Bangkok Insurance Public Company Limited Review report and interim financial statements 30 June 2017

Transcription

1 Bangkok Insurance Public Company Limited Review report and interim financial statements 30 June 2017

2 Independent Auditor s Report on Review of Interim Financial Information To the Shareholders of Bangkok Insurance Public Company Limited I have reviewed the accompanying statement of financial position, in which the equity method is applied, of Bangkok Insurance Public Company Limited as at 30 June 2017, the related statements of comprehensive income, in which the equity method is applied, for the three-month and six-month periods then ended, the related statement of changes in owners equity and cash flows, in which the equity method is applied, for the six-month period then ended, as well as the condensed notes to the financial statements. I have also reviewed the separate financial information of Bangkok Insurance Public Company Limited for the same period. 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: 3 August 2017

3 Bangkok Insurance Public Company Limited Statements of financial position As at 30 June 2017 and 31 December 2016 Financial statements in which the equity method is applied Separate financial statements Note 30 June December June December 2016 (Unaudited but (Audited) (Unaudited but (Audited) reviewed) reviewed) Assets Cash and cash equivalents 3 392,644, ,484, ,644, ,484,321 Premium receivables - net 4 1,692,916,726 2,301,967,498 1,692,916,726 2,301,967,498 Accrued investment income 68,035,240 54,217,445 68,035,240 54,217,445 Reinsurance assets - net 5 5,656,579,894 4,886,344,426 5,656,579,894 4,886,344,426 Reinsurance receivables - net 6 193,757, ,230, ,757, ,230,580 Investment assets Investments in securities - net 7 45,827,413,373 45,656,857,271 45,827,413,373 45,656,857,271 Loans - net 8 1,396,738,742 1,427,371,610 1,396,738,742 1,427,371,610 Investments in associates ,415, ,373, ,395, ,395,122 Investment properties - net ,351, ,895, ,351, ,895,663 Premises and equipment - net 11 1,090,857,060 1,157,710,551 1,090,857,060 1,157,710,551 Intangible assets - net ,502, ,358, ,502, ,358,409 Other assets Land and building leasehold rights - net 51,481,445 53,967,595 51,481,445 53,967,595 Others 600,924, ,824, ,924, ,824,232 Total assets 57,624,619,599 57,332,603,118 57,545,599,137 57,259,624,723 The accompanying notes are an integral part of the financial statements.

4 Bangkok Insurance Public Company Limited Statements of financial position (continued) As at 30 June 2017 and 31 December 2016 Financial statements in which the equity method is applied Separate financial statements Note 30 June December June December 2016 (Unaudited but (Audited) (Unaudited but (Audited) reviewed) reviewed) Liabilities and owners' equity Liabilities Insurance contract liabilities 14 14,295,537,839 13,480,671,518 14,295,537,839 13,480,671,518 Due to reinsurers 15 1,781,991,447 1,931,711,634 1,781,991,447 1,931,711,634 Income tax payable 142,063, ,439, ,063, ,439,797 Employee benefit obligations 332,968, ,970, ,968, ,970,794 Deferred tax liabilities ,612,126,566 4,773,816,324 4,596,322,474 4,759,220,645 Other liabilities Premiums received in advance 1,763,988,955 1,705,263,043 1,763,988,955 1,705,263,043 Commission payables 329,957, ,759, ,957, ,759,217 Accrued expenses 519,255, ,149, ,255, ,149,539 Liabilities under finance lease agreements 61,072,875 68,685,079 61,072,875 68,685,079 Others 682,556, ,407, ,556, ,407,297 Total liabilities 24,521,518,629 24,078,874,242 24,505,714,537 24,064,278,563 Owners' equity Share capital Registerred, issued and paid up 106,470,000 ordinary shares of Baht 10 each 1,064,700,000 1,064,700,000 1,064,700,000 1,064,700,000 Share premium 1,442,500,000 1,442,500,000 1,442,500,000 1,442,500,000 Retained earnings Appropriated Statutory reserve 106,470, ,470, ,470, ,470,000 Other reserve 3,100,000,000 3,100,000,000 3,100,000,000 3,100,000,000 Unappropriated 5,907,990,573 5,472,711,707 5,844,774,203 5,414,328,991 Other component of owners' equity Revaluation surplus on available-for-sale investments - net of income taxes ,481,440,397 22,067,347,169 21,481,440,397 22,067,347,169 Total owners' equity 33,103,100,970 33,253,728,876 33,039,884,600 33,195,346,160 Total liabilities and owners' equity 57,624,619,599 57,332,603,118 57,545,599,137 57,259,624,723 The accompanying notes are an integral part of the financial statements. Directors

