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					Annual Report 2006




Thai Reinsurance Public Company Limited
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1    Introduction
3    Financial Highlights
5    Letter to Shareholder
8    Milestones
9    Directors and Executive Officers of the Registrant
14   Organization Chart
15   Type of Business
21   Industry Situation and Competition
23   Risk Factors
27   Shareholders and Management Structure
38   Corporate Governance
42   Company and Society
43   Related Party Transaction
46   Management‘s Discussion and Analysis
     of Financial Condition and Result of Operations
56   Ten Year Summary
57   Financial Statements
                                                             Thai Reinsurance Public Company Limited
                                                                                       Annual Report   001
Introduction



About The Company   Thai Reinsurance Public Co., Ltd. was formerly registered on July 18,1978
                    as a limited company under the Civil and Commercial Law, dubbed then as
                    the Thai Reinsurance Company Limited, with an initial registered capital of
                    Baht 30 Million, it was established under the joint ownership of all the Life
                    and Non-Life insurance companies in Thailand with the support and
                    cooperation from all those related to the field of insurance both from the
                    private and government sectors.

                    The company had been authorized by the Ministry of Commerce to carry
                    out all types of life and non-life reinsurance activities with the main
                    objective of strengthening the Thai insurance industry and the economy as
                    a whole by supporting retention of premium within Thailand and limiting the
                    exposure on foreign exchange. On December 30,1993, the company went
                    public. Its present registered capital is Baht 1,187.8 million with paid-up
                    capital of Baht 1,187.4 million.
                                                                    Thai Reinsurance Public Company Limited
                                                                                              Annual Report   002
Introduction


General Information
    Company & Head Office Name        Thai Reinsurance Pcl.
    Registered Number                 PCL Registration No. 246
    Location                          223/1 Soi Ruamruedee, Witthayu Rd., Lumpini, Pathumwan
                                      Bangkok 10330 Tel: 0-2256-6822 Fax: 0-2256-6832
    Home Page                         www.thaire.co.th
    Registered Capital                1,187,764,000 ordinary shares of Baht 1 each,
                                      Total 1,187,764,000 Baht
    Issued and paid-up                1,187,354,940ordinary shares of Baht 1 each,
                                      Total 1,187,354,940 Baht
    Nature of Business                Provision of reinsurance (Non-life insurance business)

Other References
    Share Registrar/ Transfer Agent   Thailand Securities Depository Co., Ltd.
                                      The stock exchange of Thailand Bldg.
                                      4 th , 6-7th Fl., 62 Rachadapisek Rd., Klongtoey Bangkok 10110
                                      Tel: 0-2359-1200 Fax: 0-2359-1259
    Auditors                          Rungnapa Lertsuwankul , No. 3516
                                      Certified Public Accountant (Thailand) Ernst & Young
                                      Lake Rachada Office Complex 33rd Fl., 193/136-137
                                      NewRachadapisek Rd., Bangkok 10110
                                      Tel: 0-2264-0777 Fax: 0-2661-9192
    Internal Auditors                  A.M.T. Associates Office Ltd.
                                      491/27 Silom Plaza, Silom Road,Silom, Bangrak, Bangkok 10500
                                      Tel. 0-2234-1676 Fax. 0-2237-2133
    Legal Advisor                     C.B. Law Office Ltd.
                                      Satorn Thani 2 Bldg. 10th Fl., 92/61 North Sathorn Rd., Bangrak
                                      Bangkok 10500 Tel: 0-2233-5399 Fax: 0-2236-4980
                                                                                                     Thai Reinsurance Public Company Limited
                                                                                                                               Annual Report   003
Financial Highlights


                                                                                                       Growth (%)

                                                              2006        2005         2004     2006/2005      2005/2004
           Operating Result (Million baht)

               Gross Written Premium                        4,024        3,764       3,395           6.91             10.86

               Net Written Premium                          2,613        2,544       2,282           2.71             11.47

               Profit before tax                              611         627            531        (2.51)            18.04

               Net Profit                                     462         482            450        (4.05)             6.99

               Net Profit per Share (Baht)                    0.39        0.41         0.39         (4.88)             5.13




                  Net Written Premium(Million)                                                 Net Profit (Million)

                                                  2,544       2,613
                                      2,282                                                                         482       462
         2,192                                                                                         450
                        2,054                                                                 395
                                                                                 332




         2002           2003          2004       2005         2006               2002      2003        2004     2005          2006




                                                                                                       Growth (%)

                                                                       2006   2005     2004     2006/2005      2005/2004
               Financial Status at the end of Year (Million Baht)

               Total Assets                                           4,622 4,649 4,417             (0.58)             5.23

               Total Liabilities                                      2,270 2,289 2,057             (0.85)            11.28

               Paid-up capital                                        1,187 1,180 1,167              0.61              1.14

               Total Capital Funds (Shareholder’s Equity)             2,334 2,360 2,361             (1.09)           (0.04)

               Book Value per share                                    1.97   1.99     2.02         (1.01)           (1.49)

               Dividend per Share (Baht)                               0.36   0.36     0.36          0.00              0.00




                    Total Assets (Million)                                                      Total Capital Funds
                                                                                              (Shareholder’s Equity)
                                              4,649         4,622                          2,461      2,361     2,360         2,334
                    4,434          4,417
       3,616                                                                     1,949




       2002          2003          2004       2005          2006                 2002      2003        2004     2005          2006
                                                                                        Thai Reinsurance Public Company Limited
                                                                                                                  Annual Report   004
Financial Highlights



                                                                         2006            2005           2004

              Financial Ratio (Percentage)

              Return on Revenue                                          15.9            16.5           17.7

              Return on Net Written Premium                              17.7            18.9           19.7

              Return on Equity                                           19.7            20.4           18.7

              Return on Assets                                           10.0            10.6           10.2

              Return on Investments                                       8.1             9.7               7.0

              Combined Ratio                                             86.2            87.6           84.4




               Return on Equity (Percentage)                               Return on Assets (Percentage)


      21.0                                                        11.0
                                                    20.4                                                          10.6
                                                           19.7   10.0                                  10.2               10.0
      19.0                                                                                     9.8
                                             18.7                                 9.6
                                                                   9.0
                    17.7          17.9
      17.0                                                         8.0
              2002       2003         2004      2005   2006                 2002        2003         2004     2005      2006




              Combined Ratio(Percentage)                                 Return on Investments(Percentage)


      100.0
                                 97.2                                                      12.1
                                                                  10.0                                            9.7
                                                                                7.7                                        8.1
       90.0                                                                                             7.0
                     89.2                           87.6           5.0
                                                           86.2
                                             84.4
       80.0                                                        0.0
              2002        2003        2004      2005   2006                2002         2003         2004     2005      2006
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   005
Letter to Shareholder


In what has been a eventful and challenging year for the industries and Thaire. I am pleased to report that we
finished the year with good earnings and a strong balance sheet. Thaire team remained intensely focused on our
business objectives, continuing to innovate with new products and services to meet our customers’ needs. In
2001 we laid out a series of Thaire priorities and key growth strategies. They were : staying customer focused;
identifying new business opportunities; emphasizing new product development; and focusing on controlling
costs. I believe we made good progress in each of these areas during the past years.

Thaire’s net income totaled Baht 462.3 million in 2006,a decrease of 4.1 percent over net income for 2005. On a
per share basis , Thaire earned Baht 0.39 in 2006, down 4.8 percent from the Baht 0.41 per share earned in the
preceding year. This performance was achieved after a release of Baht 30 million from our loss fluctuation
reserve. At the end of 2006 our loss fluctuation reserve stood at Baht 70 million, down from Baht 100 million at
beginning of the period.

Thaire’s total shareholder’s equity at December 31, 2006 was Baht 2.33 billion. Cash flow from our insurance
operations and our balance sheet remain strong. For 2006, we achieved a return on equity of 19 percent; remain
among the highest ROE organizations in our industry.

Thaire’s ability to report solid earnings and cash flow in the face of unfavorable economic conditions reflects the
diversity and strength of our major businesses – General Insurance, Life Insurance and Servicing Companies; all
are well positioned in the Thai market. We remained intensely focused on our business objectives, continuing to
innovate with new products and services to meet our customers’ needs.

In 2006, we have made progress in upgrading Thaire’s ratings. Currently, Standard & Poor’s rate our long-term
local currency Counterparty Credit (CCR) and Financial Strength Rating (FSR) BBB+ (Good) with positive
outlook. At this level, Thaire’s rating is among the highest of any insurance and financial services organization in
the country.

We are proud of being awarded in 2006 by The Stock Exchange of Thailand the Set Awards for Distinction in
Maintaining Excellent Corporate Governance Report and being nominated Best Performance – Financials. Both
of the awards are in recognition of the “Best Practices”, keep us in the forefront of Good Corporate Governance.
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   006
Letter to Shareholder

We have remain focused in growing our non life business with targeted opportunities, reflecting in the expansion
of our business in 2006 with an increase of 6.9 percent in our general gross reinsurance premium from Baht 3.48
billion to Baht 3.72 billion. At the same time our net reinsurance premium increased by 2.1 percent, from Baht
2.27 billion to Baht 2.32 billion. The main driving force for the mentioned growth was our miscellaneous business
which sharply increased year on year by 23 percent. This increase leads to growth of our treaty reinsurance
business by over 13 percent in 2006. For the year under review our underwriting result for Non Life business was
Baht 358.8 million, compared to Baht 358.3 million in 2005. This result is acceptable when considering the major
loss sustained by our company at Thai Airways International’s catering facility at Suvarnabhumi International
Airport in the first quarter of the year. It must be said that our readily available loss fluctuation reserve improved
our net exposure from the mentioned losses. At the beginning of 2006 our loss fluctuation reserve was Baht 100
million and by the end of that year it had decreased by Baht 30 million to Baht 70 million. For 2006, the overall
loss ratio for our Non Life business was 45 percent and combined ratio was 88 percent, same level as in the
previous year.

We consider the growth of life business as important for us. We maintain a strong business relationship with most
local and joint venture life companies that are in the market. Through which we offer a full range of risk and
saving products that address particular needs. For 2006, the recorded gross reinsurance premium increased by
6.7 percent, from Baht 285.2 million to Baht 304.4 million. For the period our net reinsurance premium increased
by 7.9 percent, from Baht 273.3 million to Baht 295.0 million. We achieved for 2006 an adjusted underwriting
profit of Baht 80.3 million for our Life business, representing a substantial increase of 117.8 percent from Baht
36.9 million that was recorded in the previous year. The life reinsurance premium now accounts for 11.3 percent
of our total net premium income, compared to 10.7 percent that was recorded in the last year. We are confident
that within the next couple of years this figure will exceed 15.0 percent. Life business is considered to be less
volatile, and hence increasing this part of our business will improve the volatility of our overall portfolio.

We have maintained a careful investment strategy that’s focused on the long term, however, with the slowdown in
the economy in 2006 our investment income dropped to Baht 292.3 million from Baht 353.0 million in the previous
year, or representing a decrease of 17.2 percent. The average investment yield for 2006 was 8.05 percent, or
representing a decrease of 1.59 percentage points under what was recorded in the previous year. This is
considered to be favorable compared to an estimate of 5 percent of others in the same sector.
                                                                             Thai Reinsurance Public Company Limited
                                                                                                       Annual Report   007
Letter to Shareholder

We maintain our support for charities that are focused on rural development. We have realized that education
and healthcare is not something that everybody can easily afford, many take it for granted. We believe that the
various funds for education and healthcare that are supported by us could make a difference for some of the
underprivileged people. We believe that responsible corporate citizenship is the hallmark of business leadership.
Both of our funds and also through our volunteer work, we hope to bring care and encouragement to the people
in need as well as create a positive atmosphere for the community. In 2006 our total support for our funds
increased from the previous year by Baht 1.4 million to Baht 2.4 million.

We are ready for the challenges ahead in 2007. In the coming year the market will soften on certain lines of
business and there will be an increased amount of capacity in the marketplace. Our underwriting team is ready to
face the challenges by targeting expansion of business by offering the right solutions to our customers. We will
capitalize on every new opportunity ahead and remain optimistic about our ability to operate at an acceptable
profitability level. It's our aim to become much more than a conventional reinsurer by developing new products,
new services and new distribution channels that will evolve around reinsurance business for the local market. We
will maintain our interest in assisting small to medium sized companies in the local market to meet economies of
scale with lower operating expense ratios through the utilization of our services. We are indeed very excited
about the future.

We continue to evolve as a leading organization in our industry, we rely on the commitment of our high quality
employees, our strength depends on their diligence and ongoing dedication to our company. In closing, we
would also like to thank our shareholders and clients for the continued support of Thai Re. Together, we have a
bright future.




                                                                                    Surachai Sirivallop
                                                                                    President & CEO
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   008
Milestones


March 2004 :
Awarded the “Insurance company whose service benefits the ” Awarded the for the year 2003 by the development of
insurance business” for the year 2003 by the Insurance Department, Ministry of Commerce.


July 2004 :
Awarded from the Stock Exchange of Thailand “Best Corporate Governance”.


September 2004:
The international ratings agency Standard & Poor’s upgraded the financial strength rating of the company to BBB
(Good) with positive outlook, previously stable.


July 2005 :
“Distinction in Maintaining Excellent Corporate Governance Report” and “Nominee for Best Performance – Financials”
Awarded from Stock Exchange of Thailand


October 2005 :
The international ratings Standard & Poor’s approvaled the financial strength rating of the company to BBB+ (Stable)
with positive outlook.


November 2005 :
Evaluated by the Thai Institute of Directors as one of the most outstanding Thai public companies for the 1st Quartile
and to qualify for a position in the final round for “The Best Board of Directors” for 2004/2005


July 2006 :
Distinction in Maintaining Excellent Corporate Governance Report and nominated for Best Performance – Financials
award from Stock Exchange of Thailand


October 2006 :
Rated by the Thai Institute of Directors as “Very Good” Thai public companies


November 2006 :
The international ratings Standard & Poor’s affirmed the financial strength rating of the company to increase from BBB+
(Stable outlook) to BBB+ (Positive outlook).
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report    009
Board Members
1. Mr. Suchin Wanglee Age 70        Independent Chairman, Chairman of the Remuneration Committee, Nominating
                                    Committee, Director of Investment Committee
Shareholding                        % Shareholding 0.26
Education                           Electrical Engineering, Northrop Institute of Technology, USA.
Training Courses                    Chairman 2000, by Thai Institute of Directors Association
Experience                          Chairman of The Navakij Insurance Plc.; Director of Thai Commercial Insurance Plc.;
                                    Director of General Insurance Association (GIA)
2. Mr. Chai Sophonpanich Age 63     Independent Vice Chairman, Director of the Remuneration and Investment Committee
Shareholding                        % Shareholding 0.23
Education                           B.SC. University of Colorado, USA.
Training Courses                    Directors Certification Program(DCP) and Chairman 2000, by Thai Institute of Directors
                                    Association
Experience                          President and Chairman of Bangkok Insurance Plc. ; Chairman of Charoong Thai Wire &
                                    Cable Plc., Furakawa Metal (Thailand) Plc. and Bumrungrad Hospital Plc.; Director of The
                                    Amata Corporation plc. and Bangkok Life Assurance Ltd. ; President of General Insurance
                                    Association (GIA)
3. Dr. Kopr Kritayakirana Age 67    Independent Director
Shareholding                        % Shareholding 0.02
Education                           Ph.D. Physic, Havard University, USA.
Training Courses                    Directors Certification Program(DCP) , by Thai Institute of Directors Association
Experience                          Advisor to the National Science and Technology Development Agency; Director and Audit
                                    committee of Siam Commercial Leasing Plc. And SICCO Securities Plc.; Director of Banpu
                                    plc.; CEO of Siam Commercial Life Assurance Plc.
4. Mr. Kerati Panichewa Age 47      Independent Director
Shareholding                        % Shareholding 0.11
Education                           MBA. College of Notredame, USA.
Training Courses                    Directors Certification Program(DCP) , by Thai Institute of Directors Association
Experience                          Managing Director of Krung Thai Panich Insurance Co., Ltd.
5. Mr. Jiraphant Asvatanakul Age 47 Independent Director
Shareholding                        % Shareholding 0.03
Education                           Master of Accounting, University of Texas at Austin, USA.
Training Courses                    Directors Certification Program(DCP) by Thai Institute of Directors Association
Experience                          President & CEO of Thaivivat Insurance Plc.; Secretary of General Insurance Association
                                    (GIA)
                                                                            Thai Reinsurance Public Company Limited
                                                                                                      Annual Report      010
Board Members
6. Mr.Charuek Kungwanphanich Age58   Independent Director
Shareholding                         % Shareholding -
Education                            Bachelor of Statistic, Chulalongkorn University
                                     Directors Certification Program(DCP) , Director Accreditation Program (DAP),
Training Courses
                                     Finance for Non-Finance Directors Program(FN)
                                     by Thai Institute of Directors Association
Experience                           Managing Director of Dhipaya Insurance Plc.; Director of Road Accident Victims
                                     Protection Co.,Ltd. And National Credit Bureau Co.,Ltd.
7. Mr. Chanin Roonsamrarn Age 59     Independent Director, Director of the Audit and Remuneration Committee
Shareholding                         % Shareholding -
Education                            MS. Fort Hays State University, USA.
Training Courses                     Directors Certification Program(DCP) and Chairman 2000, by Thai Institute of
                                     Directors Association
Experience                           Managing Director and CEO of The Siam Industrial Credit Plc.; Chairman of SICCO
                                     Securities Plc.; Charirman of SICCO Advisory Co.,Ltd.; Director of Human Result
                                     and Remuneration Committee of Samaggi Insurance Plc. Director of the Audit and
                                     Independent Director Home Product Center Plc.
8. Dr. Suchart Sungkasem Age 59      Independent Director
Shareholding                         % Shareholding -
Education                            Ph.D. Economics, University of Miami, USA
Experience                           Deputy Chief Executive Officer of Phatra Insurance Plc.;
9. Mr. Adisorn Tantianankul Age 59   Independent Director
Shareholding                         % Shareholding -
Education                            B.A. (English), Assumption Commercial College
Training Courses                     Directors Certification Program(DCP) , by Thai Institute of Directors Association
Experience                           President of The Ayudhaya Insurance Plc.; Chairman of Property Insurance
                                     Subcommittee in GIA
10. Mr. Arnop Porndhiti Age 59       Independent Director and Director of the Remuneration Committee
Shareholding                         % Shareholding 0.03
Education                            Diploma of Management, European Centre for Continuing Education,
                                     Insead,France.
Experience                           President of MSIG Insurance (Thai) Co.,Ltd.; Vice President of GIA
                                                                           Thai Reinsurance Public Company Limited
                                                                                                     Annual Report        011
Board Members
11. Mr. Apirak Thaipatanagul Age 63   Independent Director
Shareholding                          % Shareholding 0.01
Education                             M.S. Actuarial Sciences, University of Iowa, USA.
Experience                            Managing Director of Thai Life Insurance Co.,Ltd.; Chairman of Thai Life Assurance
                                      Association
12. Mr. Aswin Kongsiri Age 61         Independent Director and Director of the Audit Committee
Shareholding                          % Shareholding -
Education                             B.S. (honor student) Philosophy, Politics and Economics, Oxford
                                      University,UK.
Training Courses                      Directors Certification Program(DCP) and Chairman 2000, by Thai Institute of
                                      Directors Association
Experience                            Director, Audit committee, Risk Management committee and chairman of the
                                      Nominating committee and Remuneration committee Of Muang Thai Life Assurance
                                      Co.,Ltd. ; Director and Audit committee of Padaeng Industry Pcl. ; Director of CH-
                                      Karnchang Pcl. ; Director and Executive Director of Krung Thai Bank Pcl. ; Director
                                      , Chairman of Risk Management committee and chairman of Nominating committee
                                      BAFS pcl.
13. Mr. Udom Vichayabhai Age 71       Independent Director, Chairman of the Audit Committee and Director of the
                                      Investment Committee
Shareholding                          % Shareholding -
Education                             BBA., Boston University, USA.
Training Courses                      Directors Certification Program(DCP) ,Director Accreditation Program(DAP),
                                      Chairman 2000 and Audit Committees Program (ACP) by Thai Institute of Directors
                                      Association
Experience                            Director and Director of Audit Committee Thai-German Ceramic Plc., Laguna Resort
                                      & Hotel Plc.; Director of Alcon Packaging Strongpack Plc. And Thai Wah Food
                                      Products Plc. ; Chairman of Puket Fantacy Public Co.,Ltd.
14. Mr. Surachai Sirivallop Age 65    President & CEO and Director of the Investment Committee
Shareholding                          % Shareholding 0.12
Education                             Bachelor of Laws, Thamasat University
Training Courses                      Directors Certification Program(DCP) , by Thai Institute of Directors Association
Experience                            Regional Manager of AIU Far East, Hong Kong; Managing Director of AIG
                                      Reinsurance Co.,Ltd., Hong Kong; Vice President of General Insurance Association
                                                                  Thai Reinsurance Public Company Limited
                                                                                              Annual Report       012
Management Team

