197,088, ,924,858 Changes in assumptions and loss reserves 641,792 (3,945,076) Claims paid during the periods (227,434,632) (288,297,926) Ending balances 214,223, ,927,329 8

18 As at 30 September 2017 and 31 December 2016, the Company, which is a reinsurer under the reinsurance contracts, has loss reserves under such contracts totaling Baht 8.9 million and Baht 5.2 million, respectively Unearned premium reserves For the nine-month period ended 30 September 2017 For the year ended 31 December 2016 Beginning balances 301,308, ,796,945 Premium written during the periods 577,571, ,934,307 Premium earned during the periods (503,357,865) (609,422,960) Ending balances 375,521, ,308, Due to reinsurers 30 September December 2016 Amounts withheld on reinsurance 155,851, ,261,207 Amounts due to reinsurers 24,640,241 2,630,530 Total due to reinsurers 180,492, ,891, 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. 9

19 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 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. The following tables present revenue and profit information regarding the Company s operating segments for the three-month and nine-month periods ended 30 September 2017 and For the three-month period ended 30 September 2017 Marine and Personal Fire transportation Motor accident Miscellaneous Total Underwriting revenue Premium written Direct premium written 4,322, , ,907,612 13,106,114 31,514, ,470,776 Inward premium written 37,680, ,440 1,070,389 38,755,480 Total premium written 42,003, , ,907,612 13,110,554 32,585, ,226,256 Less: Premium ceded (2,379,640) (251,750) (37,009,362) (10,770,544) (25,694,817) (76,106,113) Net premium written 39,623, ,879 93,898,250 2,340,010 6,890, ,120,143 Less: Unearned premium reserves increased from prior period (25,745,547) (66,796) (12,455,537) (626,919) (1,127,671) (40,022,470) Net earned premium 13,878, ,083 81,442,713 1,713,091 5,762, ,097,673 Commission and brokerage income 892, ,701 13,220,484 4,135,944 8,934,088 27,283,582 Total underwriting revenue 14,770, ,784 94,663,197 5,849,035 14,696, ,381,255 Underwriting expenses Claim and loss adjustment expenses (recovery/reversal) 1,659,321 (24,178) 36,475,579 1,813,643 4,357,865 44,282,230 Commission and brokerage expenses 21,554,144 66,190 20,160, ,990 5,750,074 48,206,405 Other underwriting expenses 1,420,154 97,125 27,153, ,338 3,033,756 32,571,441 Contributions to Road Accident Victims Protection Co., Ltd ,667, ,667,376 Contributions to the Office of Insurance Commission 541,412 Contributions to the General Insurance Fund 451,177 Contributions to the Victims Compensation Fund 462,643 Operating expenses 18,385,944 Total underwriting expenses 150,568,628 Loss from underwriting (20,187,373) Net investment revenues 2,882,458 Gains on investments 1,195,975 Fair value gains 6,171,359 Other income 3,513,632 Loss before income tax expenses (6,423,949) Income tax benefits 2,413,032 Loss for the period (4,010,917) 10

20 For the three-month period ended 30 September 2016 Marine and Personal Fire transportation Motor accident Miscellaneous Total Underwriting revenue Premium written Direct premium written 4,250, , ,770,670 1,736,927 14,727, ,139,905 Inward premium written 33,536, ,264 34,217,053 Total premium written 37,787, , ,770,670 1,737,845 15,406, ,356,958 Less: Premium ceded (2,702,084) (285,090) (59,413,857) (1,275,938) (11,022,419) (74,699,388) Net premium written 35,084, ,641 51,356, ,907 4,384,237 91,657,570 Less: Unearned premium reserves increased from prior period (23,396,890) (199,474) (3,146,875) (86,809) (858,052) (27,688,100) Net earned premium 11,688, ,167 48,209, ,098 3,526,185 63,969,470 Commission and brokerage income 940, ,036 26,935, ,519 3,658,791 32,117,110 Total underwriting revenue 12,628, ,203 75,145, ,617 7,184,976 96,086,580 Underwriting expenses Claim and loss adjustment expenses 465,993 28,249 19,773, ,592 1,438,971 21,846,096 Commission and brokerage expenses 19,217,340 76,786 16,935, ,615 2,815,186 39,390,216 Other underwriting expenses 1,048,563 98,340 23,705, , ,852 26,454,332 Contributions to Road Accident Victims Protection Co., Ltd ,129, ,129,878 Contributions to the Office of Insurance Commission 396,420 Contributions to the General Insurance Fund 330,350 Contributions to the Victims Compensation Fund 418,766 Operating expenses 16,761,750 Total underwriting expenses 110,727,808 Loss from underwriting (14,641,228) Net investment revenues 2,336,070 Gains on investments 3,826,453 Fair value losses (5,033,762) Other income 3,202,270 Loss before income tax expenses (10,310,197) Income tax revenue 1,963,374 Loss for the period (8,346,823) During the three-month periods ended 30 September 2017 and 2016, the Company had premiums written from a major insurance broker with premiums written, contributing 54% and 53%, respectively, of total premiums written in each period. 11