5 Bangkok Insurance Public Company Limited Statements of comprehensive income For the three-month periods ended 30 June 2017 and 2016 Financial statements in which the equity method is applied Separate financial statements Note Profit or loss: Revenues Gross premium written 3,769,342,347 3,661,364,858 3,769,342,347 3,661,364,858 Less: Premium ceded to reinsurers (1,088,832,874) (963,703,120) (1,088,832,874) (963,703,120) Net premium written 2,680,509,473 2,697,661,738 2,680,509,473 2,697,661,738 Add: Unearned premium reserves decreased from prior period 77,604,780 41,484,236 77,604,780 41,484,236 Net earned premium 2,758,114,253 2,739,145,974 2,758,114,253 2,739,145,974 Fee and commission income 251,075, ,838, ,075, ,838,728 Shares of profits from investments in associates, accounted for under the equity method 9.2 6,272,473 2,439, Net investment revenue 375,697, ,049, ,697, ,049,159 Gains (losses) on investments (6,923,400) 33,645,751 (6,923,400) 33,645,751 Other income 43,300,582 37,497,448 43,300,582 37,497,448 Total revenues 3,427,536,914 3,390,616,436 3,421,264,441 3,388,177,060 Expenses Gross claims 2,485,134,280 1,481,371,674 2,485,134,280 1,481,371,674 Less: Claim recovery from reinsurers (1,102,064,637) (228,344,256) (1,102,064,637) (228,344,256) Commissions and brokerages 524,646, ,800, ,646, ,800,683 Other underwriting expenses 463,119, ,716, ,119, ,716,584 Operating expenses 207,767, ,290, ,767, ,290,565 Investment expenses 22,140,051 20,875,969 22,140,051 20,875,969 Finance costs 884, , , ,054 Total expenses 2,601,628,180 2,491,641,273 2,601,628,180 2,491,641,273 Profits before income tax expenses 825,908, ,975, ,636, ,535,787 Less: Income tax expenses 13.2 (89,198,226) (130,792,431) (87,943,733) (130,304,555) Profits for the periods 736,710, ,182, ,692, ,231,232 Other comprehensive income (loss): Items to be recognised in profit or loss in subsequent periods: Losses on revaluation of available-for-sale investments (1,638,233,599) (3,774,143,725) (1,638,233,599) (3,774,143,725) Add: Income taxes 327,646, ,828, ,646, ,828,745 Items to be recognised in profit or loss in subsequent periods - net of income taxes (1,310,586,879) (3,019,314,980) (1,310,586,879) (3,019,314,980) Other comprehensive loss for the periods (1,310,586,879) (3,019,314,980) (1,310,586,879) (3,019,314,980) Total comprehensive loss for the periods (573,876,371) (2,251,132,248) (578,894,351) (2,253,083,748) Earnings per share: 16 Basic earnings per share Profits for the periods The accompanying notes are an integral part of the financial statements.

6 Bangkok Insurance Public Company Limited Statements of comprehensive income For the six-month periods ended 30 June 2017 and 2016 Financial statements in which the equity method is applied Separate financial statements Note Profit or loss: Revenues Gross premium written 7,978,056,036 7,813,905,908 7,978,056,036 7,813,905,908 Less: Premium ceded to reinsurers (2,459,168,034) (2,324,157,320) (2,459,168,034) (2,324,157,320) Net premium written 5,518,888,002 5,489,748,588 5,518,888,002 5,489,748,588 Add (less): Unearned premium reserves (increased) decreased from prior period 24,811,799 (891,174) 24,811,799 (891,174) Net earned premium 5,543,699,801 5,488,857,414 5,543,699,801 5,488,857,414 Fee and commission income 555,797, ,011, ,797, ,011,092 Shares of profits from investments in associates, accounted for under the equity method 9.2 6,042,067 2,277, Net investment revenue 671,175, ,019, ,175, ,019,087 Gains on investments 14,079,310 60,995,805 14,079,310 60,995,805 Other income 95,398,480 87,548,677 95,398,480 87,548,677 Total revenues 6,886,192,627 6,844,709,674 6,880,150,560 6,842,432,075 Expenses Gross claims 4,664,362,125 3,404,633,012 4,664,362,125 3,404,633,012 Less: Claim recovery from reinsurers (1,732,156,721) (543,614,242) (1,732,156,721) (543,614,242) Commissions and brokerages 1,072,621,163 1,116,987,005 1,072,621,163 1,116,987,005 Other underwriting expenses 904,469, ,905, ,469, ,905,849 Operating expenses 471,831, ,383, ,831, ,383,052 Investment expenses 43,788,362 42,749,325 43,788,362 42,749,325 Finance costs 1,808,019 1,906,618 1,808,019 1,906,618 Total expenses 5,426,723,356 5,347,950,619 5,426,723,356 5,347,950,619 Profits before income tax expenses 1,459,469,271 1,496,759,055 1,453,427,204 1,494,481,456 Less: Income tax expenses 13.2 (172,446,932) (206,435,826) (171,238,519) (205,980,305) Profits for the periods 1,287,022,339 1,290,323,229 1,282,188,685 1,288,501,151 Other comprehensive income (loss): Items to be recognised in profit or loss in subsequent periods: Losses on revaluation of available-for-sale investments (732,383,465) (3,928,315,030) (732,383,465) (3,928,315,030) Add: Income taxes 146,476, ,663, ,476, ,663,006 Items to be recognised in profit or loss in subsequent periods - net of income taxes (585,906,772) (3,142,652,024) (585,906,772) (3,142,652,024) Other comprehensive loss for the periods (585,906,772) (3,142,652,024) (585,906,772) (3,142,652,024) Total comprehensive income (loss) for the periods 701,115,567 (1,852,328,795) 696,281,913 (1,854,150,873) Earnings per share: 16 Basic earnings per share Profits for the periods The accompanying notes are an integral part of the financial statements.