1. Mr. Surachai Sirivallop Age 65    President and Chief Executive Officer
Education                            Bachelor of Laws, Thammasat University
Experience                           Former Managing Director of AIG Reinsurance Co.,Ltd.,
                                     Hong Kong
2. Mr. Chuanchai Cheausamut Age 58   Executive Vice President
Education                            Bachelor of Business Administration (Accounting), Chulalongkorn University
Experience                           Comptroller of New Hampshire Insurance Co., Senior Vice President -
                                     Finance & Operations of Thai Reinsurance Plc.
3. Mr. Prawit Thongtanakul Age 40    Senior Vice President - Business Development
Education                            Master of Structural Steel Design, Imperial College
Experience                           Profit Centre Manager, AIG Insurance; Client Manager, Swiss Reinsurance
4. Mrs. Thitaporn Tarakij Age 47     Senior Vice President - Finance & Operations
Education                            Master of Business Administration, Kasetsart University
Experience                           Vice President-Accounting & Finance of Thai Reinsurance Plc.
5. Mr. Theera Bunnag Age 37          Senior Vice President – International
Education                            Diploma in Hotel Management, Les Roches, Switzerland
Experience                           Vice President–International of Thai Reinsurance Plc.
6. Mr. Chamroen Phusit Age 44        Vice President - Investment
Education                            Bachelor of Business Administration (Finance), Dhurakijpundit University;
                                     Mini MBA, Thamasart university
Experience                           Assistant Vice President - Investment of Thai Reinsurance Plc.
7. Mrs. Nantinee Chinwanno Age 43    Vice President - Customer Support
Education                            Master of Business Administration, University of Missouri, USA
Experience                           Assistant Vice President - Customer Support of
                                     Thai Reinsurance Plc.
8. Mr. Chanaphan Piriyaphan Age 36   Vice President - Marketing
Education                            Master of Business Administration, New York Institute of Technology, USA,
                                     ANZIIF
Experience                           Assistant Vice President - Business Development of
                                     Thai Reinsurance Plc.
                                                                         Thai Reinsurance Public Company Limited
                                                                                                     Annual Report     013
Management Team

9. Ms. Sasithorn Suk-Amporn Age 43        Vice President - Accounting / Finance & Operation Support
Education                                 Bachelor of Business Administration (Accounting)-Honor , Chulalongkorn
                                          University
Experience                                Assistant Vice President - Accounting & Finance of
                                          Thai Reinsurance Plc.
10. Mrs. Nalina Bodharamik Age 36         Vice President - Business Development
Education                                 Master of Business Administration, University of West Florida, USA; ANZIIF
Experience                                Assistant Vice President - Business Development of
                                          Thai Reinsurance Plc.
11. Mr. Wiwat Bhencha-arporn Age 34       Vice President - Business Development
Education                                 Master of Business Administration, University of Hartford, USA
Experience                                Assistant Vice President - Business Development of
                                          Thai Reinsurance Plc.
12. Mrs. Chanya Tancharoen Age 54         Vice President - Business Development
Education                                 Diploma of Secretary, Illinois Commercial College
Experience                                Assistant Vice President, New Hampshire Insurance Company
13. Mr. Wichai Supasuteekul Age 41        Vice President - Information Technology
Education                                 Master of Engineering (Computer Engineering), King Mongkut Institute of
                                          Technology (Ladkrabang)
Experience                                Manager – Computer Support and Network of Thainumtip Co.,Ltd Assistant
                                          Vice President - Information Technology of
                                          Thai Reinsurance Plc.
14. Ms. Pojaman Fuangaromya Age 33        Assistant Vice President – Business Development
Education                                 Master of Business Administration, Seattle University, USA
Experience                                Credit Analysis, EXIM Bank ; Manager - Business Development of
                                          Thai Reinsurance Plc.
15. Mr. Adulsak Ratanasawake Age 37       Assistant Vice President - Research and Statistics
Education                                 Master of Applied Statistic (Acturial Science), NIDA
Experience                                Research and Statistics Division Manager of Thai Reinsurance Plc.
16. Mrs.Tippawan Bhencha-arporn Age 35 Assistant Vice President - Research and Statistic

Education                                 M.B.A. (Marketing), University of Hartford
Experience                                Management Associate, AIA
                     Thai Reinsurance Public Company Limited
                                               Annual Report   014
Organization Chart
                                                                                         Thai Reinsurance Public Company Limited
                                                                                                                   Annual Report        015
        Type of Business
        Type of Business
        Thai Reinsurance Public Co., Ltd. and its affiliated or subsidiary companies are mainly involved in the
        reinsurance business with all of the local Non-Life & Life insurance companies, a select number of overseas
        business relationships are also maintained. The gross written premium is divided into the following main
        categories:
                                                          Thai Reinsurance

      100 %                     100 %                    100 %                    80 %                      37.8 %                      40 %


Thai Re Life            TR Training             Thai Re Services           First Tech                  EMCS                         TID

                                                                                                             20 %

        There are all together four companies affiliated or subsidiary companies that have separate roles, as follows:
        The Our Group
                                                                                                   Capital Registered/   Percentage Owned
                      Company & Head Office                         Nature of Business              Issued & Paid up            (%)
                                                                                                      (Million Baht)
         Thaire Life Assurance Co., Ltd.                    Provision of Reinsurance                   200 / 200               100
         223/1 Soi Ruamruedee, Witthayu Rd.,                (Life insurance business)
         Lumpini, Pathumwan Bangkok 10330
         Tel: 0-2651-4222 Fax: 0-2256-6828
         TR Training Co.,Ltd.                               Training service and advisory in            0.5 / 0.5              100
         Reget House 14th Fl., 183 Rajadamri Rd.,           insurance
         Lumpini, Pathumwan Bangkok 10330
         Tel: 0-2255-6165-6 Fax: 0-2255-6427
         Thai Re Services Co.,Ltd.                          Provide claim management and                 20/20                 100
         Reget House 14th Fl., 183 Rajadamri Rd.,           operation support for insurance
         Lumpini, Pathumwan Bangkok 10330                   business such as policies printing
         Tel: 0-2255-6425-6 Fax: 0-2255-6427
         First tech Solution Co.,Ltd.                       Provide Business Process                     50/50                     80
         Reget House 14th Fl., 183 Rajadamri Rd.,           Outsourcing for Domestic
         Lumpini, Pathumwan Bangkok 10330                   Insurance companies
         Tel: 0-2255-6420-4 Fax: 0-2255-6427
         Thai Insurer Datanet Co., Ltd. (TID)               Provision of computer Service               30 / 30                    40
         100/1 Wong Wanich A 16th Fl., Rama IX
         Rd., Huaw Khwang Bangkok 10320
         Tel: 0-2247-7200 Fax: 0-2247-7214
         EMCS Thai Co.,Ltd. (EMCS)                          Provision of computer service in            40 / 40                57.8
         Reget House 10th Fl., 183 Rajadamri Rd.,           relation to motor insurance claims
         Lumpini, Pathumwan Bangkok 10330
         Tel: 0-2650-5700 Fax: 0-2651-9091
                                                                                  Thai Reinsurance Public Company Limited
                                                                                                            Annual Report   016
Type of Business

Juristic Person in witch the company holds shares more than 10%

                                                                       Capital Registered/    Percentage Owned
            Company & Head Office                Nature of Business     Issued & Paid up             (%)
                                                                          (Million Baht)
 Thai Insurance Institute Limited (T.I.I.)      Provision of               21.5 / 21.5              17.7
 3354/32 Manorom Building 10th floor,           insurance training
 Rama IV Rd., Klongtoey Bangkok 10110
 Tel: 0-2671-7440-1 Fax: 0-2671-7427


Our Business Goals
1. Expansion of the life insurance segment
To diversify and maintain our company’s sources of revenue, The Company has aimed to increase the proportion
of income from the life insurance segment, of which the performance is typically considered more predictable
than the non-life insurance segment. (Statistically speaking, it is easier to forecast the possibility of deaths of the
insured than that of accidents / disasters _ the insurance business has understandably been more volatile and
involves more risks than its counterpart.) In 1999, The Company launched a five-year plan to increase the ratio of
the life insurance segment to five percent of the total premiums. The company has initiated a strategic
partnership with Scor Vie, the world’s leading insurance company based in France. The main clients targeted are
the new line of insurance companies in the process of expansion. The company is pleased to report that it has
surpassed its initial five-per cent goal within the period of three years only. At present, the life insurance segment
constitutes nine percent of the net insurance premiums and continues to grow satisfactorily. The segment is likely
to become of greater significance in years to come.
2. From reinsurer to service provider
Beside the reinsurance business, the core operation of the group, The Company aims to expand its base to
become a leading service provider in the related field. This will eventually constitute the third major source of
revenue (beside the reinsurance and other investments), as well as reduce the potential volatility within the sector.
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report   017
Type of Business

Type of Product and Services
The majority of the business in our portfolio is Fire reinsurance from the domestic market. The portfolio mix of our
business is as per the following table:

                                                    2549              2548
                                                   รอยละ            รอยละ
 • Non Life Reinsurance - Domestic
                              Fire                 48.8             52.1
                              Marine                7.5              7.9
                              Motor                 3.9              4.9
                              Misc                 27.3             23.4
                                                   87.5             88.3
                           - International          1.2              1.0
       Total Non-Life Reinsurance                  88.7             89.3
 • Life Reinsurance                                11.3             10.7
 Total                                             100.0            100.0

Reinsurance Services&Sources of Business
The Life and Non Life reinsurance services that are provided by Thai Reinsurance are categorized as either Non
Market Agreement or Market Agreement business. The following are explanations for both of the categories of
business:
The Non Market Agreement Business
1. Facultative reinsurance
The business that is known as Facultative reinsurance is the reinsurance provided for an individual risks on terms
and conditions that have been agreed specifically for that risk. Making up approximately 29 percent of the total
gross written premium in 2005.
2. Treaty reinsurance
Under treaty arrangements Thai Reinsurance agrees to accept the risks offered by the insurance companies,
known as cessions, without the option of declining. Treaty arrangements of Thai Reinsurance are with both local
and overseas insurance companies. Making up approximately 71 percent of the total gross written premium in
2005.
The Market Agreement Business
There was originally two benefits that would be resulting from the establishment of Thai Reinsurance over 20
years ago for the local insurance market. The first being an increased spread of premium and retention of the
local insurance business that would have normally been reinsured overseas. The second being the gathering of
valuable statistics that could be eventually utilized for the development of the entire local insurance industry,
hence the existence of the Market Agreements between all of the current local Non Life and Life insurance
companies and Thai Reinsurance.
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report     018
Type of Business
Since the formation of the various Market Agreements, Thai Reinsurance has arranged common account Excess
of Loss protection for the benefit of all of the member companies.
Most of the Market Agreements for Non Life business are proportional contracts being on quota share basis that
Thai Reinsurance have with the insurance companies. The classes of the business that included are Fire, Motor
as per Motor Vehicle Accident Victims Act 1992, Marine, and Miscellaneous excluding particular types of
insurances. The mentioned classes of business could include proportional reinsurance, retrocession, and by
consideration of the maximum sum insured per risk. Particular stipulation is made in the market agreements of
commission, reporting, payment method, and etc. The market agreement contracts terminate at the end of each
year and they are automatically renewed every year except in the situation where one of the parties gives a
cancellation notice in 3 months in advance prior to the end of that particular year.
Life business also follows similar procedure as Non Life business. Market Aggreement for Non Life businesses is
handled by Thai Reinsurance’s subsidiary, ThaiRe Life. The Market Agreements have been arranged with most of
the Life insurance companies inThailand.
         Detail of Reinsurance and Retrocession of Thai Reinsurance follow the market contract.

                                                        Reinsurance Premium
   1. Five percent of the Non-Life Insurance policy (exclude voluntary motor) that the members (Insurance company that
   registed in Thailand) release for all cedents under the previous condition (5% Quota Share).
   2. 10% of the Fire policy and All Risks Policy from members (Insurance company that registed in Thailand) that have sum
   insured more than THB 30 million which we release direct to our cedents follow the Thailand Fire Pool condition.
   3. 5% - 10% of the reinsurance type 1st Surplus of the Life Insurance that most of Domestic Life Insurance companies.

                                                          Thai RE

                              Retrocession Premium                           Net Premium

    Approximately 50% of (1) bring retrocession                        Thai Re keep the risk approximately 50% of (1)
    premium back to members by the condition

    Approximately 90% of (2) bring retrocession                        Thai Re keep the risk approximately 10%of (2)
    premium back to members by the condition

    Approximately 11 of (3) bring retrocession premium                 Thai Re keep the risk approximately 89% of (3)
    back to 7 of 13 members follow the condition
                                                                                  Thai Reinsurance Public Company Limited
                                                                                                            Annual Report       019
Type of Business
Other Contract
It is general business contract that the company and it’s subsidiary do with the other insurance companies in
both domestic and international. The difference between other contract and Market Agreement is the other
contract that the company do not have to return the retrocession back to the parties. The income from the other
contract is 41% from our net reinsurance income.
Risk Management
The company’s has always had a strategy of retaining as much as possible the portfolio of its business. By doing
so the company has to arrange a set of Excess of Loss programs that would protect its business that it retains.
The way that the Excess of Loss program are arranged take into account the overall exposure of the company to
any single risk loss or a multiple of losses from a natural catastrophe that could affect the financial stability of the
company. The maximum limit that the company have to retain following any loss event would be Baht 90 million
per property loss, Baht 20 Million for Marine loss, and Baht 50 million for Miscellaneous loss.
Claim
In general following any loss event the reinsured notifies all of the reinsurers the shares of their exposure through
the specific reinsurance that has been arrange between the two parties. For facultative reinsurance the process
follows the above with each loss being compensated to the reinsured on a case by case basis. For treaty
reinsurance the compensation is made to the reinsured only after the amount of loss exceeds the minimum that is
specified in the treaty, that would be per month or per quarter. For all of the small losses below the minimum
would be paid in advance by the reinsured. At the same time the company also processes all losses that are
exceeding Excess of Loss limits with its reinsurers accordingly.

Revenue Structure
The revenue structure of the company and it’s subsidiaries come from 2 main parts,
being from reinsurance and investment. The following table provides and overview of
the revenue structure of the company:
                                                                                                Unit : Million Baht
                                                                  2006                   2005                   2004
        Business Group                   Support by
                                                             Amount Percent         Amount Percent Amount            Percent
                                    Thai Re &ThaiRe-Life      317.8                  270.2                  265.8
 1. Net Underwriting Profit /1                                            51.8                   43.0                       50.1
                                    (only ThaiRe-Life)        [76.0]                 [32.9]                 [31.1]
                                    Thai Re &ThaiRe-Life      296.2                  357.9                  265.2
 2. Net Investment Income/2                                               48.2                   57.0                       49.9
                                    (only ThaiRe-Life)        [26.6]                 [16.0]                 [15.0]
                            Total                             614.0      100.0       628.1      100.0       531.0           100.0

Note 1 Net profit from insurance mean profit from insurance premium after deduct the expense
     2
       Profit form Investment includes the profit from share dividend, benefit interest, and other interests.
                                                                             Thai Reinsurance Public Company Limited
                                                                                                       Annual Report   020
Type of Business

Products and Services
The products and services of the company and its subsidiaries can be summarized per the following:
1. “Market Agreement”
This business comes from all Life and Non-Life Insurance Companies in Thailand. It serves the objective of the
Department of Insurance which requires part of the premiums written in Thailand to be retained. At present this
business makes up approximately 30% of the whole volume of premium in the company’s portfolio.
2. “Voluntary Business”
This business constitutes all the business which is not considered to be Market Agreement from all Life and Non-
Life Insurance Companies in Thailand. It is the business that the company has to compete with other reinsurers.
The strategy of the company is to maximize its market share in the Thai Market. From this strategy the company’s
objective would be to increase the Voluntary business from 45% in 2000 to 70% of the gross written premium in
2006.
It can be observed that the portfolio mix of the company has changed dramatically to be more balanced when
compared to the portfolio mix in 2000. For example, Fire insurance in year 2000 represented 60% of the portfolio
mix compared to 49% in 2006; the difference of 11% has been replaced by Miscellaneous and Marine classes.
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report     021
Industry Situation and Competition

Based on the information that has been provided by the Insurance Department of Thailand the growth of the
insurance industry is progressing well. The direct premium of the Non-Life insurance market in 2006 was Baht
93,314 million, representing an increase of 5% from 2005. At the same time the Non-Life reinsurance premium
was Baht 28,554 million, up by 0.007% from 2005. The direct premium of the Life insurance for 2006 increased
by 4% from 2005 to Baht 174,426 million. The Life reinsurance premium for 2006 was up by 19% from 2005 to
Baht 4,327 million.
The characteristic of Thai Market can be classify into 2 groups as follow:
1. The first group, consists of insurance companies that make up 22 percent of the total business written in
Thailand for 2006. The business written by them would be on a direct basis, through co-insurance or even
reinsurance.
2.The second group, consists of professional reinsurance companies, Thai Reinsurance included, that make up
78 percent of the remainder of the business that written in Thailand for 2006. The business written by them would
be only reinsurance.

