Part 3

Financial Status and Operation Result

13. Important Financial Data

Financial Status and Operation Result

  -------------------- --- --- --- --- --- --- --- --- --- ----------- --- -------- ----------- --- -------- ----------- --- --------
  Statements of                                                                                              (Unit :         
  Financial Position                                                                                         Thousand        
                                                                                                             Baht)           

                                                           2013            %        2014            %        2015            %

  Cash and cash                                            237,828         5.6%     143,698         3.3%     326,834         7.1%
  equivalents                                                                                                                

  Accrued investment                                       10,788          0.2%     19,954          0.5%     7,840           0.2%
  income                                                                                                                     

  Premium receivables                                      386,651         9.1%     339,564         7.8%     426,394         9.3%

  Reinsurance assets                                       523,448         12.3%    443,233         10.2%    483,710         10.5%

  Investment assets                                                                                                           

  Investment in                                                                                                               
  securities                                                                                                                 

                                                           -               0.0%     -               0.0%     -               0.0%

  Trading securities                                       331,926         7.8%     189,449         4.4%     257,922         5.6%

  Available-for-sale                                       911,092         21.4%    932,479         21.5%    1,847,234       40.2%
  investments                                                                                                                

  Held-to-maturity                                         1,157,394       27.1%    1,329,482       30.7%    397,681         8.7%
  investments                                                                                                                

  Other investments                                        4,386           0.1%     3,721           0.1%     3,721           0.1%

  Loans                                                    11,203          0.3%     10,971          0.3%     7,996           0.2%

                                                           -               0.0%     -               0.0%     -               0.0%

  Property, buildings,                                     222,992         5.2%     241,402         5.6%     277,547         6.0%
  equipments                                                                                                                 

  Intangible assets                                        9,574           0.2%     9,181           0.2%     8,772           0.2%

  Deferred tax assets                                      63,133          1.5%     47,696          1.1%     73,276          1.6%

  Other assets                                             392,293         9.2%     619,018         14.3%    471,017         10.3%

  Total assets                                             4,262,708       100.0%   4,329,848       100.0%   4,589,944       100.0%

  Income tax payable                                       583             0.0%     4,051           0.1%     -               0.0%

  Due to reinsurers                                        363,771         8.6%     353,762         8.2%     358,657         7.8%

  Insurance contract                                                                                                          
  liabilities                                                                                                                

  Loss reserves and                                        989,554         23.2%    842,492         19.5%    907,610         19.8%
  outstanding claim                                                                                                          

  Premium reserve                                          1,416,401       33.2%    1,462,720       33.8%    1,574,100       34.3%

  Employee benefit                                         115,738         2.7%     135,801         3.1%     105,557         2.3%
  obligations                                                                                                                

                                                                                                                              

                                                                                                                             

                                                                                                                              

                                                                                                                             

  Other liabilities                                        455,098         10.7%    429,720         9.9%     549,248         12.0%

  Equity                                                   921,563         21.6%    1,101,302       25.4%    1,094,772       23.8%

  Total liabilities                                        4,262,708       100.0%   4,329,848       100.0%   4,589,944       100.0%
  and equity                                                                                                                 

                                                                                                                              
  -------------------- --- --- --- --- --- --- --- --- --- ----------- --- -------- ----------- --- -------- ----------- --- --------

[TABLE]

  ----------- --- --- --- -------- --- --- --- --- --- ------------- --- --- ------------- --- --- ------------- --- ---
                                                       2013                  2014                  2015              

  Net                     (Baht)                       0.33                  0.60                  0.07               
  earnings                                                                                                           
  per share                                                                                                          

  Dividend                (Baht)                       0.16                  0.56                  0.05               
  per share                                                                                                          

  Shares                                               151,500,000           151,500,000           303,000,000        
  ----------- --- --- --- -------- --- --- --- --- --- ------------- --- --- ------------- --- --- ------------- --- ---

  ------------- -------------- ------------ ---- --- ---- --- --- --- --- ------------- --- --- ------------- --- --- ------------- --- ---
                                                                                                                                         

                                                                          2013                  2014                  2015               

  Cash flows                                                                                                                             
  from                                                                                                                                  
  operating                                                                                                                             
  activities                                                                                                                            

                Direct premium                                            2,948,393             3,118,595             3,074,914          
                written                                                                                                                 

                Cash paid for                                             (30,205)              (230,198)             (184,681)          
                reinsurance                                                                                                             

                Loss incurred                                             (1,396,777)           (1,625,664)           (1,602,361)        
                on direct                                                                                                               
                insurance                                                                                                               

