annual report deves 2010 · by the office of the insurance commission (oic) ... the oic has since...

into the 65 year of successthMoving

Annual Report 2010THE DEVES INSURANCE PUBLIC COMPANY LIMITED

P R I D E I N P R O T E C T I O N

into the 65 year of successthMoving

Pride in Protection

means commitment to customer care by meeting the needs of internal andexternal customers, and always be ready to provide the best services and unprejudicedsupport to ensure customer satisfaction, which will ultimately bring productivebenefits to customers and the Company.

means to have the sense of honour and pride in being a part of an organizationowned by the Crown Property Bureau, and thereby working and behaving withself-respect, honesty, prudence, conscientiousness, and to be prepared to fulfilloneûs responsibilities with efficiency and transparency to oneself, the organizationand customers.

means striving to improve skills, knowledge and specializations, being open tonew ideas and developments so as to attain prowess and be able to effectively sharethe acquired skills with colleagues, and having unyielding devotion to duty, with theultimate aim of strengthening teamwork and enhancing the corporate competitiveness.

means carrying out duties with honesty and transparency, keeping firmly toobligations in order to earn trust and confidence from customers, and promoting thegood image of Deves Insurance.

CustomerCentricCustomerCentric

DignifiedDignified

MasterlyMasterly

AssuringAssuring

Chairmanûs Statement..................................................................................................................2

General Information...........................................................................................................................4

Structure of Shareholders.....................................................................................................5

Organization Structure.................................................................................................................6

Board of Directors.................................................................................................................................8

Executive Officers..............................................................................................................................12

Dignity and Corporate Social Responsibility..................................17

Marketing and Service Development............................................................26

Principles of Corporate Governance..............................................................30

Benefit of Directors........................................................................................................................39

Boardûs Meeting.....................................................................................................................................40

The Appropriation of the Earnings....................................................................41

Report of the Audit Committee..............................................................................42

Key Financial Ratios......................................................................................................................43

Report and Financial Statements........................................................................45

The Companyûs Information.........................................................................................75

Other Information.............................................................................................................................76

Headquarters and Regional Branches........................................................77

CONTENT

ANNUAL REPORT 20102

Dear Shareholder

The Thai economy was faced with a variety of negative factors throughout 2010, ranging from global

economic uncertainties, internal political troubles, baht fluctuations and impact of capital outflows to

natural disasters. Yet, the countryûs economic growth remained encouraging at around 8%, as a result of

goods and service exports as well as reviving domestic demand - an obvious driver during the latter half

of the year. In addition to strong economic fundamentals, the growth was also fuelled by improved

employment and higher agricultural income, coupled with the continued easing of finance and monetary

policies. The non-life insurance business grew in line with the national economy at the rate of 14%, with

marine and miscellaneous segments enjoying growth rates of 19% and 14% respectively. Motor insurance,

which represented more than 60% of the overall sector in terms of premium volume, registered 14%

expansion. The non-life industry reported, at end of 2010, Baht 125,000 million in aggregate premiums.

During the year, the Second Insurance Industry Development Plan (2010-2014) was promulgated

by the Office of the Insurance Commission (OIC) with a view to bringing domestic insurance systems up

to international standards. The OIC has since implemented key measures under the Plan by imposing on

non-life insurers certain new regulations and registrarûs notifications. The major requirements, which have

come into force over the course of 2010 include: the risk-based capital adequacy test; the application

of international standards for policy liability calculation and claims reserve calculation; the requirements

on types and categories of capital as well as procedures/criteria for non-life insurerûs capital calculation;

and the formulation in writing of reinsurance strategies.

To respond to the changing environment, Deves Insurance has realigned its operational framework

and implementation measures, and has thus achieved a strong ranking in the risk-based capital test.

We have taken preparatory steps in such areas as personnel, organization-wide risk management, and

asset-liability management. There has also been effective communication across the organization to ensure

that all concerned have a thorough understanding of the operational changes and are able to fulfil the

requirements.

Chairmanûs Statement

The Deves Insurance Public Company Limited 3

With regard to 2010 operating results, the Company reported gross premiums written of Baht 3,419.0

million, a year-on-year increase of 24%. Miscellaneous premiums, which constituted 48% of overall premium

income, amounted to Baht 1,633.0 million. Motor premiums rose by 41% to Baht 1,442.0 million, as a result

of compulsory policies written through the Land Transport Department channel. Fire premiums amounted

to Baht 242.0 million, while marine premiums totalled Baht 102.0 million, a rise of 4% over the previous year.

Net premiums written were Baht 2,015.0 million, an increase of 47% mainly as a result of the Companyûs

focus on select business as well as its redefined policy on higher retention levels. All lines of underwriting

recorded an aggregate increase of Baht 249.0 million in unearned premium reserve. Accordingly, earned

premiums came to Baht 1,753.0 million, an increase of 29% over 2009. Underwriting expenditure went up 38%

to Baht 1,125.0 million. Underwriting income also rose 17% to Baht 628.0 million, while investment income

dropped by 11% to Baht 64.0 million. Underwriting income, combined with investment and other income

made a total of Baht 700.0 million. After taking into account operating and other expenses totalling Baht

595.0 million, the Company posted a net profit, after corporate income tax, of Baht 71.0 million. Earnings per

share were Baht 5.90, decreased by 35% from 2009, whereas total assets were up year on year by 7%

to Baht 5,064 million.

The Company continues to work towards transition to international standards and to enhance

capacity and competitiveness in preparing for the multifaceted changes in the market. On behalf of the

Board of Directors, I would like to express our gratitude to all our shareholders and valued customers for their

continued confidence in and support for the Company. Sincere thanks are also due to each and every

member of the Management and the staff for their utmost commitment and contribution to the successful

achievement of corporate goals.

Dr Chirayu Isarangkun Na Ayuthaya

Chairman

to work towards transition to international standards and

to enhance capacity and competitiveness in preparing

for the multifaceted changes in the market

ç

é

ANNUAL REPORT 20104

General Information

The Deves Insurance Public Company Limited commenced operations on 17 January 1947 with an

initial registered capital of Baht 4.0 million comprising 40,000 ordinary shares at par value of Baht 100.0, with

the Crown Property Bureau as its main shareholder. In the early stages of business, the Company was

primarily involved in underwriting of fire insurance for tenants of the Crown Property Bureau. It was later

licensed by the Ministry of Commerce to operate marine and miscellaneous insurance in 1972 and motor

insurance in 1989.

Throughout almost 65 years of operations, we have continuously and regularly improved our

underwriting and management systems. To maintain financial stability we have also appropriately

increased our authorized capital in every major phase of development: to Baht 10.0 million in 1967; to

Baht 20.0 million in 1971; to Baht 40.0 million in 1991; and in 1995 up to present the paid-up registered

capital of the Company has been Baht 120.0 million comprising 12 million ordinary shares at Baht 10.0 each.

The par value reduction from Baht 100.0 to Baht 10.0 was made in line with the requirements for

listing on the Stock Exchange of Thailand (SET). The Company obtained approval to be listed on the SET

on 29 November 1990. It was then re-registered under the Public Limited Companies Act on 11 August 1994.

The Companyûs business registration number is 0107537002478 (or previously Bor Mor Jor 494).

In 2007 the Crown Property Bureau, as Deves Insuranceûs principal shareholder, started to make

tender offers to other shareholders in a bid to apply for delisting of the Companyûs shares. The application

was consequently approved and the Company was officially delisted from the Stock Exchange of Thailand

on 22 August 2008.

The Company has always been committed to business ethics and integrity since its establishment in

1947. It was therefore the greatest honour for the Board of Directors and all executives and staff when

Deves Insurance was bestowed the Royal Garuda Emblem in 2004. By this distinction the Company pledges

itself to uphold the principles of business conduct with continuing responsibility toward society and all

stakeholders.

Another key development during business operation period of almost 65 years was the internal and

external rebranding in 2005. The exercise focused on reforming the management systems within the

organization as well as upgrading the information technology system to respond to business needs and

environment. The objective was to achieve greater efficiency so that the Company is geared for full

competition in the retail market while being able to create highest satisfaction for all insurance users.

The external rebrand was implemented through the adoption of a new logo for outside communication.

The logo was redesigned from the original image of deva in circular border to a modern and

easy-to-remember symbol, although the deva sign remains the Companyûs legally binding seal.

In designing the logo for external communication, the Company also

defined its brand promise of çPride in Protectioné and identified the

following 4 brand attributes under the new logo:

Customer Centric

Dignified

Masterly

Assuring


Structure of Shareholders

Structure of shareholders as of April 8, 2010, the date of the closure of the Share Registrar Book, are

as follow:

NAME OF SHAREHOLDERS Number of Shares % of Shareholdings

1 Crown Property Bureau 11,787,236 98.23

2 Other Shareholders 212,764 1.77

Total Issued Share Capital 12,000,000 100.00

ANNUAL REPORT 20106

Organization Structure

The Deves Insurance Public Company Limited

Board of Directors

Executive Committee

Nomination & Remuneration Committee

Board Secretariat & Corporate Communications Office

President

Underwriting Div.Insurance Business 1 Div.

Insurance Business 2 Div.

Marketing Dept.

Senior Executive Vice President

SCG Business Dept.

Energy & International Broker Business Dept.

Branch Business Dept.

Financial BusinessDept.

Retail Business and Customer Relation Dept.

Domestic Broker Business Dept.

Agent & Broker Business Dept.

Transportation Statutory Dept.

Government Service Dept.

IAR & Engineering Underwriting Dept.

Marine & Miscellaneous Underwriting Dept.

Fire & Motor Underwriting Dept.

Reinsurance Dept.


Audit Committee

Audit Office

Business Support Div.

Motor Cliams Dept.

Non-Motor Claims Dept.

Legal Office

Finance Div.

Accounting & Finance Dept.

Premium Collecting Dept.

Investment Office

Administration Div.

Information & Technology Dept.

I-Insurance Business Dept.

Support Company

Human Resources Dept.

Administration & Procurement Dept.

Risk Management Office

Business Process Development Office

Senior Executive Vice President

ANNUAL REPORT 20108

Board of Directors

ChairmanOther Positions

ë Grand Chamberlain - Bureau of the Royal Household

ë Director General - Crown Property Bureau

ë Chairman of the Board of Directors

The Siam Cement Public Company Limited

ë Director and Chairman of the Corporate Social Responsibility CommitteeThe Siam Commercial Bank Public Company Limited

Education

ë Ph.D. [Economics], Australian National University, Australia

Training from Thai Institute of Directors

ë Chairman 2000

DirectorMember of the Nomination and Remuneration CommitteeOther Positions

ë Member of the Remuneration Committee

ë Independent Director and Member of the Audit Committee

Banpu Public Company LimitedEducation

ë B.A. [Accounting and Commerce], Thammasat University

ë Diploma, National Defence College


ë Chairman 2000

Dr Chirayu IsarangkunNa Ayuthaya

Mr Sansern Wongcha-um

Mr Montri Mongkolswat

Independent DirectorChairman of the Nomination and Remuneration CommitteeOther Positions

ë Deputy Minister of Transport [2006-2008]ë Chairman - Bualuang Securities Public Company Limited

ë Chairman - Somboon Advance Technology Public Company Limited

ë Independent Director and Chairman of the Audit Committee

The Erawan Group Public Company Limited

Education

ë Master of Business Administration, University of Bridgeport, USAë Diploma, National Defence College, Class 37


ë Chairman 2000

ë Director Accreditation Program

ë Finance for Non-Finance Directors


Mr Na BhengbhasangKrishnamra

Mr AviruthWongbuddhapitak

Dr Charnchai Musignisarkorn

DirectorChairman of the Executive CommitteeOther Positionsë Advisor - Crown Property Bureauë Director and Member of the Executive Committee

Thai Plastic and Chemicals Public Company Limitedë Chairman of the Audit Committee and Director

Advance Info Service Public Company Limitedë Director, Member of the Audit Committee

Chairman of the Nomination, Remuneration & Corporate GovernanceCommittee - TMB Bank Public Company Limited

Educationë Master of Business Administration, New York University, USATraining from Thai Institute of Directorsë Director Certification Programë Role of the Compensation Committee

Independent DirectorOther Positions

ë Executive Vice President

The Siam Commercial Bank Public Company Limited

ë Chairman of the Executive Board

The Cambodian Commercial Bank Company Limitedë Vice Chairman

The Siam Administrative Management Company Limited

Education

ë Master of Engineering-Mechanical, University of Pennsylvania, USA


ë Director Certification Program

Independent DirectorMember of the Nomination and Remuneration CommitteeOther Positionsë Vice Chairman and Chairman of the Executive Committee

[2005-2010] - ACL Bank Public Company Limited

Education

ë Ph.D. [Agricultural Economics], Kyoto University, Japan


ë Director Certification Programë Director Accreditation Program

ANNUAL REPORT 201010

Independent DirectorMember of the Audit CommitteeOther Positions

ë Accountant

The Support Foundation of Her Majesty Queen Sirikit of Thailand

Education

ë B.A. [Accounting - 2nd Honoured], Chulalongkorn UniversityTraining from Thai Institute of Directors


Mrs PhansopitLikitthammanit

Independent DirectorChairman of the Audit CommitteeMember of the Nomination and Remuneration CommitteeOther Positionsë President - The Siam Administrative Management Company Limitedë Chairman - Raimon Land Public Company Limitedë Chairman of the Audit Committee

Subsrithai Public Company LimitedEducationë B.A. [Accounting], Chulalongkorn Universityë Diploma, National Defence CollegeTraining from Thai Institute of Directorsë Director Certification Programë Audit Committee Programë Director Accreditation Program

Mr Sompoch Intranukul

Independent DirectorMember of the Audit CommitteeOther Positions

ë Head of Business Promotion Department [2003-2004]

Crown Property BureauEducation

ë Master of Business Administration, Long Island University, USA



Mr Virasak Tokakuna


DirectorOther Positionsë Senior Head of the Real Estate Management Department [2001-2006]

Crown Property Bureau

Education

ë Master of Business Administration, Central Missouri State University, USA



Mr Arrak Soontaros

Independent DirectorOther Positions

ë Director, Member of the Remuneration Committee

Thai Plastic and Chemicals Public Company Limited

ë Independent Director, Member of the Remuneration Committee

Thoresen Thai Agencies Public Company LimitedEducation

ë Bachelor of Science [Management Science], Colorado State University,

USA


ë Director Accreditation Program

Mr Sak Euarchukiati

PresidentMember of the Executive CommitteeOther Positionsë Member of the Committee

The Energy for Environment Foundation [Non Profit Organization]