                                                            Non-Life Insurance                  Life Insurance
                                                   Million THB Proportion Percentage Million THB Proportion Percentage
 Direct Premium Insurance                           93,314        100.0               174,426        100.0
 Reinsurance Premium                                28,554         30.6        100.0   4,327          2.5      100.0
    - Domestic
       Reinsurance Premium of ThaiRe                     3,719    4.0         13.0          304          0.2            7.0
       Reinsurance Premium of other companies            4,786    5.1         16.8
    - International                                     20,049   21.5         70.2
Source from        - Department of Insurance
                   - Thai Reinsurance Public Co.,Ltd.
From the information that is presented in the above table, there is 30.6 percent of the total direct premiums of the
Non Life insurance industry in 2006 was for reinsurance, 29.8 percent was reinsured locally and 70.2 percent
was reinsure internationally. Also from the information that is presented in the above table, it is clear that 2.5
percent of the total direct premiums of the Life insurance industry in 2006 was for reinsurance.
The market share for our company of the Non Life reinsurance market is around 13.0 percent and 7.0 percent for
Life reinsurance market.
In recent years, there has been less competition in Thailand because there has been many changes to the
number of international reinsurers that are active in South-East Asia markets. Hence it is felt there are
opportunities that the company could explore since we already specialize in this market with the following
competitive advantages:
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report    022
Industry Situation and Competition


1. The company is the only professional Thai reinsurer with shareholder that are from the domestic Life and Non Life
insurance industries and they also our important cedants.
2. The company have market agreement with every non-life insurance companies in Thailand for 5 percent of every
policies and 5-10 percent for life insurance through the 1st Surplus Treaties.
3. The government’s policy of locally retaining as much business as possible by increasing the limit of retention for
Fire, Miscellaneous, and Marine insurance
4. Dedicating over 20 years of experience to the servicing of the local market’s needs as a priority.
5. A strong financial stability with a steadily growing shareholder’s equity.
6. A close business relationship with key regional insurance and reinsurance companies.
We have a relentless focus on profitable growth. The foundation for our growth is well established - a strong financial
position, having the support from the our customers that make up the majority of both Life and Non Life insurance
companies in the local market, 71 from 96 are non-life insurance and the rest are life insurance, intensively
maintaining an innovative product range to serve them, and a powerful entrepreneurial culture.
A customer focused, entrepreneurial approach to doing business has been deeply engrained in our culture. By
managing our business through highly focused business units that are all profit centers, we have maintained the
discipline and focus of owner-entrepreneurs. The business units are compensated for sustainable, long-term results
through programs that measure and reward performance, benefiting our shareholders and customers.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   023
Risk Factors
1. Liberalization & Deregulation
In the next few years prior to eventual liberalization & deregulation of the Thai Insurance Industry it is expected
that there shall be mergers and acquisitions between local companies and also involving at times foreign
companies. As a result companies become stronger and achieve high efficiency with better economies of scale.
Also expected is that there should be new reinsurers requirements with more sophisticated products and
services. To enhance reinsurance requirements by the local market the Department of Insurance (DOI) is already
considering the benefits of approving another license for a local reinsurance company.
Protection and solution
The way that Thai Reinsurance can evade any problems that might arise in the future if there is liberalization and
deregulation of the local market does occur is to efficiently utilize its assets. Base on statistics that has been
accumulated in the last 30 years there has been efficient setting by the management of business strategies that
are to capture beneficial opportunities with adequate returns. The management has also been capable of apply
the right working system to minimize cost and putting the right human resources in order to maximize utility.
2. Reinsurance Business Risk
The risk that is faced by Thai Reinsurance in doing reinsurance business can be classed as internal and external
threats as per the following details:

     • The external threats such as unexpected natural perils, changing weather patterns due to the general
          concern over global warming. To date there has been an increasing frequency of earthquakes, floods,
          and tropical storms that have already caused a considerable amount of loss to human life and property.
          On the other hand man-made perils such as terrorism are has also caused a considerable amount of
          loss to human life and property in an increasing amount, included would be threats from moral hazard.
     • The external threats that come with the practice of issuing insurance coverage in the local market,
          meaning in other countries insurance coverage is received as premiums is paid in advance but in
          Thailand premiums are paid after the coverage is provided.
     • The external threats that are linked to the cancellation of the tariff by the Department of Insurance when
          the local market is liberalized and deregulation are enforced.
     • The external threats from the errors of management and operation in all steps that have to do with a
          issuing of policies, setting of guidelines, internal controlling, effective underwriting processes, risk
          management, retrocession planning, and claims management.
Protection and solution
The ways that Thai Reinsurance can manage the problems that might arise from the changing weather patterns is
by carefully monitoring the latest information from the local and regional meteorological institutions, particular
attention has been given to the information that pertains to the natural perils such as tropical storms that would
eventually produce flooding. As flood is regarded as the most detrimental natural peril for Thailand, Thai
Reinsurance has been carefully monitoring the initiatives that have been made to continuously improve flood
prevention measures across Thailand.
                                                                             Thai Reinsurance Public Company Limited
                                                                                                       Annual Report   024
Risk Factors

The underwriting process is an integral part of risk management. The way that Thai Reinsurance Manage
problems that might arise from underwriting issues and the changing requirements for insurance coverage or
products are by the following methods:
    • Making the Enterprise Risks Management Guideline for all staff of the company to use as a standard.
      The completion of this is expected to be around the end of 2007.
    • Managing well its portfolio of business that is encompassing all aspects that would improve the overall
      geographical, products and service spread of its business;
    • Applying a prudent underwriting guideline that considers the local market database that has been
      available to Thai Reinsurance from the many years of experience. The database also dictates the
      eventual marketing strategies that are created to continuously improve the overall positioning of Thai
      Reinsurance in the local market with the development of new products and services that target
      individual or groups of insurance companies;
    • Formulating clear business policies with internal systems that automatically review the results and
      provide opportunities for immediate correction if required;
    • Maintaining the Shareholder’s Equity at a satisfactory level according to professional standards;
    • Setting aside adequate amounts of reserves for coverage of claims and liabilities that might materialize
      in the future;
    • Acquiring an adequate amount of Excess of Loss reinsurance that efficiently protects the Thai
      Reinsurance portfolio from large losses that could strain the financial solvency. The Excess of Loss
      reinsurance is supported by a number of international reinsurance companies that have proper financial
      security ratings as assigned by the reputable international rating agencies.
    • Thai Reinsurance is efficient in planning of retrocession programs for every class of business which are
      all part of the risk management strategy.
    • Utilization of statistics as an instrument to achieve higher growth in our market share with the
      introduction of new products to the local market.
3. Investment
The Department of Insurance directive clearly dictates the types and limitations of the investments allowed to be
made by the insurance companies. The following are the directives:
     • The amount of investments in stock, bond, and unit trusts must not exceed 5 percent of the total asset
         of the insurance companies.
     • The amount of investment in promissory note must not exceed than 10 percent of the total asset of the
         insurance companies.
Thai Reinsurance carries out a conservative approach in investments in order to achieve a good spread of
investments by managing the amount of cash deposit, promissory note, bond, stock, unit trust, and etc. All of the
investments will generate returns that would come in the form of interest, dividend, and capital gain.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   025
Risk Factors
The ways that Thai Reinsurance efficiently manages its investment policy in a sluggish economic environment is
by the following methods:
     • Applying a diversification of investments with a balance between equity, notes, loans, deposits and
          corporate & government bonds;
     • Maintaining a conservative investment strategy that has resulted in the acquisition of equity that has
          provided superior securities and reasonable rates of return on the long-term;
     • Having the upper management constantly involved in formulating efficient investment strategies that are
          flexible enough to match the changing investment environment.
4. Information Technology
The protection of the database belonging to Thai Reinsurance from accidental or intentional tampering by
employee and outsiders is considered to be a very important issue since all successful business strategies rely
heavily on reliable database.
The ways that Thai Reinsurance protects its database is by the following methods:
    • The continual improvement and investment of Thai Reinsurance’s computer systems;
    • The establishment of an emergency plan that incorporates a reliable back-up system.
5. Foreign Exchange Rate
The possible negative impact resulting from foreign exchange issues are common with insurance and
reinsurance companies that have a large amount of foreign business.
With the continuing decline in the overseas business that is underwritten by Thai Reinsurance, now contributing
less than 1 percent of the total gross written premium, it is considered that any possible negative impact resulting
from foreign exchange issues would have a minimal impact. The company had responsibility per risk not exceed
than THB 90 million (US$ 2.25 million).
6. Human Resources
The insurance companies in the local market are now showing an increasing amount of attention on issues
pertaining to human resources development and management. In order to survive the heightening
competitiveness of the market the insurance companies have commenced to focus on finding ways to retain key
employees or recruit potential candidates that have experience and the ability to make a difference.
The ways that Thai Reinsurance has been able to maintain and develop its human resources is by the following
methods:
    • By establishing the successful Employee Stock Option Program that has been well received by key
         employees, enjoying the privilege to acquire valuable Thai Reinsurance equity at par value each time
         the capital has been increased.
    • By carrying out annual surveys in order to monitor the levels of salaries and benefits that are being
         offered by other insurance companies and banks.
As a result of the above Thai Reinsurance has been able to guarantee its positioning within the top companies as
an employer of highly experienced and motivated employees.
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   026
Risk Factors
7. The effect in decreasing in investment value in the future:
The company had 6 subsidiaries in 2006, two of which are still in deficit, one being Firstech Solution and the
other being Thai Re Services. The reason for this subsidiaries mentioned being in deficit is because both of them
were only established in 2006 and that the software installation process have not been fully completed. There is
strong confidence by the company that the insurance industry still requires the services of the 2 mentioned
companies.
         Problem Solving:
         The company is willing to assist the subsidiaries that are facing cash-flow problems by investing more
money in them, however, if the subsidiaries cannot operate well the company may lower their investment or event
decide to relinquish their total investment in the subsidiaries.
8. Capital Requirement
To operate a reinsurance company, an identical concept is utilized as in other companies in the financial field.
This means that there has to be enough capital to support the current operating of business and putting aside
enough profit for future development, at the same time meeting expectation on investment returns for
shareholders.
For many years since the economic crisis of 1997 to help our shareholder, Thai Reinsurance has been
transforming net profit into dividend and increasing capital by issuing stock for shareholder at par value every 2-3
years. Resulting from this the shareholders had received the benefit in term of dividend and capital gain. It’s
noted that this concept can create a certain amount of risk for the company if it is not able to increase capital on
time or at the right amount, due to certain internal crisis or stock market slump. Thus resulting in the credibility of
Thai Reinsurance being discredited and having negative consequences on the operating of business.
 With the Stock Dividend tax problem of the past having now been overcome due to a change in the law, the
company is able to initiate a concept that involves both cash and stock dividend pay out which is advantageous
for the shareholders because they gain additional stock and cash. For the company, this concept is also
advantageous with additional capital being gained.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   027
Shareholders and Management Structure

Shareholders
The top-ten shareholders of Thai Reinsurance as at September 14, 2006 are as per the following table:
                               Name                                  No. of Shares          Ratio (%)
      1. Government of Singapore Investment Corporation                82,871,700             7.00
       2. Thai NVDR Co.,Ltd.                                           70,223,400            5.93
       3. Thai Trust Fund                                              68,728,100             5.81
      4. Albouys Nominees Ltd.                                         62,018,300            5.24
      5. The Viriyah Insurance Co.,Ltd.                                57,248,350            4.84
      6. Bangkok Insurance Public Co.,Ltd.                             47,830,740            4.04
      7. Aberdeen Glowth Trust Fund                                    41,097,500             3.47
       8. The Navakij Insurance Public Co.,Ltd.                        33,804,630            2.86
       9. Krungthai Panich Insurance Co.,Ltd.                          31,819,870            2.69
      10. Somers (U.K.) limited                                        22,436,000             1.90
                                                                      518,078,590            43.78
      11. Other Shareholders                                          665,132,420            56.22
                                Total                                1,183,211,010          100.00
It is noted that the company do not have any absolute major shareholder who can dictate policies on the
direction of the company, and managing the company by himself or his group. In additional, company never
releases any bonds or transfer securities that affect the right of shareholders.
Management
Management Structure
Apart for the 14 members of the Board of Directors of the company there are also three additional Committees
that have been created. Firstly, Audit Committee that was created to foresee auditing duties. Secondly,
Remuneration Committees that was created to foresee remuneration duties. Lastly, the Investment Committee
that was created to foresee investment duties. The Board of Directors is allowed to set-up any specific Committee
as necessary.
Board of Directors
The company’s Board of Directors, would direct policy, monitor and supervise the management of the company
and its subsidiaries. With no particular shareholder having a clear majority, the task of appointing the members of
the Board of Directors is achieved by voting at the shareholders meeting.
Committees
As at December 31, 2006, 11 of the 14 members of Board of Directors of the company are independent Directors
with no responsibilities in day to day basis operation in both the company and the subsidiaries .It can be
observed that the committees are independent from management of the company .They also do not represent
any shareholders or any groups of shareholder that could have a majority amount of shares .It’s necessary to
mention that 13 out of 14 Board of Directors of the company have succeeded the IOD or similar international
courses.
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   028
Shareholders and Management Structure

Company Director
The company’s Board of Directors has the responsibility to set the vision, mission, strategy, goal, planning of
budgets for the company .They also have the responsibility to shareholders in monitoring and managing the
company achieve the vision, mission, and maintain policies .
Limitation of the Authorities and Responsibility
Board of Directors has to work under the Law, objectives and the regulations of the company with honesty and
have to be aware of the benefits to the company.
Board of Directors is responsible for reviewing, voting and directing the company’s policies as follow:
•      Release company Policy in day to day basis and authorize for the long-term plan.
•      Review the management structure, working solutions, and annual budget.
•      Hire or terminate the executives & consider adjusting the salaries, fringe benefits and evaluation of the
       President and CEO performance.
•      Consider about the employee salary rate and fringe benefits
•      Assign duties for the management level
•      Follow up and evaluate the performance of those at management level
Board of Directors is responsible in assigning the level of authority to the President & CEO, and in turn it’s his
responsibility to assign authority to other that are below the rank, avoiding any conflict of interest at the same
time.
Normally the Chairman and the President & CEO are responsibility to give an orientation to new Board’s
members. To be more effective in monitoring of the new members of the Board of Director’s, the companies will
arrange the orientation for new Board’s member.
Board of Director has responsibility of electing one of the Directors as Chairman and President & CEO. The
elected person will hold that position for one year and have to be elected again in the following year after the first
General Meeting of the shareholders. For absolute effectiveness to handle the making of policies monitoring of
day-to-day operations the Chairman and President & CEO have to be different persons. The Board of Directors
also have the responsibility to elect the Vice Chairman and Secretary General of the Board of Directors.
Board of Directors has 4 General meetings a year, once a quarter, and may have occasional meetings for the
special case such as for the consideration of the budget, annual directions, and monitoring of operations, etc.
The Secretary General has to send the meeting notification, the agenda of meeting, and relate document to the
directors at lease 10 days in advance. In general the meeting takes around 2 hours to complete. The reports of
the meetings that are approved by the Board of Directors are stored for rechecking again by the related
department.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report     029
Shareholders and Management Structure
Board of Directors is responsible to evaluate the performance and ability of problem solving of sub committees
and give suggestion for the improvement for the year. In evaluating the 2005 performance, Board of Directors
had completed the questionnaire and it can be concluded that the overall result for year 2006 is acceptable in
every part with good corporate governance, conflict of interest, and management in mind. The Board of Directors
is also responsible to provide the management of the company with its vision, mission, strategies, and budget
plan. It is also responsible for the following up process in order to make sure that all is done properly.
In 2006 there were 4 General meetings; Board of Directors that attended are as per the following :

                                                                                           Remuneration
                      Name                       Position          Attendant
                                                                                 Conference Gratuity             Total
  1.   Mr. Suchin      Wanglee           Chairman and                 4/4         100,000    894,000            994,000
  2.   Mr. Chai        Sophonpanich      Vice-Chairman                3/4          85,000    894,000            979,000
  3.   Dr. Kopr        Kritayakirana     Independent Director         4/4         100,000    447,000            547,000
  4.   Mr. Kerati      Panichewa         Independent Director         4/4         100,000    447,000            547,000
  5.   Mr. Charuek     Kungwanphanic     Director                     3/4          85,000    447,000            532,000
  6.   Mr.Jiraphan     Asvatanakul       Independent Director         4/4         100,000    447,000            547,000
  7.   Mr. Chanin      Roonsamrarn       Independent Director         4/4         100,000    447,000            547,000
  8.   Mr. Adisorn     Tantianankul      Independent Director         4/4         100,000    447,000            547,000
  9.   Dr. Sucharti    Sungkasem         Independent Director         3/4          85,000    447,000            532,000
 10.   Mr. Arnop       Porndhiti         Independent Director         4/4         100,000    447,000            547,000
 11.   Mr. Apirak      Thaipatanagul     Independent Director         4/4         100,000    447,000            547,000
 12.   Mr. Aswin       Kongsiri          Independent Director         4/4         100,000    447,000            547,000
 13.   Mr. Udom        Vichaiyabhai      Independent Director         4/4         100,000    447,000            547,000
 14.   Mr.             Sirivallop        President&CEO                4/4         100,000    894,000            994,000
 15.   Ms. Kanda       Xivivadh (2)      Independent Director         0/4          25,000    447,000            472,000
                                Total                                            1,380,000 8,046,000           9,426,000
Note. 1.Remuneration of the Board of Directors as mentioned above includes only the remuneration for the Directors only,
       however, the other remuneration that are paid for the Sub-Directors (if any) will be indicated in the related topic.
       2. It is necessary for you to note that Ms. Kanda Xivivadh is no longer a Director of the company since the General
       Shareholder Meeting on April 12, 2006. According to this the number of Directors of the Company had decreased
       from 15 Directors to 14 Directors.
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report   030
Shareholders and Management Structure