7 Bangkok Insurance Public Company Limited Statements of cash flows For the six-month periods ended 30 June 2017 and 2016 Financial statements in which the equity method is applied Separate financial statements Note Cash flows from (used in) operating activities Direct premium written 8,320,530,337 7,996,453,453 8,320,530,337 7,996,453,453 Cash paid for reinsurance (1,151,427,097) (1,335,269,399) (1,151,427,097) (1,335,269,399) Interest income 135,839, ,537, ,839, ,537,139 Dividend income 520,726, ,025, ,726, ,025,075 Other investment income 73,561,326 71,760,824 73,561,326 71,760,824 Other income 16,463,274 12,701,581 16,463,274 12,701,581 Losses incurred on direct insurance (3,260,849,670) (3,340,646,949) (3,260,849,670) (3,340,646,949) Commissions and brokerages on direct insurance (1,045,580,195) (1,022,582,659) (1,045,580,195) (1,022,582,659) Other underwriting expenses (1,010,408,842) (950,762,261) (1,010,408,842) (950,762,261) Operating expenses (620,803,591) (488,661,399) (620,803,591) (488,661,399) Investment expenses (30,537,149) (29,493,181) (30,537,149) (29,493,181) Income taxes (177,082,963) (176,028,263) (177,082,963) (176,028,263) Investments in securities (471,793,309) (765,283,578) (471,793,309) (765,283,578) Loans 30,632, ,717,201 30,632, ,717,201 Deposits at financial institutions (417,276,193) 62,592,231 (417,276,193) 62,592,231 Net cash provided by operating activities 911,994,654 1,036,059, ,994,654 1,036,059,815 Cash flows from (used in) investing activities Cash flows from Premises and equipment 6,205,841 4,055,611 6,205,841 4,055,611 Cash provided by investing activities 6,205,841 4,055,611 6,205,841 4,055,611 Cash flows used in Premises and equipment (67,349,007) (68,767,290) (67,349,007) (68,767,290) Intangible assets (18,947,455) (77,759,364) (18,947,455) (77,759,364) Cash used in investing activities (86,296,462) (146,526,654) (86,296,462) (146,526,654) Net cash used in investing activities (80,090,621) (142,471,043) (80,090,621) (142,471,043) Cash flows from (used in) financing activites Dividends paid 17 (851,743,473) (718,672,500) (851,743,473) (718,672,500) Net cash used in financing activities (851,743,473) (718,672,500) (851,743,473) (718,672,500) Net increase (decrease) in cash and cash equivalents (19,839,440) 174,916,272 (19,839,440) 174,916,272 Cash and cash equivalents at beginning of the periods 412,484, ,703, ,484, ,703,073 Cash and cash equivalents at end of the periods 392,644, ,619, ,644, ,619,345 (88,974,464) (88,974,464) The accompanying notes are an integral part of the financial statements.

8 Bangkok Insurance Public Company Limited Statements of changes in owners' equity For the six-month periods ended 30 June 2017 and 2016 Financial statements in which the equity method is applied Other component of equity Revaluation surplus Issued and Retained earnings on available-for-sale paid-up Appropriated investments - net Note share capital Share premium Statutory reserve Other reserve Unappropriated of income taxes Total Balance as at 1 January ,064,700,000 1,442,500, ,470,000 3,100,000,000 4,401,022,684 24,341,477,582 34,456,170,266 Dividend paid (718,672,500) - (718,672,500) Profit for the period ,290,323,229-1,290,323,229 Other comprehensive loss for the period (3,142,652,024) (3,142,652,024) Balance as at 30 June ,064,700,000 1,442,500, ,470,000 3,100,000,000 4,972,673,413 21,198,825,558 31,885,168,971 Balance as at 1 January ,064,700,000 1,442,500, ,470,000 3,100,000,000 5,472,711,707 22,067,347,169 33,253,728,876 Dividend paid (851,743,473) - (851,743,473) Profit for the period ,287,022,339-1,287,022,339 Other comprehensive loss for the period (585,906,772) (585,906,772) Balance as at 30 June ,064,700,000 1,442,500, ,470,000 3,100,000,000 5,907,990,573 21,481,440,397 33,103,100,970 The accompanying notes are an integral part of the financial statements.

9 Bangkok Insurance Public Company Limited Statements of changes in owners' equity (continued) For the six-month periods ended 30 June 2017 and 2016 Separate financial statements Other component of equity Revaluation surplus Issued and Retained earnings on available-for-sale paid-up Appropriated investments - net Note share capital Share premium Statutory reserve Other reserve Unappropriated of income taxes Total Balance as at 1 January ,064,700,000 1,442,500, ,470,000 3,100,000,000 4,349,614,994 24,341,477,582 34,404,762,576 Dividend paid (718,672,500) - (718,672,500) Profit for the period ,288,501,151-1,288,501,151 Other comprehensive loss for the period (3,142,652,024) (3,142,652,024) Balance as at 30 June ,064,700,000 1,442,500, ,470,000 3,100,000,000 4,919,443,645 21,198,825,558 31,831,939,203 Balance as at 1 January ,064,700,000 1,442,500, ,470,000 3,100,000,000 5,414,328,991 22,067,347,169 33,195,346,160 Dividend paid (851,743,473) - (851,743,473) Profit for the period ,282,188,685-1,282,188,685 Other comprehensive loss for the period (585,906,772) (585,906,772) Balance as at 30 June ,064,700,000 1,442,500, ,470,000 3,100,000,000 5,844,774,203 21,481,440,397 33,039,884,600 The accompanying notes are an integral part of the financial statements.

10 Bangkok Insurance Public Company Limited Table of contents for notes to interim financial statements For the three-month and six-month periods ended 30 June 2017 and 2016 Note Contents Page 1. Corporate information Basis for preparation of financial statements Cash and cash equivalents Premium receivables Reinsurance assets Reinsurance receivables Investments in securities Loans and interest receivables Investments in associates Investment properties Premises and equipment Intangible assets Deferred tax asset/liabilities and income tax expenses Insurance contract liabilities Due to reinsurers Earnings per share Dividends paid Segment information reporting Related party transactions Assets with the Registrar Assets with restrictions and commitments Commitments and contingent liabilities Fair value of financial instruments Approval of interim financial statements... 28

11 Bangkok Insurance Public Company Limited Notes to interim financial statements For the three-month and six-month periods ended 30 June 2017 and Corporate information Bangkok Insurance Public Company Limited ( the Company ) is a public company incorporated and domiciled in Thailand, and listed on the Stock Exchange of Thailand. The Company s major shareholder is Bangkok Bank Pubic Company Limited whereby as at 30 June 2017 and 31 December 2016, such major shareholder held 9.97% of the issued and paid-up ordinary shares of the Company. The Company is principally engaged in the provision of non-life insurance. The Company s registered office is located at No. 25, Bangkok Insurance Building, South Sathon Road, Tung Ma Ha Mek, Sathon, Bangkok. 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 No. 34: Interim Financial Reporting, and in accordance with the format of financial statements specified in the Notification of the Office of Insurance Commission ( OIC ) regarding criteria, procedures, terms and conditions for preparation and submission of financial statements and operating performance reports of non-life insurance companies dated 4 March 2016 whereby the Company choose 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 those presented 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, they 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 such financial statements in Thai language. 1