ë Member of The Council of Engineering

Education

ë Master of Business Administration, University of Michigan [Ann Arbor],

USATraining from Thai Institute of Directors

ë Director Accreditation ProgramMr Anant Keskasemsook

Ms Supaporn TreesaenSecretary to the Board of Directors

Mrs Pawinee TippetchSecretary to the Executive Committee

Secretary to the Nomination andRemuneration Committee

Ms Nittaya NamkulSecretary to the Audit Committee


Executive Officers

Mr Anant KeskasemsookPresident

Top Executives

Mr Chatchai ChinvetkitvanitSenior Executive Vice President :Insurance Business 1 & 2 Division

Mr Umnaj LohsuwanExecutive Vice President :

Insurance Business 2 Division

Mr Supradit Ram-IndraSenior Executive Vice President :

Administration Division &Finance Division

Mr Preecha VitavaskarnvejExecutive Vice President :

Underwriting DivisionVice President [Acting] - Reinsurance

Department

Mr Santi IamvuthipreechaExecutive Vice President :Business Support Division

Mrs Santana TantisiriwatExecutive Vice President :

Finance DivisionVice President [Acting] :

Accounting & Finance Department


Mr Ponthep SidhiVice President : Direct Report to President

Mr Manot SinlaparatanapornVice President : Risk Management Office

Ms Nittaya NamkulVice President : Audit Office

Ms Duangratana ChinvannoVice President [Acting] : Business Process Development Office

Mrs Pawinee TippetchVice President : Board Secretariat & Corporate Communications Office

Mrs. Navarat TeekhasaeneeAssistant Vice President : Human Resources Department

Mrs Nichapat PavaluksanawatAssistant Vice President : Administration & Procurement Department

Mr Siriphot OrbaiyokvijitAssistant Vice President : Business Process Development Office

Mr Anant KeskasemsookPresident

Corporate Functions


Mr Chatchai ChinvetkitvanitSenior Executive

Vice President : InsuranceBusiness 1 & 2 Division

Insurance Business 1Division

Mrs Chutatip SirimajanVice President : SCG Business Department

Mr Montree Deo-IsaresVice President : Energy & International Broker Business Department

Mr Suchon Sa-ingthongVice President : Financial Business Department

Ms Duangrat ChinvannoVice President : Branch Business Department

Mrs Supatra DisayabutrVice President : Retail Business and Customer Relationship Department

Mr Pongsathorn ThananurakwongVice President : Marketing Department

Mr Paitoon TraisathidwornAssistant Vice President : Energy & International Broker Business Department

Mr Jirut PrapasoAssistant Vice President : Energy & International Broker Business Department

Mrs Boonyawadee ChuenjitsiriAssistant Vice President : Financial Business Department

Mrs Prathana KaewvataAssistant Vice President : Financial Business Department

Mr Therdsak PungvicharAssistant Vice President : Branch Business Department

Mr Umnaj LohsuwanExecutive Vice President :



Mr Sombat SoponvattanaseveeVice President : Domestic Broker Business Department

Vice President [Acting] : Agent & Broker Business Department

Mr Sakchai SakdaratVice President : Transportation Statutory Department

Mr Narin SuthiprapaVice President : Government Service Department

Mr Somsak ArpornsiripongAssistant Vice President : Domestic Broker Business Department

Executive Officers


Mr Preecha VitavaskarnvejExecutive Vice President :

Underwriting Division

Underwriting Division

Mr Boonyong VongsriVice President : IAR & Engineering Underwriting Department

Mr Phanomsak MongkholnimitVice President : Marine & Miscellaneous Underwriting Department

Mr Sombat TanjaturonVice President : Fire & Motor Underwriting Department

Mrs Sirinuch NilparisutAssistant Vice President : IAR & Engineering Underwriting Department

Ms Thanida YomprasertAssistant Vice President : Marine & Miscellaneous Underwriting Department

Ms Pancharose TeerasuwanAssistant Vice President : Reinsurance Department

Mr Ariya JakranurakVice President : Motor Claims Department

Mr Narongrit ChongpaiboolVice President : Non-Motor Claims Department

Mr Somchit RungruengchotsakulAssistant Vice President : Motor Claims Department

Mr Amornchart SiripattananuntakulAssistant Vice President : Motor Claims Department

Mr Pramote SawangchaengAssistant Vice President : Non-Motor Claims Department

Ms Soparwan TongyuakAssistant Vice President : Non-Motor Claims Department

Mrs Siriporn ChankaewAssistant Vice President : Legal Office

Mr Santi IamvuthipreechaExecutive Vice President :Business Support Division

Business SupportDivision


Mr Supradit Ram-IndraSenior Executive Vice

President : AdministrationDivision & Finance Division

AdministrationDivision

Mr Pongnarin SuriyapholVice President : Information & Technology Department

Mr Noppadol J.JitcharoenchaiVice President : I-Insurance Business Department

Mrs Rangsima NinvilaiAssistant Vice President : Information & Technology Department

Mrs Santana TantisiriwatVice President [Acting] : Accounting and Finance Department

Mrs Viparat KeharuangrongVice President : Premium Collecting Department

Mrs Santana TantisiriwatExecutive Vice President :

Finance Division

Finance Division

Executive Officers


As a non-life insurer of the Crown Property Bureau and as part of Thai society, The Deves

Insurance PCL, through its Directors, management and staff, is dedicated to operating within the

legal framework and to fairness, integrity and responsibility towards all stakeholders - a commitment

that will contribute to the insured and society as a whole. It is also our continuing policy to promote

activities or projects of philanthropic agencies, organizations and foundations, with the hope that

our budgetary support to such non-profit bodies would bring about development in diverse areas

while leading to sustainable benefit to the nation.

Dignity and Corporate Social Responsibility

Support for Insurance for Society Project

Her Royal Highness Princess Maha Chakri Sirindhorn granted an audience at Dusidalai Hall,

Chitrlada Palace to Mr Anant Keskasemsook, President of The Deves Insurance PCL (standing, 3rd

from right) on the occasion of the presentation of the Insurance for Society Project in Honour of HRH

Princess Maha Chakri Sirindhorn by the executives of the Office of the Insurance Commission (OIC)

and sponsors of the programme.

Presentation towards Royal Foundation

Her Royal Highness Princess Maha Chakri

Sirindhorn granted an audience to Mrs Pawinee

Tippetch, Vice President, Board Secretariat &

Corporate Communications Office of The Deves

Insurance PCL, who presented the Companyûs

contribution to Somdetch Phra Mahitala Dhibesra

Adulyadej Vikrom the Prince Father Foundation,

to which Deves Insurance is a regular contributor.

Our Dignity


Contribution to Sai Jai Thai Foundation

Mr Umnaj Lohsuwan, Executive Vice

President (Insurance Business 2) of The Deves

Insurance PCL presented Air Chief Marshal

Kamthon Sindhavanont, Vice Chairman of

the Sai Jai Thai Foundation under Royal

Patronage, with a 100,000 baht contribution

towards the Foundationûs work in supporting

disabled veterans and families of fallen

soldiers.

Support for Education and Research

Grants

Mrs Pawinee Tippetch, Vice President,

Board Secretariat & Corporate Communi-

cations Office of The Deves Insurance PCL

presented Dr Rawin Raviwongse, Dean of the

Faculty of Engineering, Mahidol University

with the Companyûs financial support to the

study and research grants of Mahidol

Engineering Foundation.

Community and Social Responsibility Programmes

Deves Insurance aims to remain an example of good corporate citizen in society. Not only have we

been committed to honest and principled conduct of business, we have also given priority to devoting

our human and financial resources to undertake, to our best efforts, different Corporate Social Responsibility

(CSR) activities, particularly those programmes aimed at youth and children development as well as

promotion of health and safety of life and property. Emphasis has also been given on supporting the

well-being of the communities in which we operate, for they are like close family to Deves Insurance.

With a firm commitment to achieving the goals and objectives of sustainable benefit to society

and communities in its CSR work, the Company has, during 2010, delegated to the Nomination and

Remuneration Committee the additional role of a CSR Committee. The responsibilities of the new committee

include setting of CSR policies and budgets, formulation of action plans for all of the Companyûs CSR

initiatives, as well as monitoring CSR progress for reporting to the Board meetings.

Under the oversight of the Nomination and Remuneration Committee, the Company has set

clearly-defined policies, goals and objectives of its CSR programmes which are grouped into categories of:

social and community development; education; children and youth; and volunteering spirit.


Deves Insurance supported Phra Nakorn

District in arranging for plastic canopies to be

erected as bus-stop shelters around Sanam Luang

to provide shade and cover for bus commuters

and passers-by.

Mr Anant Keskasemsook, President of The

Deves Insurance PCL presented Pol Lt Col

Charnrit Subsombat, Traffic Police Inspector,

Phraratchawang Metropolitan Police Station

with fire extinguisher boxes for road accident

prevention.

Deves Insurance provided mobile tents

to Nang Lerng Police Station for putting up in

public service areas and for use in its community

relations activities.


Deves Insurance PCL presented pink polo shirts to

Mr Suwaporn Jermrangsi, Phra Nakhon District

Director for distribution to and use by members

of Phra Nakhon communities in their activities

organized in honour of His Majesty the Kingûs

84th Birthday Anniversary.

SOCIAL AND COMMUNITY DEVELOPMENTçClean, Safe Communities are Devesû Delightsé Project is aimed at supporting state agencies in ensuring

safe living conditions in the communities.



Deves Insurance PCL presented a Raksuk

insurance policy with 3-year medical coverage

to Ms Duangjai Ketwongse, the wife of a traffic

police officer who died on duty.

Deves Insurance sponsored the production

of reflective vests for distribution to street

cleaners of Phra Nakhon District to improve

their safety at work.

EDUCATIONçDeves Solicitudeé Project has been initiated to support the building or renovation of educational facilities

in promoting a learning-conducive environment, with the early phase focusing on schools located nearby

the Company.

Mr Sansern Wongcha-Um, Chairman of the Nomination and Remuneration Committee presented

Mr Suwaporn Jermrangsi, Phra Nakhon District Director with Baht 1.3 million in financial support to the

renovation of Wat Rachnadda School. Also pictured at the presentation are executives of the District Office.

Playing field + Refurbished groundsà


Mr Anant Keskasemsook, President of

Deves Insurance presented the newly-renovated

classrooms of Wat Phra Chetuphon School to

the templeûs senior clerics, Phra Nakhon District

executives and the schoolûs teaching staff. The

renovation was sponsored by the Company and

included fitting of glass panels around the rooms

to block external noises.

Mrs Pawinee Tippetch, Vice President,

Board Secretariat & Corporate Communications

Office, represented the Company in presenting

books and shelves to Mr Chinnaworn Boonyakiat,

Minister of Education, for distribution to book-

deprived schools in rural, remote areas.

çDeves Insuranceûs Care for Youthé Deves Insurance has, for four consecutive years, provided raincoats

to students of Bangkok Metropolitan schools to protect the youngsters against colds and flu in the rainy

season.

CHILDREN AND YOUTHçSmiles for usé Project As childrenûs smiles and laughter always bring one hope and joy, Deves Insurance

seeks to be a part in creating smiles and laughter among youngsters as gift of joy for everyone - the

smiles that are not only for the benefit of the children or their parents and teachers, but for us all in

society in hoping for a better future.


The Deves Insurance PCL, in cooperation with the Crown Property Bureau, organized a çJoyful Arté

day at the Maha Jesadabodin Pavillion grounds. A total of 300 students from schools in Phra Nakhon

areas joined the activity of painting the Loha Prasat (metal castle) on T-shirts.

Deves Insurance provided gifts to Bangkok Metropolitan schools in support of their Childrenûs Day activities.

The Equestrian Therapy Project has been initiated to support Wat Mahathad School in the therapy,

rehabilitation and development of pupils of the schoolûs special-needs programme. The Project has been

implemented since 2009, catering to 4 groups

of children to date [48 sessions]. The

assessment conducted by the medical team

of Thong Theekhayu Camp, Veterinary and

Remount Department reveals that all

participating children have demonstrated

better emotional and physical development

and that they are able to communicate

with and adjust themselves significantly

better to surrounding society, while showing

a satisfactory degree of less reliance on

others in their ability to lead a normal life.


Major General Bunsanti

Saensawasdi, Director of the

Veterinary and Remount Depart-

ment (middle row, 4th from left)

presided over the launching

ceremony of Deves Insuranceûs

4th Equestrian Therapy Project,

amid the cheerfulness of children

and the delight of parents,

teachers and Deves representatives.

The Aqua Therapy Project is designed for

the development of children requiring special

care, as a further stage following the Equestrian

Therapy Project. It aims to encourage and

maintain an ongoing process of therapy to help

the children develop physically, mentally and

emotionally.

Hand prints by special-needs pupils of

Wat Mahathad School given as a token of

their appreciation for the Companyûs financial

support for classroom renovation.

A picture of horses thoughtfully drawn by

children from their memory and impression of

the Equestrian Therapy Project, for presentation

to Deves Insurance.

Clay horses on colourful grass base are

the work by pupils of Wat Mahathad Schoolûs

special-needs class. The craft piece demonstrates

the childrenûs happiness and bonds with the

developmental activities they have received in

the Equestrian Therapy Project.


VOLUNTEERING SPIRITçLet us be the giveré Project is a volunteering programme of Deves staff who seek to do good deeds and

give up their time and energy to contribute back to society. By taking part in socially beneficial activities

without expecting anything in return, we only hope that the outcomes of such deeds would bring about

a benevolent, harmonious and unselfish society that values the virtue of giving.

Deves people helped clean up Ratcha-

damnoen Klang and Phra Sumane Roads to

improve and smarten the surrounding landscapes.

Management and staff members joined up in

the activity in which Phra Nakhon Districtûs City

Law Enforcement Section and Public Cleaning &

Public Park Section collaborated by providing

water hoses for cleaning.

Deves people helped Phra Nakhon District

in its campaign to persuade voters to exercise

their rights in the Bangkok Councilorsû and District

Councilorsû elections.

Blood donations - To give without expecting

anything in return is always a great deed,

especially to give oneûs blood. Deves Insurance

staff has therefore joined together every three

months to make blood donation to the Thai Red

Cross Society and the activity has seen more

and more participation each year.

Currently, 142 Deves Insurance staff are

active blood donators, with blood donation so

far amounting to 242,800 c.c.


A drawing of Deves Insurance building

the work by Nattachon Prasertsom, a special-needs pupil of Wat Mahathad School.

Our social responsibility activities began out of the commitment to fairbusiness conduct, and consideration for societyûs best interests as well as thetrust in staff capacity and power of participation which has brought aboutthe çvolunteering spirité. We therefore aim to undertake programmes thatcontribute to society and communities, while aspiring to continuous develop-ment and sustainable success and in reflecting our promise of çpride inprotectioné.