Definition of Independent Director
The Independent Directors means persons whom are having all of the qualifications that are required by the
Securities and Exchange Commission and are also required by the Stock Exchange of Thailand, per the
following:
1.      The person is not able to hold shares more than 5% for the voting in the parent company or related
        company. Those that may have conflict of interest are also not able to be Independent Directors.
2.     The person is not able to have any responsibilities in the management of the company by being an officer
       or advisor who receives salary. It’s also not possible for that person to be an auditor, lawyer, or
       management executive of the company and it’s subsidiary or any juristic person who may have conflict
       interest.
3.     The person is not able to have any direct or indirect related business or conflict of interests in terms of
       monetary gain and management of the company and it’s subsidiary or has part in the decision making for
       the company.
       The meaning of related business or conflicts of interests are per the following points:
       (a)    The person is not able to have interest or controlling power in a related business that has a total
              sum of reinsurance or retrocession more than 10% of reinsurance premium in that particular year.
       (b)    The person is not able to have any deposits, treasury notes, or other investments in any funds that
              the person has management authority more than 10% for the overall assets.
4.     The person is not able to have any close relationship with executives, major shareholders of the company
       and its subsidiaries or the any other person that have conflict interests. Furthermore, the person is not a
       representative for the protection of the interest of Directors or major shareholders.
5.     The person can manage the task at hand without any interferences or concerns with the interests that
       relate to the benefits. They have to be independent from the influence of any person or group or any
       circumstances.
6.     Every year the Board of Directors will evaluate the performance and the qualification of the Directors.
Committee
It is the company’s policy to encourage effective supervisory activities and fully recognize the rights and equality
of all shareholders .This is evident through procedures of the Meeting of Shareholders, during which all
shareholders rights are dictated by the one share, one vote rule and all votes are not transferable .The
company’s management structure is created with transparency and without conflict of interest.
The company sets up its committees to supervise every particular aspect of management, as follows;
•     The Audit Committee
•     he Nomination CommitteeT
•     The Remuneration Committee
•     The Investment Committee
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report   031
Shareholders and Management Structure
The authority, duty and responsibility of each committee is assigned by the Board of Directors and clearly
specified in the guidelines for the Board of Directors and relevant charters .Risk management and control, two
important factors in business operations, are assessed and controlled via policy, strategy and measure
established by the company .The Investment Committee also identifies measures to cope with any emergency
situations that may occur.
The Audit Committee
The Audit Committee of Thai Reinsurance was set up on 24 February 1999 with three members, whom have been
appointed by the Board of Directors to constantly meet in order to perform the directing and overseeing duties
that were accordingly assigned by the Board of Directors. The Audit Committee is responsible for communicating
with the Board of Directors and Auditor on matters pertaining to the correctness of preparation of financial
statements under recognized accounting principles and in line with the information that the Audit Committee has
been receiving. In addition, the Audit Committee has also been responsible for considering the appropriateness
of the internal control system and reporting to the Board of Directors. The Audit Committee has made positive
remarks to the Board of Directors following their recent review. The committee will hold their responsibilities for 3
years. The committee members are as per the following:

             Name                               Position                  Attendant in year 2006     Conference fee
 1. Mr. Udom Vichaiyabhai         Deputy head of Auditor Committee                 4/4                   140,000
 2. Mr. Chanin Roonsamrarn        Auditor Committee                                4/4                   100,000
 3. Mr. Aswin Kongsiri            Auditor Committee                                4/4                   100,000

The Audit Committee has responsibilities over the following activities:
1.    Review and approve the financial report
2.     Review the control system within the company for the effectiveness
3.     Propose the auditor of the company and assign the remuneration in account audit. It must be noted that
       the account audit has to choose 4 years time.
4.     Monitoring the company to abide by the law and to follow company’s regulations.
5.     Avoid and protect the conflict of interest between related persons.
6.     Make and submit the audit report to the Board of Directors
7.     Make a report to the shareholder by publishing their findings in the Annual Report.
8.     Audit committee have to meetings at least 4 time a year and may invite the management team to attend
       the meeting to provide them the information required.
9.     Collaborate with account audit and internal audit in order to inspect the direction of the company.
10.    Reporting of acts of dishonesty, unusual or major fault for internal control. The audit committee has a right
       to inspect and report to Board of Director.
11.    Follow the duties that the Board of Directors assigns.
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report     032
Shareholders and Management Structure
Nominating Committee
The Nominating Committee was set up on 18 November 2004, consists of 5 members, which have been
appointed by the Board of Directors to constantly meet in order to find appropriate replacement persons for
positions within the company that are vacant. The Committee will have responsibilities for 3 years. The members
of the Committee are as per the following:

                 Name                                 Position                    Attendant in year 2006       Conference fee
 1. Mr. Suchin Wanglee                Deputy head of Nominating Committee                   1/1                      None
 2. Mr. Chai Sophonpanich             Nominating Committee                                  1/1                      None
 3. Mr. Chanin Roonsamrarn            Nominating Committee                                  1/1                      None
 4. Mr. Udom Vichaiyabhai             Nominating Committee                                  1/1                      None
 5. Mr. Aswin Kongsiri                Nominating Committee                                  1/1                      None

The Nominating Committee has responsibility over the following:
1.        Considering the standards, qualification levels, and the related systems for the company’s Directors that
          have completed their term.
2.        Considering the person that has past the above and present their findings to the Board of Directors and/or
          General Meeting of shareholders.
3.        Considering and proposing the right person to take the position of President & CEO and other executives
          when required.
Remuneration Committee
The Remuneration Committee of the company was set up on 23 May 2002 with five members being appointed by
the Board of Directors. The Committee constantly meets in order to set the remuneration standards. The
Committee will be responsible for 3 years. The Committee Members are as per following:

                Name                                  Position                   Attendant in year 2006 Conference Fee
     1. Mr. Suchin Wanglee           Deputy hear of Remuneration Committee                  1/1                  25,000

     2. Mr. Chai Sophonpanich        Remuneration Committee                                 1/1                  25,000
     3. Mr. Chanin Roonsamrarn       Remuneration Committee                                 1/1                  25,000
     4. Mr. Arnop Porndhiti          Remuneration Committee                                 1/1                  25,000
                                                                             Thai Reinsurance Public Company Limited
                                                                                                       Annual Report   033
Shareholders and Management Structure
The Remuneration Committee has the following responsibilities:
1.    Design the structure of remuneration and other benefit for Directors, Advisors and the Committee
      Members of the company and it’s subsidiaries.
2.    Design remuneration policies for executives that contribute to the performance of the company.
3.    Assign the remuneration for the Directors and present to General Meeting for shareholders.
4.    Consider for remuneration from positions above Vice - President before voting in General Meeting for
      shareholders.
In 2006, the Remuneration Committee had 1 meeting to set up the standard of remunerations. The Remuneration
Committee had provided the Board of Directors with instructions on the remuneration of the President & CEO,
and the Management of the company for 2007
Investment Committee
The Investment Committee of the company was set up on 28 February 1994 consisting of five members, which
have been appointed by the Board of Directors to constantly meet in order to review investments. The committee
will be responsible for 3 years. The Committee Members are as per the following:

                      Name                           Position          Attendant in year 2006        Conference Fee
 1.      Mr. Suchin       Wanglee              Investment Committee                 1/1                    None
 2.      Mr. Chai         Sophonpanich         Investment Committee                 1/1                    None
 3.      Mr. Udom         Vichaiyabhai         Investment Committee                 1/1                    None
 4.      Mr. Surachai     Sirivallop           Investment Committee                 1/1                    None

         The Investment Committee has also the right to setup the Sub-Committee to handle the occasional
special projects.
Executive
As at 31 December 2006, executives that are defined by the Securities & Exchange Commission are the following
persons:

                               Name                                   Position
          1. Mr. Surachai         Sirivallop                President and CEO
          2. Mr. Chuanchai Cheausamut                       Executive Vice-President
          3. Mr. Prawit          Thongtanakul               Senior Vice-President
          4. Ms. Thitaporn       Tarakij                    Senior Vice-President
          5. Mr. Theera          Bunnag                     Senior Vice-President
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   034
Shareholders and Management Structure

The President & CEO has responsibilities as per the following:
1.     Managing by law, regulation, objectives with utmost honesty, and has full awareness of the benefits of the
       company as expected from the Board of Directors.
2.     Managing all responsibilities that are related to hiring, dismissing, moving of positions, and the setting of
       punishments. Adjust the salaries for all employees of the company but this does not include the
       employees that the Board of Director or the company regulations specifically assign.
3.     Set up the working systems, job descriptions and directions of the company without any conflict to the
       company regulations without the permission of the Board of Directors.
4.     Managing business along with the company regulations and set up the authority for employees at every
       level.
5.     Managing all business transactions that the company has to deal with except for those the President &
       CEO has a conflict of interest. For business transactions that have conflict of interest, the permission of the
       Board of Directors would be required. The President & CEO may also set up a representative to handle
       the specific transaction.
6.     The President & CEO is able to permit the Executive Vice President to stand in his position to make
       decision if the President is not available to perform decisions by himself on routine transactions, specific
       transactions the decision making of the Chairman is required. In case the position of President & CEO is
       vacant and a replacement is not available, Board of Directors has to choose one of the Directors or the
       executive to act as the President & CEO temporarily.
Secretary General and Audit committee
Mr. Chuanchai Cheausamut
Nominating Directors and Executives System
Authorities and Duties
Directors have to work under the law, objectives, company regulations, and resolutions from the Shareholder
General or Extraordinary Meetings.
Nominating the Directors
Prior to appointment of any new Directors of the company permission has to be authorized from the Shareholder
Meeting. Prior to the company being publicly listed the promotion of a Director of the company never past the
Nominating Committee. The company gives the right to Shareholders to propose candidates to be elected in the
General Shareholder’s Meeting as members of Board of Directors by propose in company’s website or by
wording in the General Shareholder’s Meeting.
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   035
Shareholders and Management Structure

Voting
Voting is the system to exercise the right of the shareholder, with the following conditions:
1.       Each shareholder has the right to vote in relation to amount of shares held.
2.       Each shareholder has the right to vote and represent other shareholders that have permitted him or her to
         do so.
3.       Those that have the majority of votes form shareholders become Directors.
For every General Shareholders Meeting, one third of the Directors have to resign from the position. For the first
and second year the Directors have to randomly resign. From the third year onwards, the first in first out system
has to be applying for the directors that have to resign. The directors who had resigned can apply to be
nominated again.
Apart for the above reasons the Directors can also resign from the following reasons:
1.       Death
2.       Resignation
3.       Lack of the qualification or having been forced to resign by the laws that publicly listed companies must
         follow
4.       Resignation forced by shareholders with a resolution unanimous resolution of at least achieving three forth
         of the available votes at the General Shareholders Meeting.
5.       Resignation forced upon by the court of law
If a vote is not possible for any reason for promote new Director. The Board of Directors have to nominate
themselves a qualified candidate to be elected in the next General Shareholders Meeting unless the term of that
particular Director will expire within 2 month. The resolution of the Board of Directors that nominate the candidate
must represent at lease three fourth of the remaining Directors. The candidate that becomes the Director can only
remain in the position for the remaining time of the previous Director.
It must be noted that the shareholders that vote for the Director have to commit their entire right to vote for one
candidate without separating their right to others.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   036
Shareholders and Management Structure

Executive nominating
The Nominating Committee are responsible to find Directors and executives of the company.
The remunerations are per the following in 2006:

                                No. of       Salary       Conference fee      Gratuity     Other         Total
                               Member     (THB1,000)(2)   (THB 1,000) (3)   (THB1,000)   benefit(4)   (THB 1,000)

 Board of Director(1)           15             -            1,380            8,046         -            9,426
 Audit Committee                 3             -             340                -          -             340
 Remuneration Committee          4             -             100                -          -             100
 Director and Executive (2)      8          32,757             -                -         1,898        34,655
 Note. 1. The figure stated includes the remuneration for the Directors, including the remuneration for Ms.
        Kanda Xivivadh who resigned during the middle of the year.
       2. The figure stated includes Salary and Bonuses for Management of the Subsidiary and the
      Management whom resigned within 2006.
      3. The figure stated includes the conference fee for each quarter.
      4. The figure states includes the money that the company paid for the Board of Directors for Provident Fund
Other forms of Remuneration
Warrants
In 2001, it was decided that there would be issuance of 1,000,000 ESOP Warrants under the Employee Stock
Option Plan. The ESOP Warrants were issued only to key employees of the company’s and its subsidiary or
affiliated companies at initially no cost but with an exercise price of Baht 26.25. Subsequently, at the
Shareholder’s Meeting on April 10, 2003 it was decided that the exercise price of the ESOP Warrants would be
decreased from Baht 26.25 to Baht 2.625, and that the remaining ESOP Warrants would increase in numbers
from 735,000 to 7,350,000 ESOP Warrants. The Par Value was decreased from Baht 10 to Baht 1.
The ESOP warrants project was over a 5 year term divided into 5 equal sub-terms. At the end of the term in June
2006 the ESOP warrants had transformed into stock for 9.89 million units, with 110,000 units remaining not
transformed. The 4.9 million units of ESOP warrants that were assigned to the management of the company were
all transformed into stock.
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report   037
Shareholders and Management Structure

Human Resource
As at December 31, 2006 Thai Reinsurance had 140 employees as per the following allocations:
                Department                                   Employees
 Business Development                                           28
 Operation Support                                              21
 Finance and Accounting                                         17
 Other                                                          34
 Total Thai Reinsurance                                        100
 Subsidiaries                                                   40
 Total                                                         140
Remunerations of the employees
Remunerations of employees are based on salary surveys that are conducted on an annual basis with
comparisons of other companies in the insurance and financial industries in Thailand. In 2006 the company spent
Baht 85 million in remunerations; this is equivalent to 53 percent of the operating cost. The details are per the
following:
                   Remunerations (Million Baht)                            2006
  Salary and overtime fee                                                   51.6
  Bonus                                                                     14.9
  Provident Fund                                                             4.4
  Other Allowance                                                            4.1
  Total Thai Reinsurance                                                    75.0
  Subsidiaries                                                              10.0
  Total                                                                     85.0
Human Resource Development Policy
The company realises that developing the skills of employees very important, hence the initiation of the “Training
Road Map” program for each employee which is aimed at improving the skills of the employees and also
developing a high level of cooperation amongst particular teams and also across divisions in the company.
In 2006, the company sent 86 employees to the different training courses, which matched the requirements of
employees as per the following:
                   Course                       Number of Course          Number of Participants
 Within Thailand – Other place                          100                          69
                   - With in Thai Re                     2                           40
 Other Countries                                         4                            5
 LOMA and ANZIF                                          3                            3

Labor Dispute       We are pleased to inform that the company has never experience a labor dispute.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   038
Corporate Governance

The company’s Board of Directors, would direct policy, monitor and supervise the management of the company
and its subsidiaries, to ensure conduct of business is in conformity with the 15 guidelines of the Code of Best
Practices set out by the Stock Exchange of Thailand.
1. Policy on Good Corporate Governance
Board of Directors has set five guidelines to monitor the level of good corporate governance as per the following:
•   Structure, duty and responsibility of board of directors
•   Right of shareholders and relate parties
•   Conflict of interest
•   Business ethics
•   Control systems and internal audit
The company has posted the details of the above mentioned in the company’s intranet and continuously updates
are be made.
2. Shareholders : Right and Equitable Treatment
All shareholders are invited to the annual shareholder’s meeting. The company would send out a letter of
invitation and agenda of each meeting for the shareholder’s prior consideration. It must be noted that
shareholders are not able to transfer their share within 14 days before the general meeting.
3. Various groups of Stakeholders
The company provides certain right to Stakeholders, including shareholders, customers and the community, in
order to understand the needs of customers and providing a system to address concerns from customers and
the community. These rights have been established as appropriate and with fairness to all Stakeholders, without
compromising any regulations and contracts with customers. A set of guidelines have been set up to protect the
rights of the Stakeholders as per the following:
• Applying proper business ethics whilst operating transactions with cedants, competitors and society.
• Applying proper fairness with cedants by not operating in conjunction with other reinsurers to deceive the
  reinsureds.
• Applying a continuous approach of “win-win” tactics with the reinsured.
• Applying a swift approach in doing business with the reinsured without affecting the standard of service.
• Applying a practice of utmost secrecy with regards to information of the reinsured unless permission has
  been granted by the reinsured or specifically ordered by law.
• Applying a complete disclosure of accurate information that is expected from a publicly listed company.
• Applying a level of transparency in operation without corruption.
• Applying complete approach in following the laws and regulations.
• Applying proper avoidance of the act of money laundering
• Applying the most effective methods of utilization of natural resources and also finding substituted natural
  resources to replace those used in order to contribute to being more concerned about the environment.
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report   039
Corporate Governance
• Applying recycling method.
• Applying proper and cleanliness standards for the working environment.
• Applying careful safety standard in the work place to avoid accidental injury.
4. Shareholder’s Meeting
In year 2006, 9 directors attended 1 General Shareholder’s Meeting. The company’s Board of Directors,
representative from each committee, and relevant executives will be ready to provide information and answer any
questions from the participants. The company always sends invitations to the General Shareholder’s Meeting
within the time specified by law and also communicates the same through the company’s website. Also, the
company’s contact points are identified so that inquiries, complaints and suggestions could be processed
through the company website.
5. Leadership and Vision
The authority of each committee, made up of both experts and experienced persons in that particular field, is
independent from each other and is within the terms of each committee. The decisions and resolutions passed
by respective committees would be submitted to the Board of Directors for acknowledgment of possible impact
on performance, or approval for implementation in the corporate plan.
6. Conflict of Interest
Each committee and executives will be appropriately selected, considered and appointed by the Board of
Directors. The Audit Committee may also make recommendations to the Board of Directors concerning possible
conflict of interest issues caused by any member of a committee. By doing so, any decision affecting the
company’s or it subsidiaries’ undertakings should be made with transparency and fairness.
The company has the following measures in place that would protect sensitive information of the company:
• The executives of the company have to report all securities held by themselves and their spouse on a yearly
    basis to both the Securities and Exchange Commission and also to the company. The executive also have to
    report all securities that are held on behalf of their children whom have not themselves reached the minimum
    age required by the Securities and Exchange Commission.
• The employees of the company are responsible for taking care of sensitive information of the company.
    Once any of the sensitive information is found to be publicly available it is the responsibility of the employees
    to inform the executive as soon as possible in order to form a special action group to handle the situation.
• The company keeps all sensitive information that regard its financial position a secret before any release is
    made to the Securities and Exchange Commission. It is the duty of all executive to treat sensitive information
    of the company with utmost seriousness.
The company will apply the maximum punishment possible to any executive or employee that is found to have
breached the above mentioned measures.
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   040
Corporate Governance
7. Business Ethics
Each and every employee is considered to be an integral part of the company and is instructed on business
ethics, before commencing work with the company, through guidelines described in the employee manual and
Intranet. The company has specifically set out guidelines of business ethics in the Board of Directors manual, to
re-emphasize the important of ethics on every level of the company’s organizational structure.
8. Balance of Power for Non-Executive Directors
Among the company’s Board of Directors, Directors are independent, in accordance to the criteria designated by
the Audit Committee, and are not involved in the daily operations of the company, and independent from
Stakeholders.
9. Aggregation or Segregation of Positions
The various committees within the company are fairly appointed, without any one Director having more decision-
making authority than is appropriate, so as not to unfairly impact a resolution.
10. Remuneration for Directors and Management
In fairness with regard to remuneration paid to each committee and to executives, the company conducted a
comparison study among all committees and executives and found that the rate of remuneration provided is in
the same level as that of companies in a similar business. Moreover, the Remuneration Committee has approved
remuneration. For additional information please refer to Shareholders and Management Structure.
11. Board of Directors Meeting
Meetings of the Board of Directors are held once every quarter by arranging the date with each Director in
advance. During 2006, a total of 4 meetings were held. For additional information please refer to Shareholders
and Management Structure.
12. Committee
The authority and responsibility of appointed members of all various committees would be clearly defined. The
report of the committee’s meeting as well as matters for due consideration would be submitted to next
Company’s Board of Directors’ meeting. For additional information please refer to Shareholders and Management
Structure.
13. Controlling System and Internal Audit
From the Board of Directors meeting of February 22, 2007, the internal control system was reviewed. The system
is divided into 5 sections, being for control over organization and environment, risk management, executive
monitoring, database and communication, and follow-up system. The Board of Directors also during the meeting
agreed that the company and its subsidiaries had efficient internal control especially with regards to the level of
executives monitoring of the company and it’s subsidiaries. It was evident that there was sufficient control over
the related transactions with major shareholder, director, executive, and relate parties about conflict of interest in
order to protect the interest of company and its subsidiaries.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   041
Corporate Governance