                Loss                                                      (39,081)              (32,847)              (27,841)           
                adjustment                                                                                                              
                expenses on                                                                                                             
                direct                                                                                                                  
                insurance                                                                                                               

                Commission and                                            (518,926)             (529,268)             (532,430)          
                brokerage on                                                                                                            
                direct                                                                                                                  
                insurance                                                                                                               

                Other                                                     (54,109)              (87,433)              (100,377)          
                underwriting                                                                                                            
                expenses                                                                                                                

                Interest                                                  39,401                34,881                46,123             
                income                                                                                                                  

                Dividend                                                  65,725                55,726                43,186             
                income                                                                                                                  

                Ther                                                      5,021                 5,575                 4,063              
                investment                                                                                                              
                income                                                                                                                  

                Other income                                              4,707                 8,509                 9,611              

                Operating                                                 (437,062)             (614,962)             (500,341)          
                expenses                                                                                                                

                Income tax                                                (43,217)              (26,367)              (25,785)           

                               Net cash                                   543,870               76,547                204,081            
                               from                                                                                                     
                               operating                                                                                                
                               activities                                                                                               

  Cash flows                                                                                                                             
  from                                                                                                                                  
  investing                                                                                                                             
  activities                                                                                                                            

                Cash flows                                                                                                               
                from                                                                                                                    

                Investments in                                            1,758,925             1,534,106             1,313,928          
                securities                                                                                                              

                Loans                                                     4,320                 4,672                 6,157              

                Other                                                     -                     -                     -                  
                investments                                                                                                             

                Deposits at                                               674,483               780,000               1,336,434          
                financial                                                                                                               
                institutions                                                                                                            

                Equipmen                                                  128                   645                   863                

                               Net cash                                   2,437,856             2,319,423             2,657,382          
                               from                                                                                                     
                               investing                                                                                                
                               activities                                                                                               

                Cash flows                                                                                                               
                used in                                                                                                                 

                Investment in                                             (1,984,564)           (1,379,844)           (2,019,591)        
                securities                                                                                                              

                Loans                                                     (4,370)               (4,440)               (3,182)            

                                                                          -                     -                     -                  

                Deposits at                                               (999,992)             (1,013,213)           578,783            
                financial                                                                                                               
                institutions                                                                                                            

                Property,                                                 (32,696)              (44,124)              (59,938)           
                buildings and                                                                                                           
                equipment                                                                                                               

                               Cash used in                               (3,021,622)           (2,441,621)           (2,661,494)        
                               investing                                                                                                
                               activities                                                                                               

                               Net cash                                   (583,766)             (122,198)             (4,112)            
                               used in                                                                                                  
                               investing                                                                                                
                               activities                                                                                               

  Cash flows                                                                                                                             
  from                                                                                                                                  
  financing                                                                                                                             
  activities                                                                                                                            

                                                                          -                     -                     -                  

                Dividend paid                                             (65,144)              (48,479)              (16,833)           

                               Net cash                                   (65,144)              (48,479)              (16,833)           
                               used in                                                                                                  
                               financing                                                                                                
                               activities                                                                                               

  Net decrease                                                            (105,040)             (94,130)              183,136            
  in cash and                                                                                                                           
  cash                                                                                                                                  
  equivalents                                                                                                                           

  Cash and cash                                                           342,868               237,828               143,698            
  equivalents                                                                                                                           
  at beginning                                                                                                                          
  of year                                                                                                                               

  Cash and cash                                                           237,828               143,698               236,834            
  equivalents                                                                                                                           
  at end of                                                                                                                             
  year                                                                                                                                  

                                                                                                                                        
  ------------- -------------- ------------ ---- --- ---- --- --- --- --- ------------- --- --- ------------- --- --- ------------- --- ---

  ----------- --------------- ----------------------- --- --- --- ----- ---- --- --- -------- --- --- -------- --- --- -------- --- ---
  Financial                                                                                                                         
  Ratios                                                                                                                            

                                                                                     2013             2014             2015          

                                                                                                                                     

  (1)         LIQUIDITY RATIO                                                                                                        

              1               Liquidity ratio                                        0.59             0.55             0.57          

              1               Premium receivable                                     48.88            42.86            44.11         
                              turnover ratio                                                                                        

                                                                                                                                     

  (2)         PROFITABILITY                                                                                                          
              RATIO                                                                                                                 

              2               Retention ratio                                        76.29            75.12            77.55         

              2               Loss ratio                                             56.27            55.91            59.94         

              2               Gross profit margin                                    1.82             1.57             (2.40)        
                              ratio                                                                                                 