21 For the nine-month period ended 30 September 2017 Marine and Personal Fire transportation Motor accident Miscellaneous Total Underwriting revenues Premium written Direct premium written 12,918,235 2,998, ,880,634 25,235,322 81,541, ,573,886 Inward premium written 38,959, ,882 6,031,331 44,997,363 Total premium written 51,877,385 2,998, ,880,634 25,242,204 87,572, ,571,249 Less: Premium ceded (8,350,518) (1,856,601) (117,714,036) (20,844,994) (68,381,181) (217,147,330) Net premium written 43,526,867 1,141, ,166,598 4,397,210 19,191, ,423,919 Less: Unearned premium reserves increased from prior period (11,574,434) (19,658) (84,540,358) (384,245) (4,339,514) (100,858,209) Net earned premium 31,952,433 1,121, ,626,240 4,012,965 14,852, ,565,710 Commission and brokerage income 2,462, ,678 42,390,565 8,069,061 22,737,901 76,286,367 Total underwriting revenues 34,414,595 1,748, ,016,805 12,082,026 37,590, ,852,077 Underwriting expenses Claim and loss adjustment expenses 5,329, ,456 79,689,672 4,485,680 10,120,234 99,828,670 Commission and brokerage expenses 23,704, ,715 63,106,360 2,779,533 15,338, ,280,307 Other underwriting expenses 2,334, ,492 83,492,865 1,761,202 7,085,256 95,027,595 Contributions to Road Accident Victims Protection Co., Ltd ,805, ,805,452 Contributions to the Office of Insurance Commission 1,597,591 Contributions to the General Insurance Fund 1,331,566 Contributions to the Victims Compensation Fund 1,453,506 Operating expenses 54,411,379 Total underwriting expenses 376,736,066 Loss from underwriting (40,883,989) Net investment revenues 8,458,543 Gains on investments 3,857,469 Fair value gains 5,988,618 Other income 10,239,903 Loss before income tax expenses (12,339,456) Income tax benefits 3,873,500 Loss for the period (8,465,956) 12

22 For the nine-month period ended 30 September 2016 Marine and Personal Fire transportation Motor accident Miscellaneous Total Underwriting revenues Premium written Direct premium written 11,066,220 2,839, ,170,837 4,610,309 51,690, ,377,537 Inward premium written 34,308, ,699 5,009,408 39,322,739 Total premium written 45,374,846 2,839, ,170,837 4,615,008 56,699, ,700,276 Less: Premium ceded (10,645,274) (2,191,291) (189,003,031) (3,288,081) (53,098,604) (258,226,281) Net premium written 34,729, , ,167,806 1,326,927 3,601, ,473,995 Add (less): Unearned premium reserves (increased) decreased from prior period (21,649,013) (241,428) (8,332,429) (421,383) 1,370,418 (29,273,835) Net earned premium 13,080, , ,835, ,544 4,971, ,200,160 Commission and brokerage income 2,208, ,846 85,574,184 1,212,883 12,865, ,482,093 Total underwriting revenues 15,289,540 1,027, ,409,561 2,118,427 17,836, ,682,253 Underwriting expenses Claim and loss adjustment expenses (recovery/reversal) 1,687,410 31,180 80,214,547 (376,246) 2,184,294 83,741,185 Commission and brokerage expenses 20,892, ,307 53,716, ,504 7,210,252 83,005,085 Other underwriting expenses 1,550, ,148 71,417, ,003 3,057,601 77,127,094 Contributions to Road Accident Victims Protection Co., Ltd ,252, ,252,379 Contributions to the Office of Insurance Commission 1,261,133 Contributions to the General Insurance Fund 1,050,944 Contributions to the Victims Compensation Fund 1,326,725 Operating expenses 50,223,181 Total underwriting expenses 313,987,726 Loss from underwriting (39,305,473) Net investment revenues 8,229,293 Losses on investments (520,471) Fair value gains 6,720,666 Other income 10,977,124 Loss before income tax expenses (13,898,861) Income tax revenue 7,148,853 Loss for the period (6,750,008) During the nine-month periods ended 30 September 2017 and 2016, the Company had premiums written from a major insurance broker with premiums written, contributing 52% and 51%, respectively, of total premiums written in each period. 13