12 2.2 The financial statements in which the equity method is applied The Company prepares the financial statements, in which equity method is applied, which has presented investments in associates under the equity method. 2.3 Separate financial statements The Company prepares its separate financial statements, which has presented investments in associates under the cost method. 2.4 Revised and new financial reporting standards During the period, the Company adopted the revised financial reporting standards and interpretations (revised 2016) and new accounting treatment guidance which is 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 revised and new financial reporting standards does not have any impact on these financial statements. Moreover, the financial reporting standard that involves changes to key principles is summarised below. TAS 27 (revised 2016) Separate Financial Statements This revised standard stipulates an additional option to account for investments in subsidiaries, joint ventures and associates in separate financial statements under the equity method, as described in TAS 28 (revised 2016) Investments in Associates and Joint Ventures. However, the entity is to apply the same accounting treatment for each category of investment and if an entity elects to account for such investments using the equity method in the separate financial statements, it has to adjust the transaction retrospectively. Hence, the management decided to continue its accounting treatment on its investments in associates under the cost method in the separate financial statements and therefore there is no impact on these separate financial statements. 2.5 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 2016, except for the adoption of revised and new financial reporting standards as described in Note 2.4 to the interim financial statements. 2

13 3. Cash and cash equivalents Financial statements in which the equity method is applied and Separate financial statements 30 June December 2016 Cash on hand 2,654,381 2,851,115 Deposits at banks with no fixed maturity date 59,990, ,633,206 Deposits at banks with fixed maturity date 330,000, ,000,000 Total cash and cash equivalents 392,644, ,484,321 As at 30 June 2017 and 31 December 2016, saving deposits and fixed deposits carried interests at the rates between 0.05 and 1.45 percent per annum and 0.05 and 1.00 percent per annum, respectively. 4. Premium receivables As at 30 June 2017 and 31 December 2016, the balances of premium receivables are classified by overdue periods, counted from the maturity date, under the stipulated law of the premium collection as follows: Financial statements in which the equity method is applied and Separate financial statements 30 June December 2016 Not yet due 1,161,081,842 1,698,668,793 Overdue not longer than 30 days 192,759, ,853,642 Overdue 31 days to 60 days 117,313, ,378,445 Overdue 61 days to 90 days 84,585,299 85,243,530 Overdue 91 days to 1 year 137,176, ,823,088 Overdue longer than 1 year 28,274,444 22,981,531 Total 1,721,191,170 2,324,949,029 Less: Allowance for doubtful accounts (28,274,444) (22,981,531) Premium receivables - net 1,692,916,726 2,301,967,498 3

14 For premium receivables due from 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. 5. Reinsurance assets Financial statements in which the equity method is applied and Separate financial statements 30 June December 2016 Insurance reserves refundable from reinsurers Loss reserves 3,680,988,226 2,807,288,733 Unearned premium reserves 2,018,699,567 2,124,622,742 Total 5,699,687,793 4,931,911,475 Less: Allowance for doubtful accounts (43,107,899) (45,567,049) Reinsurance assets - net 5,656,579,894 4,886,344,426 As at 30 June 2017 and 31 December 2016, Insurance reserves refundable from reinsurers include insurance reserves refundable from reinsurers due to flood situation in 2011 amounting to Baht 35.3 million and Baht million, respectively. 6. Reinsurance receivables Financial statements in which the equity method is applied and Separate financial statements 30 June December 2016 Amounts deposited on reinsurance 35,961,169 37,688,914 Amounts due from reinsurers 202,579, ,542,813 Total 238,541, ,231,727 Less: Allowance for doubtful accounts (44,783,800) (112,001,147) Reinsurance receivables - net 193,757, ,230,580 4

15 7. Investments in securities 7.1 Classified by type of investment Financial statements in which the equity method is applied and Separate financial statements 30 June December 2016 Cost/ Cost/ Amortised cost Fair value Amortised cost Fair value Available-for-sale investments Government and state enterprise securities 1,924,382,383 1,931,087,555 1,894,339,916 1,901,523,224 Private sector debt securities 1,306,688,744 1,332,041,283 1,092,027,542 1,115,812,842 Equity securities 6,816,458,519 33,636,201,305 6,568,477,215 34,121,692,568 Total 10,047,529,646 36,899,330,143 9,554,844,673 37,139,028,634 Add: Unrealised gains 26,851,800,497-27,584,183,961 - Total available-for-sale investments 36,899,330,143 36,899,330,143 37,139,028,634 37,139,028,634 Held-to-maturity investments Deposits at financial institutions which matured over 3 months 8,247,932,148 7,830,655,955 Total held-to-maturity investments 8,247,932,148 7,830,655,955 General investments Domestic equity securities 609,234, ,234,808 Foreign equity securities 166,120, ,120,034 Total 775,354, ,354,842 Less: Allowance for impairment (95,203,760) (88,182,160) General investments - net 680,151, ,172,682 Investment in securities - net 45,827,413,373 45,656,857,271 On 12 May 2017, the Board of Directors Meeting No. 2/2017 of the Company resolved to approve the sale of 1,159,950 ordinary shares in EMCS Thai Company Limited, for Baht 50 per share, totaling Baht 58.0 million, to Thai Reinsurance Public Company Limited and the Company already entered into the Share Sale and Purchase Agreement dated 25 June

16 7.2 Revaluation surplus on available-for-sale investments Financial statements in which the equity method is applied and Separate financial statements For the six-month period ended 30 June 2017 For the year ended 31 December 2016 Revaluation surplus on available-for-sale investments - beginning of the periods 27,584,183,961 30,426,846,978 Gains (losses) on revaluation during the periods (713,999,126) (2,797,439,533) Gains on sales of available-for-sale investments during the periods transferred to be recognised in profit or loss (18,384,338) (45,223,484) Revaluation surplus on available-for-sale investments - end of the periods 26,851,800,497 27,584,183,961 Less: Income taxes (5,370,360,100) (5,516,836,792) Revaluation surplus on available-for-sale investments - net of income taxes 21,481,440,397 22,067,347, Investments subject to restriction As at 30 June 2017 and 31 December 2016, the Company placed certain investments as securities with the Registrar and the bank to secure bank overdraft facilities and others as required in the normal course of business of the Company as described in Notes 20 and 21 to the interim financial statements. 6