Mr Sansern Wongcha-Um, Chairman of the Nomination and Remuneration

Committee and Mr Sompoch Intranukul, Chairman of the Audit Committee, Deves

Insurance PCL were presented with a drawing of Deves Insurance building

by the pupils of Wat

Mahathad Schoolûs

special-needs pro-

gramme as a gesture

of their appreciation

for the Companyûs

funding and support.


Marketing and Service Development

CentralWorld, Level 4 Beacon ZoneTel: 0-2646-1084-5

SCB Park Plaza, Rachadapisek Road, West Building,G/Floor Tel: 0-2937-6056, 0-2937-5163

The Paseo Mall, Lardkrabang RoadK101 Plaza Foyer, Ground Floor Tel : 0-2329-8999

Supreme Complex (Samsen) L3/3-L3/4, 3rd FloorTel: 02-667-4034

Cordial Service

Aiming to deliver maximum satisfaction to policyholders through quality service, we have established

a number of Deves Stations in several community and business areas, especially within large department stores,

to offer a one-stop service for our clients. These service centres are designed to facilitate customersû insurance

applications and premiums payments, and to provide assistance and information on claims processing.

The Mall Ngamwongwan2nd Floor, Service Zone

Tel: 0-2550-0440

The Government Complex CommemoratingHis Majesty the Kingûs 80th Birthday Anniversary,

5 December 2007, Chaengwattana Road,Building B, G/Floor Tel: 0-2143-8411-12


Deves Insurancemobile

flood claims centre

On motor underwriting, Deves Insurance has raised the standards of and awarded quality

accreditation to all approved garages with the sign of çDeves-endorsed garageé. This represents a new

dimension of the Companyûs service which will be kept on a path of continuous improvement.

During the October-November 2010 heavy flooding in various parts of the country, the Company sent

out mobile units to collect flood damage claims from policyholders. Teams were dispatched with these

service vans to deliver relief kits to our customers in the affected areas.

Ceremony to award signs of quality accreditation by Deves Insurance.

Customer Service Centre at Head OfficeDeves Insurance Building 2

Customer Lounge at Head OfficeDeves Insurance Building 1

Deves Insurancemobile

flood claims centre


Deves Insurance is committed to providing accurate information and useful advice which can help

make the insured and the public aware of the rights and protection they are entitled to from insurance,

particularly the basic coverage under the Motor Vehicle Accident Victims Protection Act.

Pictured is Mr Chatchai Chinvetkitvanit,

Senior Executive Vice President and Mr Ariya

Jakranurak, Vice President-Motor claim Dept.

of Deves Insurance presenting gift to Pol Lt

Col Jumpol Kananurak, Public Relations

Department, Metropolitan Police Division

during a Traffic Radio for Society interview

on çwhat to do in a car crashé at the Royal

Thai Police Bureau.

Your products

As our customers are central to everything we do, we have taken particular care over every step and

detail of all services offered. Every insurance product is designed to meet your individual needs and satisfaction.

ë Cancer Fix Insurance offers convenient, instant coverage

without the need for medical checkup. While premiums are

fixed and not age linked, full sum insured will be paid

immediately upon discovery of any stage of cancer.

ë Home Protection and Office Protection covers homes and offices

against loss or damage caused by fire and other hazards,

with the special benefit of the added flood coverage.

ë Liability Insurance [Trusty Business] covers the policyholders

against damage to the property of, or injury to and loss of

life of their customers, arising from an accident on their

premises.


ë Worry-free Work Insurance relieves the burden of finding a

guarantor or a guarantee. It provides protection against direct

damage to the employerûs property caused by the employeeûs

act, where the employment contract requires the employee to

pay compensation for the damage from such act.

ë All-Risks Insurance [Safe SME] protects small and medium-sized

enterprises against various risks including fires, thefts/burglaries,

natural disasters, strikes, riots, aviation hazards, vehicle impact

and/or collision as well as cash loss.

Business Alliance

Deves Insurance entered into a business alliance agreement in

December 2010 with Sompo Japan Asia Holdings Pte Ltd and Sompo

Japan Insurance (Thailand) Co, Ltd. The partnership is aimed at

strengthening the business capacity of both parties towards long-term

mutual success in better serving each otherûs customers.

Photo shows Mr Anant Keskasemsook, President of Deves (middle) exchanging the signed

agreements with Mr Surapon Vongvadhanaroj (second from left), Chairman of Sompo Japan

Insurance (Thailand) Co, Ltd and the President Mr Yuji Kawauchi (left). Also present at the signing

of the cooperation deal were Mr Tadashi Baba, Managing Director of Sompo Japan Asia Holdings

(second from right) and Mr Aviruth Wongbuddhapitak, Executive Committee Chairman of Deves

Insurance (right).


Rights of ShareholdersThe Company recognizes the shareholdersû ownership rights and functions which are exercised

through the appointed Board of Directors. It has therefore been committed to respecting and protecting

the basic rights of all shareholders in accordance with applicable laws and regulations. In all actions taken

by the Board, the Directors have always given primary consideration to the rights and interests of the

shareholders and have set down the following guidelines for promoting the rights and equality of all

shareholders.

Access to InformationThe Company ensures that complete information is accessible to all shareholders in a timely

and equitable manner. All forms of communications with shareholders comply, in every respect, with

regulatory requirements. News and information of which shareholders should be informed are posted

on the Companyûs website [www.deves.co.th]. These include resolutions of Board meetings, annual

reports, notices of general meetings and forms of proxy. Supplementary information is made available

prior to the dispatch of meeting notice to provide all shareholders with sufficient details for perusal

in advance of the meeting. Minutes of general meetings are also published on the website within

fourteen days of each meeting.

Additionally, information about the Companyûs business and community activities or çCorporate

Newsé is provided on the çCompany Profileé page of the website which is regularly updated by the

responsible unit.

Convening of Shareholdersû MeetingFor every general meeting convened, the Company would send to all shareholders a written

notice together with supporting documents and forms of proxy stipulated by the Ministry of

Commerce. The documents provide complete information relevant to the meeting as well as facts

and rationale and the Boardûs opinions for each item on the agenda to enable the shareholders to

make informed decision when voting on the resolutions. The notice is sent out in advance within the

statutory period and is also published in the newspapers for three consecutive days at least three days

prior to the date of the meeting.

Shareholdersû MeetingThe Board of Directors places great significance on the Companyûs general meetings of

shareholders. All members of the Board, especially the Chairman, attend every general meeting to

receive the statements of the Executive Board and the Management and to respond to shareholdersû

questions, except where the exigencies of commitment prevent their participation. The attendance of

Directors is recorded as part of the minutes of the meeting. The Companyûs auditors and legal

advisors also take part in these meetings to answer any queries relevant to and within their

responsibilities.

During the meeting, shareholders are offered the opportunity to comment and raise questions

without any time restriction. All queries, observations and suggestions from shareholders as well as the

Managementûs clarifications are thoroughly recorded in the minutes of each meeting. Constructive

suggestions will then be considered and adopted for operational improvement. Shareholders can fully

exercise their voting rights in every decision made at general meetings.

The main business of the meeting is dealt with in its itemized order. No significant matters other

than those specified in the notice of meeting would be added to the agenda. Only questions and

observations of shareholders are put forward as any other business of the meeting.

Principles of Corporate Governance


Promotion of Shareholder ParticipationThe Company facilitates shareholdersû attendance at the meeting by arranging conference

facilities as well as adequate reception and registration staff to ensure convenient registration by all

shareholders and proxies, a process which can now be done two hours in advance of the meeting.

All previous shareholdersû meetings have been held in the district where the Companyûs head

office is located. To facilitate and encourage maximum attendance, a map of the meeting venue

has also been appended to the notice of meeting. After the holding of each meeting, the Company

would publish on its website the resolutions and minutes of the meeting so that the information is

promptly available to shareholders, investors and the interested public.

Protection of Shareholder ValueIt remains our priority to protect the rights and entitlements of all shareholders. The Company has

continuously implemented the policy announced at its application for listing on the Stock Exchange

of Thailand in 1990, i.e. to distribute at least 50% of its net profit to shareholders as dividends.

Equitable Treatment of ShareholdersThe Company respects and promotes equitable treatment for all shareholders by adhering to the

following practices.

1. Each general meeting is conducted in accordance with the agenda set out in the notice of

meeting so that all shareholders can have advance information of the matters to be discussed

and decided. No business shall be added onto the agenda without prior notification to the

shareholders.

2. To protect the voting rights of all shareholders, the Company would send out with the notice of

meeting forms of proxy that include the name of at last one Independent Director as the

recommended proxy. The forms, which follow the Ministry of Commerce formats, allow those

shareholders unable to attend the meeting to appoint a proxy and to indicate the way in

which the proxy should be voting on their behalf. The shareholders are offered the alternative

of appointing any person to attend in their place, or to appoint the Audit Committee Chairman

or any Independent Director to vote according to their intention.

3. There has been an open and transparent system of voting at all previous meetings. Shareholders

can use the ballot papers provided by the Company to cast votes at their discretion. After

the votes have been counted, the Chairman would announce the outcome to the Meeting.

The voting outcome of each resolution is also recorded in the minutes of the meeting. The unit

responsible for organizing the meeting would keep all ballots together in case of future queries

about the accuracy and transparency of the votes taken.

Roles of StakeholdersThe Company is committed to treating all stakeholders equitably and to conducting business with

responsibility toward all interested parties. Appreciating the importance of progressing steadily and sustainably

together, we have established within the Companyûs Code of Conduct the guidelines for ensuring equality

of protection and treatment for all of our stakeholders.


Shareholders : All shareholders are given equal importance and are treated with fairness. In addition

to protecting shareholdersû basic rights under statutory requirements, the Board of

Directors always gives prime consideration to the best interests of the shareholders,

while aiming to promote long-term success so as to create shareholder value.

Customers : To reach the vision of being the provider of superior non-life insurance service, the

Company has implemented a quality management programme by applying Total Quality

Management (TQM) as guidelines for allocating plans and responsibilities across the

organization. The aim is to ensure continuing improvement in organizational capabilities

and to focus on meeting the needs of customers and interested parties. Quality policy

has been developed and adjusted gradually through operational progression.

Currently, the Company is pursuing the following ISO 9001 : 2008 quality policy:

çto continuously enhance service quality so as to satisfy customersû needs and

achieve customer satisfactioné

The Company has since 1998 been granted the ISO certification of quality management system

from the accreditation body, TUV NORD.

Such ISO system represents an approach to maintaining operational consistency within recognized

standards. It also provides all customers and partners, as our business stakeholders, the assurance that

their rights and interests shall be properly protected.

Employees : The Company believes that the staff have a vital role to play in the growth and success

of the organization. We therefore attach importance to developing the capacity and

competences of our personnel at all levels. The Company has in place a sound and

constantly developed system of human resource management and a long-term human

resource development plan formulated by the Personnel Department. Functional

competencies have also been identified as the basis for staff development planning,

thus allowing all personnel to receive specialist and skills training necessary for their work

and career advancement.

We maintain an operational environment conducive to pleasant working atmosphere. The use of

advanced systems and technology has always been promoted to ensure greater efficiency in processes

and coordination. Moreover, the Company has built up on the intranet a collection of information and

articles about business and organizational management, so that staff members can study or learn about

new management concepts for professional self-development as well as increased efficiency.

The Company takes into consideration factors essential to the living conditions of staff and thus

provides employee benefits such as provident fund, health insurance and annual check-up. We also

encourage staff to keep healthy through regular exercises by organizing internal sports competitions,

providing fitness facilities.

Staff compensation scheme is drawn up on the basis of industry comparables. Annual salary

increases are subject to individual staffûs performance which is evaluated against a pre-determined set

of criteria. The performance review needs to be agreed upon by the staff member and the line manager

to ensure fairness and transparency. The system is designed to motivate employees to work toward goals

and objectives.

To reinforce its core values in line with organizational attributes, Deves Insurance has defined its

vision and mission as follows:


VisionTo be a provider of quality non-life insurance services operating under good governance principles

and being recognized as çthe insurer of choiceé.

Missionë To enhance and maintain image of a good organization.

ë To operate under good governance principles.

ë To achieve successful performance so as to deliver long-term shareholder value.

ë To achieve maximum customer satisfaction through improved service quality.

ë To promote effective human resource management practices.

ë To enhance operational efficiency and competitiveness through modern technology.

Business partners : It is our key priority to operate to trade terms and conditions while

respecting mutual benefits. We therefore treat and work with all

partners with honesty and equitableness, taking care to maintain the

reputation and credibility of the organization.

Competitors : The Company always adheres to the rule of fair and ethical competition.

Creditors : We strictly honour all obligations to our creditors.

Society and the environment : The Board of Directors as well as the Management Team and all staff

recognize that business organizations are part of society. With available

capacity and resources, businesses can have a vital role to play in

caring for the communities and in contributing to societyûs improvement.

We have therefore undertaken various socially beneficial activities and

projects, with the aim to promote their sustainability and long-term

benefit. All programmes are monitored and evaluated to ensure that

they truly contribute to and serve the interests of targeted sectors of

society. The Company has also acted as the focal point for initiating

and encouraging employee association and involvement in initiatives

designed to support social causes. Examples include the setting up of

Deves Volunteer Group to provide development support to rural schools

and youths, and the Groupûs blood donations to the Thai Red Cross Society.

Disclosure and TransparencyThe Board of Directors fully recognizes its ethical and statutory responsibility to all shareholders and

has discharged its duties with integrity and prudence in protecting the Companyûs interests, which mean

the overall interests of the shareholders. It is therefore a key responsibility of the Board to ensure that the

Company prepares and discloses complete and accurate financial and non-financial information in a

timely and transparent manner through channels easily and equally accessible to all shareholders as well

as interested parties. These include disclosures in the annual report and the Companyûs website at

www.deves.co.th. Enquiries are welcomed on this regularly updated website. The Board Secretariat and

Corporate Communications Office, which serves as the Investor Relations function, ensures all enquiries

are attended to in a timely manner.

The above disclosures refer to the Companyûs financial statements which have been certified by

the auditors as correct in material aspects in accordance with generally accepted accounting principles

and which have been endorsed by the Audit Committee and the Board of Directors. Also included are

the Companyûs corporate governance policy, annual performance reports of the Directors and Board


committees, directorsû and executive remuneration policy and details which reflects the duties and

responsibilities of the Company Directors.

Additionally the Company has always complied with the rules of other regulatory agencies

regarding submission of returns/reports and information disclosure. We deem that such practices are

integral to good corporate governance.

Responsibilities of the BoardThe Board of Directors represents all shareholders in the oversight and control of the Company to

ensure strong and sustainable business returns. With a duty to all shareholders, the Board is responsible

for setting corporate vision and business policies and for providing assurance that the Company operates

with the highest responsibility toward all stakeholders while meeting statutory requirements as well as its

obligations to all concerned.