23 The following table presents the Company s operating segmental assets as at 30 September 2017 and 31 December Assets of insurance segment Assets of Marine and Total insurance investments Unallocated Fire transportation Motor Miscellaneous segment segment assets Total Assets As at 30 September ,274,353 1,431, ,541, ,090, ,339, ,303,026 99,243,114 1,066,885,143 As at 31 December ,441,284 1,260, ,429,655 78,764, ,895, ,402, ,736, ,034,944 Liabilities As at 30 September ,374,364 2,402, ,433, ,143, ,354,061-97,795, ,149,496 As at 31 December ,730,338 2,112, ,731,882 98,403, ,978,479-58,852, ,831, Earnings per share Basic earnings per share is calculated by dividing losses for the periods by the weighted average number of ordinary shares in issue during the periods. 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 summarized below. Name of related parties Type of business Relationship with the Company T.C.C. Land Co., Ltd. Holding company 67.82% of shares held in the Company (1) 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 (1) Before 16 June 2017, the Company s parent company is T.C.C. Corporation Company Limited, which held 67.82% of the issued and paid-up share capital of the Company. 14

24 16.2 Significant related party transactions During the three-month and nine-month periods ended 30 September 2017 and 2016, 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 30 September For the nine-month periods ended 30 September Pricing Policy Siam Food Products Plc. Premium written Premium rates depending on type of insurance Southeast Insurance Plc. Inward premium written (1) 38,011 33,338 41,881 37,280 Normal commercial terms for reinsurance depending on type of insurance and reinsurance contracts Premium ceded to reinsurers , Normal commercial terms for reinsurance depending on type of insurance and reinsurance contracts Commission and brokerage income As stated in the agreement upon normal commercial terms Commission and brokerage expenses 20,708 18,736 21,346 18,821 As stated in the agreement upon normal commercial terms Southeast Life Insurance Plc. Life insurance premium paid - - 1,172 1,169 As stated in the agreement upon normal commercial terms Southeast Capital Co., Ltd. Car rental expenses , As stated in the agreement upon normal commercial terms (1) Presented as a part of Gross premium written in the statements of comprehensive income Outstanding balances As at 30 September 2017 and 31 December 2016, the Company had the following significant balances with its related companies. (Unit: Thousand Baht) 30 September December 2016 Southeast Insurance Plc. Amounts due from (due to) reinsurers 492 (45) 15

25 16.4 Directors and key management s benefits During the three-month and nine-month periods ended 30 September 2017 and 2016, the Company had employee benefit expenses incurred on its directors and key management as below. (Unit: Million Baht) For the three-month periods ended 30 September For the nine-month periods ended 30 September Short-term employee benefits Post-employment benefits Total Assets placed with the Registrar As at 30 September 2017 and 31 December 2016, 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) 30 September December 2016 Cost Fair value Cost Fair value Placed as guarantee securities Deposits with financial institutions Placed as insurance reserves Deposits with financial institutions Total

26 18. Commitments and contingent liabilities 18.1 Operating lease commitments The Company has entered into several lease agreements in respect of the lease of computer equipment and its related services. As at 30 September 2017 and 31 December 2016, future minimum lease payments required under these operating lease contracts were as follows: (Unit: Million Baht) Payable within 30 September December 2016 Within 1 year Over 1 year but not over 5 years Total Bank guarantees As at 30 September 2017 and 31 December 2016, 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 30 September 2017 and 31 December 2016, the Company had litigation cases being claimed for a total compensation of approximately Baht 60.8 million and Baht 20.8 million, respectively, for being the insurer. The outcome of those litigation cases have yet been finalised. The maximum sum insured of all policies under the litigation cases totaled Baht 32.2 million and Baht 34.1 million, respectively. However, the Company already considered and set aside provision for losses that may be arisen amounting to approximately Baht 8.3 million and Baht 9.2 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. 17

27 19. Fair value of financial instruments The Company applies a quoted market price in an active market to measure its assets and liabilities that are required to be measured at fair value by relevant financial reporting standards except in case that there is no active market of an identical asset or liability or when a quoted market price is not available, the Company measures fair value using valuation technique that is appropriate in the circumstances and maximises the use of relevant observable inputs related to assets and liabilities that are required to be measured at fair value. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into three levels based on categories of inputs to be used in fair value measurements as follows: Level 1 - Use of quoted market prices in an observable active market for such assets or liabilities Level 2 - Use of other observable inputs for such assets or liabilities, whether directly or indirectly Level 3 - Use of unobservable inputs such as estimates of future cash flows As of 30 September 2017 and 31 December 2016, the Company had the following assets that were measured at fair value using different levels of inputs as follows: 30 September December 2016 Level 1 Level 2 Total Level 1 Level 2 Total Trading investments Government and state enterprise securities - 66,652,012 66,652,012-70,507,254 70,507,254 Private sector debt securities - 148,742, ,742, ,639, ,639,812 Equity securities 103,754,649 13,692, ,447,471 71,115,869 8,920,149 80,036,018 Warrants 532, ,

28 Valuation techniques and inputs for Level 2 valuation (a) (b) The fair values of investments in debt securities are determined using the yield curve as announced by the Thai Bond Market Association. The fair value of investments in investment units that are not listed on the Stock Exchange of Thailand is determined by using the net asset value per unit as announced by the fund managers. During the periods, 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 9 November