17 8. Loans and interest receivables As at 30 June 2017 and 31 December 2016, the balances of loans and interest receivables, classified by overdue periods, are as follows: Financial statements in which the equity method is applied and Separate financial statements 30 June 2017 Mortgaged loans Other loans Total Accrued Accrued Accrued Overdue years Principal interest Principal interest Principal interest (1) Total Not yet due 1,236,591, ,765 5,011,734-1,241,603, ,765 1,242,091,411 Overdue Less than 3 months 1,655,907 17, ,655,907 17,120 1,673, months 104,462, ,462, ,462,076 Longer than 12 months 49,017, ,017,113-49,017,113 Loans and interest receivables 1,391,727, ,885 5,011,734-1,396,738, ,885 1,397,243,627 (1) Shown as a part of accrued investment income in the statements of financial position Financial statements in which the equity method is applied and Separate financial statements 31 December 2016 Mortgaged loans Other loans Total Accrued Accrued Accrued Overdue years Principal interest Principal interest Principal interest (1) Total Not yet due 1,264,559,264 1,008,440 3,380,260-1,267,939,524 1,008,440 1,268,947,964 Overdue 3-6 months 108,494,017 2,493, ,494,017 2,493, ,987, months 847, , ,925 Longer than 12 months 50,090, ,090,144-50,090,144 Loans and interest receivables 1,423,991,350 3,501,915 3,380,260-1,427,371,610 3,501,915 1,430,873,525 (1) Shown as a part of accrued investment income in the statements of financial position Credit limits granted to each employee under the Company s employee welfare plan are not exceeding Baht 450,000 for personal guarantee loans with interest being charged at the rate of 3.0% per annum, and not exceeding 40 times of employee s salary for mortgaged loans with interest being charged at the rate of 2.5% per annum. As at 30 June 2017 and 31 December 2016, the outstanding balances of employee loans were Baht 46.0 million and Baht 39.8 million, respectively. 7

18 9. Investments in associates 9.1 Details of associates Issued and paid-up share capital as at Shareholding percentage Country of 30 June 31 December 30 June 31 December Company s name Nature of business incorporation (USD) (USD) (%) (%) Asia Insurance (Cambodia) Plc. Non-life insurance Cambodia 7,000,000 7,000, Asian Insurance International (Holding) Limited Holding company Bermuda 5,740,000 5,740, Bangkok Insurance (Lao) Limited Non-life insurance Lao 2,000,000 2,000, Financial statements in which the Company s name equity method is applied Separate financial statements 30 June December June December 2016 Asia Insurance (Cambodia) Plc. 72,114,126 69,861,966 30,202,059 30,202,059 Asian Insurance International (Holding) Limited 113,511, ,468,179 72,054,063 72,054,063 Bangkok Insurance (Lao) Limited 27,789,472 28,043,372 32,139,000 32,139,000 Total 213,415, ,373, ,395, ,395, Shares of profits (losses) and dividends income Financial statements in which the equity method is applied Share of profits (losses) from investments in associates for the three-month periods ended 30 June Financial statements in which the equity method is applied Share of profits (losses) from investments in associates for the six-month periods ended 30 June Separate financial statements Dividend received for the six-month periods ended 30 June Company s name Asia Insurance (Cambodia) Plc. 1,408,387 2,304,513 2,252,160 3,220, Asian Insurance International (Holding) Limited 4,070,176 (96,454) 4,043,807 (147,755) - - Bangkok Insurance (Lao) Limited 793, ,317 (253,900) (794,901) - - Total 6,272,473 2,439,376 6,042,067 2,277,

19 9.3 Summarised financial information of associates (Unit: Million Baht) Total revenues for the six-month Profits (losses) for the six-month Total assets as at Total liabilities as at periods ended periods ended 30 June 31 December 30 June 31 December 30 June 30 June Company s name Asia Insurance (Cambodia) Plc Asian Insurance International (Holding) Limited (0.2) (0.4) Bangkok Insurance (Lao) Limited (1.5) (1.4) As at 30 June 2017 and 31 December 2016, the Company accounted for investments in associates under the equity method (in the financial statements in which the equity method is applied) based on the financial information, as prepared by the associates management, which has yet been reviewed by their external auditors. 10. Investment properties Financial statements in which the equity method is applied and Separate financial statements Net book value as at 1 January ,895,663 Depreciation charge for the period (8,544,008) Net book value as at 30 June ,351,655 As at 30 June 2017 and 31 December 2016, the fair values of the investment properties amounting to Baht million and Baht million, respectively, which were appraised by an independent valuer using the income approach. The key assumptions used in such appraisal are yield rate, inflation rate, long-term vacancy rate and long-term growth rate in rental fee, etc. 9

20 11. Premises and equipment Financial statements in which the equity method is applied and Separate financial statements Office furniture, Condominium fixtures and Construction in Land Buildings unit equipment Motor vehicles progress Total Net book value as at 1 January ,132, ,444,698 29, ,026,137 75,594,132 43,483,290 1,157,710,551 Addition during the period - at cost ,051,586 3,807,465 22,677,234 70,536,285 Transfer in (out) during the period - at cost ,186,395 - (23,186,395) - Disposals during the period - at net book value (6,310) (34,145) - (40,455) Depreciation charge for the period - (13,623,465) - (111,354,633) (12,371,223) - (137,349,321) Net book value as at 30 June ,132, ,821,233 29, ,903,175 66,996,229 42,974,129 1,090,857, Intangible assets Financial statements in which the equity method is applied and Separate financial statements Computer Computer softwares softwares under development Total Net book value as at 1 January ,854,888 26,503, ,358,409 Addition during the period - at cost 17,607,759 1,339,696 18,947,455 Transfer in (out) during the period - at cost 24,350,521 (24,350,521) - Amortisation for the period (34,802,872) - (34,802,872) Net book value as at 30 June ,010,296 3,492, ,502,992 10