1. Composition of the BoardThe Articles of Association of the Company stipulates that the Board should comprise at least

five members. In 2010, the Companyûs Board had a membership of twelve, consisting of one

executive Director and eleven non-executive Directors.

Directorsû term of appointment is governed by the Companyûs Articles of Association. All

Directors are eligible for re-election at the end of their term.

Independent Directors

The Company has defined the requirements of independent directors in accordance with

the regulation the Office of the Insurance Commission (OIC), as follows:

ë Not having more than 0.5% holding in the paid-up capital of the Company or its affiliated,

associated or related companies;

ë Not being involved in the management of, nor engaging in any paid employment with

the Company or its affiliated, associated or related companies or its major shareholders;

ë Not having an interest or stake, directly or indirectly, in the finance and management of

the Company or its affiliated, associated or related companies or its major shareholders;

ë Not being related to or being a family member of any senior executive or major

shareholder of the Company.

Other company directorships

The Board of Directors is composed of individuals who represent a breadth of expertise, each

holding key executive posts with various organizations. Their distinct backgrounds and knowledge can

contribute efficiently to the shaping of corporate policies and direction and to the achievement of

maximum returns and benefits for the Company and all shareholders.

Board membersû directorships with other companies [details disclosed under çBoard of Directorsé

Section] have no effect on the fulfillment of their duties as the Company Directors. All members of

the Board attend every regularly scheduled meeting. They are also fully committed to studying

all materials required for decision-making at meetings and to providing constructive advice to the

Management on a regular basis.

Separation of Roles

The Chairman of the Board is not the same person as the President of the Company, both being

two separate positions. Their distinct roles and responsibilities are clearly defined in the çDelegation of

Authorityé which sets down specifically the scope of authority and duties of the Board of Directors,


the Committee of the Board and each level of the Management Team.

The Directors elect one suitable member as Chairman of the Board who chairs the meetings of

the Board and of the shareholders. The Chairman is a non-executive Director, thus allowing the

Company to establish and maintain an appropriate balance of power. Furthermore, with thorough

understanding of and continued commitment to good governance practices, the Chairman has

encouraged all Directors to exercise independent judgement in the best interests of the Company

and the shareholders.

The position of President is subject to an identification and nomination process led by the

Nomination and Remuneration Committee before being recommended for approval and

appointment by the Board. The President has responsibility for leading the Management Team in

implementing the approved policies and strategies within the agreed framework toward successful

performance of the Company.

Company Secretary : The Company has appointed a Company Secretary and set up a Board

Secretariat and Corporate Communications Office to be responsible for liaising between the Board

and the Management Team. Other responsibilities are to keep the Directors updated on relevant laws

and regulations so as to provide assurance of strict compliance by their performance to all regulatory

requirements and to ensure that the Management works to the Board resolutions.

2. Board CommitteesAt present, the Company has three committees of the Board, i.e. the Executive Committee,

the Audit Committee and the Nomination and Remuneration Committee. These Committees are

independent in the performance of their duties within the authority and responsibility delegated by

the Board, while providing the Board with useful recommendations on the respective areas. Each of

the three Committees meet regularly, as scheduled in its work plans, to consider and review matters,

and after each meeting, the secretary would send the minutes of the meeting to all directors. The

aim is to keep members of the Board informed on important matters and developments, and to

enable them to continuously monitor any improvement determined by Board policy. Acknowledging

reports of the Board committees has also been made one of the main items on the agenda for

quarterly meetings, so that problems and recommendations can be reported directly by the

responsible parties.

Authority and Responsibilities of Board Committees

The Executive Committee was appointed on 25 June 1992. It is currently composed of

2 members and is responsible for the operational management within the authority and duties

mandated by the Board of Directors in the çDelegation of Authorityé. This written Delegation describes

how the Boardûs authority and responsibility are delegated down to the Committees of the Board and

to the next level of management.

The Audit Committee, appointed on 31 August 1999, consists of 3 independent Directors. It is

responsible for discharging the tasks assigned by the Board. The main duties of the Committee are to

oversee the accuracy, completeness and reliability of the Companyûs financial reporting and

disclosures; to ensure an effective and appropriate system of internal control within the Company;

to prevent conflicts of interest while ensuring compliance with all applicable laws and requirements;

and to select and recommend the appointment of the Companyûs Auditors and the approval of

their fees. Members of the Audit Committee have a 3-year term of office.


The Nomination and Remuneration Committee - In its meeting on 21 February 2003, the Board of

Directors resolved to appoint a çRemuneration Committeeé to comprise 3 members, with the Chairman

and most members being independent Directors. The function of the Committee was to consider and

recommend to the Board the compensation structure and system as well as the limit and budget for

remuneration and benefits for Directors, Board Committees and top executives from Vice President to

President. Members of the Committee have been appointed for a 3-year term of office.

In 2005, the Board of Directors extended the scope of the Committeeûs responsibility to

include the nomination function and renamed it the çNomination and Remuneration Committeeé.

The Committee has thus assumed the additional duty of selecting and nominating qualified persons

as the Companyûs new directors as well as considering the re-election of directors retiring by rotation.

The Committee would then recommend such nominations for the approval of the Board of Directors

or the shareholdersû meeting. Later in 2010, the Board determined in its meetings that Corporate

Social Responsibility (CSR), through honest and ethical business conduct to participation in social/

community improvement and environment conservation, had such an important part to play in social

development and remedy. It was therefore resolved that the Nomination and Remuneration

Committee be assigned the additional role of CSR Committee. The responsibility of this new

committee is to set policies, plans and budgets for all the Companyûs CSR programmes and to

monitor progress against established plans and timeframes. Currently, the Committee is made up of

four independent and non-executive Directors.

3. Roles and Responsibilities of the BoardThe Board of Directors recognizes the significance of its role and accountability to shareholders

and has thus performed its duties honestly and prudently to safeguard the Companyûs interests,

which represent the interests of all shareholders. The Board takes responsibility for determining and

approving all important matters relating to the Companyûs operations, such as setting corporate vision

and mission, strategies, financial goals as well as business and financial plans, and ensuring the

established policies and plans are efficiently and effectively implemented by the Management.

The Board has drawn up and introduced a çCorporate Governance Policyé, a çCode of Business

Ethicsé as well as a çCode of Conduct for Staffé and has ensured strict and consistent compliance

within the organization. The Policy and the Codes are also published on the intranet and the

corporate website to promote among Directors, officers, employees and all concerned a better

understanding of the ethical standards for the Companyûs business conduct.

To avoid potential conflicts of interest, the Board deems it essential to ensure that no one uses

his position as a director, executive or staff member of the Company for personal gain or advantage.

All Directors are therefore not permitted any activity which is in conflict or competition with the

Companyûs business. Overall benefits for the Company and the shareholders will be taken chiefly into

account for the conduct of any transactions in which a conflict of interest might arise and in such

cases all interested parties will be excluded from the decision making process.

The Board has established, within the organizational structure, an Audit Office which

serves as the implementation function of and reports directly to the Audit Committee. The Audit

Committee has responsibility for overseeing the financial reporting process as well as the accurate,

complete and reliable disclosure of financial information. The Committee also ensures that the

Company maintains an effective and appropriate system of internal control and internal audit. The

Audit Office is responsible for preparing and submitting annually its audit plan and internal control


appraisal plan for endorsement by the Board.

Moreover, a Research and Management Information Function has also been set up within the

Companyûs management structure to take responsibility for analyzing and assessing business

and market environments. All useful information as well as unusual signs are collated and examined

to create an early warning system. The Company has established a Risk Management Committee

to assess and identify the scope and impact of those risks facing the Company and their

likelihood of occurrence with a view to devising measures to mitigate any potential losses or

damage to the Company. A çRisk Management Handbooké has also been issued as guidelines

for all concerned. The Risk Management Committee presents its risk report to the Board meeting

on a quarterly basis.

4. Board MeetingsBoard meetings are scheduled for consideration and approval of the Companyûs quarterly

financial reports in accordance with the provisions of the Public Limited Companies Act. In addition

to the four regular meetings, the Board also holds meetings to discuss and approve annual

business and financial plans, evaluate in-year performances as well as reviewing issues arising.

The Companyûs Articles of Association require that not less than half of the total number of

directors must be present at Board meeting and such quorum has been met for every previous

meeting of the Board.

A schedule of Board meetings for the entire year is planned in advance. The main business

or agenda is also clearly specified for each meeting, although additional items can be put forward

by Directors or relevant parties. The Company ensures the agenda and supporting documents are

circulated in advance of the meeting to allow every Director sufficient time for perusal and that the

format and contents of all meeting materials are clear and comprehensibly presented. Each

meeting of the Board takes about two hours on average.

Senior executives, who are not members of the Board but are related to the business of the

meeting, will be invited to the meeting to provide additional information on the issues relevant

to them. To avoid conflicts of interest and ensure transparency for all concerned, the Board has

stipulated that any Director who has an interest in any matter being considered may not vote on such

matter and that Directors are not to be involved in the day-to-day management of the Company.

5. Board Self-AssessmentThe Company has not engaged in self-assessment of the Board of Directors. However, the

Boardûs overall performance can be evaluated in light of annual business plans and goals. In this

regard, the Company has to date posted strong and consistent results while complying with

all regulatory requirements.

6. Remuneration of Directors and ExecutivesThe Nomination and Remuneration Committee is responsible for determining and recommending

Directorsû remuneration, through Board meeting, for approval of shareholdersû meeting. Remuneration

and benefits for Directors and members of every committee of the Board are subject to approval

by shareholders. Members of Board Committees are remunerated more for their additional duties

and responsibilities.


In determining Directorsû remuneration, the Committee would make comparison of the

current remuneration for Board members against the annual compensation survey conducted by

the Thai Institute of Directors. This is to ensure that the remuneration packages for Company

Directors are at a level appropriate and comparable to industry practices and can reflect the

experience, accountability and responsibility as well as expected contribution of the individual

members.

Directorsû remuneration currently comprises annual emolument and monthly or per-meeting

stipend at the rate fixed for each committee and as approved by the shareholdersû meeting.

The Company discloses details of each Directorûs remuneration in its Annual Report on a yearly basis.

The remuneration packages of senior executives are determined by the Nomination and

Remuneration Committee in consultation with the Executive Committee who is responsible for

appraising the performance of senior management members from the level of Vice President to

President. Such performance reviews are based on a set of realistic and measurable criteria

aimed at achieving agreed long-term strategic objectives.

Apart from the performance factor of the individual members, the remuneration of senior

management will take account of the Companyûs annual results along with the comparability with

peer companies in the industry. The results of the determinations will then be submitted to the Board

meeting for approval.

7. Director and Executive DevelopmentHow the Board and the Management perform their roles and duties are crucial to the Companyûs

activities and its achievement of business objectives. The Board of Directors has therefore placed

importance on personal development and development of staff at all levels. The Board has also

encouraged its members and Company Secretary to attend seminars and courses organized by

the Thai Institute of Directors which are beneficial to their performance.

Upon appointment, new directors are provided with an induction pack containing documents

which introduce the business activities, direction and objectives of the Company and other

information necessary for directorûs duties.

As regards executive development, the Company has arranged for senior officers to take

training courses that can help the individual members to develop their business management skills

or gain expertise in domestic and overseas business operations, and to apply the knowledge and

experience acquired to contribute to the Companyûs performance.


Benefit of Director in Year 2010 [Baht]

Board of Executive Audit Nomination and Total

Directors Committee Committee Remuneration

Committee

Dr Chirayu Isarangkun Na Ayuthaya 810,000 810,000

Mr Sansern Wongcha-um 540,000 30,000 570,000

Mr Montri Mongkolswat 540,000 180,000 15,000 735,000

Mr Aviruth Wongbuddhapitak 540,000 240,000 780,000

Mr Na Bhengbhasang Krishnamra 540,000 540,000

Mr Sompoch Intranukul 540,000 180,000 15,000 735,000

Dr Charnchai Musignisarkorn 540,000 15,000 555,000

Mrs Phansopit Likitthammanit 540,000 120,000 660,000

Mr Arrak Soontaros 540,000 540,000

Mr Virasak Tokakuna 540,000 120,000 660,000

Mr Sak Euarchukiati 428,548 428,548

Mr Anant Keskasemsook 540,000 180,000 720,000

Total 6,638,548 600,000 420,000 75,000 7,733,548

Besides the benefits stated above, the Company did not pay any other benefits to Directors.

As for the shareholding in 2010, none of the directors and executives hold the Companyûs shares.

Benefit of Director


DIRECTORSû ATTENDANCE IN YEAR 2010 (5 Board of Directorsû Meetings were held.)

Name No. of Attendance

1 Dr Chirayu Isarangkun Na Ayuthaya 4/5

Chairman

2 Mr Sansern Wongcha-um 4/5

3 Mr Montri Mongkolswat 5/5

4 Mr Aviruth Wongbuddhapitak 4/5

5 Mr Na Bhengbhasang Krishnamra 5/5

6 Mr Sompoch Intranukul 4/5

7 Dr Charnchai Musignisarkorn 5/5

8 Mrs Phansopit Likitthammanit 5/5

9 Mr Arrak Soontaros 4/5

10 Mr Virasak Tokakuna 5/5

11 Mr Sak Euarchukiati 5/5

12 Mr Anant Keskasemsook 5/5

EXECUTIVE DIRECTORSû ATTENDANCE IN YEAR 2010 (12 Executive Committeeûs Meetings were held.)


1 Mr Aviruth Wongbuddhapitak 12/12

Chairman of the Executive Committee

2 Mr Anant Keskasemsook 12/12

AUDIT DIRECTORSû ATTENDANCE IN YEAR 2010 (5 Audit Committeeûs Meetings were held.)



Chairman of the Audit Committee

2 Mrs Phansopit Likitthammanit 5/5

3 Mr Virasak Tokakuna 5/5

NOMINATION AND REMUNERATION DIRECTORSû ATTENDANCE IN YEAR 2010

(2 Nomination and Remuneration Committeeûs Meetings were held.)


1 Mr Sansern Wongcha-um 2/2

Chairman of the Nomination and Remuneration Committee

2 Dr Charnchai Musignisarkorn 2/2


4 Mr Montri Mongkolswat 2/2

Boardûs Meeting


The Appropriation of the Earnings

The Board of Directors Propses the appropriation of the earnings

of Baht 264,736,458.71 as follows :

Unit : Baht

December 31, 2010 December 31, 2009

Unappropriated Retained Earnings Brought Forward 193,824,136.79 189,205,586.96

Add - Net Profit 70,912,321.92 109,426,949.83

Total Earnings Available for Appropriation 264,736,458.71 298,632,536.79

Appropriated of earnings

1. *Dividend Per Share : 2010 = Baht 5.00 (2009 = Baht 5.00) 60,000,000.00 60,000,000.00

2. Stock Dividened Per Share = Baht 15.00 180,000,000.00 -

3. Legal Reserve - -

4. General Reserve - 40,000,000.00

5. Expansion Reserve 3,135,351.54 4,808,400.00

Total Appropriated Earnings 243,135,351.54 104,808,400.00

6. Unappropriated Retained Earnings Carried Forward 21,601,107.17 193,824,136.79

264,736,458.71 298,632,536.79

* (12 Million Common Shares)

We are pleased to propose for the Shareholdersû approval.