              2               Gross profit to total                                  1.75             1.46             (2.31)        
                              revenues ratio                                                                                        

              3               Underwriting expenses                                  41.91            42.52            42.46         
                              ratio                                                                                                 

              3               Return on investment                                   3.16             6.95             3.01          
                              ratio                                                                                                 

              3               Net written premium                                    2.35             2.26             2.21          
                              ratio                                                                                                 

              3               Net profit margin ratio                                4.13             6.87             0.85          

              3               Return on shareholders                                 10.53            18.10            2.03          
                              ‘ equity ratio                                                                                        

                                                                                                                                     

  (3)         EFFICIENCY                                                                                                             
              RATIO                                                                                                                 

              3               Return on asset ratio                                  2.35             4.26             0.50          

              3               Assets turnover ratio                                  0.57             0.62             0.59          

                                                                                                                                     

  (4)         FINANCIAL RATIO                                                                                                        

              4               Debt-to-shareholders’                                  3.63             2.93             3.19          
                              equity raio                                                                                           

              4               Policy liability to                                    2.04             1.69             1.83          
                              capital fund                                                                                          

              4               Unearned premium                                       1.17             1.03             1.15          
                              reserve to                                                                                            
                              shareholders’ equity                                                                                  
                              ratio                                                                                                 

              4               Unearned premium                                       27.50            28.41            29.37         
                              reserve to asset ratio                                                                                

              5               Dividend payout ratio                                  49.04            91.94            67.86         

                                                                                                                                     

  (5)         Net earnings                                                           0.33             0.60             0.07          
              per share                                                                                                             

                                                                                                                                     

  (6)         Dividend per                                                           0.16             0.56             0.05          
              share                                                                                                                 

                                                                                                                                     

  (7)         Book value per                                                         3.04             3.63             3.61          
              share                                                                                                                 

                                                                                                                                     

                                                                                                                                     

                                                                                                                                     
  ----------- --------------- ----------------------- --- --- --- ----- ---- --- --- -------- --- --- -------- --- --- -------- --- ---

14. Analysis and Explanation of Management Department

Performance

Comparison in 2015 and 2014, the company ‘s underwriting revenue had
increased 56.77 million Baht or 2.30%

while the underwriting expenses increased 156.30 million Baht or 64.3%
resulting the underwriting profit -60.72 million Baht

which decreased 99.53 million Baht or -256.45% At the same time, the
company investment earnings decreased 96.01

million Baht resulting the company ‘s net earnings after tax 22.32
million Baht that decreased 20% more than in 2014.

Underwriting revenue and expense

The company had underwriting revenue 2,527.88 million Baht that
increased 2.30% as compared in 2014 due to

Thai economy condition with low growth rate as the global economy. It
made the purchease power decline that affected

the overall non-life insurance industry. Therefore, the company needed
to take various measurements to maintain market

share resulting the capacity of marketing underwriting profit in 2015.

Investment earnings

Besides the underwriting earnings, the company had a main investment
earnings with investment ratio as the Office

of Insurance Commission (OIC) announcement which had the investment
amount as of year end 2015 shown in

the Financial Statements and recorded as market price 2,514.55 million
Baht that increased 48.45 million Baht from 2014.

In 2015, the company has the decrease of investment earnings and return
96.01 million Baht or -49.19% from 2014

due to the current securities situation in 2015.

  -------------------------- -------------- ---------- ------------- ----------
  Investment Type            2015                      2014          

                             Amount         Ratio(%)   Amount        Ratio(%)

                             (Million Baht)            (Million      
                                                       Baht)         

  Cash                       336            13.4%      1,093         44.3%

  Bond                       62             2.5%       237           9.6%

  Fixed Income               166            6.6%       99            4.0%

  Equity                     413            16.4%      362           14.7%

  Unit Trust                 1,530          60.8%      664           26.9%

  Other                      8              0.3%       11            0.5%

  Total                      2,515          100.0%     2,466         100.00%
  -------------------------- -------------- ---------- ------------- ----------

Financial Status

The company had total assets 4,589.94 million Baht that increased 6.01%
from 2014; cash and cash equivalents 326.83

million Baht or 7.12% of total assets; investment assets included bank
deposits, fixed income, equity, government bond and other investments
2,514.55 million Baht or 54.78%, reinsurance assets and premium
receivables 910.10 million Baht or 19.83%, property, buildings,
equipment and other assets 838.45 million Baht or 18.27%

For liabilities, the company had total liabilities 3,495.17 million
Baht, increasing 8.26% from 2014. The main items of insurance contract
liabilities included loss reserves, outstanding claim and premium
reserves 2,481.71 million Baht, increasing

7.66% from 2014. Furthermore, the company had the reinsurance
liabilities and other liabilities 1,031.46 million Baht, increasing

9.76% from 2014.