21 13. Deferred tax asset/liabilities and income tax expenses 13.1 Deferred tax assets/liabilities As at 30 June 2017 and 31 December 2016, the components of deferred tax assets and liabilities are as follows: Changes in deferred tax assets or Financial statements in which the equity method is applied liabilities for the six-month periods ended 30 June 30 June December Deferred tax assets arose from: Allowance for impairment on investments 19,040,752 17,636,432 1,404,320 (3,494,800) Premium reserves 159,944, ,237,780 (7,293,513) 15,159,148 Loss reserves of claims incurred and reported 447,746, ,915,316 18,831,213 (25,524,919) Loss reserves of claims incurred but not yet reported 69,093,252 69,120,229 (26,977) 17,905,247 Provision for long-term employee benefits 67,584,124 64,784,554 2,799,570 2,793,517 Others 11,619,097 10,912, ,866 (2,430,965) Total 775,028, ,606,542 Deferred tax liabilities arose from: Gains on revaluation of available-for-sale investments 5,370,360,100 5,516,836, ,476, ,663,006 Actuarial gains 990, , Shares of profits from investments in associates 15,804,092 14,595,679 (1,208,413) (455,521) Total 5,387,154,587 5,532,422,866 Deferred tax liabilities 4,612,126,566 4,773,816,324 Total changes 161,689, ,614,713 Recognition of changes in: - Profit or loss 15,213,066 3,951,707 - Other comprehensive income 146,476, ,663, ,689, ,614,713 11

22 Changes in deferred tax assets or liabilities for the six-month periods Separate financial statements ended 30 June 30 June December Deferred tax assets arose from: Allowance for impairment on investments 19,040,752 17,636,432 1,404,320 (3,494,800) Premium reserves 159,944, ,237,780 (7,293,513) 15,159,148 Loss reserves of claims incurred and reported 447,746, ,915,316 18,831,213 (25,524,919) Loss reserves of claims incurred but not yet reported 69,093,252 69,120,229 (26,977) 17,905,247 Provision for long-term employee benefits 67,584,124 64,784,554 2,799,570 2,793,517 Others 11,619,097 10,912, ,866 (2,430,965) Total 775,028, ,606,542 Deferred tax liabilities arose from: Gains on revaluation of available-for-sale investments 5,370,360,100 5,516,836, ,476, ,663,006 Actuarial gains 990, , Total 5,371,350,495 5,517,827,187 Deferred tax liabilities 4,596,322,474 4,759,220,645 Total changes 162,898, ,070,234 Recognition of changes in: - Profit or loss 16,421,479 4,407,228 - Other comprehensive income 146,476, ,663, ,898, ,070,234 12

23 13.2 Income tax expenses Income tax expenses for the three-month and six-month periods ended 30 June 2017 and 2016 are made up as follows: Financial statements in which the equity method is applied For the three-month periods ended 30 June Separate financial statements For the three -month periods ended 30 June Current income taxes: Interim corporate income tax charge (71,979,798) (93,313,782) (71,979,798) (93,313,782) Deferred income taxes: Deferred income taxes relating to origination and reversal of temporary differences (17,218,428) (37,478,649) (15,963,935) (36,990,773) Income tax expenses reported in profit or loss (89,198,226) (130,792,431) (87,943,733) (130,304,555) Financial statements in which the equity method is applied For the six-month periods ended 30 June Separate financial statements For the six-month periods ended 30 June Current income taxes: Interim corporate income tax charge (187,659,998) (210,387,533) (187,659,998) (210,387,533) Deferred income taxes: Deferred income taxes relating to origination and reversal of temporary differences 15,213,066 3,951,707 16,421,479 4,407,228 Income tax expenses reported in profit or loss (172,446,932) (206,435,826) (171,238,519) (205,980,305) 13

24 Reconciliations between income tax expenses and the product of accounting profits for the three-month and six-month periods ended 30 June 2017 and 2016 and the applicable tax rate are as follows: Financial statements in which the equity method is applied For the three-month periods ended 30 June Separate financial Statements For the three-month periods ended 30 June Accounting profits before income tax expenses 825,908, ,975, ,636, ,535,787 Applicable tax rate 20% 20% 20% 20% Income taxes at the applicable tax rate (165,181,745) (179,795,033) (163,927,252) (179,307,157) Net tax effect on tax-exempt revenues and non-tax deductible expenses 76,099,178 49,019,700 76,099,178 49,019,700 Others (115,659) (17,098) (115,659) (17,098) Income tax expenses reported in profit or loss (89,198,226) (130,792,431) (87,943,733) (130,304,555) Financial statements in which the equity method is applied For the six-month periods ended 30 June Separate financial Statements For the six-month periods ended 30 June Accounting profits before income tax expenses 1,459,469,271 1,496,759,055 1,453,427,204 1,494,481,456 Applicable tax rate 20% 20% 20% 20% Income taxes at the applicable tax rate (291,893,854) (299,351,811) (290,685,441) (298,896,290) Net tax effect on tax-exempt revenues and non-tax deductible expenses 119,562,581 92,933, ,562,581 92,933,083 Others (115,659) (17,098) (115,659) (17,098) Income tax expenses reported in profit or loss (172,446,932) (206,435,826) (171,238,519) (205,980,305) 14