A.M.T. Association that manages by PhD. Katesaree Narongdej has been named as the auditor, responsible for
internal auditing. Ensuring the work conduct is effective and without risk. The auditor reports its findings to the
Audit Committee each quarter, with emphasis on credibility, thorough information gathering and effective
conduct of business.
14. Board of Directors Report
Board of Directors has the responsibility to review the financial report and present it to the shareholders.
Reporting to the Board of Directors is the Audit Committee, which review the financial information of the company
on a regular basis and providing a report to the Board of Directors every quarter and at the end of the year.
15. Relationship with Investors
The company has always been concerned about how the investors can access to the financial and non-financial
related information of the company when making important decision on their investments. To make sure that there
is total compliance the company follows the guidelines required by the Stock Exchange of Thailand and Security
& Exchange Commission. The company provides complete set of information on its website “www.thaire.co.th“.
The company has also assigned staff to take care of the “Relationship with Investors” and has setup several
meetings with the investors in 2006, 27 meetings in total
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   042
Company and Society

The company realizes that being part of the industry and community is of utmost importance. Hence it is the duty
of the company to adhere to its responsibilities by following certain guidelines that would be beneficial for the
industry and society. The following are the guideline
a) Benefits for insurance industry
1. Providing the Life and Non Life industry with training and consulting on an array of insurance topics
2. Providing an integral role for the centralization of research on the statistics of the industry that is submitted
through the market agreements.
3. Providing support for risk management for the industry through the risk survey that are conducted by
professional surveyors.
4. Providing a key role in the management of the “Uar-Artorn” Personal Accident project that was initiated by the
government policy so that the people from the glass-root would have insurance coverage.
5. Providing collaboration between the Department of Insurance, Thai Life Assurance Association, and The
General Insurance Association in order to support the general insurance industry in Thailand. The company is
pleased to inform that it is the second year in succession that “Support for the Development Insurance Industry
Award“ is being awarded.
b) Benefits for Society:
A. General Social Activities
1. The company runs a project that aims to provide scholarships for under privileged students from Sakonakorn
and Mukdarharn provinces. The scholarships provided by the company are for middle to higher levels of
education. The project has already given a total scholarship amount of Baht 879,310 to the mentioned group, and
to another it has given Baht 495,000, in total the company has given Baht 1,374,310.
2. Health care – The company has also associated itself with a project that aim to provide proper sanitation in
school that are located in under developed provinces and it has donated Baht 406,592 in total to Ban-Nune-
Kruad School and Ban-Nong-Pai Schools in Prajubkhereekhan Province.
3. The company has donated money towards Chai-Pattana Association, Sakol Pue Kon Pikarn Association, and
the temple.
The company has donated for the general social activities an amount totaling Baht 2,400,000 in 2006,
representing an increase of Baht 1,300,000 from 2005.
                                                                                                 Thai Reinsurance Public Company Limited
                                                                                                                           Annual Report          043
          Relate Party Transactions

          Relate Party Transactions
          There are a certain number of the members of the company’s Board of Directors that are involved in the
          management of local insurance companies, hence Connected Transactions are arising out of the ongoing
          business relationships that are through the reinsurance services provided by the company. Another form of
          Connected Transaction that are arises is when the company have invested in securities of the insurance
          companies that are managed by some of the Board of Directors.
          The following is a list of those members of the company’s Board of Directors that are involved in the management
          of insurance companies that have Connected Transactions in year 2006 as follow:
          1. Reinsurance Services
                                                                                                                                       (Unit : Million Baht)
                                             Written Premium     Account Receivable     Premium Ceded      Account Payable
             Company Involved                                                                                                       Name of Director
                                             2006       2005       2006       2005      2006       2005     2006     2005
Deves Ins. Pcl.                               66.4      190.1        -        25.5       7.8       29.3       -       1.5     Mrs. Kanda Xivivadh
Krungthai Panich Ins. Co., Ltd.               52.7      66.1        3.7       4.8        15.6      15.5      1.3      0.6     Mr. Kerati Panichewa
Dhipaya Ins. Pcl.                            505.4      426.8      41.9       39.6       92.2      101.9     9.1      6.2     Mr. Charuek Kungwanphanich
Road Accident Victims Protection Co.,Ltd.     (0.6)     24.0         -        0.3        16.7        -       6.4       -      Mr. Charuek Kungwanphanich
Thaivivat Ins. Pcl.                          134.1      48.2        1.3       1.0        25.9      12.1      1.4      0.6     Mr. Jiraphant Asvatanakul
The Siam Commercial Samaggi Insurance        138.2      134.0      12.5       7.4        39.3      38.8      7.6      5.8     Mr. Chanin Roonsamrarn
Bangkok Insurance Pcl.                       339.0      262.9      40.7       15.9       90.4      117.0     10.0     6.8     Mr. Chai Sophonpanich
The Navakij Ins. Pcl.                         91.6      85.5        7.8       4.3        31.0      26.4      3.2      1.8     Mr. Sujin Wanglee
The Thai Commercial Ins. Pcl.                 3.8        9.6         -        0.9        17.4       2.7       -       0.1     Mr. Sujin Wanglee
Phatra Ins. Pcl.                             109.5      98.5       23.3       1.2        35.5      39.2      3.7      1.3     Dr.Sucharti Sungkasem
Mueng Thai Life Assurance Pcl.                0.4        1.7         -        0.3         -          -        -        -      Mr. Aswin Kongsiri
Thai Life Ins. Co., Ltd.                      7.7        9.1        0.3       (1.5)      0.9        1.1      0.3      0.2     Mr. Apirak Thaipatanagul
The Ayudhya Ins. Pcl.                        134.1      110.1      12.3       2.8        29.0      29.0      2.5      1.1     Mr. Adisorn Tantianankul
MSIG Ins. (Thai) Co., Ltd.                   115.5      104.2      11.1       7.8        44.3      42.7      3.6      2.3     Mr. Arnop Porndhiti
Total                                       1,697.8    1,570.8     154.9     110.3      446.0      455.7     49.1     28.3

          Note : It is necessary to note that the relationship between the deposit premium and account payable that the company has with
          Deves Insurance PCL. and Mueng Thai Life Assurance PCL. was terminated since year end of 2005 so it will not show in the 2006
          accounting year.
                                                                                                 Thai Reinsurance Public Company Limited
                                                                                                                           Annual Report                  044
Relate Party Transactions

2. Investment in Securities
                                                                                                                                     (Unit : Million Baht)
                                                      Type of           Investment Fund              Dividend Receivable
                Company Involved                                                                                             List of Committee
                                                    Investment           2006      2005               2006       2005
 The Siam Commercial Samaggi Insurance Plc.        Common Stock          26.5      22.6                  -        1.9    Mr. Chanin Roonsamrarn
 The Siam Industrial Credit Pcl.                         Note           12.5           10.0             -          1.0          Mr. Chanin Roonsamrarn
 Bangkok Insurance Pcl.                            Common Stock         262.9          139.1          11.2         13.1         Mr. Chai Sophonpanich
 Bamrungraj Hospital Plc.                          Common Stock         27.2           28.2            0.4         0.7          Mr. Chai Sophonpanich
 Furakawa Metal (T) Pcl.                           Common Stock          1.7            2.1            0.1         0.2          Mr. Chai Sophonpanich
 Charoong Thai Wire & Cable Pcl.                   Common Stock          1.5            0.1             -           -           Mr. Chai Sophonpanich
 Phatra Insurance Plc.                             Common Stock         31.8           28.9            2.4         2.0          Dr. Sucharti Sungkasem
 The Ayudhaya Insurance Plc.                       Common Stock           -            29.7             -          1.9          Mr. Adisorn Tantianankul
 Bangkok Aviation Fuel Services Plc.               Common Stock          7.9           29.7            0.6         1.9          Mr. Aswin Kongsiri
 Total                                                                  372.0          260.7          14.7         20.8

All of the mentioned investments in the table above were in the Stock Exchange of Thailand as long term
investment. All of these are performing well and have provided a good level of dividends. It is necessary to note
that the company has an investment policy not to do “Cross Holding”. The maximum share that the company
invests in related parties will not exceed 2%.
3. Companies that have transaction with our group
The table indicates the long-term investments that were made by the company that through the Stock Exchange
of Thailand except for Aberdeen Trust Fund Co., Ltd that the company and it subsidiaries holding their share
around 12.5 percent without the objective of Cross Holding, and these shares have already been sold in year
2005 through The Stock Exchange of Thailand. As at December 31, 2005, the company as holding the largest
proportion of share approximately 1 percent of the authorized shares capital of each of the indicated companies.
Furthermore, the company’s investments with its subsidiaries & affiliated companies are per the following table:
                                                                                                                          (Unit : Million Baht)
                                                                                       Total                   Outstanding
         Company Involved                    List of expenses                                                                            Pricing Policy
                                                                                2006           2005          2006      2005
 Thaire Life Assurance Co., Ltd. Proportion of average expenses                  2.0            1.8           0.5       0.5               Par Value
 Thai Insurers Datanet Co., Ltd. Data processing service fee                    0.4            0.5           0.0          0.0             Cost-plus
 TR Training                       Average expense that company collect         0.5            0.8           0.0          0.2             Par Value
 TR Training                       Training cost that company collect           1.2            1.4           0.0          0.7            Market Value
 First Tech.                       Proportion of average expenses               0.8            0.0           0.1          0.0             Par Value
 Thai Re Services                  Proportion of average expenses               0.6            0.0           0.1          0.0             Par Value
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   045
Relate Party Transactions

The reasons behind the Related Parties Transactions
The existence of Connected Transactions that insurance companies have with us is considered to be beneficial
to the future development of business of the company, likewise it is felt that the Connected Transactions that Thai
Reinsurance has with its subsidiaries or affiliates are also beneficial.
The standardization and authorization of the related transactions.
According to the regulations set by the Stock Exchange of Thailand, all the companies with relate transactions
with the subsidiaries. The company has to be responsible for appropriate levels of controls and inspections by
making sure that directors have no conflict of interest as mention in previous chapter, however, this does not
include routine transactions of the company such as purchasing. It is necessary for the company to publish the
information about the types and values of the related transactions and also to provide the reason why they
choose to do relates transactions for the annual shareholders meeting. Prior to any conduct of a related
transaction by the company permission from Stock Exchange of Thailand is required. For all existing related
transactions that are comparable with market price and also must be ongoing for many years, automatically
acquire the authorization of the auditor. A quarterly report is generated for the Audit Committee on the related
transactions that fall into the mention category.
Trend of the related transactions in the future
The company still has a policy to continue the related transactions with the intention to follow previous standards.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   046
Management’s Discussion and
Analysis of Financial Condition and Result of Operations
Overview
Our recorded results for 2006 was Baht 462.3 million of net income, or representing a slight decrease of 4.1
percent from the prior year, or Baht 0.39 per share was achieved compared to Baht 481.8 million and Baht 0.41
per share that was reported in 2005. Our shareholder's equity totaled Baht 2.33 billion at year-end, and the return
on equity was 19 percent, compared to 20 percent that was recorded in the previous year.
We are growing with profitability across our portfolio of Life & Non Life reinsurance business with many initiatives
being taken to accelerate our progress in the years ahead. In 2006 we recorded a 6.9 percent increase in our
gross reinsurance premium to Baht 4.03 billion from Baht 3.76 billion that was achieved in the previous year. At
the same time our net reinsurance premium also was up by 2.7 percent to Baht 2.61 billion from Baht 2.54 billion.
We have remain focused in growing our non life business with targeted opportunities, reflecting in the expansion
of our business in 2006 with an increase of 6.9 percent in our general gross reinsurance premium from Baht 3.48
billion to Baht 3.72 billion. At the same time our net reinsurance premium increased by 2.1 percent, from Baht
2.27 billion to Baht 2.32 billion. The main driving force for the mentioned growth would be our miscellaneous
business sharply increasing year on year by 23 percent which lead to our treaty reinsurance business growing by
over 13 percent in 2006. For the year under review our underwriting result for Non Life business was Baht 358.8
million compared to Baht 358.3 million that was achieved in the previous year. This result is acceptable when
considering the major fire & engineering loss sustained by our company at Thai Airways International’s catering
facility at Suvarnabhumi International Airport in the first quarter of the year. It must be said that our readily
available loss fluctuation reserve improved our net exposures from those mentioned losses. At the beginning of
2006 the loss fluctuation reserve was Baht 100 million and by the end of that year it had decreased by Baht 30
million to Baht 70 million. For 2006, the overall loss ratio for our Non Life business in 2006 was 45 percent and
combined ratio was 88 percent, same level as in the previous year.
We consider the growth of life business as important for us. We maintain a strong business relationship with most
local and joint venture life assures that are in the market. Through which we offer a full range of risk and saving
products that address particular needs. For 2006, the recorded gross reinsurance premium increased by 6.7
percent, from Baht 285.2 million to Baht 304.4 million. For the period our net reinsurance premium increased by
7.9 percent, from Baht 273.3 million to Baht 295.0 million. We achieved for 2006 an adjusted underwriting profit of
Baht 80.3 million for our Life business, representing an impressive increase of 117.8 percent from Baht 36.9
million that was recorded in the previous year. The life reinsurance premium now accounts for 11.3 percent of our
total net premium income, compared to 10.7 percent that was recorded in the last year. We are confident that
within the next couple of years this figure will exceed 15 percent. Life business is considered to be less volatile,
and hence increasing this part of our business will improve the volatility of our overall portfolio.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   047
Management’s Discussion and
Analysis of Financial Condition and Result of Operations
We have maintained a careful investment strategy that’s focused on the long term, however, with the slowdown in
the economy in 2006 our investment income dropped to Baht 292.3 million from Baht 353.0 in the previous year,
or representing a decrease of 17.2 percent. The average investment yield for 2006 was 8.05 percent, or
representing an decrease of 1.59 percentage points under what was recorded in the previous year. This is
considered to be favorable compared to an estimate of 5 percent of others in the same sector.
We value the importance of our financial strength. In 2006 the credit rating agency Standard & Poor's upgraded
our long-term local currency Counterparty Credit (CCR) and Financial Strength Rating (FSR) rating from BBB+
(GOOD) with stable outlook to BBB+ (GOOD) with positive outlook. The main factors that contributed to the
affirmation of the rating were the maintenance of our strong financial position, professional management and
favorable insurance market condition.




We have been preparing to be more than a conventional reinsurer that is just supplying capacity for the traditional
lines of business to the insurance market that we currently lead. It is obvious that the market will become more
deregulated in the years ahead with increased competition and smaller margins. We have been continuously
pursuing additional sources of income by developing some innovative ways to service the market with our
subsidiaries. The first of our five subsidiaries, Thai Insurers Datanet Co., Ltd., has been successfully managing data
and developing software for the market. The meaningful returns that have been reported for this subsidiary have
provided encouraging signs for its potential in the future. The second of our five subsidiaries, EMCS Thai Co., Ltd.,
has been working hard at expanding its customer base with motor insurers and garages in the last couple of years.
The innovative electronic motor claims service that this subsidiary offers would standardize motor repair cost that's
expected to render substantial savings on claims handling and claims cost. This subsidiary is now profitable, with
an increased number of customers and transactions. The third of our five subsidiaries, TR Training & Consulting
Co., Ltd., is progressing as expected with a clear objective to provide the market with an array of training programs
and valuable consultation on various technical issues. In 2006, we initiated our forth subsidiary, being Firsttech
Solutions Co., Ltd., that would specially service the needs of those insurance companies that are interested in
business process outsourcing. We are confident to say that the service provided by this subsidiary would be
beneficial to those companies in the insurance industry that are keen to lower their operating expense and
ultimately be more competitive in the business environment of the future. Also in 2006, we initiated our fifth
subsidiary, being Thaire Services Co., Ltd., under this subsidiary are two divisions, the first division being Print
Serve which provides complete insurance policy administration services, and the second division being Third Party
Administration which provides claims processing for Heath insurance business.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   048
Management’s Discussion and
Analysis of Financial Condition and Result of Operations

Review of Operations
We are growing with profitability across our portfolio of Life & Non Life reinsurance business with many initiatives
being taken to accelerate our progress in the years ahead. In 2006 we recorded a 6.9 percent increase in our
gross reinsurance premium to Baht 4.03 billion from Baht 3.76 billion that was achieved in the previous year. At
the same time our net reinsurance premium also was up by 2.7 percent to Baht 2.61 billion from Baht 2.54 billion.
This Review of Operations discusses the performances of Thai Re in 2006 made by each business segment.
Reinsurance Results
The company's operation is divided into two parts, the first is Non-Life (representing 88.7 percent of our
combined net premium income) and the second is Life reinsurance (representing 11.3 percent of our combined
net premium income). Because of our size, being focused on providing reinsurance services to the domestic
market remains our priority. As an established local reinsurance company with over 20 years of experience we
have managed to acquire a firm understanding of the market and the future potential.
Witthe market statistics that we have gathered, it is felt that we can remain very competitive by servicing our
clients needs.
                                                  ( in thousand Baht, except ratios )
                                                     2006          2005        % Growth
 Gross Premium Written                            4,023,889      3,763,671        6.9
 Net Premium Written                              2,612,941      2,544,048        2.7
 Underwriting Profit (Loss)                        439,189        395,134        23.4
 Loss Ratio                                          44.7           45.0
 Total Expense Ratio (Underwriting & Operating)      41.6           42.2
 Combined Loss and Expense Ratio                     86.3           87.2

Through a selective process we were able to expand our business in 2006. We continued to target new and
renewing business in order to compliment our portfolio, the majority being short-tail business that is in Thailand.
In 2006, the recorded general gross reinsurance premium increased by 6.9 percent, from Baht 3.76 billion to
Baht 4.02 billion, at the same time the net reinsurance premium increased by 2.7 percent, from Baht 2.54 billion
to Baht 2.61 billion.
For 2006 our underwriting result was good, with Baht 439.2 million being achieved compared to Baht 395.2
million that was achieved in the previous year. This result is acceptable when considering the major loss
sustained by our company at Thai Airways International’s catering facility at Suvarnabhumi International Airport in
the first quarter of the year. It must be said that our readily available loss fluctuation reserve improved our net
exposures from those mentioned losses. At the beginning of 2006 the loss fluctuation reserve was Baht 100
million and by the end of that year it had decreased by Baht 30 million to Baht 70 million. For 2006, the overall
loss ratio for our Non Life business in 2006 was 45 percent and combined ratio was 86 percent, representing a
slight improvement over the previous year’s loss ratio of 45 percent and combined ratio of 87.
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report   049
Management’s Discussion and
Analysis of Financial Condition and Result of Operations

