We aim to be the most preferred non-life insurer in Thailand

4.8 Foreign currencies
Transactions in foreign currency are translated into Baht at the exchange rate ruling at the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the
balance sheet date.
Gains and losses on exchange are included in determining income.
4.9 Unearned premium reserve
Unearned premium reserve is set aside in compliance with the Notification of the Ministry of Commerce governing
the appropriation of unearned premium reserves of non-life insurance companies as follows:
Fire, marine and transportation (Hull),
- Monthly average basis (the one-twenty fourth basis)
Motor and Miscellaneous
Marine and transportation (Cargo)
Traveling accident
- Net premium written for the last ninety days
- Net premium written for the last thirty days
4.10 Loss reserve and outstanding claims
Outstanding claims are recorded at the amount to be actually paid. Loss reserve is provided upon receipt of claim
advices from the insured based on the claims notified by the insured and estimates made by the Company’s management. The
maximum value of claims estimate is not however, to exceed the sum-insured under the relevant policy. In addition, the Company
set up a provision for losses incurred but not yet reported (IBNR) at 2.5% of the net written premium for the previous 12 months in
compliance with the Notification of Ministry of Commerce governing the appropriation of unearned premium reserves and loss
reserve by the non-life insurance company. However, since January 1, 2009, the Company is to allocate IBNR according to the
actuarial method, but it is not to be less than 2.5% of the total net written premium written on all types of risk in the twelve months
prior to the allocation date.
4.11 Commissions and brokerages
Commissions and brokerages are expended when incurred.
4.12 Employee benefits
Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses
when incurred.
4.13 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investment with an original
maturity of three months or less and not subject to withdrawal restrictions.
4.14 Long-term leases
Leases of vehicles which transfer substantially all the risks and rewards of ownership are classified as finance
leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease
payments. The outstanding rental obligations, net of finance charges, are included in other long-term payables, while the interest element
is charged to the income statements over the lease period. The equipment acquired under finance leases is depreciated over the useful
life of the asset.
4.15 Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.
4.16 Income tax
Income tax is provided in the accounts based on the taxable profits determined in accordance with tax legislation.
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