To the Shareholders of The Deves Insurance Public Company Limited

The Board of Directors has appointed, to the Audit Committee, three Independent Directors who meet

all the statutory requirements. The current Committee consists of Mr Sompoch Intranukul, Mrs Phansopit

Likitthammanit and Mr Virasak Tokakuna, with Miss Nittaya Namkul being the Committee Secretary.

In 2010 a total of five meetings were held by the Audit Committee with participation of senior

executives or external and internal auditors where appropriate. The purposes and results of the meetings are

summarized as follows.

1. Reviewing the Companyûs quarterly and annual financial reports for 2010. The Committee, having

sought the opinion of the auditors and executives as to the objectivity and adequacy of the financial

disclosure, concurred with the auditors that all financial statements were accurate and conformed to

generally accepted accounting standards and that there was full disclosure of related transactions.

2. Reviewing and assessing the adequacy, appropriateness and effectiveness of internal control

systems by: considering the internal auditorsû findings based on approved audit plans; reviewing the

information system audit carried out by the Audit Office of the Siam Cement PCL; and considering the

results of the assessment of internal control systems conducted in accordance with OIC requirements by

the Certified Public Accountants for 2009. With all the above reviews, the Committee reached the opinion

that appropriate systems of internal control and monitoring were in place within the organization.

3. Reviewing the Companyûs compliance with applicable laws and regulations as well as its fulfilment

of third-party obligations. In this regard, the Committee concluded that throughout the year

the Company complied fully with legal and regulatory requirements while meeting all its obligations with

third parties.

4. Reviewing the conflict-of-interest disclosures by Directors and executives, and concluding that no

conflict-of-interest transactions were found.

5. Selecting and recommending, to the Board for further approval by shareholders, the appointment

of external auditors and the fixing of their fees for 2011. In this connection, it was recommended that

Ernst & Young Office Limited should be appointed as the Companyûs Auditors for fiscal 2011.

6. Considering and agreeing any revisions/amendments to the Audit Committee Charter as well as

to the internal audit procedures and internal audit guidelines.

In conclusion, the Audit Committee has fully discharged its responsibilities mandated by the Board

under the Audit Committee Charter. It has also reached the opinion that the Company has maintained

accurate financial reporting as well as effective and appropriate systems of internal control and internal

audit while ensuring strict compliance with all regulatory requirements and complete disclosure of

information.

(Sompoch Intranukul)

Chairman of the Audit Committee

Report of the Audit Committee


Unit : Million Baht

2010 2009 2008

FINANCIAL STATUS AT YEARS END

Total Assets 5,064.12 4,731.11 4,614.08

Total Liabilities 2,968.95 2,646.86 2,579.26

Shareholdersû Equity 2,095.16 2,084.25 2,034.82

OPERATING PERFORMANCE FOR THE YEAR

Gross Premium Income 3,419.00 2,762.08 3,272.00

Profit on Underwriting 628.31 539.50 436.34

Investment Income 64.33 72.57 96.13

Other Income 6.86 13.10 15.86

Operating Expense 594.99 464.89 404.49

Income Tax 33.60 50.85 44.99

Net Profit 70.91 109.43 98.85

FINANCIAL RATIOS

Return on Gross premium income 2.07% 3.96% 3.02%

Return on Equity 3.38% 5.25% 4.86%

Return on Total Assets 1.40% 2.31% 2.14%

Net Profit Per Share 5.91 9.12 8.24

Book Value Per Share 174.60 173.69 169.57

KEYS FINANCIAL RATIOS


Report and financial statementsThe Deves Insurance Public Company Limited

31 December 2010 and 2009


Report of Independent Auditor

To the Shareholders of The Deves Insurance Public Company Limited

I have audited the accompanying balance sheets of The Deves Insurance Public Company Limited

as at 31 December 2010 and 2009, and the related statements of income, changes in shareholdersû equity

and cash flows for the years then ended. These financial statements are the responsibility of the Companyûs

management as to their correctness and the completeness of the presentation. My responsibility is to issue

a report on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards

require that I plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement. An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by management, as well as evaluating the

overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the

financial position of The Deves Insurance Public Company Limited as at 31 December 2010 and 2009, and

the results of its operations and its cash flows for the years then ended in accordance with generally

accepted accounting principles.

Nonglak Pumnoi

Certified Public Accountant (Thailand) No. 4172

Ernst & Young Office Limited

Bangkok: 4 March 2011


Balance SheetsThe Deves Insurance Public Company Limited

As at 31 December 2010 and 2009

(Unit : Baht)

Note 2010 2009

Assets

Investments in securities 6, 9

Bonds 1,475,149,849 895,158,768

Notes - 10,753,732

Bill of exchange 770,000,000 520,000,000

Stocks 7,310,437 7,310,179

Debentures 867,130,065 504,809,111

Total investments in securities-net 3,119,590,351 1,938,031,790

Loans 7

Mortgage loans 13,086,538 13,856,856

Other loans 4,268,064 4,984,408

Total loans 17,354,602 18,841,264

Cash and deposits at financial institutions 8, 9 705,424,212 1,627,855,253

Premises and equipment-net 10 75,791,530 82,886,799

Leasehold right-net 11 32,933,123 34,771,415

Computer software-net 12 16,550,951 25,137,530

Due from reinsurers 11,042,576 58,582,071

Premium due and uncollected-net 9, 13 435,605,501 457,534,359

Accrued investment income-net 9, 16 14,174,869 12,470,845

Other assets

Deferred tax assets-net 14 188,842,727 147,802,914

Properties foreclosed-net 15 13,988,794 13,988,794

Advance payment of ceded premium 273,577,050 203,957,735

Prepaid commissions and brokerages 47,931,018 36,437,022

Claim receivable from litigant-net 17 40,753,532 32,652,393

Others-net 18 70,558,117 40,158,195

Total other assets 635,651,238 474,997,053

Total assets 5,064,118,953 4,731,108,379

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


Balance Sheets (Continued)The Deves Insurance Public Company Limited

As at 31 December 2010 and 2009

(Unit : Baht)

Note 2010 2009

Liabilities and shareholdersû equity

Liabilities

Unearned premium reserves 19 989,905,045 727,859,991

Loss reserves and outstanding claims 463,027,422 318,200,966

Amounts withheld on reinsurance treaties 113,569,964 131,759,150

Due to reinsurers 163,526,709 217,485,174

Other liabilities

Corporate income tax payable 11,175,872 15,467,142

Premium received in advance 536,028,768 393,191,061

Accrued commissions and brokerages 9 42,443,529 42,657,817

Liabilities under finance lease agreements 20 23,382,952 27,939,640

Suspense accounts to settle with premium due 35,437,963 41,718,733

Accrued expenses 129,793,629 26,876,418

Account payable-purchase of investment 384,741,011 649,771,954

Others 75,921,200 53,927,766

Total other liabilities 1,238,924,924 1,251,550,531

Total liabilities 2,968,954,064 2,646,855,812

Shareholdersû equity

Share capital

Registered

12,000,000 ordinary shares of Baht 10 each 120,000,000 120,000,000

Issued and paid-up

12,000,000 ordinary shares of Baht 10 each 120,000,000 120,000,000

Premium on share capital 620,000,000 620,000,000

Retained earnings

Statutory reserve

Statutory reserve 21 12,000,000 12,000,000

General reserve 22 970,000,000 930,000,000

Expansion reserve 22 108,428,430 103,620,030

Unappropriated 264,736,459 298,632,537

Total shareholdersû equity 2,095,164,889 2,084,252,567

Total liabilities and shareholdersû equity 5,064,118,953 4,731,108,379

Off balance sheet item-commitment

Commitment 1,191,263 2,025,854



Income StatementsThe Deves Insurance Public Company Limited

For the years ended 31 December 2010 and 2009

Fire Marine and transportation

Underwriting income

Gross premium written 242,352,189 101,479,589

Less: Premium ceded (52,321,868) (78,021,902)

Net premium written 190,030,321 23,457,687

Unearned premium reserves (increase) decrease

from previous year 1,681,143 174,116

Earned premium written 191,711,464 23,631,803

Underwriting expenses

Losses incurred during the year 14,411,964 7,058,240

Loss adjustment expenses 1,077,749 623,491

Commissions and brokerages 26,166,580 (13,226,340)

Other underwriting expenses 21,156,878 2,196,620

Total underwriting expenses 62,813,171 (3,347,989)

Underwriting income 128,898,293 26,979,792

Net investment income

Gains on investments in securities

Other income

Operating expenses

Personnel expenses

Premises and equipment expenses

Taxes and duties

Allowance for doubtful accounts

Directorsû remuneration (Note 24)

Compensation road accident expense

Other operating expenses

Total operating expenses

Income before corporate income tax

Corporate income tax (Note 14)

Net income for the year

Basic earnings per share (Note 25)

Net income



(Unit: Baht)

2010 2009

Motor Miscellaneous Total Total

1,442,399,220 1,632,765,500 3,418,996,498 2,762,083,151

(52,046,051) (1,221,452,050) (1,403,841,871) (1,391,586,051)

1,390,353,169 411,313,450 2,015,154,627 1,370,497,100

(250,132,864) (13,767,448) (262,045,053) (13,143,469)

1,140,220,305 397,546,002 1,753,109,574 1,357,353,631

634,370,137 239,165,287 895,005,628 681,321,369

17,523,015 5,464,360 24,688,615 19,390,694

70,425,856 (23,243,944) 60,122,152 (9,054,805)

81,411,627 40,213,321 144,978,446 126,199,544

803,730,635 261,599,024 1,124,794,841 817,856,802

336,489,670 135,946,978 628,314,733 539,496,829

61,408,183 64,174,902

2,916,566 8,400,049

6,860,369 13,100,824

699,499,851 625,172,604

278,883,685 265,049,285

111,621,402 99,436,173

1,381,730 1,968,705

1,947,165 1,029,608

7,921,986 8,603,500

96,442,897 8,191,134

96,789,268 80,614,207

594,988,133 464,892,612

104,511,718 160,279,992

(33,599,396) (50,853,042)

70,912,322 109,426,950

5.91 9.12


Issued and fully Premium on

paid-up share capital share capital

Balance as at 1 January 2009 120,000,000 620,000,000

Net income for the year - -

Total income for the year - -

Dividend paid (Note 22) - -

Unappropriated retained earnings transferred to reserves (Note 22) - -

Balance as at 31 December 2009 120,000,000 620,000,000

Balance as at 1 January 2010 120,000,000 620,000,000

Net income for the year - -

Total income for the year - -

Dividend paid (Note 22) - -

Unappropriated retained earnings transferred to reserves (Note 22) - -

Balance as at 31 December 2010 120,000,000 620,000,000


Statements of Changes in Shareholdersû EquityThe Deves Insurance Public Company Limited



(Unit : Baht)

Retained earnings

Appropriated

Statutory General Expansion

reserve reserve reserve Unappropriated Total

12,000,000 890,000,000 99,304,776 293,520,841 2,034,825,617

- - - 109,426,950 109,426,950

- - - 109,426,950 109,426,950

- - - (60,000,000) (60,000,000)

- 40,000,000 4,315,254 (44,315,254) -

12,000,000 930,000,000 103,620,030 298,632,537 2,084,252,567

12,000,000 930,000,000 103,620,030 298,632,537 2,084,252,567

- - - 70,912,322 70,912,322

- - - 70,912,322 70,912,322

- - - (60,000,000) (60,000,000)

- 40,000,000 4,808,400 (44,808,400) -

12,000,000 970,000,000 108,428,430 264,736,459 2,095,164,889


(Unit : Baht)

2010 2009

Cash flows from (used in) operating activities

Net direct premium written 3,422,877,781 2,896,235,534

Reinsurance paid 747,810,587 (810,252,190)

Losses incurred of direct insurance (2,619,704,492) (1,170,480,286)

Loss adjustment expenses of direct insurance (82,642,434) (30,102,043)

Commissions and brokerages of direct insurance (223,857,713) (189,201,151)

Other underwriting expenses (144,978,446) (126,199,544)

Net investment income 60,561,879 82,522,492

Other income 3,987,078 12,270,568

Operating expenses (481,463,244) (470,840,771)

Corporate income tax (78,091,003) (44,799,032)

Net cash from operating activities 604,499,993 149,153,577

Cash flows from (used in) investing activities

Cash flows from

Investments in securities 166,469,352 1,334,934,403

Loans 1,486,661 -

Deposits at financial institutions 723,857,682 2,250,727,630

Premises and equipment 2,873,305 834,781

Cash from investing activities 894,687,000 3,586,496,814

Cash flows used in

Investments in securities (1,361,000,010) (1,428,127,900)

Loans - (3,417,345)

Deposits at financial institutions (516,604,755) (1,413,343,888)

Premises and equipment (15,605,387) (18,529,162)

Intangible assets (2,387,546) (13,210,174)

Cash used in investing activities (1,895,597,698) (2,876,628,469)

Net cash from (used in) investing activities (1,000,910,698) 709,868,345


Cash Flows StatementsThe Deves Insurance Public Company Limited



(Unit : Baht)

2010 2009

Cash flows from (used in) financing activities

Payment of payables under finance lease agreements (8,767,409) (8,485,250)

Dividend paid (60,000,000) (60,000,000)

Net cash used in financing activities (68,767,409) (68,485,250)

Net increase (decrease) in cash and cash equivalents (465,178,114) 790,536,672

Cash and cash equivalents at the beginning of year 1,478,217,948 687,681,276

Cash and cash equivalents at end of year (Note 26) 1,013,039,834 1,478,217,948

Supplement cash flows information:

Non-cash items

Vehicle from finance lease agreements - 4,445,000


Cash Flows Statements (Continued)The Deves Insurance Public Company Limited



1. General informationThe Deves Insurance Public Company Limited (çthe Companyé) is a public company

incorporated and domiciled in Thailand. Its major shareholder is the Crown Property Bureau. The

Company is principally engaged in the provision of non-life insurance. The registered office of

the Company is at 97 and 99 Ratchadamnoen Road, Bawornnivet, Phranakorn, Bangkok 10200.

2. Basis of preparationThe financial statements have been prepared in accordance with accounting standards

enunciated under the Accounting Profession Act B.E. 2547, Thai accounting practices related to

insurance and the accounting and reporting guidelines prescribed by the Office of Insurance

Commission (çOICé) except that TAS 12 Income Taxes has been adopted before the date

enforcement.