25 14. Insurance contract liabilities Financial statements in which the equity method is applied and Separate financial statements 30 June 2017 Insurance contract liabilities Reinsurance on liabilities Net Loss reserves Claims incurred and reported 6,659,481,606 (3,615,696,061) 3,043,785,545 Claims incurred but not reported 367,650,526 (22,184,266) 345,466,260 Premium reserves Unearned premium reserves 7,268,405,707 (2,018,699,567) 5,249,706,140 Total 14,295,537,839 (5,656,579,894) 8,638,957,945 Financial statements in which the equity method is applied and Separate financial statements 31 December 2016 Insurance contract liabilities Reinsurance on liabilities Net Loss reserves Claims incurred and reported 5,717,486,956 (2,743,278,949) 2,974,208,007 Claims incurred but not reported 364,043,881 (18,442,735) 345,601,146 Premium reserves Unearned premium reserves 7,399,140,681 (2,124,622,742) 5,274,517,939 Total 13,480,671,518 (4,886,344,426) 8,594,327,092 15

26 14.1 Loss reserves Financial statements in which the equity method is applied and Separate financial statements For the six-month period ended For the year ended 30 June December 2016 Beginning balances 6,081,530,837 6,683,116,552 Claims incurred the periods 4,508,813,802 7,156,500,946 Change in loss reserves of prior period s claims 177,848,810 (151,777,644) Changes in assumptions in calculating loss reserves - (11,773,302) Claims paid during the periods (3,741,061,317) (7,594,535,715) Ending balances 7,027,132,132 6,081,530,837 As at 30 June 2017 and 31 December 2016, the Company, which is a reinsurer under the reinsurance contracts, had loss reserves and outstanding claims under such contracts totaling Baht million and Baht million, respectively. As at 30 June 2017 and 31 December 2016, loss reserves and outstanding claims included loss reserves and outstanding claims incurred as a result of the flood situation in 2011 amounting to Baht 58.1 million and Baht million, respectively Unearned premium reserves Financial statements in which the equity method is applied and Separate financial statements For the six-month period ended For the year ended 30 June December 2016 Beginning balances 7,399,140,681 7,271,855,700 Premium written during the periods 7,978,056,036 16,031,323,734 Premium earned during the periods (8,108,791,010) (15,904,038,753) Ending balances 7,268,405,707 7,399,140,681 16

27 14.3 Unexpired risk reserves Financial statements in which the equity method is applied and Separate financial statements For the six-month period ended For the year ended 30 June December 2016 Beginning balances 4,279,482,220 4,320,166,720 Estimated claims for the periods 1,159,316,719 2,855,251,103 Risk expired during the periods (1,289,847,191) (2,895,935,603) Ending balances 4,148,951,748 4,279,482, Due to reinsurers Financial statements in which the equity method is applied and Separate financial statements 30 June December 2016 Amounts withheld on reinsurance 1,058,070,982 1,019,925,074 Amounts due to reinsurers 723,920, ,786,560 Total due to reinsurers 1,781,991,447 1,931,711, Earnings per share Basic earnings per share is calculated by dividing profits for the periods (excluding other comprehensive income or loss) by the weighted average number of ordinary shares in issue during the periods. 17

28 17. Dividends paid Dividend declared during the six-month periods ended 30 June 2017 and 2016 are as follow: Approved by Total dividend Dividend per share (Million Baht) (Baht) The first interim dividend for 2017 Meeting No. 2/17 of Board of Directors on 12 May Final dividend for 2016 Annual General Meeting No. 24 of the Shareholders on 28 April Total dividends for the period The first interim dividend for 2016 Meeting No. 2/16 of Board of Directors on 13 May Final dividend for 2015 Annual General Meeting No. 23 of the Shareholders on 22 April Total dividends for the period

29 18. Segment information reporting The Company is organised into business units based on its insurance products. During the current periods, there was no change in the organisational structure of its reportable segments. Operating segment information for the three-month and six-month periods ended 30 June 2017 and 2016 can be classified by types of insurance products as follows: Financial statements in which the equity method For the three-month period ended 30 June 2017 Marine and Fire transportation Motor Miscellaneous Total Underwriting revenue Premium written 396,330,237 97,332,879 1,467,744,911 1,807,934,320 3,769,342,347 Less: Premium ceded to reinsurers (109,651,852) (47,311,207) (44,745,861) (887,123,954) (1,088,832,874) Net premium written 286,678,385 50,021,672 1,422,999, ,810,366 2,680,509,473 Add (less): Unearned premium reserves (increased) decreased from prior period (15,881,924) (1,086,339) 132,162,643 (37,589,600) 77,604,780 Net earned premium 270,796,461 48,935,333 1,555,161, ,220,766 2,758,114,253 Fee and commission income 42,140,884 14,901,241 11,228, ,805, ,075,284 Total underwriting revenue 312,937,345 63,836,574 1,566,389,713 1,066,025,905 3,009,189,537 Underwriting expenses Claims and losses adjustment expenses - net (reversal) (10,888,528) 4,339,965 1,013,862, ,755,405 1,383,069,643 Commission and brokerage expenses 92,230,264 10,919, ,085, ,411, ,646,461 Other underwriting expenses 58,703,675 15,617, ,682, ,115, ,119,337 Total underwriting expenses 140,045,411 30,876,891 1,434,630, ,282,721 2,370,835,441 Profit from underwriting 172,891,934 32,959, ,759, ,743, ,354,096 Shares of profits from investments in associate 6,272,473 Net investment revenue 375,697,722 Losses on investments (6,923,400) Other income 43,300,582 Operating expenses Investment expenses (207,767,698) (22,140,051) Finance cost (884,990) Profit before income tax expenses 825,908,734 Less: Income tax expenses (89,198,226) Profit for the period 736,710,508 19