As in the previous year our company's portfolio mix remained basically unchanged for 2006 with a major portion
of the overall net premium written being Fire business, 56 percent. Other classes such as Miscellaneous 31
percent, Marine 9 percent, Motor 4 percent and Life 10.7 percent completing the remainder of the portfolio mix.
Domestic Non-Life Reinsurance
In 2006, the business generated from the domestic market represents 91.6 percent of our overall written
premium. The overall gross premium written was Baht 3.69 billion for the year under review, representing an
increase of 6.8 percent from Bahr 3.45 billion of the previous year. The net written premium was up by 1.8
percent in 2006, from Baht 2.25 billion that was recorded in the previous year to Baht 2.29 billion.
Our underwriting results fell just by 0.9 percent for 2006 with Baht 356.3 million being achieved compared to Baht
359.5 million that was recorded in the previous year. The overall loss ratio for 2006 was 45.2 percent and
combined ratio was 82.9 percent, representing a slight dip compared to the overall loss ratio of 44.5 percent and
combined ratio of 82.6 percent that was recorded in 2005.
At January 1st, 2006 the loss fluctuation reserve was Baht 100 million and by December 31st, 2006 it had
decreased to Baht 70 million.
                                                        ( in thousand Baht, except ratios )
                                                     2006         2005        % Growth
 Gross Premium Written                            3,687,588     3,452,824        6.8
 Net Premium Written                              2,286,067     2,245,027        1.8
 Underwriting Profit (Loss)                        356,266       359,493        (0.9)
 Loss Ratio                                          45.2          44.5
 Combined Loss and Expense Ratio                     82.9          82.6

Fire
This segment of our business includes Fire and Industrial All Risk classes of insurance, constituting 59.8 percent of
the total domestic Non-Life gross written premium and 55.7 percent of the total net written premium. In the year
under review, the total gross written premium was Baht 2.2 billion, edging up by 1.5 percent compared to the
previous year. In 2006, the net written premium was Baht 1.3 billion, down slightly by 3.8 percent from the previous
year. The main factor that negatively affected this segment of our business was the softening market terms.
This segment of our business recorded an underwriting profit of Baht 195.2 million in 2006 compared to Baht
86.5 million that was achieved in the previous year, or representing an healthy gain of 125.6 percent. The
contributory factor for the improved underwriting profit for the year under review was our updated ground up
analysis of our exposures. The combined ratio for 2006 was 84.7 percent or representing a marked improvement
of 7 percentage points over 91.7 percent that was recorded for the previous year.
In 2007 we will be continuing to devote as much attention as possible to this segment of our business as in the
previous years. We believe that our ability and commitment to continue a targeted approach at gaining new and
also renewing attractive business opportunities is unwavering.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   050
Management’s Discussion and
Analysis of Financial Condition and Result of Operations
Miscellaneous
This segment of our business includes all classes of reinsurance except Fire, Marine and Motor business. The
main classes for this segment of our business are the various engineering classes and personal & group
accident business. After Fire this segment of our business represents the second largest portion of our
company's portfolio mix, constituting 29.9 percent of the total domestic Non-Life gross written premium and 31.2
percent of the total net written premium. The overall gross premium written of Miscellaneous business amounted
to Baht 1.1 billion for the year 2006 versus Baht 872.1 million at the end of 2005, representing a jump of 26.6
percent. The net written premium recorded an increase of 19.9 percent to Baht 714.0 million from Baht 595.2
million. To achieve a more balance portfolio of business there has been much attention devoted by us to expand
this segment of our business, and in 2006 there was marked increases from all lines.
In 2006, the underwriting profit recorded a decrease of 59.4 percent to Baht 60.8 million, versus Baht 149.7
million that was recorded in the previous year. The negative change was principally as a result of our exposure to
the major engineering loss sustained at Thai Airways International’s catering facility at Suvarnabhumi International
Airport in the first quarter of the year. The loss ratio for the year under review was 50.3 percent versus 42.1
percent that was recorded in 2005. The 86.9 percent combined ratio that was recorded for 2006 represented a
13.2 percentage point decline on what was recorded in the previous year.
In 2007, it's expected that stimulus for the growth of this segment of our business should be from the successful
development by our Customer Service Division of interesting new products for our clients and also exploring new
channels of distribution that are catering to the niche markets. The new products that we have already been
developed are Cancer Insurance, Household Package, SME Package, Health Per Diem, Accident Per Diem, and
Loan Protection. Moreover, they have been working hard in 2006 to service key clients with the ongoing
development of the bancassurance scheme that should solidify our competitive advantage in the marketplace.
Motor
This segment of our business has benefited from the general increase in the volume for car sales in the domestic
market in 2006. The Motor gross written premium was Baht 103.3 million, decreasing 17.1 percent compared to
Baht 124.5 million that was achieved in 2005. The net written premium for 2006 went down by 17.2 percent, from
Baht 123.5 million that was recorded one year earlier to Baht 102.3 million in 2006. The decline in this segment of
our business was principally due to the cancellation of the Compulsory Motorcycle Insurance Pool.
The recorded underwriting profit for the year under review for this segment of our business was hindered by
facultative loss also from discontinued treaties. For 2006 the result of this segment of our business reduced by
30.3 percent to Baht 36.3 million versus Baht 52.1 million that was recorded in the preceding year. The 65.8
percent combined ratio that was recorded in 2005 is still considered to be acceptable.
In 2007, it's expected that there would be able to further expand this segment of our business through a selective
approach on particular opportunities.
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report   051
Management’s Discussion and
Analysis of Financial Condition and Result of Operations

Marine
This segment of our business includes both Marine Hull and Cargo classes of reinsurance business, the latter
constituting the bulk of our portfolio mix for this segment of our business. This segment of our business has not
benefited from the general decrease in the volume for both domestic and foreign cargo in 2006. For the year
under review, the Marine gross written premium was Baht 275.6 million, down by 3.2 percent compared to Baht
195.7 million that was achieved one year earlier.
In 2006, the underwriting profit for this segment of our business edged down by 10.1 percent, from Baht 71.1
million to Baht 64.0 million that was recorded in the previous year. The combined ratio for this segment of our
business in 2006 declined slightly to 67.4 percent from 66.6 percent that was recorded in the previous year.
In 2007, it's expected that if there’s to be growth in this line of our business, then there would have to be general
improvement in the economy which should support improved volume of both domestic and foreign cargo.
Oversea Non-Life Reinsurance
                                                         ( in thousand Baht, except ratios )
                                                      2006         2005         % Growth
 Gross Premium Written                             3,687,588     3,452,824         6.8
 Net Premium Written                               2,286,067     2,245,027         1.8
 Underwriting Profit (Loss)                         356,266       359,493         (0.9)
 Loss Ratio                                           45.2          44.5
 Combined Loss and Expense Ratio                      82.9          82.6
This segment of our business includes all classes of reinsurance from overseas markets. The classes for this
segment of our business are Fire, Marine and Miscellaneous treaty business. It’s evident that we still maintain our
focus on domestic rather than overseas business, however, we do consider business opportunities with particular
markets around the region. In 2006, this segment of our business represented less than 0.8 percent of our
company's total Non-Life gross written premium. For the year under review the gross written premium was Baht
31.9 million or 24.2 percent up from the previous year, entirely from six treaties through connections with four
business partners from Hong Kong, Singapore and South Korea.
This segment of our business recorded a marked underwriting profit of Baht 2.7 million in 2006 compared to Baht
1.2 million in underwriting deficit that was achieved in the previous year, or representing a strong gain of 319.3
percent. The combined ratio for 2006 was 87.8 percent or representing a significant improvement of 14
percentage points over 101.8 percent that was recorded for the previous year.
In 2007, the stimulus for growth of this segment of our business is our intention to focus our efforts on
opportunities in the facultative business from Indochina.
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report   052
Management’s Discussion and
Analysis of Financial Condition and Result of Operations
Life Reinsurance
This segment of our business includes all classes of Ordinary and Group Life reinsurance, the latter representing
the majority of the portfolio.
We have achieved steady growth of this segment of our business in the last couple of years. In 2006, there was
an increase of 6.7 percent recorded for the gross written premium of Baht 304.4 million, compared to Baht 285.2
million that was achieved in the previous year. The net written premium for the year under review was Baht 295.0
million, or representing an improvement of 7.9 percent from Baht 273.3 million that was achieved in year 2005.
The underwriting profit for the 2006 was Baht 80.3 million, or representing a robust growth of 117.8 percent from
Baht 36.9 million that was achieved in the previous year. The combined ratio for 2006 was an impressive 70.6
percent, compared to what was recorded in the previous year.
We will continue to pursue further growth opportunities in 2007 with a keen desire to improve our position. We are
encouraged by our strong relationship with clients that have been developing in the last couple of years. For the
year under review life reinsurance accounted for 11.3 percent of our total net premium income, within the next
couple of years we are certain that this figure will exceed 15 percent.
Since the establishment of the cooperation agreement with SCOR in 1997, we have successfully pursued a
specific objective of being a leader in the domestic Life reinsurance market.
                                                    ( in thousand Baht, except ratios)
                                                  2006        2005       % Growth
 Gross Premium Written                           304,399     285,171       6.7
 Net Premium Written                             294,972     273,347       7.9
 Underwriting Profit (Loss)                      80,258      36,857       117.8
 Loss Ratio                                       41.0        47.8
 Combined Loss and Expense Ratio                  70.6        77.1

Investment
We have maintained a careful investment strategy that’s focused on the long term, however, with the slowdown in
the economy in 2006 our investment income dropped to Baht 292.3 million from Baht 353.0 in the previous year,
or representing a decrease of 17.2 percent. The average investment yield for 2006 was 8.05 percent, or
representing a decrease of 1.59 percentage points under what was recorded in the previous year. This is
considered to be favorable compared to an estimate of 5 percent of others in the same sector.
The SET Index in 2006 went down by 45.80 points from 725.64 points at January 4th to 679.84 points at
December 31st. Our continued approach, as previous years, to maintain a conservative investment strategy has
resulted in our acquisition of equity that will provide superior securities and reasonable rates of return on the
long-term. For 2006, our total investment portfolio was Baht 3.80 billion compared to Baht 3.60 billion for the
previous year.
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report   053
Management’s Discussion and
Analysis of Financial Condition and Result of Operations
                                                            ( in thousand Baht, except ratios)
                                      31 December 2006               31 December 2005
                                   Amount     Proportion (%)      Amount     Proportion (%)
 Bonds and Treasury bills           9,980           0.3           582,571         16.2
 Shares /1                        1,061,398        28.8           788,981         21.9
 Debentures                        609,713         16.5           436,704         12.1
 Notes                             288,509          7.8           410,500         11.4
 Warrants                          225,160          6.1           85,569           2.4
 Corporate Bonds                    3,980           0.1            1,647            -
 Loan                             1,134,194        30.8          1,191,557        33.1
 Investment Units                  351,803          9.6           99,892           2.9
 Total                            3,684,737       100.0          3,597,421       100.0
Remark /1 Included Investment in subsidiaries
Outlook for 2007
We have a relentless focus on the growth of profitability. The foundation of our growth is well established with a
strong financial position, having the support from the our customers that make up the majority of both Life and
Non Life insurance companies in the local market, intensively maintaining an innovative product range that's
readily available to our customers, and promoting a powerful entrepreneurial culture within our company.
Financial Rationale
The overall financial strength of the company is considered to be very stable. It is evident that the shareholders
earn approximately 20 percent return on equity from year 1993 to 2000. The return on equity of 2006 was
approximately 20 percent, still considered to be within the expectations of the company. The overall return on
assets was around 10.0 percent, a slight increase when compare to 10.6 percent in previous year. The combined
ratio for the period under review was acceptable as per the table below.
                                                 2006           2005
  Loss Ratio                                    44.7%          45.0%
  Commissions                                   36.9%          37.2%
  Operating Expenses                             4.7%           5.0%
  Combined Ratio                                86.3%          87.2%

The reserve fund of our company is above the international standard set by S&P as it can be seen in the ratio in
technical and reserve as at 31 December 2006 is still high at 164 percent from the standard 150 percent.
Financial Status
At year end of 2006, company and it’s subsidiaries total asset Baht 4,621 million, similar to year 2005. The total
assets include investment returns 80 percent, debts and amount recoverable from reinsurers 14 percent,
equipment and other assets 6 percent.
                                                                                    Thai Reinsurance Public Company Limited
                                                                                                              Annual Report   054
Management’s Discussion and
Analysis of Financial Condition and Result of Operations

The asset in investment includes corporate and government bonds, stock, debenture, note, deposit, loan, and
unit trusts, registered capital share, accrued income on investments that are accounted for under the equity
method that consider investment in subsidiary and associated companies, and allowance for impairment in
investment as per the accounting standards. The allowance at year end was Baht 30 million, representing a
decrease from year 2005 of Baht 200,000.
The collection of account receivables remains efficient with around Baht 224 million still to be collected from
reinsurers. The company set the account receivables turnover at 68 days.
Another type of asset is amount that is deposited for reinsurance. This is part of the reinsrance premium that the
reinsured holds in some contracts. Normally the reinsureds would hold 40 percent from reinsurance premium and
will return the deposit premium plus interest around 0.5–1 percent at the completion of the calendar year, this
amounts to around Baht 392 million.
Liability
The total liabilities as at 31 December 2006 was Baht 2,269 million, representing an decrease of Baht 19 million
from the previous year. Mainly from the reserving of Life insurance premium which was not included in the income
of Baht 1,080 million, increasing by Baht 75 million for the year under review.
Furthermore, the claim reserves and claims outstanding stood at around Baht 870 million. The company use the
conservative way to set up the mentioned. It can be said that the company had set up the Loss Fluctuation Reserve
separate from the Claims reserves that use for prompt adjustments of the losses. The company had set up reserves
for IBNR several years before Department of Insurance released the policy to force all of the insurance companies
set up reserves at 2.5% of net insurance premium (effect since 2002). Claim reserves and claims outstanding as at
31 December 2006, inclusive of Loss Fluctuation Reserve and IBNR reserves was Baht 141 million.
Liquidity
It is evident that in year 2006, the company’s liquidity is sufficient. This was the result from our policy that create
Loss Fluctuation Reserve. Cash flow in year 2006 will be present as follow:
                                                              Unit : Million Baht
 Cash and Equivalents from last year                                  510.4
 Net cash flows from operating activities                             454.2
 Cash received from share subscription                                 7.6
 Net cash flows used in investing activities                         (153.7)
 Dividend Paid                                                       (425.7)
 Cash and Equivalents at end of year                                  392.8
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   055
Management’s Discussion and
Analysis of Financial Condition and Result of Operations
As at December 31, 2006 the company and it’s subsidiaries had cash flow around Baht 393 million. This is
considered to be enough for routine operations. The proportion of cash flow is 0.7 times the amount of assets
compared to liabilities. If the company requires emergency cash, the company can transform the short term
investment into cash to pay for any large claims.
Investment Cost
None.
Capital Resources
As at 2006 year end, the proportion of liability to the shareholder is 0.97 times, similar to the previous year. The
company never sources capital from loans or other trust funds.
The share value in the hands of the shareholder is Baht 2,334 million. The par value at year end was 1.97 Baht per share.
                                                                                                                                                                                 Thai Reinsurance Public Company Limited
                                                                                                                                                                                                           Annual Report   056
     Ten Year Summary

                                                                                         2006             2005            2004             2003        2002        2001        2000        1999        1998         1997
Operations (Thousand Baht)
 Gross Written Premiums                                                                 4,023,889 3,763,671 3,394,989 3,055,080 3,118,707 2,841,442 2,683,893 2,529,907 2,719,125 2,923,432
 Net Written Premiums                                                                   2,612,941 2,544,048 2,282,419 2,054,295 2,191,989 1,877,953 1,783,770 1,655,704 1,586,083 1,568,174
 Net Underwriting Profit                                             (Note 1)             317,759 257,586 265,781        67,343 204,243 274,404 276,587 220,611 192,243 284,663
 Net Investment Income                                                                    294,076 352,847 260,980 403,721 209,937 129,299 183,524 229,484 233,278                    86,450
 Net Profit                                                                               462,280 481,781 450,328 394,639 332,353 305,903 348,190 323,061 299,107 277,935
Ratio (%)
  Loss Ratio                                                         (Note 2)              44.68%          44.95%          38.07%           51.67%      45.37%      38.40%      33.05%      30.93%      35.98%       38.58%
  Expense Ratio                                                      (Note 3)              41.56%          42.19%          46.31%           45.51%      43.81%      49.75%      51.54%      51.50%      50.02%       42.97%
  Combined Ratio                                                                           86.24%          87.14%          84.38%           97.18%      89.18%      88.15%      84.59%      82.43%      86.00%       81.55%
 Earning per share (Baht)                                            (Note 4)                 0.39            0.41            0.39             0.37        0.30        0.28        0.33        0.31        0.30         0.28
Selected Financial Information (Thousand Baht)
 Total Assets                                                        (Note 5)           4,621,760       4,648,537       4,417,493         4,433,824   3,615,735   3,288,748   3,208,617   3,344,647   2,887,277    2,655,438
 Total Invested Assets                                                                  3,684,737       3,597,421       3,683,919         3,721,399   2,912,081   2,527,782   2,504,968   2,610,251   2,293,161    2,195,272
 Technical Reserve                                                   (Note 6)           1,950,659       1,875,184       1,656,873         1,548,885   1,409,548   1,286,088   1,392,780   1,389,351   1,333,568    1,281,795
 Paid-up Capital                                                                        1,187,355       1,180,250       1,166,926         1,129,274   1,010,612   1,010,612     841,260     841,260     560,840      560,840
 Total Capital Funds (Shareholders’ Equity)                                             2,333,869       2,354,213       2,360,585         2,461,204   1,948,539   1,798,455   1,569,709   1,628,809   1,274,930    1,173,996
 Book Value per share (Baht)                                                                 1.97            1.99            2.02              2.12        1.93        1.78        1.87        1.94        2.27         2.09
 Dividend per share (Baht)                                                                   0.36            0.36            0.36              0.30        0.30        0.30        0.40        0.35        0.40         0.40
 Note :
1. Net of other operating expenses
2. Loss incurred expressed as a percentage of earned premiums
3. A ratio of total incurred expenses to net written premiums
4. Adjusted to par value of Baht 10 for comparison purposes
5. Since year 2000, the amount of Total Assets is the net result that has taken into consideration the amount Due from/to each insurer.
6. Aggregation of Unpaid losses, Unearned premium reserve and Life policy reserve
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   057
Report on the Board of Director’s
Responsibility towards the Financial Statements

The Board of Directors is responsible for the financial statements of the company and its subsidiaries, and the
financial information appearing in the annual report and on the Internet. As such, the financial statements are
prepared in accordance with generally accepted accounting practices in Thailand, by utilizing appropriate
accounting policies, consistency and cautious discretion, and the best methods for calculating estimates.
Moreover, sufficient important information is disclosed in the footnotes to the financial statements.

The Board of Directors has called for the establishment and implementation of an effective internal control
system, to ensure reasonable confidence that the reporting of accounting data is accurate, comprehensive and
sufficient to support assets. At the same time, any possible weakness could be found in advance so as to
prevent malfeasance or significant misconduct or wrongdoing.