The presentation of the financial statements has been made in compliance with the order of

the Registrar dated 6 March 2002, issued under the Accounting Act B.E. 2543.

The financial statements in Thai language are the official statutory financial statements of

the Company. The financial statements in English language have been translated from the Thai

language financial statements.

The financial statements have been prepared on a historical cost basis except where otherwise

disclosed in the accounting policies.

3. Adoption of new accounting standardsDuring the current year, the Federation of Accounting Professions issued a number of revised

and new accounting standards as listed below.

a) Accounting standards that are effective for fiscal years beginning on or after 1 January 2011

(except Framework for the Preparation and Presentation of Financial Statements, which is

immediately effective):

Framework for the Preparation and Presentation of Financial Statements (revised 2009)

TAS 1 (revised 2009) Presentation of Financial Statements

TAS 2 (revised 2009) Inventories

TAS 7 (revised 2009) Statement of Cash Flows

TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors

TAS 10 (revised 2009) Events after the Reporting Period

TAS 11 (revised 2009) Construction Contracts

TAS 16 (revised 2009) Property, Plant and Equipment

TAS 17 (revised 2009) Leases

TAS 18 (revised 2009) Revenue

TAS 19 Employee Benefits

TAS 23 (revised 2009) Borrowing Costs

TAS 24 (revised 2009) Related Party Disclosures

TAS 26 Accounting and Reporting by Retirement Benefit Plans

TAS 27 (revised 2009) Consolidated and Separate Financial Statements

TAS 28 (revised 2009) nvestments in Associates

Notes to Financial statementsThe Deves Insurance Public Company Limited



TAS 29 Financial Reporting in Hyperinflationary Economies

TAS 31 (revised 2009) Interests in Joint Ventures

TAS 33 (revised 2009) Earnings per Share

TAS 34 (revised 2009) Interim Financial Reporting

TAS 36 (revised 2009) Impairment of Assets

TAS 37 (revised 2009) Provisions, Contingent Liabilities and Contingent Assets

TAS 38 (revised 2009) Intangible Assets

TAS 40 (revised 2009) Investment Property

TFRS 2 Share-Based Payment

TFRS 3 (revised 2009) Business Combinations

TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued Operations

TFRS 6 Exploration for and Evaluation of Mineral Resources

TFRIC 15 Agreements for the Construction of Real Estate

b) Accounting standards that are effective for fiscal years beginning on or after 1 January 2013:

TAS 12 Income Taxes

TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government

Assistance

TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates

The Companyûs management believes that these accounting standards will not have any

significant impact on the financial statements for the year when they are initially applied, except

for the following accounting standard which management expects the impact on the financial

statements in the year when they are adopted.

TAS 19 Employee Benefits

This accounting standard requires employee benefits to be recognised as expense in

the period in which the service is performed by the employee. In particular, an entity has to

evaluate and make a provision for post-employment benefits using actuarial techniques.

Currently, the Company accounts for such employee benefits when they are incurred.

At present, the management has evaluated that Baht 38.6 million will be affected to

the financial statements in the year when this standard is adopted.

4. Significant accounting policies4.1 Revenue recognition

a) Premium

For insurance policies with coverage periods of up to one year, premium income

is recognised on the date the insurance policy comes into effect, after deducting a

premium ceded and cancelled. For long-term insurance policies with coverage periods of

longer than 1 year, related revenues and expenses are recorded as unearned and

prepaid items. The Company recognises unearned and prepaid as income and expenses

over the coverage period.

b) Reinsurance premium

Reinsurance premium income is recognised when the reinsurer places the reinsurance

application or the statement of accounts with the Company.


c) Interest and dividends

Interest income is recognised on an accrual basis based on the effective interest

rate. Dividends are recognised when the right to receive the dividends is established.

d) Interest on loans

Interest is recognised over the term of the loans based on the amount of outstanding

principal. No accrual is made for loans with default on interest over six consecutive months.

4.2 Investments

a) Investments in securities held for trading are stated at fair value. Changes in the fair value

of these securities are recorded as gains or losses in the income statement. Investments

are classified as held for trading if they are acquired for the purpose of selling in the near term.

b) Investments in debt securities, both due within one year and expected to be held to

maturity, are recorded at amortised cost. The premium/discount on debt securities is

amortised/accreted by the effective rate method with the amortised/accreted amount

presented as an adjustment to the interest income. The debt securities are classified

as held to maturity when the Company has the positive intention and ability to hold them

to maturity.

c) Investments in non-marketable equity securities, which the Company classifies as other

investments, are stated at cost net of allowance for loss on impairment (if any).

The fair value of marketable securities is based on the latest bid price of the last

working day of the year. The fair value of debt instruments is determined based on yield

rates quoted by the Thai Bond Market Association.

The weighted average method is used for computation of the cost of investments.

In the event the Company reclassifies investments from one type to another, such

investments will be readjusted to their fair value as at the reclassification date. The

difference between the carrying amount of the investments and the fair value on the

date of reclassification are recorded as gains or losses in the income statement or

recorded as surplus (deficit) from changes in the value of investments in shareholdersû

equity, depending on the type of investment that is reclassified.

On disposal of an investment, the difference between net disposal proceeds and

the carrying amount of the investment is recognised as income or expenses in the income

statement.

4.3 Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, cash at financial institutions and

all highly liquid investments with an original maturity of three months or less and not subject to

withdrawal restrictions.

4.4 Premium due and uncollected and allowance for doubtful accounts

Premium due and uncollected are stated at the net realisable value. Allowance for

doubtful accounts is provided for the estimated losses that may be incurred in collection of

receivables. The allowance is generally based on collection experiences and analysis of debt aging.

4.5 Loans and allowance for doubtful accounts

Loans are stated at the net realisable value. The Company provides allowance for

doubtful accounts on the basis of collection experience, a review of current status of the loan

receivables and the appraisal value of the collaterals of each debt.


4.6 Due from reinsurers

Due from reinsurers are stated at the net realisable value. The Company provides

allowance for doubtful accounts based on the estimated loss that may be incurred in the

collection of receivables, on the basis of collection experience and a review of status of

receivables as at the balance sheet date.

4.7 Related party transactions

Related parties comprise enterprises and individuals that control, or are controlled by, the

Company, whether directly or indirectly, or which are under common control with the Company.

They also include individuals which directly or indirectly own a voting interest in the

Company that gives them significant influence over the Company, key management personnel,

directors and officers with authority in the planning and direction of the Companyûs operations.

4.8 Premises and equipment/depreciation

Land is stated at cost. Building and equipment are stated at cost less accumulated

depreciation and allowance for loss on impairment of assets (if any).

Depreciation of building and equipment is calculated by reference to their costs on

the straight-line basis over the following estimated useful lives:

Building and building improvements - 5 years and 20 years

Furniture, fixtures and office equipment - 3 years and 5 years

Motor vehicles - 5 years

Depreciation is included in determining income.

No depreciation is provided on land and construction in progress.

An item of premises and equipment is derecognised upon disposal or when no future

economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of

an asset (calculated as the difference between the net disposal proceeds and the carrying

amount of the asset) is included in the income statement when the asset is derecognised.

4.9 Intangible assets and amortisation

Acquired intangible assets are recognised at cost. Following initial recognition, the

intangible assets are carried at cost less any accumulated amortisation and any accumulated

impairment losses (if any).

Intangible assets with finite lives are amortised on a systematic basis over the economic

useful life and tested for impairment whenever there is an indication that the intangible

asset may be impaired. The amortisation period and the amortisation method of such intangible

assets are reviewed at least at each financial year end. The amortisation expense is charged

to the income statement.

The useful lives of computer software with finite useful life are 7 years and 10 years.

4.10 Leasehold rights and amortisation

Leasehold rights are stated at cost less accumulated amortisation. Amortisation is

calculated by reference to its cost on a straight-line basis over the lease period.

The amortisation is included in determining income.

4.11 Properties foreclosed

Properties foreclosed are stated at the lower of cost or net realisable value. The Company

recorded allowance for impairment of these assets.


4.12 Impairment of assets

At each reporting date, the Company performs impairment reviews in respect of the

premises and equipment and intangible assets whenever events or changes in circumstances

indicate that an asset may be impaired. An impairment loss is recognised when the recoverable

amount of an asset, which is the higher of the assetûs fair value less costs to sell and its value

in use, is less than the carrying amount. In determining value in use, the estimated future cash

flows are discounted to their present value using a pre-tax discount rate that reflects current

market assessments of the time value of money and the risks specific to the asset. In determining

fair value less costs to sell, an appropriate valuation model is used. These calculations are

corroborated by a valuation model that, based on information available, reflects the amount

that the Company could obtain from the disposal of the asset in an armûs length transaction

between knowledgeable, willing parties, after deducting the costs of disposal.

Impairment losses are generally recognised in the income statement.

In the assessment of asset impairment if there is any indication that previously recognised

impairment losses may no longer exist or may have decreased, the Company estimates the

assetûs recoverable amount. A previously recognised impairment loss is reversed only if there

has been a change in the assumptions used to determine the assetûs recoverable amount since

the last impairment loss was recognised. The increased carrying amount of the asset attributable

to a reversal of an impairment loss shall not exceed the carrying amount that would have

been determined had no impairment loss been recognised for the asset in prior years. Such

reversal is recognised in the income statement.

4.13 Long-term leases

Leases of equipment 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.

Operating lease payments are recognised as an expense in the income statement on

a straight line basis over the lease term.

4.14 Foreign currencies

Transactions in foreign currencies are translated into Baht at the exchange rate ruling

at the date of the 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.

4.15 Unearned premium reserve

Unearned premium reserve is set aside as follows, in compliance with the OIC guidelines:

Fire, motor, hull and miscellaneous - Daily average basis (the one-three hundred

sixty fifth basis) 2009: Monthly average basis

(the one-twenty fourth basis)

Marine and transportation (cargo) - Net premium written for the last ninety days

Travelling accident and boxing - Net premium written for the last thirty days


4.16 Loss reserve and outstanding claims

Outstanding claims are recorded at the amount to be actually paid. Loss reserve is

provided upon the receipt of the claims advice from the insured based on the claims notified

by the insured and estimates made by the Companyûs management. The maximum value

of claims estimated is not however, to exceed the sum-insured under the relevant policy.

In addition, the Company is to allocate a provision for losses incurred but not reported (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 in compliance with the OIC guidelines.

4.17 Commissions and brokerages

Commissions and brokerages are expended when incurred.

4.18 Employee benefits

Salaries, wages, bonuses and contributions to the social security fund and provident fund

are recognised as expenses when incurred.

4.19 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.

4.20 Income tax

a) Current tax

Income tax is provided in the accounts at the amount expected to be paid to the

taxation authorities, based on taxable profits determined in accordance with tax legislation.

b) Deferred tax

Deferred income tax is calculated based on temporary differences at the balance

sheet date between the tax bases of assets and liabilities and their carrying amounts, by

using the tax rates that are expected to apply to the period when the asset is realised or

the liability is settled, based on tax rates that have been enacted or substantively enacted

by the end of the reporting period.

The Company recognises deferred tax liabilities for taxable temporary differences and

recognises deferred tax assets for deductible temporary differences and tax losses carried

forward. The Company recognises deferred tax assets to the extent that it is probable that

future taxable profit will be available against which such deductible temporary differences

and tax losses carried forward can be utilised.

At each balance sheet date, the Company reviews and reduces the carrying amount of

deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will

be available to allow all or part of the deferred tax asset to be utilised.

The Company records deferred tax directly to equity if the tax relates to items that are

recorded directly to equity.


5. Significant accounting judgments and estimatesThe preparation of financial statements in conformity with generally accepted accounting

principles at times requires management to make subjective judgments and estimates regarding matters

that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures

and actual results could differ from these estimate. Significant judgments and estimates are as follows:

Leases

In determining whether a lease is to be classified as an operating lease or finance lease, the

management is required to use judgment regarding whether significant risk and rewards of ownership

of the leased asset has been transferred, taking into consideration terms and conditions of the

arrangement.

Allowance for doubtful accounts

In determining an allowance for doubtful accounts, the management needs to make judgment

and estimates based upon, among other things, debt collection history, aging profile of outstanding

debts and the prevailing economic condition.

Impairment of equity investments

The Company treats other investments as impaired when the management judges that there

has been a significant or prolonged decline in the fair value below their cost or where other objective

evidence of impairment exists. The determination of what is çsignificanté or çprolongedé requires judgment.

Premises and equipment/Depreciation

In determining depreciation of building and equipment, the management is required to make

estimates of the useful lives and salvage values of the Companyûs building and equipment and to

review estimate useful lives and salvage values when there are any changes.

In addition, the management is required to review premises and equipment for impairment on

a periodical basis and record impairment losses in the period when it is determined that their

recoverable amount is lower than the carrying amount. This requires judgments regarding forecost of

future revenues and expenses relating to the assets subject to the review.

Intangible assets

The initial recognition and measurement of intangible assets, and subsequent impairment

testing, require management to make estimates of cash flows to be generated by the asset and

to choose a suitable discount rate in order to calculate the present value of those cash flows.

Deferred tax assets

Deferred tax assets are recognised in respect of temporary differences only to the extent

that it is probable that taxable profit will be available against which these differences can be utilised.

Significant management judgment is required to determine the amount of deferred tax assets that

can be recognised, based upon the likely timing and level of estimate future profits.

Loss reserve and outstanding claims

At each reporting date, the Company has to estimate loss reserve and outstanding claims

taking into account two factors. These are the expected ultimate cost of claims reported at the

balance sheet date, and the expected ultimate cost of claims incurred but not reported (IBNR) at the

balance sheet date. The ultimate cost of outstanding claims is established using a range of standard

actuarial claims projection techniques, such as the Chain Ladder and Bornheutter-Ferguson methods.


The main assumptions underlying these techniques relate to historical experience, including the

development of claims estimates, paid and incurred losses, average costs per claim and claim

numbers. To perform the calculation, it is necessary to perform analysis based on the type of

insurance and to use the services of an actuary with expertise, experience, and an understanding of

the insurance business and the Companyûs products.

Nevertheless, such estimates are forecasts of future outcomes, and actual results could differ.

Post-retirement benefits

Post-retirement benefit costs are based on actuarial calculations, interest within these

calculations are assumptions as to salary increases and discount rate, among others.

Litigation

The Company has contingent liabilities as a result of litigation. The Companyûs management

has used judgment to assess of the results of the litigation and believes that losses incurred will not

exceed the recorded amounts as at the balance sheet date. However, actual results could differ from

the estimates.