30 Financial statements in which the equity method For the three-month period ended 30 June 2016 Marine and Fire transportation Motor Miscellaneous Total Underwriting revenue Premium written 381,444,052 94,715,335 1,588,932,347 1,596,273,124 3,661,364,858 Less: Premium ceded to reinsurers (116,839,337) (47,152,240) (46,419,424) (753,292,119) (963,703,120) Net premium written 264,604,715 47,563,095 1,542,512, ,981,005 2,697,661,738 Add (less): Unearned premium reserves (increased) decreased from prior period 1,668,843 2,349,552 80,731,981 (43,266,140) 41,484,236 Net earned premium 266,273,558 49,912,647 1,623,244, ,714,865 2,739,145,974 Fee and commission income 46,672,155 15,160,868 13,462, ,543, ,838,728 Total underwriting revenue 312,945,713 65,073,515 1,636,707, ,257,916 2,980,984,702 Underwriting expenses Claims and losses adjustment expenses - net 12,380,599 3,316, ,266, ,064,234 1,253,027,418 Commission and brokerage expenses 144,030,531 10,909, ,003, ,857, ,800,683 Other underwriting expenses 60,268,190 18,955, ,983, ,509, ,716,584 Total underwriting expenses 216,679,320 33,181,075 1,348,252, ,431,524 2,267,544,685 Profit from underwriting 96,266,393 31,892, ,454, ,826, ,440,017 Shares of profits from investments in associates 2,439,376 Net investment revenue 336,049,159 Gains on investments 33,645,751 Other income 37,497,448 Operating expenses Investment expenses (202,290,565) (20,875,969) Finance cost (930,054) Profit before income tax expenses 898,975,163 Less: Income tax expenses (130,792,431) Profit for the period 768,182,732 20

31 Financial statements in which the equity method is applied and Separate financial statements For the six-month period ended 30 June 2017 Marine and Fire transportation Motor Miscellaneous Total Underwriting revenue Premium written 795,468, ,429,283 3,035,540,074 3,923,618,664 7,978,056,036 Less: Premium ceded to reinsurers (238,681,877) (124,487,230) (93,597,122) (2,002,401,805) (2,459,168,034) Net premium written 556,786,138 98,942,053 2,941,942,952 1,921,216,859 5,518,888,002 Add (less): Unearned premium reserves (increased) decreased from prior period (12,767,985) 285, ,297,126 (168,002,404) 24,811,799 Net earned premium 544,018,153 99,227,115 3,147,240,078 1,753,214,455 5,543,699,801 Fee and commission income 93,640,763 35,724,552 25,089, ,342, ,797,810 Total underwriting revenue 637,658, ,951,667 3,172,329,759 2,154,557,269 6,099,497,611 Underwriting expenses Claims and losses adjustment expenses - net 39,092,422 4,700,561 2,042,039, ,373,304 2,932,205,404 Commission and brokerage expenses 185,424,706 23,139, ,309, ,747,181 1,072,621,163 Other underwriting expenses 114,111,703 31,143, ,113, ,100, ,469,387 Total underwriting expenses 338,628,831 58,984,361 2,865,461,554 1,646,221,208 4,909,295,954 Profit from underwriting 299,030,085 75,967, ,868, ,336,061 1,190,201,657 Shares of profits from investments in associates 6,042,067 Net investment revenue 671,175,159 Gains on investments 14,079,310 Other income 95,398,480 Operating expenses Investment expenses (471,831,021) (43,788,362) Finance cost (1,808,019) Profit before income tax expenses 1,459,469,271 Less: Income tax expenses (172,446,932) Profit for the period 1,287,022,339 21

32 Financial statements in which the equity method is applied and Separate financial statements For the six-month period ended 30 June 2016 Marine and Fire transportation Motor Miscellaneous Total Underwriting revenue Premium written 791,658, ,404,075 3,263,627,593 3,562,215,984 7,813,905,908 Less: Premium ceded to reinsurers (259,867,624) (99,162,627) (107,312,937) (1,857,814,132) (2,324,157,320) Net premium written 531,790,632 97,241,448 3,156,314,656 1,704,401,852 5,489,748,588 Add (less): Unearned premium reserves (increased) decreased from prior period 1,657,144 4,089, ,738,181 (129,376,466) (891,174) Net earned premium 533,447, ,331,415 3,279,052,837 1,575,025,386 5,488,857,414 Fee and commission income 122,757,183 36,265,106 29,023, ,964, ,011,092 Total underwriting revenue 656,204, ,596,521 3,308,076,676 1,937,990,350 6,039,868,506 Underwriting expenses Claims and losses adjustment expenses - net (reversal) (9,333,517) 13,461,542 2,191,479, ,411,172 2,861,018,770 Commission and brokerage expenses 231,637,689 22,177, ,847, ,324,913 1,116,987,005 Other underwriting expenses 122,787,473 34,156, ,496, ,465, ,905,849 Total underwriting expenses 345,091,645 69,794,884 3,006,823,279 1,396,201,816 4,817,911,624 Profit from underwriting 311,113,314 67,801, ,253, ,788,534 1,221,956,882 Shares of profits from investments in associates 2,277,599 Net investment revenue 654,019,087 Gains on investments 60,995,805 Other income 87,548,677 Operating expenses Investment expenses (485,383,052) (42,749,325) Finance cost (1,906,618) Profit before income tax expenses 1,496,759,055 Less: Income tax expenses (206,435,826) Profit for the period 1,290,323,229 The following table presents the Company s operating segment assets as at 30 June 2017 and 31 December Financial statements in which the equity method is applied Marine and Unallocated Financial Fire transportation Motor Miscellaneous Total segments assets statements Assets As at 30 June ,754, ,422, ,378,893 5,938,553,713 7,438,109,755 50,186,509,844 57,624,619,599 As at 31 December ,720, ,168, ,041,189 5,406,723,083 7,276,653,923 50,055,949,195 57,332,603,118 Liabilities As at 30 June ,409,923, ,863,929 5,344,079,184 8,549,686,562 17,643,552,899 6,877,965,730 24,521,518,629 As at 31 December ,441,907, ,951,702 5,574,198,189 7,578,961,298 16,935,018,720 7,143,855,522 24,078,874,242 For the three-month and six-month periods ended 30 June 2017 and 2016, the Company had no major customer with revenue of 10 percent or more of the total revenues. 22