The company had equity 1,094.77 million Baht, decreasing 0.59% from
2014. The company had profit from operations 22.32

million Baht and other comprehensive income in values of
available-for-sale investments together with actuarial estimate of
employee benefit obligation -12.02 million baht.

In 2015, the company had direct premium written 3,125 million Baht with
growth rate 2.5% which was same as

the growth rate of total non-life insurance business and the company had
market share of comprehensive motor insurance ’2015

in the 13^(th) number.

  -------------------- ---------- ----------- ---------- ----------- ---------- -----------
                                                                     Unit:      
                                                                     Million    
                                                                     Baht       

                       2015                   2014                   2013       

                       Business   Thaivivat   Business   Thaivivat   Business   Thaivivat

                                                                                

  1. Total direct      209,278    3,125       205,247    3,049       203,021    2,890
  premium written                                                               

  % Growth             1.9%       2.5%        1.1%       5.5%        13.0%      10.7%

  2. Fire              10,484     176         11,058     176         11,812     167

  % Growth             -5.2%      0.0%        -6.4%      5.4%        21.0%      3.0%

  3. Marine            5,342      16          5,293      14          5,299      10

  % Growth             0.9%       14.3%       -0.1%      38.5%       2.0%       9.1%

  4. Motor             120,423    2,367       117,903    2,278       118,471    2,306

  % Growth             2.1%       3.9%        -0.4%      -1.2%       14.0%      10.2%

  5. Miscellaneous     73,027     566         70,993     581         67,491     406

  % Growth             2.8%       -2.6%       5.2%       42.9%       11.0%      17.1%
  -------------------- ---------- ----------- ---------- ----------- ---------- -----------

Thailand economy grows 2.8 percent in 2015, recovers slowly from 2014,
which expands only 0.8 percent, the main drivers of the economy is the
government expenditure and revenue from the tourism sector. The number
of foreign tourists is 29.8 million persons, increases 20.4 per cent
from 24.8 million persons in 2014 while export drops 5.8 percent that
decreased three consecutive years due to the economic slowdown in major
trading partners : China, Europe and Japan. For the US economy expands
continuously, the export value grows 7.7 percent to the CLMV countries
Cambodia, Laos, Myanmar and Vietnam. The export prices fell as a drop in
crude oil prices and agricultural prices in the global market. The
export sector has been affected by the cut of Trade Preferences (GSP) in
Thailand's exports to the EU from January 2015 that makes Thailand
products be taxable at the normal rate. It is the competitive
disadvantage in 6 countries ASEAN that have still entitled to GSP
(Beneficiary Countries) from EU: Cambodia, Indonesia, Laos, Myanmar,
Philippines and Vietnam.

The main agricultural products decline, some products have been damaged
by drought. Agricultural prices continuously decline since 2014 due to a
drop in prices of key commodities such as paddy, rubber, palm oil and
shrimp. The decline in production and agriculture prices have still been
affected the household income decrease in agricultural sector. However,
oil prices have continuously fallen in June 2014 from above 100 dollars
per barrel to below 40 dollars per barrel in December 2015 that supports
the purchasing power of households especially in retail business.

In September, 2015 the government announces a stimulus plan to promote
the well-being of low earning people, stimulate small investors across
the country, take care of both the public and private from small to
large businesses

as follows :

1.  Assistance measures for low income people through loan of Housing
    and Urban Fund up to one million baht per fund with total limit
    60,000 million baht for infrastructure development at the community
    level, proceeding contract d through the Government Savings Bank and
    the Bank for Agriculture and Agricultural Cooperatives to be
    completed in December 2015.

2.  Promotion measures to the well-being of district level by budget
    allocation to develop, repair water sources,

  hospital and g school five million baht per district with the total
  limit 36,275 million baht and to stimulate small investment of
  government across the country not more than 40,000 million baht with
  capital expenditure not more than 1 million baht and is complete in
  December 2015.

3.  Fiscal measures to help enterprises, small and medium enterprises
    (SMEs) urgently with low interest term

  (Soft Loan) to increase liquidity. It is the working capital 100,000
  million Baht with interest rate 4 percent

  per year which the loan was paid out quickly in late November 2015. It
  also provides for a reduction in the corporate tax rate from 15 and 20
  percent to be 10 percent of net profit two consecutive periods for
  SMEs with

  a net profit of 300,001 baht or more.