6. Investments in securities(Unit: Baht)

2010 2009

Cost/ Cost/

Amortised cost Fair value Amortised cost Fair value

Trading securities

Debt securities

Bonds 1,446,886,452 1,444,334,060 862,575,639 863,444,944

Debentures 853,057,575 867,130,065 496,198,738 504,809,111

Unrealised gains on changes

in value of investments 11,520,098 - 9,479,678 -

2,311,464,125 2,311,464,125 1,368,254,055 1,368,254,055

Equity securities

Ordinary shares 458 738 448 480

Unrealised gains on changes

in value of investments 280 - 32 -

738 738 480 480

Total trading securities 2,311,464,863 2,311,464,863 1,368,254,535 1,368,254,535


(Unit: Baht)

2010 2009

Cost/ Cost/

Amortised cost Fair value Amortised cost Fair value

Held-to-maturity debt securities

Bonds 30,815,789 31,713,824

Notes - 17,209,453

Bills of exchange 770,000,000 520,000,000

Debentures 7,100,000 10,100,000

Allowance for loss on impairment (7,100,000) (16,555,721)

Total held-to-maturity debt securities 800,815,789 562,467,556

Other securities

Ordinary shares 2,713,699 2,713,699

Preference shares 4,688,000 4,688,000

Allowance for loss on impairment (92,000) (92,000)

Total other securities 7,309,699 7,309,699

Total investments in securities - net 3,119,590,351 1,938,031,790

Investments in debt securities as at 31 December 2010 and 2009 will be due as follows:

(Unit: Baht)

2010

Due within

Within 1 year 1 - 5 years Over 5 years Total

Trending securities

Bonds 1,249,452,403 91,089,023 103,792,634 1,444,334,060

Debentures 108,646,857 359,111,769 399,371,439 867,130,065


Bonds 30,815,789 - - 30,815,789

Bills of exchange 770,000,000 - - 770,000,000

Total 2,158,915,049 450,200,792 503,164,073 3,112,279,914

(Unit: Baht)

2009

Due within

Within 1 year 1 - 5 years Over 5 years Total

Trending securities

Bonds 769,722,002 93,722,942 - 863,444,944

Debentures 131,051,059 353,138,951 20,619,101 504,809,111


Bonds - 31,713,824 - 31,713,824

Notes - Net 10,753,732 - - 10,753,732

Bills of exchange 520,000,000 - - 520,000,000

Total 1,431,526,793 478,575,717 20,619,101 1,930,721,611


As at 31 December 2010, Baht 14 million (2009: Baht 14 million) of bonds have been pledged as

securities with the Registrar of the Office of Insurance Commission under the Non-Life Insurance Act.

As at 31 December 2010, Baht 16 million (2009: Baht 16 million) of bonds have been pledged

as securities with a bank in respect of certain performance bonds as required in the normal course

of business.

As at 31 December 2010, the Company pledged the investment in securities with fair value

totaling Baht 230 million as non-life insurance policy reserve with the Registrar of the Office of

Insurance Commission under the Non-life Insurance Act.

As at 31 December 2010, the investments in debentures and notes included investments totaling

Baht 7.1 million (2009: Baht 17 million) in a number of companies facing difficulties, which may have

repayment problems. The Company has provided full allowance for impairment for these investments.

7. Loans7.1 The balances of loans are classified by principal aging as follows:

(Unit: Baht)

Age of receivables Secured Others

2010 2009 2010 2009

Accrued Accrued Accrued Accrued

Principal Interest Principal Interest Principal Interest Principal Interest

Not yet due 13,086,538 5,122 13,856,856 5,100 4,268,064 772 4,984,408 628

7.2 The details of loans to employee are as follows:

Project Collateral Credit line Interest rate

Emergency loan Person Not exceeding 5 or 10 0.5% per annum plus

times monthly salary, SCB*ûs 1-year fixed

based on the length of deposit rate for personal

employment, with a accounts

limit of Baht 100,000

Housing loan Pledged assets Not exceeding 60 times 2.0% per annum plus

monthly salary with a SCB*ûs 1-year fixed

limit of Baht 1.2 million, deposit rate for personal

and not to exceed 80 accounts

percent of the appraised

value of the collateral

Credit line exceeding 60 SCB*ûs MLR plus 0.5% per

times monthly salary or annum

Baht 1.2 million

*Siam Commercial Bank Pcl.


8. Cash and deposits at financial institutions(Unit: Baht)

2010 2009

Cash on hand 721,729 831,370

Deposits without maturity 371,094,230 972,620,811

Deposits with maturity 333,608,253 654,403,072

Total cash and deposits at financial institutions 705,424,212 1,627,855,253

As at 31 December 2010, bank deposits in saving accounts, and fixed deposits, carried internals

between 0.5 and 3.0% per annum (2009: between 0.5 and 2.0% per annum.)

As at 31 December 2010, fixed deposits totaling Baht 19.8 million (2009: Baht 13.8 million) have

been pledged as bail bond in cases where insured drivers have been charged with criminal offence

and to secure against the issuance of bank guarantees by the bank on behalf of the Company.

9. Related party transactionsThe relationship between the Company and the related parties are summarised below:

Companyûs name Relationship

Crown Property Bureau 98.23% of shares held in the Company and common director

The Siam Commercial Bank Pcl. Common directors

Kasikorn Bank Pcl. Common directors

ICBC (Thai) Pcl. Common directors

Thai Plastic and Chemicals Pcl. Common directors

The Siam Cement Pcl. Common directors

During the years, the Company had significant business transactions with related parties.

Such transactions, which are summarised below, arose in the ordinary course of business and were

concluded on commercial terms and bases agreed upon between the Company and those related

parties.

(Unit: Thousand Baht)

2010 2009

Transactions with related parties

Premium written - Crown Property Bureau 50,055 9,251

- The Siam Commercial Bank Pcl. 332,971 182,878

Interest income - The Siam Commercial Bank Pcl. 800 4,375

- ICBC (Thai) Pcl. 4,602 1,343

- The Siam Cement Pcl. 516 346

Commission paid from - The Siam Commercial Bank Pcl.

direct premium written (Non-life insurance broker) 63,492 35,976

Underwriting expenses - The Siam Commercial Bank Pcl. 28,650 9,391

Operating expenses - Crown Property Bureau 1,560 1,560


Pricing policies

Transactions with related parties

Premium written Normal commercial terms for insurance for major customers

Interest income 0.65% - 5.15% per annum (2009: 0.50% - 5.15% per annum)

Commission paid from direct insurance In accordance with the Notification by the Registrar

regarding çCommission rate for Non-life insuranceé

Underwriting expenses Normal commercial terms for insurance

Operating expenses As indicated in the agreement

As at 31 December 2010 and 2009, the Company presented the following significant balances

of assets and liabilities with its related parties as follows:

(Unit: Baht)

2010 2009

Investments in securities - debentures

The Siam Cement Pcl. 10,444,928 10,501,867

Investments in securities - notes

ICBC (Thai) Pcl. 200,000,000 200,000,000

Deposits at banks

The Siam Commercial Bank Pcl. 188,590,512 837,310,370

Kasikorn Bank Pcl. 25,812,874 16,077,622

ICBC (Thai) Pcl. 80,143,791 80,000,000

Total 294,547,177 933,387,992

Premium due and uncollected

Crown Property Bureau 3,918,212 3,474,489

The Siam Commercial Bank Pcl.* 9,764,846 4,614,574

Total 13,683,058 8,089,063

Accrued investment income

The Siam Commercial Bank Pcl. 113,068 -

ICBC (Thai) Pcl. 1,941,233 221,474

The Siam Cement Pcl. 129,808 128,397

Total 2,134,109 349,871

Accrued commissions and brokerages

The Siam Commercial Bank Pcl. 1,817,384 813,125

* Premium due and uncollected between the Company and The Siam Commercial Bank Pcl. (çSCBé)

consists of premium due and uncollected from an insurance policy that SCB made directly with the

Company and premium due and uncollected from a policy in which SCB is a non-life insurance broker for

the Company.

Directors and managementûs benefits

In 2010, the Company had salaries, bonuses, meeting allowances and gratuities of its directors

and management recognized as expenses totaling Baht 26 million (2009: Baht 25 million).


10. Premises and equipment(Unit: Baht)

Building and Furnitureûs

Building Fixture and Construction

Land Improvements equipment Vehicles in progress Total

Cost

31 December 2009 11,088,422 102,568,994 121,787,901 66,407,251 2,954,250 304,806,818

Additions - 1,928,701 7,031,479 6,699,581 1,907,626 17,567,387

Disposals - - - (7,902,719) - (7,902,719)

Transferred in (out) - 3,251,711 183,080 - (3,434,791) -

31 December 2010 11,088,422 107,749,406 129,002,460 65,204,113 1,427,085 314,471,486

Accumulated depreciation

31 December 2009 - 71,114,771 106,383,238 44,422,010 - 221,920,019

Depreciation for the year - 7,008,686 8,062,982 9,590,976 - 24,662,644

Depreciation on disposals - - - (7,902,707) - (7,902,707)

31 December 2010 - 78,123,457 114,446,220 46,110,279 - 238,679,956

Net book value

31 December 2009 11,088,422 31,454,223 15,404,663 21,985,241 2,954,250 82,886,799

31 December 2010 11,088,422 29,625,949 14,556,240 19,093,833 1,427,085 75,791,530

Depreciation charge for the year (as included in income statements)

2009 23,748,804

2010 24,662,644

As at 31 December 2010, certain equipment items have been fully depreciated but are still in

use. The gross carrying amount (before deducting accumulated depreciation) of those assets amounted

to approximately Baht 116 million (2009: Baht 91 million).

As at 31 December 2010, the Company had vehicle under financial lease agreements with net

book value amounting to Baht 11 million (2009: Baht 19 million).

11. Leasehold right(Unit: Baht)

Leasehold right - building

Cost

31 December 2009 70,479,640

31 December 2010 70,479,640

Accumulated amortisation

31 December 2009 35,708,225

Amortisation charged for the year 1,838,292

31 December 2010 37,546,517

Net book value

31 December 2009 34,771,415

31 December 2010 32,933,123

Amortisation charged for the year (as included in income statements)

2009 1,838,292

2010 1,838,292


12. Computer software(Unit: Baht)

Computer software

Cost

31 December 2009 61,549,017

Additions 2,387,546

31 December 2010 63,936,563

Accumulated amortisation

31 December 2009 36,411,487

Amortisation charged for the year 10,974,125

31 December 2010 47,385,612

Net book value

31 December 2009 25,137,530

31 December 2010 16,550,951

Amortisation charged for the year (as included in income statements)

2009 7,833,343

2010 10,974,125

13. Premium due and uncollectedThe balances of premium due and uncollected as at 31 December 2010 and 2009 are classified

by aging as follows:

(Unit: Baht)

Age of receivable 2010 2009

Less than or equal to 2 months 284,669,175 247,746,463

Over 2 - 3 months 57,592,247 45,896,660

Over 3 - 12 months 85,746,628 130,904,992

Over 12 months 24,579,335 49,022,054

Total premium due and uncollected 452,587,385 473,570,169

Less: Allowance for doubtful accounts (16,981,884) (16,035,810)

Premium due and uncollected - net 435,605,501 457,534,359

14. Corporate income tax/deferred tax assetsCorporate income tax for the year has been calculated at the rate of 30% of income before

tax after adding back certain provisions and expenses which are disallowable for tax computation

purposes and deducting dividend income which is exempted from tax.

The income tax expenses for the years 2010 and 2009 are as follows:

(Unit: Baht)

2010 2009

Income tax for the year calculated from taxable profit 74,639,209 35,391,874

Net decrease (increase) in deferred income tax assets (41,039,813) 15,461,168

Income tax as included in income statements 33,599,396 50,853,042


Reconciliation between tax expense and the product of accounting profit multiplied by the

applicable tax rate for the years ended 31 December 2010 and 2009 is as follows:

(Unit: Baht)

2010 2009

Accounting income 104,511,718 160,279,992

Applicable tax rate - 30% 31,353,515 48,083,998

Tax effect of exempted income and non-deductible expenses 2,245,881 2,769,044

Income tax for the year in income statements 33,599,396 50,853,042

As at 31 December 2010 and 2009, the components of deferred tax assets and deferred tax

liabilities can be summarised as follows:

(Unit: Baht)

Balance sheets Income statements

2010 2009 2010 2009

Deferred tax assets

Unearned premium reserves 55,152,958 53,898,345 1,254,613 12,085,962

Allowance for doubtful accounts -

premium due and uncollected 5,094,565 4,810,743 283,822 (3,344,411)


claim refundable 1,904,921 2,791,891 (886,970) 1,254,772


other receivable 2,382,866 2,621,366 (238,500) 1,417,138

Loss reserves 91,880,373 71,335,833 20,544,540 (24,140,265)

Incurred but not reported (IBNR)

loss reserves 29,888,152 10,278,728 19,609,424 (508,852)

Allowance for impairment loss -

properties foreclosed 2,297,451 2,297,451 - -

Others 4,113,002 2,601,414 1,511,588 926,464

Deferred tax liabilities

Allowance for losses (gains) for

investments in securities and accrued

income (1,937,411) 592,396 (2,529,807) (4,040,684)

Liabilities under finance lease agreements (1,703,520) (3,161,760) 1,458,240 191,050

Others (230,630) (263,493) 32,863 697,657

Deferred tax assets - net 188,842,727 147,802,914 41,039,813 (15,461,169)

15. Properties foreclosed(Unit: Baht)

2010 2009

Properties received from dept settlement 21,646,965 21,646,965

Less: Allowance for impairment loss (7,658,171) (7,658,171)

Properties foreclosed - net 13,988,794 13,988,794


16. Accrued investment income(Unit: Baht)

2010 2009

Accrued investment income 14,590,390 12,886,366

Less: Allowance for doubtful accounts (415,521) (415,521)

Accrued investment income - net 14,174,869 12,470,845

17. Claim receivable from litigant(Unit: Baht)

2010 2009

Claims receivable from litigants 47,103,268 41,958,697


Claims receivable from litigants - net 40,753,532 32,652,393

18. Other assets - others(Unit: Baht)

2010 2009

Other receivables 28,868,123 17,043,210


Other receivables - net 21,290,546 8,304,324

Others 49,267,571 31,853,871

Total 70,558,117 40,158,195

19. Additional unearned premium reservesAs at 31 December 2010, the retained earnings of the Company excluded Baht 243 million

(2009: Baht 272 million) on of additional unearned premium reserves which the Company should

set aside for the premium ceded to a foreign reinsurer, in compliance with the regulations of the

Office of Insurance Commission. With reference to the opinion expressed by the Federation of

Accounting Professional (FAP) in a letter dated 7 August 2006, the FAP opined that since non-life

insurance companies have transferred their risks from insurance to the reinsurers and no longer have

commitments in respect of debt settlement, therefore no unearned premium reserve is recorded as

liability in the financial statements.