Moreover, the Board of Directors has appointed the Audit Committee, which includes a non-management
member, to supervise and be responsible for the quality of financial data and the system for internal controls. The
opinion of the Audit Committee on this matter is contained in the annual report.

Furthermore, it is the opinion of the Board of Directors that the Company’s internal control system is, overall,
satisfactory and capable of creating confidence in the credibility of the 2006 financial statements of the company
and its subsidiaries.




                   Suchin Wanglee                                           Surachai Silivallop
                    Chairman                                                President & CEO
                                                                             Thai Reinsurance Public Company Limited
                                                                                                       Annual Report   058
Audit Committee Report


The Audit Committee comprises 3 Directors: Mr. Udom Vichaiyabhai as a Deputy Head of Audit Committee, Mr.
Aswin Kongsiri, and Mr. Chanin Roonsamrarn as a Committee Members, was appointed by the Board of
Directors on 1999 and has met four times in 2006 to perform the directing and overseeing duties that were
assigned by the Board of Directors.

The Audit Committee has examined the Company’s year-end financial statements of 2006, with consultation with
the Management Board and Auditor. It has been found that the financial statements were prepared under the
recognized accounting principles, are correct and in line with the information that the Audit Committee has
received. In addition, the Audit Committee has also considered the appropriateness of the internal control
system, and has already provided relevant comments to the Board of Directors.

In the past year, the Audit Committee attended by Management, Internal Audit officers and external auditors. The
following matters were reviewed.
       1. The Company’s financial reports were reviewed prior to disclosure to the Stock Exchange of Thailand
           and Securities Exchange Commission.
       2. Selection and proposal of appointment of the Company’s auditors, including consideration of audit fees.
       3. Approval for the annual internal audit plans; acknowledgement of internal controls reports and follow-
           up of recommended amendments, as well as support and development of a more effective internal
           audit department through the authorization to hire a co-sourcing consultant. The advisor is to
           participate in the operations of the internal audit department, employing the method of risk – based
           audit approach for various corporate areas and inspection of internal controls. This also extends to
           the Company’s subsidiaries. A repeated emphasis was made to management to improve those areas
           of the internal controls that had some weaknesses.
       4. As at 2006, the company itself decided to change the internal auditor from KPMG Phoomchai
           Advisory Co., Ltd. to be A.M.T. Associate that have Prof. Katesaree Narongdaj as Managing Director
           for more clarity of the auditing process since Ernst & Young also conduct the company’s account
           audit. Following the auditing process the auditor summarized that the company had implemented a
           successful IT program that was specially developed to support the auditing process.
       5. Follow-up of the Company and its subsidiaries’ progress and compliance with legislation and
           restrictions relevant to its operation.
       6. Consultations with the external auditors concerning duties and scope, in order to enhance efficiency
           and reduce overlapping tasks conducted by the external auditors and the internal auditors.
       7. Conduct self-evaluation of the Audit Committee to consider its performance over the past year. The
           findings are used as guidelines for its development and improvement.
       8. Inspection of the related transaction report.
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   059
Audit Committee Report


The Audit Committees has agreed that the company had a satisfactory level of internal control, risk management,
good management, good corporate governance and with efficient monitoring system. The company is also
practicing to date standardized and transparent accounting and financial reporting systems, which are reviewed
time to time. In addition, the company has been following all laws and regulations for the insurance industry.

The Audit Committee had proposed to the Board of Directors in the General Shareholder Meeting to promote
Mr. Sophon Permsirivallop(No.3182) and/or Ms. Nonglak Pumnoi (No.4172) and/or Ms. Siraporn Ouaanunkun
(No.3844) form Ernst & Young to be Account Audits for the company in year 2006 with the Audit Fee of Baht
1,070,000, increasing from year 2005 by Baht 310,000 or 41%.

The Audit Committee is of the opinion that the overall internal controls of the Company are satisfactory, efficient
and effective in line with international standards.




                                                                   Udom Vichayabhai
                                                            Chairman of the Audit Committee
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report   060
Report of Independent Auditor


To The Board of Directors and Shareholders of
Thai Reinsurance Public Company Limited

I have audited the accompanying consolidated balance sheets of Thai Reinsurance Public Company Limited and
its subsidiaries as at 31 December 2006, the related consolidated statements of income, changes in
shareholders’ equity and cash flows for the year then ended, and the separate financial statements of Thai
Reinsurance Public Company Limited for the same period. These financial statements are the responsibility of the
management of the Company and its subsidiaries as to their correctness and the completeness of the
presentation. My responsibility is to express an opinion on these financial statements based on my audit. The
consolidated financial statements of Thai Reinsurance Public Company Limited and its subsidiaries, and the
separate financial statements of Thai Reinsurance Public Company Limited for the year ended 31 December
2006 were audited in accordance with generally accepted auditing standards by another auditor of our firm who,
under her report dated 8 February 2006, expressed an unqualified opinion on those statements.

I conducted my audit 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 audit provides 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 Thai Reinsurance Public Company Limited and its subsidiaries and of Thai Reinsurance Public
Company Limited as at 31 December 2006, and the results of their operations and cash flows for the year then
ended, in accordance with generally accepted accounting principles.




                                                                      Rungnapa Lertsuwankul
                                                          Certified Public Accountant (Thailand) No. 3516
                                                                    Ernst & Young Office Limited
                                                                     Bangkok: 7 February 2007
                                                                                    Thai Reinsurance Public Company Limited
                                                                                                              Annual Report   061
    Balance Sheets
     AS AT 31 DECEMBER 2006 AND 2005

                                                                                                          (Unit :Baht)
                                                              CONSOLIDATED                      THE COMPANY ONLY
                                               Note
                                                            2006        2005                    2006        2005
 Assets
   Investments in securities
     Bonds                                              225,159,755    85,569,119   162,182,589    30,694,465
     Treasury bills                                      9,979,537    582,570,838        -        454,032,327
     Notes                                              288,509,303 410,500,000 216,000,000 362,000,000
     Stocks                                            1,036,784,960 764,943,638 928,737,694 699,918,438
     Debentures                                         609,712,922 436,704,267 419,664,662 305,603,540
     Units trust                                       1,134,194,422 1,191,556,823 1,080,084,079 1,128,289,212
      Total investments in securities - net   6, 8     3,304,340,899 3,471,844,685 2,806,669,024 2,980,537,982
  Loans
     Mortgage loans                                      2,964,312           614,149          2,964,312          614,149
     Others                                              1,015,213          1,032,957          893,073          1,032,957
     Total loans                                         3,979,525          1,647,106         3,857,385         1,647,106
 Investment in subsidiary companies
     Accounted for under equity method          7             -                 -           495,093,454        363,499,771
 Investments in associated companies
     Accounted for under equity method          7        24,613,459         24,037,488       24,613,459         24,037,488
 Cash and deposits at financial institutions            351,803,645         99,891,779      224,745,552         89,666,211
 Equipment - net                                9        15,346,365         19,007,933       12,216,778         17,146,702
 Amounts deposited on reinsurance treaties      8       392,154,954        397,030,640      357,295,321        376,476,417
 Due from reinsurers - net                   8, 11      244,023,420        186,121,605      234,892,872        178,783,386
 Accrued income on investments                           22,207,855         16,241,974       17,487,257         13,859,239
 Other assets
     Deferred tax assets                       19       187,016,911 210,517,130 177,845,125 205,932,674
     Deferred excess of loss                             31,266,008    50,959,893   31,266,008     50,959,893
     Intangible assets - net                   10        32,306,852    15,556,171   10,662,406     11,179,241
     Receivable from sales of securities                      -       147,356,165        -        147,356,165
     Others                                              12,700,111    8,324,274     8,568,043     5,935,801
 Total assets                                          4,621,760,004 4,648,536,843 4,405,212,684 4,467,018,076




The accompanying notes are an integral part of the financial statements.
                                                                                   Thai Reinsurance Public Company Limited
                                                                                                             Annual Report      062
         Balance Sheets
          AS AT 31 DECEMBER 2006 AND 2005


                                                                                                              (Unit :Baht)
                                                                       CONSOLIDATED                THE COMPANY ONLY
                                                        Note
                                                                     2006        2005              2006         2005
 Liabilities and shareholders' equity
   Liabilities
     Life premium reserve                                        147,486,047   136,673,725            -                -
     Unearned premium reserve                                    932,981,268   868,319,844      932,981,268       868,319,844
     Loss reserves and outstanding claims                 12     870,192,046   870,190,600      855,458,281       860,136,017
     Amounts withheld on reinsurance treaties                     16,811,531    8,457,385        16,811,531        8,457,385
     Due to reinsurers                                    8      125,439,746   144,882,240      117,171,554       134,999,206
     Other liabilities
       Corporate income tax payable                              65,767,994    95,049,661    50,492,911    87,231,417
       Deferred tax liabilities                           19     37,416,397    68,289,773    29,933,616    61,440,111
       Dividend payable                                          41,384,076    41,751,681    41,384,076    41,751,681
       Others                                                    32,037,734    55,326,667    27,110,252    50,469,582
 Total liabilities                                              2,269,516,839 2,288,941,576 2,071,343,489 2,112,805,243
 Shareholders' equity
     Share capital                                        13
       Registered
  1,187,764,000 ordinary shares of baht 1 each                  1,187,764,000 1,187,764,000 1,187,764,000 1,187,764,000
       Issued and paid-up
  1,187,354,940 ordinary shares of baht 1 each
 (2006: 1,180,249,660 ordinary shares of baht 1 each)           1,187,354,940 1,180,249,660 1,187,354,940 1,180,249,660
     Premium on share capital                                    163,438,070 161,476,695 163,438,070 161,476,695
     Surplus on revaluation of investments - net          6       41,921,359   106,818,254   41,921,359    106,818,254
     Subscription received in advance from exercise       13           -        1,489,700             -             1,489,700
    Retained earnings
      Appropriated
         Statutory reserve                                14     126,799,771 125,039,435 118,776,400 118,776,400
         General reserve                                         106,000,000 106,000,000 106,000,000 106,000,000
         Emergency reserve                                        44,000,000   44,000,000    44,000,000    44,000,000
      Unappropriated                                             664,354,992 629,139,026 672,378,426 635,402,124
 Equity attributable to company's shareholders                  2,333,869,132 2,354,212,770 2,333,869,195 2,354,212,833
 Minority interest - equity attributable to
      Minority shareholders of subsidiaries                      18,374,033     5,382,497         -             -
 Total shareholders' equity                                     2,352,243,165 2,359,595,267 2,333,869,195 2,354,212,833
 Total liabilities and shareholders' equity                     4,621,760,004 4,648,536,843 4,405,212,684 4,467,018,076

The accompanying notes are an integral part of the financial statements.
                                                                                                                                  Thai Reinsurance Public Company Limited
                                                                                                                                                            Annual Report     063
          Statements of Earning
          AS AT 31 DECEMBER 2006 AND 2005


                                                                                                                                                                            (Unit :Baht)
                                                                                                           CONSOLIDATED
                                                                                                       2006
                                                                                                     Non-life                                                                2005
                                                       Life                         Marine and                                                          Total                Total
                                                                      Fire                           Motor       Miscellaneous       Total
                                                                                  transportation
Underwriting income
   Premium written                                 304,399,585    2,212,190,206   278,500,448 103,290,993 1,125,508,118 3,719,489,765 4,023,889,350 3,763,670,912
   Less : Premium ceded                            (9,427,497)    (930,621,498)   (79,862,814) (1,002,996) (390,033,292) (1,401,520,600) (1,410,948,097) (1,219,623,181)
   Net premium written                             294,972,088    1,281,568,708   198,637,634 102,287,997 735,474,826 2,317,969,165 2,612,941,253 2,544,047,731
   Life policy and unearned premium reserve
      (Increase) decrease from previous year       (10,812,322)     1,720,743      (177,292)        2,304,926    (68,509,801)     (64,661,424)      (75,473,746)       (106,166,843)
Total underwriting income                          284,159,766    1,283,289,451   198,460,342      104,592,923   666,965,025     2,253,307,741     2,537,467,507       2,437,880,888
Underwriting expenses
   Losses incurred during the year (Note 12)       116,596,490     589,058,716    52,373,260       43,708,603    331,939,403     1,017,079,982     1,133,676,472       1,095,860,135
   Commissions and brokerages                       87,304,689     497,613,643     82,141,899      24,011,774    257,022,805      860,790,121       948,094,810         938,031,030
   Other underwriting expenses                          113          258,507         54,725         568,467       15,625,255       16,506,954       16,507,067           8,855,595
Total underwriting expenses                        203,901,292    1,086,930,866   134,569,884      68,288,844    604,587,463     1,894,377,057     2,098,278,349       2,042,746,760
Income on underwriting                             80,258,474      196,358,585     63,890,458      36,304,079     62,377,562      358,930,684       439,189,158         395,134,128
Investment income
   Interest and dividends                                                                                                                           173,647,070         160,675,368
   Gains on securities trading                                                                                                                      128,165,238         198,652,747
   Reversal of loss on impairment of investments                                                                                                      119,890             909,587
Total investment income                                                                                                                             301,932,198         360,237,702
                                                                                                               Thai Reinsurance Public Company Limited
                                                                                                                                         Annual Report     064
   Statements of Earning
   AS AT 31 DECEMBER 2006 AND 2005


                                                                                                                                               (Unit :Baht)
                                                                                           CONSOLIDATED
                                                                                        2006
                                                                                     Non-life                                                     2005
                                                      Life            Marine and                                               Total              Total
                                                             Fire                     Motor   Miscellaneous   Total
                                                                    transportation
Investment expenses                                                                                                         (9,631,959)        (7,197,054)
Income on investments                                                                                                      292,300,239        353,040,648
Total income on underwriting and investments                                                                               731,489,397        748,174,776
Services income                                                                                                             27,222,371         14,847,094
Services expenses                                                                                                          (28,595,700)       (13,238,933)
Income (loss) on services                                                                                                   (1,373,329)         1,608,161
Share of income (loss) on investments in associated
   Accounted for under the equity method                                                                                     1,775,911         (193,550)
Management fee income (note 21)                                                                                              1,299,873         1,434,924
Other income                                                                                                                 2,282,227         2,022,841
Operating expenses
   Personnel expenses (Note 16)                                                                                             76,136,015        76,983,502
   Premises and equipment expenses                                                                                          12,807,732        14,094,360
   Taxes and duties                                                                                                            57,568           65,186
   (Reversal of) doubtful debts                                                                                             (2,234,247)       1,655,351
   Directors' remuneration (Note 18)                                                                                         9,866,000        9,860,000
                                                                                                                            Thai Reinsurance Public Company Limited
                                                                                                                                                      Annual Report       065
       Statements of Earning
       AS AT 31 DECEMBER 2006 AND 2005

                                                                                                                                                               (Unit :Baht)
                                                                                                         CONSOLIDATED
                                                                                                      2006
                                                                                                   Non-life                                                       2005
                                                                   Life             Marine and                                                 Total              Total
                                                                           Fire                     Motor   Miscellaneous    Total
                                                                                  transportation
    Other expenses                                                                                                                          24,797,264    22,331,614
 Total operating expenses                                                                                                                  121,430,332 124,990,013
 Income before income tax                                                                                                                  614,043,747 628,057,139
 Corporate income tax (note 19)                                                                                                           (148,773,191) (145,064,300)
 Income after income tax                                                                                                                   465,270,556 482,992,839
 Net income attributable to minority interest                                                                                              (2,990,824)   (1,212,319)
 Net income for the years                                                                                                                  462,279,732 481,780,520
 Basic earnings per share (note 20)
    Net income                                                                                                                                0.391         0.410
    Weighted average number of ordinary shares (shares)                                                                                   1,182,943,083 1,174,971,069
 Diluted earnings per share (note 20)
    Net income                                                                                                                                0.390         0.407
    Weighted average number of ordinary shares (shares)                                                                                   1,186,367,149 1,183,972,930




The accompanying notes are an integral part of the financial statements.
                                                                                                                                   Thai Reinsurance Public Company Limited
                                                                                                                                                             Annual Report       066
 Statements of Earning
 AS AT 31 DECEMBER 2006 AND 2005


                                                                                                                                                                  (Unit :Baht)
                                                                                                           THE COMPANY ONLY
                                                                                                         2006
                                                                                                        Non-life                                                 2005
                                                                                       Marine and                                                                Total
                                                                         Fire                           Motor      Miscellaneous          Total
                                                                                     transportation
Underwriting income
   Premium written                                                   2,212,190,206 278,500,448 103,290,993 1,125,508,118 3,719,489,765                      3,478,499,806
   Less : Premium ceded                                              (930,621,498) (79,862,814) (1,002,996) (390,033,292) (1,401,520,600)                  (1,207,799,523)
   Net premium written                                               1,281,568,708 198,637,634 102,287,997 735,474,826 2,317,969,165                        2,270,700,283
   Unearned premium reserve (increase) decrease from previous year     1,720,743     (177,292)   2,304,926 (68,509,801)     (64,661,424)                     (56,691,426)
Total underwriting income                                            1,283,289,451 198,460,342 104,592,923 666,965,025 2,253,307,741                        2,214,008,857
Underwriting expenses
   Losses incurred during the year (Note 12)                          589,058,716    52,373,260       43,708,603   331,939,403       1,017,079,982           988,875,622
   Commissions and brokerages                                         497,613,643     82,141,899      24,011,774   257,022,805        860,790,121            858,000,445
   Other underwriting expenses                                          258,507         54,725         568,467      15,756,050         16,637,749             8,879,773
Total underwriting expenses                                          1,086,930,866   134,569,884      68,288,844   604,718,258       1,894,507,852          1,855,755,840
Income on underwriting                                                196,358,585    63,890,458       36,304,079    62,246,767        358,799,889            358,253,017
Investment income
   Interest and dividends                                                                                                             148,327,019            145,313,597
   Gains on securities trading                                                                                                        126,410,838            198,652,726
   Reversal of loss on impairment of investments                                                                                        119,890                909,587
Total investment income                                                                                                               274,857,747            344,875,910
Investment expenses                                                                                                                   (9,217,921)            (6,943,119)
Income on investments                                                                                                                 265,639,826            337,932,791
Total income on underwriting and investments                                                                                          624,439,715            696,185,808
                                                                                                                                Thai Reinsurance Public Company Limited
                                                                                                                                                          Annual Report     067
     Statements of Earning
     AS AT 31 DECEMBER 2006 AND 2005