4.  Measures of transfer fees reduction for registration and real estate
    mortgages 0.01 percent for 6 months

  (29 Oct. 2015 to 28 Apr.2016) and 10,000 million baht loan through the
  Government Housing Bank that

  focuses on credits for the low and medium household income.

Car sales fell 10 percent from 0.88 million vehicles in 2014 to 0.79
million vehicles in 2015, it is the first time to recover over over 1
million vehicles in 24 months resulting from the motor sales including
consumers accelerate purchases of cars before the excise tax adjustment
on new cars in 2016, especially the PPV (Pickup Truck Base Passenger
Vehicle) or multipurpose vehicle that the price has increased more than
any other group while motorcycle sales 1.63 million units, decreases
3.67 per cent. The upcountry consumers start to have more purchasing
power in fourth quarter from the government measures.

The Monetary Policy Committee (MPC.) decides to decrease the policy rate
twice from 1.50 percent to 2 percent per year during March - April 2015
to support continuously the economic recovery and maintain price
stability according to the monetary policy of other countries such as
Australia, New Zealand, South Korea, China, India and Russia. The EU and
Japan have still had money policy easing by policy rate decrease to be
low level and QE (Quantitative Easing) issuance for the economic
recovery that is still weak. However, the effectiveness of Thailand
further monetary easing to economy is limited because banks are careful
to give loan resulting deterioration of credit quality while the banks
liquidity banks are abundant. For price stability, inflation is -0.9
percent from energy prices drop as crude oil prices in the world market.
The OPEC crude oil supply surplus remains high volume production in
order to maintain market share and revenue from oil exports. While
external stability, Thailand's current account surplus continues,
international reserves are higher than the foreign debts about 2.8 times
and foreign exchange rate is still good for exports.

Securities Market
In 2015, the SET Index of Thailand drops 14.02 percent from the end of
2014 to close at 1288.02 points. Price to earnings ratio is 14.51 times,
dividend ratio is 3.58 percent, net sales of foreign investors 155,631
million baht which is the third consecutive year by net sales in 2014
and 2013 are 35,696 million baht and 194,702 million baht respectively
due to the anxiety of slowdown of the Chinese economy and region. The
volatility in the Chinese financial markets makes more volatile the
world financial markets from the period between June and August 2015,
the stock price of China falls more than 40 percent of global stock
indexes decline. The anxiety of rising interest in the Fed. puts
pressure on capital outflows from emerging markets in Asia all year.
Although the interest rates increases in December 2015 from 0.25% to
0.50%, a drop in oil prices by increasing production impacts heavily on
the performance of listed companies which are tied to oil prices, etc.
The instruments have given positive returns such as Property Fund,
Infrastructure Funds and REITs Fund of Thailand, with a total return and
dividend 9.4 per cent.

Trends
Bank of Thailand forecasts that the economy would grow 3.5 percent in
2016, driven mainly by Thailand's economy in tourism sector and
continuity of government investment which are expected to stimulate
private investment to expand. While the acceleration measures of private
sector investment, financial measures to help SMEs and Investment
acceleration measures in the special economic zone border by giving more
investment benefits and tax incentives for 10 industries as a new engine
of growth that help improvement of the overall investment.

The main risk in 2016 has still been the slowdown of Chinese economy due
to the Chinese Government emphasizes to reform the economic structure
more than the economic growth resulting the commodity prices are likely
to decline to low levels and press on the export recovery of Thailand.
The possibility of US and European Union (EU) announce the cancellation
of sanctions against Iran resulting Iran's oil exports have increased
and oil prices fall

lower than 30 dollars per barrel. Drought and household debt are higher
than 80 per cent of GDP that forces on the private consumption. For
infrastructure development of public investment in transportation by
land, water, air, rail, Bangkok Mass Transit Authority and late
expansion of the airport Suvarnabhumi for interconnection between
Thailand and neighboring countries that are the key factors to help
support the next economic recovery in Thailand.

Life insurance business in 2016 expects to have the growth premium rate
2 percent as in 2015. For motor market

In 2016, total sales would be 720,000 units decreasing 10 percent. The
prices of agricultural products especially rice and rubber continuously
decline and the most severe drought in 20 years resulting motor sales
faces a sluggish market and used cars from finance with lower prices
than new models with price hike bythe new tax structure that are
important drive. The Commercial vehicles market has the growth trend as
public transportation investment, The investment in special economic
zone border including trade liberalization under the AEC are the driven
key that make expand to the transport sector business. The motorcycle
market trends in 2016 will not grow due to the limit of more population
number and car ownership proportion. For all risk property insurance
rates are likely to decline from last year due to the reinsurance
company decrease reinsurance rate from no serious natural disasters.