20. Liabilities under finance lease agreements(Unit: Baht)

2010 2009

Liabilities under finance lease agreements 28,800,406 37,567,815

Less: Deferred interest expenses (5,417,454) (9,628,175)

23,382,952 27,939,640

Less: Portion due within one year (11,087,701) (5,816,292)

Liabilities under finance lease agreement - net of current portion 12,295,251 22,123,348


The Company has entered into finance lease agreements with the leasing companies to

lease motor vehicles for use in its operations, whereby it is committed to pay rental on a monthly basis.

The terms of the agreements are generally between 4 and 5 years.

As at 31 December 2010, future minimum lease payments required under the finance lease

agreements were as follows:

(Unit: Baht)

Less than 1 year 1 - 5 years Total

Future minimum lease payments 14.10 14.70 28.80

Deferred interest expenses (3.02) (2.40) (5.42)

Present value of future minimum lease payments 11.08 12.30 23.38

21. Statutory reservePursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required

to set aside to a statutory reserve at least 5% of its net income after deducting accumulated deficit

brought forward (if any), until the reserve reaches 10% of the registered capital. The statutory reserve

is not available for dividend distribution.

22. Appropriations of retained earnings and dividend paidDividends declared in 2010 and 2009 consist of the following:

(Unit: Baht)

Approved by Total dividends Dividend per share

Final dividends for 2009 Annual General Meeting of

shareholders on 24 April 2009 60,000,000 5.0

Final dividends for 2010 Annual General Meeting of

shareholders on 29 April 2010 60,000,000 5.0

In addition, the Annual General Meeting of shareholders approved the resolution to appropriate

retained earnings for the following purposes:

(Unit: Baht)

2010 2009

General reserve 40,000,000 40,000,000

Expansion reserve 4,808,400 4,315,254

23. Provident fundThe Company and its employees have jointly established a provident fund in accordance

with the Provident Fund Act B.E. 2530. Both employees and the Company contribute to the fund

monthly at the rates of 3% to 9% of basic salary. The fund, which is managed by Siam Commercial

Bank Plc., will be paid to employees upon termination in accordance with the fund rules. During

the year 2010, the Company contributed Baht 9.7 million (2009: Baht 8.5 million) to the fund.

24. Directorsû remunerationDirectorsû remuneration represents the benefits paid to the Companyûs directors in accordance

with Section 90 of the Public Limited Companies Act, exclusive of salaries and related benefits

payable to executive directors.


25. Basic earnings per shareBasic earnings per share is calculated by dividing the net income for the year by the weighted

average number of ordinary shares in issue during the year.

26. Cash flows statementsAs at 31 December 2010 and 2009, cash and cash equivalents as reflected in the cash flows

statements consist of:

(Unit: Baht)

2010 2009

Cash 721,729 559,719

Bank deposits 704,702,483 1,627,295,534

Bills of exchange 770,000,000 520,000,000

Less: Amounts with maturity of more than 3 months

and subject to restriction (462,384,378) (669,637,305)

Cash and cash equivalents 1,013,039,834 1,478,217,948

27. Commitments27.1 Operating lease commitments

The Company has entered into several lease agreements in respect of the lease of

office building space and motor vehicles. The terms of the agreements are generally between

1 and 3 years.

As at 31 December 2010, future minimum lease payments required under these

non-cancellable operating leases contracts were as follows:

Million Baht

Payable within:

Less than 1 year 0.95

1 to 5 years 0.24

27.2 Guarantees

As at 31 December 2010, there were outstanding bank guarantees to guarantee

electricity use and others of approximately Baht 6 million issued by banks on behalf of the

Company in respect of certain performance bonds as required in the normal course of business.

28. Contingent liabilitiesAs at 31 December 2010, the legal cases in which the Company has been sued for a total of

Baht 92.3 million. The Company has recorded loss reserve amounting to Baht 49.8 million and the

Companyûs management believe that such amount is adequate since it was recorded based on

reports of independent surveyors and accords with the coverage stipulated in the insurance policies.

The cases are currently being heard by the Court. However, if the Company loses these cases the

amount of loss, net of recovery from reinsurance contracts, in excess of that recorded by the

Company will not be material to the financial statements.


29. Financial information by segmentThe Companyûs operations involve a single business segment of non-life insurance, and are

carried on in a single geographic area of Thailand. As a result, all of the revenues, operating profits

and assets as reflected in these financial statements pertain to the aforementioned business segment

and geographic area.

30. Financial instruments30.1 Financial risk management

Credit risk

The Company is exposed to credit risk primarily with respect to premium due and uncollected,

amounts due from reinsures and mortgage loans.

Concentrations of the credit risk with respect to premiums due and uncollected and

amounts due from reinsurers are insignificant due to the large number of customers comprising

the customer base and their dispersion across different industries and geographic regions.

Concentrations of the credit risk with respect to mortgage loans are insignificant due to

the Company provide loans to its employees. In addition the values of the securities placed as

collateral are adequate for the Company to receive complete payment of debt and the ratio

of loans to collateral values is in accordance with the notification of the Registrar relating to

the other business investments of insurance companies.

The maximum exposure to credit risk is the book value of assets after deduction of

allowance for doubtful debts as presented in balance sheet.

Interest rate risk

The Companyûs exposure to interest rate risk relates primarily to its deposits at financial

institutions, investments in securities and mortgage loans.

Significant financial assets as at 31 December 2010 classified by type of interest rates

are summarised in the table below, with those financial assets that carry fixed interest rates

further classified based on the maturity date, or the repricing date if this occurs before the

maturity date.

Fixed interest rates Floating

Within Over interest

1 year 1-5 years 5 years rate Total Interest rate

(Million Baht) (% p.a.)

Financial Assets

Investments in securities

Bonds 1,280 91 104 - 1,475 4.13 - 5.80

Bills of exchange 770 - - - 770 1.50 - 2.00

Debentures - net 109 359 399 - 867 3.00 - 11.56

Loans - - - 17 17 1.65 - 6.50

Deposits at financial

institutions 289 45 - 371 705 0.50 - 3.00

2,448 495 503 388 3,834


Foreign currency risk

The Company is exposed to foreign currency risk in respect of reinsurance transactions

with foreign reinsurers denominated in foreign currencies. The Company does not utilise forward

foreign currency contracts to mitigate its exposure to foreign currency risk.

As at 31 December 2010, the balance of significant financial assets and liabilities

denominated in foreign currencies are summarised below.

Average exchange rate as at

Financial Financial 31 December 2010

Foreign currency assets liabilities (Baht per 1 foreign currency unit)

(Million) (Million)

US dollar 0.96 0.89 30.1513

30.2 Fair valueA fair value is the amount for which an asset can be exchanged or a liability settled

between knowledgeable, willing parties in an armûs length transaction.

Methodology of fair value measurement depends upon characteristics of the financial

instruments. The fair value is determined by reference to the latest quoted market price or by

using an appropriate valuation technique.

The following methods and assumptions are used by the Company in estimating the fair

values of financial instruments:

Investments in securities

The fair value of listed securities is based on their quoted market prices.

The fair value of other securities cannot be properly calculated, and therefore no disclosure

is made.

The fair value of deposits at financial institutions, bonds, treasury bill, debentures, bills of

exchange and promissory notes with periods to maturity of less than 90 days is based on their

carrying value. For those with periods to maturity of longer than 90 days, fair value is estimated

using a discounted cash flow method based on the current interest rate and the remaining

period to maturity.

Mortgage loans

Loans with floating interest rates for which there is no significant credit risk, fair value is

based on carrying value.


31. Subsequent eventThe meeting of the Companyûs Board of Directors held on 4 March 2011 passed the following

resolutions:

31.1 Approved the Companyûs payment of a cash dividend of Baht 5 per share from the 2010

earnings to the holders of 12,000,000 ordinary shares, for a total of Baht 60,000,000.

31.2 Approved the payment of a share dividend from the Companyûs retained earnings to the

holders of 12,000,000 ordinary shares, at a rate of 1.5 shares with a par value of Baht 10 per

share for each ordinary share held, equivalent to a total dividend of Baht 180,000,000.

31.3 Approved an increase in share capital totaling Baht 180 million, comprising 18,000,000 shares

with a par value and offer price of Baht 10 per share.

32. Capital managementThe primary objectives of the Companyûs capital management are to ensure that it has an

appropriate financial structure, preserves the ability to continue its business as a going concern and

to maintain capital reserve in accordance with Notifications of the Office of Insurance Commission.

No changes were made in the objectives, policies or processes during the years end 31

December 2010 and 2009.

33. Approval of financial statementsThese financial statements were authorised for issue by the Companyûs Board of Directors on 4

March 2011.


Registration Number 0107537002478 [or previously Bor Mor Jor 494]

Establishment January 17, 1947

Paid-up Registered Capital Baht 120.0 Million

[comprising 12.0 Million common shares at par value of Baht 10 per share]

Type of Business Non-Life Insurance

Major Shareholder Crown Property Bureau

Address 97, 99 Deves Insurance Building, Ratchadamnoen Klang Avenue,

Bowornnives, Phranakorn, Bangkok 10200, Thailand

Tel 0-2670-4444

Fax 0-2280-0399

Website www.deves.co.th

Customer Service Retail Business and Customer Relation Department

Tel : 0-2670-4444 ext 1 [24 hours]

Fax : 0-2629-4575

e-mail : [email protected]

Shareholder Service Board Secretariat and Corporate Communications Office

Tel : 0-2670-4444 ext 8350-8352

Fax : 02-629-4221

e-mail : [email protected]

The Companyûs Information


SHARE REGISTRAR Thailand Securities Depository Company Limited

62 Rachadapisek Road Klongtoey Bangkok 10110

Tel 0-2229-2800, 0-2654-5599

Fax 0-2832-4994

TRUSTEE -None-

AUDITOR Mrs Nonglak Pumnoi

C.P.A. [Thailand] Registration No. 4172

or Mr Sophon Permsirivallop


or Ms Rungnapa Lertsuwankul


or Ms Sumalee Reewarabandith


or Ms Vissuta Jariyathanakorn


Ernst & Young Co., Ltd.,

33rd Floor, Lake Rajada Office Complex

193/136-137 Rajadapisek Road Bangkok 10110

Tel 0-2264-0777, 0-2661-9190

Fax 0-2264-0789-90

LEGAL ADVISOR Pramuanchai Law Office Company Limited

2038-2042 Rama 6 Road [Bantadthong] Patumwan Bangkok 10330

Tel 0-2219-2031-2

Fax 0-2215-1238

Other Information


Headquarters and regional branchesCHIANG MAI

160/2 Chiang Mai-Lampang Road,Amphur Muang, Chiang Mai 50300

Tel. 0-5341-2930-2Fax. 0-5341-3190

[email protected]

LAMPANG149-151 Highway Lampang-Ngao Road, Tambon Sob Tui,Amphur Muang, Lampang 52100Tel. 0-5435-2109, 0-5435-2244Fax. [email protected]

KHON KAEN3/13 Moo 14, Mittraparp Road,Tambon naimuang, Amphur Muang, Khon Kaen 40000Tel. 0-4334-8994, 0-4324-2832Fax. [email protected]

UBOL RATCHATHANEE777/3-4 Chayangkul Road,

Tambol Naimuang, Amphur Muang UbolRatchathanee 34000

Tel. 0-4535-5255-8Fax. 0-4535-5259

[email protected] OFFICE [BANGKOK]

97, 99 Deves Insurance Building,Ratchadamnoen-Klang Road,

Pranakorn District, Bangkok 10200Tel. 0-2670-4444Fax. 0-2280-0399

[email protected]

MAB TA PHUD [RAYONG]267/35-36 Sukhumvit Road,Tambon Mab Ta Phud, Amphur Muang,Rayong 21150Tel. 0-3860-7655-6Fax. [email protected]

NAKORN PATHOM1064/3 Phetkasaem Road,

Tambon Sanamjan,Amphur Muang, Nakorn

Pathom 73000Tel. 0-3421-0224-5Fax. 0-3428-0013

[email protected]

SARABURI767/6-7 Paholyothin Road,

Tambon Pak-Priew,Amphur Muang, Saraburi 18000

Tel. 0-3622-2055, 0-3631-8230Fax. 0-3622-2056

[email protected]

PHUKET23/12 Moo 3, Jowfatawanook Road,

Tambon Vichit, Amphur Muang,Phuket 83000

Tel. 0-7626-4736-7Fax. 0-7626-4735

[email protected]

THE MALL NAKHORN RAJSIMA1242/2 Floor B Mittraparp Road, Tambon Naimuang,

Amphur Muang, Nakhorn Rajsima 30000Tel. 0-4439-3769, 08-6378-7615

Fax. [email protected]

CHOLBURI116/45 Moo 1, Prayasajja Road,Tambon Samet, Amphur Muang, Cholburi 20000Tel. 0-3878-4395, 0-3878-4520-1Fax. [email protected]

HAT YAI [SONGKHLA]455/4 Petchakasem Road,Tambon Hat Yai, Amphur Hat Yai, Songkhla 90110Tel. 0-7436-7528-30Fax. [email protected]

PITSANULOK401/194-195 Mittraparp Road,Tambon Naimuang,Amphur Muang, Pitsunulok 65000Tel. 0-5522-1778, 0-5522-1702Fax. [email protected]

THUNGSONG382/17 Moo 2 Tambon chamai,

Amphur Thungsong, Nakhornsithammarat, 80110Tel. 0-7542-1271, 08-1376-1714, 08-1376-1723


NAKORN RAJSIMA2322 Mittraparp Road,

Tambon Naimuang,Amphur Muang,

Nakorn Rajsima 30000Tel. 0-4428-2382, 0-4428-2668


SURAT THANI4/31-32 Moo 1,

Leang Muang Road,Tambon Bang Kung,

Amphur Muang, Surat Thani 84000Tel. 0-7728-9486-7Fax. 0-7728-9488

[email protected]

Since its establishment in 1947, The Deves Insurance Public Company Limited, theinsurance company owned by the Crown Property Bureau, has always been committed tobusiness ethics and integrity. By upholding the principles of business conduct withcontinuing responsibility toward Thai society and all stakeholders throughout almost 65years of its establishment, Deves Insurance has always been aspiring to continuousdevelopment and sustainable success and in reflecting our brand promise ofçPride in Protectioné.

97, 99 Deves Building, Ratchadamnoen Klang Avenue, Bangkok 10200Tel : 0-2670-4444 Fax : 0-2280-0399http://www.deves.co.th Email : [email protected]

THE DEVES INSURANCE PUBLIC COMPANY LIMITED

annual report deves 2010 · by the office of the insurance commission (oic) ... the oic has since...

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