                                                                                                                                                                 (Unit :Baht)
                                                                                                             THE COMPANY ONLY
                                                                                                            2006
                                                                                                                                                                  2005
                                                                                                           Non-life
                                                                                                                                                                  Total
                                                                          Fire   Marine and transportation       Motor Miscellaneous         Total
 Share of income on investments in subsidiary companies and
    Associated companies accounted for under the equity method                                                                           71,893,297            34,957,180
 Management fee income (note 21)                                                                                                         1,299,873              1,434,924
 Other income                                                                                                                            6,304,316              4,840,466
 Operating expenses
    Personnel expenses (Note 16)                                                                                                          75,019,715          76,052,422
    Premises and equipment expenses                                                                                                       12,795,033          14,076,014
    Taxes and duties                                                                                                                        37,218              41,167
    (Reversal of) doubtful debts                                                                                                         (2,234,247)           1,655,351
    Directors' remuneration (Note 18)                                                                                                     9,866,000            9,860,000
    Other expenses                                                                                                                        25,634,382          22,614,844
 Total operating expenses                                                                                                                121,118,101          124,299,798
 Income before income tax                                                                                                                582,819,100          613,118,580
 Corporate income tax (note 19)                                                                                                         (120,539,368)        (131,338,060)
 Net income for the years                                                                                                                462,279,732          481,780,520
 Basic earnings per share (note 20)
    Net income                                                                                                                              0.391                0.410
    Weighted average number of ordinary shares (shares)                                                                                 1,182,943,083        1,174,971,069
 Diluted earnings per share (note 20)
    Net income                                                                                                                              0.390                0.407
    Weighted average number of ordinary shares (shares)                                                                                 1,186,367,149        1,183,972,930
The accomanying notes are an integral part of the financial statements.
                                                                                                                                      Thai Reinsurance Public Company Limited
                                                                                                                                                                Annual Report       068
          Statements of Changes in Shareholders’Equity
          AS AT 31 DECEMBER 2006 AND 2005

                                                                                                                                                                                 (Unit :Baht)
                                                                                                      CONSOLIDATED
                                                                                  Subscription                    Retained earnings
                                         Issued and     Premium on Surplus on received in                   Appropriated
                                                                                                                                                               Minority
                                           paid-up         share   Revaluation of advance from                                                                                      Total
                                                                                                   Statutory    General    Emergency Unappropriated            interest
                                        share capital      capital  investments exercise of
                                                                                                    reserve     reserve     reserve
                                                                                    warrants
Balance as at 1 January 2005
                                        1,166,925,710 155,862,320 189,992,159       2,920,350     123,370,681 106,000,000 44,000,000       571,513,436             -            2,360,584,656
(before adjustment)
Prior year adjustment                         -             -             -              -             -           -           -              88,969               -               88,969
Balance as at 1 January 2005
                                        1,166,925,710 155,862,320 189,992,159       2,920,350     123,370,681 106,000,000 44,000,000       571,602,405             -            2,360,673,625
(after adjustment)
Converted warrants to ordinary shares    13,323,950     5,614,375          -             -             -           -           -                 -                 -             18,938,325
Surplus on revaluation of investments         -             -        (83,173,905)        -             -           -           -                 -                 -            (83,173,905)
Subscription received in advance from
                                              -             -             -         (1,430,650)        -           -           -                 -                 -             (1,430,650)
exercise of warrants
Statutory reserve (Note 14)                   -             -             -              -        1,668,754        -           -           (1,668,754)            -                   -
Net income for the year                       -             -             -              -            -            -           -           481,780,520            -              481,780,520
Minority interest                             -             -             -              -            -            -           -                -             5,382,497           5,382,497
Dividend paid (Note 15)                       -             -             -              -            -            -           -          (422,575,145)           -             (422,575,145)
Balance as at 31 December 2005
                                        1,180,249,660 161,476,695 106,818,254       1,489,700     125,039,435 106,000,000 44,000,000       629,139,026        5,382,497         2,359,595,267
(before adjustment)
Prior year adjustment                         -             -             -              -             -           -           -             346,687               -               346,687
                                                                                                                                            Thai Reinsurance Public Company Limited
                                                                                                                                                                      Annual Report       069
            Statements of Changes in Shareholders’Equity
            AS AT 31 DECEMBER 2006 AND 2005

                                                                                                                                                                                      (Unit :Baht)
                                                                                                            CONSOLIDATED
                                                                                         Subscription                   Retained earnings
                                               Issued and     Premium on Surplus on received in                   Appropriated
                                                                                                                                                                     Minority
                                                 paid-up         share   Revaluation of advance from                                                                                      Total
                                                                                                         Statutory    General    Emergency Unappropriated            interest
                                              share capital      capital  investments exercise of
                                                                                                          reserve     reserve     reserve
                                                                                          warrants
 Balance as at 31 December 2005
                                             1,180,249,660 161,476,695 106,818,254         1,489,700    125,039,435 106,000,000 44,000,000       629,485,713        5,382,497         2,359,941,954
 (after adjustment)
 Converted warrants to ordinary shares
                                               7,105,280       1,961,375        -              -             -           -           -                 -                 -             9,066,655
 (Note 13)
 Surplus on revaluation of investments              -               -      (64,896,895)        -             -           -           -                 -                 -            (64,896,895)
 Subscription received in advance from
                                                    -               -           -         (1,489,700)        -           -           -                 -                 -             (1,489,700)
 exercise of warrants (Note 13)
 Statutory reserve (Note 14)                       -            -                -             -         1,760,336       -           -           (1,760,336)            -           -
 Net income for the year                           -            -                -             -             -           -           -           462,279,732            -      462,279,732
 Minority interest                                 -            -                -             -             -           -           -                -            12,991,536 12,991,536
 Dividend paid (Note 15)                           -            -                -             -             -           -           -          (425,650,117)           -     (425,650,117)
 Balance as at 31 December 2006              1,187,354,940 163,438,070      41,921,359         -        126,799,771 106,000,000 44,000,000       664,354,992       18,374,033 2,352,243,165




The accompanying notes are an integral part of the financial statements.
                                                                                                                                              Thai Reinsurance Public Company Limited
                                                                                                                                                                        Annual Report       070
           Statements of Changes in Shareholders’Equity
           AS AT 31 DECEMBER 2006 AND 2005

                                                                                                                                                                                          (Unit :Baht)
                                                                                                                  THE COMPANY ONLY
                                                                                                        Subscription                   Retained earnings
                                                                                          Surplus on                             Appropriated
                                                           Issued and      Premium on                    received in
                                                                                          revaluation
                                                             paid-up          share                     advance from                                                                        Total
                                                                                              of                       Statutory   Statutory     Statutory       Unappropriated
                                                          share capital       capital                    exercise of
                                                                                         investments                    reserve     reserve       reserve
                                                                                                          warrants
Balance as at 1 January 2005 (before adjustment)         1,166,925,710     155,862,320   189,992,159     2,920,350    118,776,400   106,000,000   44,000,000      576,107,780           2,360,584,719
Prior year adjustment                                          -                -              -             -             -             -             -            88,969                   88,969
Balance as at 1 January 2005 (after adjustment)          1,166,925,710     155,862,320   189,992,159     2,920,350    118,776,400   106,000,000   44,000,000      576,196,749           2,360,673,688
Converted warrants to ordinary shares                     13,323,950        5,614,375          -             -             -             -             -               -                  18,938,325
Surplus on revaluation of investments                          -                -        (83,173,905)        -             -             -             -               -                 (83,173,905)
Subscription received in advance from exercise of              -                -              -        (1,430,650)        -             -             -               -                  (1,430,650)
Net income for the year                                        -                -              -             -             -             -             -          481,780,520            481,780,520
Dividend paid (Note 15)                                        -                -              -             -             -             -             -         (422,575,145)          (422,575,145)
Balance as at 31 December 2005 (before adjustment)       1,180,249,660     161,476,695   106,818,254     1,489,700    118,776,400   106,000,000   44,000,000      635,402,124           2,354,212,833
Prior year adjustment                                          -                -              -             -             -             -             -            346,687                 346,687
Balance as at 31 December 2005 (after adjustment)        1,180,249,660     161,476,695   106,818,254     1,489,700    118,776,400   106,000,000   44,000,000      635,748,811           2,354,559,520
Converted warrants to ordinary shares (Note 13)            7,105,280        1,961,375          -             -             -             -             -               -                   9,066,655
Surplus on revaluation of investments                          -                -        (64,896,895)        -             -             -             -               -                 (64,896,895)
Subscription received in advance from exercise of              -                -              -        (1,489,700)        -             -             -               -                  (1,489,700)
Net income for the year                                        -                -              -             -             -             -             -          462,279,732            462,279,732
Dividend paid (Note 15)                                        -                -              -             -             -             -             -         (425,650,117)          (425,650,117)
Balance as at 31 December 2006                           1,187,354,940     163,438,070    41,921,359         -        118,776,400   106,000,000   44,000,000      672,378,426           2,333,869,195

The accompanying notes are an integral part of the financial statements.
                                                                                   Thai Reinsurance Public Company Limited
                                                                                                             Annual Report   071
       Statements of Cash Flows
        AS AT 31 DECEMBER 2006 AND 2005


                                                                                                         (Unit :Bath)
                                                                   CONSOLIDATED                   THE COMPANY ONLY
                                                                 2006         2005                2006           2005
  Cash flows from (used in) operating activities
  Net premium written from reinsurance                      2,570,754,907    2,404,544,09 2,293,495,401 2,138,113,473
  Net losses incurred from reinsurance                      (1,133,675,026   (983,715,461 (1,021,757,718) (869,168,344)
  Net commissions and brokerages from reinsurance            (948,094,810)   (938,031,030 (860,790,121) (858,000,445)
  Other underwriting expenses                                 (16,507,067)    (8,855,595)   (16,637,749)   (8,879,773)
  Net investment income                                       284,632,676    328,949,828    262,011,808    346,462,293
  Other income                                                 27,879,410     17,874,959     6,627,046      6,526,040
  Operating expenses                                         (168,374,187)   (119,525,282 (140,310,335) (106,190,372)
  Corporate income tax                                       (163,936,411)   (174,937,327 (138,572,095) (163,349,073)
  Others                                                       1,529,600      19,278,759          -             -
      Net cash flows from operating activities                454,209,092    545,582,944    384,066,237    485,513,799
  Cash flows from (used in) investing activities
  Cash flows from investing activities
  Investments in securities                                 2,850,994,880    3,055,745,09     2,631,955,269      2,601,631,671
  Loans                                                       1,078,382        500,131           972,821            500,131
  Other investments                                           1,199,940        599,970          1,199,940           599,970
  Equipment                                                   1,918,847       1,814,730         1,786,275          1,814,730
  Cash flows from investing activities                      2,855,192,049    3,058,659,92     2,635,914,305      2,604,546,502
  Cash flows used in investing activities
  Investments in securities                                 (2,990,466,835   (2,839,538,7    (2,735,383,435) (2,354,546,21
  Loans                                                        (3,410,801)     (338,000)        (3,183,100)    (338,000)
  Investment in subsidiary companies                                -         (2,647,967)      (59,999,020)   (7,600,000)
  Equipment                                                   (15,030,110)    (5,555,684)       (4,262,484)   (4,888,126)
  Cash flows used in investing activities                   (3,008,907,746   (2,848,080,4    (2,802,828,039) (2,367,372,34
  Net cash flows from (used in) investing activities         (153,715,697)   210,579,508      (166,913,734) 237,174,162
  Cash flows from (used in) financing activities
  Cash received from share subscription                       7,577,892       20,607,676        7,576,955         17,507,676
  Dividend paid                                             (425,650,117)    (422,575,145     (425,650,117)      (422,575,145)
  Net cash flows used in financing activities               (418,072,225)    (401,967,469     (418,073,162)      (405,067,469)
  Net increase (decrease) in cash and cash equivalents      (117,578,830)    354,194,983      (200,920,659)       317,620,492
  Cash and cash equivalents at beginning of year             510,391,778     156,196,795       451,666,211        134,045,719
  Cash and cash equivalents at end of year (Note 22)         392,812,948     510,391,778       250,745,552        451,666,211



The accompanying notes are an integral part of the financial statements.
                                                                                                   Thai Reinsurance Public Company Limited
                                                                                                                             Annual Report      072
          Note to Consolidated Financial Statements
           AS AT 31 DECEMBER 2006 AND 2005


          1. GENERAL INFORMATION
          Thai Reinsurance Public Company Limited (“The Company”) is a public company incorporated and domiciled in
          Thailand. The Company is principally engaged in the provision of reinsurance. The Company’s registered address is at
          223/1 Soi Ruamruedee, Wireless Road, Lumpini, Pathumwan, Bangkok.
          2. BASIS OF PREPARATION
          The 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 regulatory authority of insurance business except for the early adoption of
          Accounting Standard No. 56 “Accounting for Income Tax” which is in line with International Accounting Standard
          (IAS) No. 12 “Income Taxes” (revised 1996).
          The presentation of the financial statements has been made in compliance with the order of the Registrar dated 6
          March 2002, as empowered under the Accounting Act B.E. 2543.
          The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the
          accounting policies.
          3. BASIS OF CONSOLIDATION
          The consolidated financial statements include the financial statements of Thai Reinsurance Public Company
          Limited (hereinafter called “the Company”) and its subsidiary companies as follows:
                                                                                                            Subsidiary’s total     Subsidiary’s total
                                                                         Percentage of                         assets as a           revenuesas a
                                                                        Shareholding by      Country of     percentage to the       percentage to
        Company’s name                      Nature of business           the Company                        consolidated total   theconsolidated total
                                                                                           incorporation
                                                                                                                 assets                 revenue
                                                                       2006        2005                     2006        2005       2006         2005
Thaire Life Assurance Co., Ltd.        Provision of life reinsurance   100.00     100.00     Thailand        13.56      11.39     10.79         8.48
                                       Provision of training and
TR Training and Consulting Co., Ltd.                                   100.00     100.00     Thailand        0.02        0.02      0.26         0.19
                                       consulting services
                                       Provision of computer
EMCS Thai Co., Ltd.                    services in relation to motor   57.75       57.75     Thailand        0.55        0.39      0.76         0.41
                                       losses
Firstech Solutions Co., Ltd.           Outsourcing service             80.00         -       Thailand        1.01          -       0.05           -
                                       Losses claim management
Thaire Services Co., Ltd.                                              100.00        -       Thailand        0.38          -       0.01           -
                                       services

          Material balances and transactions between the Company and its subsidiary companies, investments in the
          subsidiaries in the Company’s account and the subsidiaries’ share capital have been eliminated from the
          consolidated financial statements.
          The results of subsidiaries and associates are included in the consolidated financial statements from the date of
          acquisition or until the effective date of disposal by the Company.
                                                                                Thai Reinsurance Public Company Limited
                                                                                                          Annual Report   073
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005


4. ADOPTION OF NEW ACCOUNTING STANDARDS
In October 2006, the Federation of Accounting Professions issued Notification No. 26/2006 regarding Accounting
Standard No. 44 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” (Amendment
No. 1), under which investments in subsidiaries, jointly controlled entities and associates are to be presented in the
separate financial statements under the cost method rather than the equity method. Entities which are not ready to
adopt the cost method in 2006 can continue to use the equity method through the end of 2006 and adopt the cost
method as from 1 January 2007.
In this regard, the Company has elected to adopt the change in 2007. Adoption of the change in 2007 will
necessitate the restatement of the Company’s 2006 separate financial statements to be presented for comparative
purposes along with the financial statements for 2007. The restatement will have the effect of decreasing net
income in the separate income statement for 2006 by approximately Baht 70.7 million (Baht 0.060 per share) and
decreasing net worth in the balance sheet at 31 December 2006 by approximately Baht 232.1 million.
5. SIGNIFICANT ACCOUNTING POLICIES
5.1 Revenue recognition
(a) Reinsurance Premium
Reinsurance Premium is recognised when the reinsurer submits the reinsurance application or the statement of
accounts is submitted to the Company.
(b) Interest and dividends
Interest income is recognised as interest accrues based on the effective rate method. Dividends are recognised
when the right to receive the dividends is established.
(c) Interest from loans
Interest income is accrued over the term of the loans based on the amount of principal outstanding.
(d) Management fee income
Management fee income from the Ua Arthorn personal accident insurance scheme is recognised as income each
quarter. The management fee is calculated at a percentage of the gross premium received under with the Ua
Arthorn personal accident scheme agreement.
(e) Rendering of services
Service revenue is recognized when services have been rendered taking into account the stage of completion.
5.2 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand, cash at bank, and all highly liquid investments with an original
maturity of three months or less and not subject to withdrawal restrictions.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   074
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005
5.3 Unearned premium reserve
Unearned premium reserve is set aside in compliance with the methods specified in the Insurance Against Loss
Act, as follows:

 Fire, motor and miscellaneous - Treaty       -    Monthly average basis (the one-twenty fourth basis)
 Fire and miscellaneous - Facultative         -    Daily average basis (the one-three hundred and sixty fifth basis.
 Marine and transportation                    -    Net reinsurance premium written for the last three months

5.4 Life policy reserve
Life policy reserve is reserve for insurance policy for 1-year or less which is determined based on the full unearned
premium reserve and the period of coverage.
5.5 Loss reserves and outstanding claims
Outstanding claims are provided for upon receipt of a claim advice from the reinsurer, in accordance with the
amount claimed by that reinsurer.
The Company provides reserves against loss which may have been incurred, but not yet reported at 2.5 percent of
net premium written for the last 12 months in compliance with the Notification of the Ministry of Commerce
governing the appropriation of unearned premium reserve.
In addition, the Company provides reserves against losses which may have been incurred under fire, marine and
transportation and miscellaneous insurance, but not yet reported at the end of the year (IBNR). Those provisions
are estimated based on the management’s judgment and past experience, and are added back for corporate
income tax purposes.
5.6 Commissions and brokerages
Commissions and brokerages are expended when they occur.
5.7 Investments
a) Investments in securities held for trading are stated at fair value. Gains or losses arising from changes in the
carrying amounts of securities are included in determining income.
b) Investments in available-for-sale securities are stated at fair value. Changes in the carrying amounts of
securities are recorded as separate items in shareholders’ equity until the securities are sold, when the changes are
then included in determining income.
c) 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 by the effective rate method with the
amortised amount presented as an adjustment to the interest income.
d) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated
at cost net of allowance for loss on diminution in value (if any).
                                                                                 Thai Reinsurance Public Company Limited
                                                                                                           Annual Report   075
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

e) Investments in subsidiary and associated companies are accounted for under the equity method.
The fair value of marketable securities is based on the latest bid price of the last working day of the year as quoted
on the Stock Exchange of Thailand. The fair value of debt instruments is determined based on the required rate of
return or the yield rates quoted by the Thai Bond Market Association. The fair value of unit trusts is determined from
their net asset value.
The weighted average method is used for computation of the cost of investments.
In the event the Company reclassifies investments in securities, such investments are adjusted to their fair value as
at the reclassification date. Differences between the carrying amount of the investments and their fair value on that
date are included in determining income or recorded as surplus (deficit) from change in the value of investments in
shareholders’ equity, depending on the type of investment which is reclassified.
5.8 Equipment and depreciation
Equipment is stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any).
Depreciation of equipment is calculated by reference to their costs on the straight-line basis over the following
estimated useful lives:
 Leasehold improvement               -   10 years, 3 years (over the period of lease)
 Motor vehicles                      -    5 years
 Office equipment and furniture      -    5 years
 Computer                            -    3 years, 5 years

Depreciation is included in determining income.
5.9 Intangible assets and amortisation
Intangible assets are stated at cost less accumulated amortisation. Amortisation is calculated by reference to cost
on a straight-line basis over the expected future period, for which the assets are expected to generate economic
benefit, as follows:
 Computer software                       - 5 year, 10 years

The amortisation is included in determining income.
5.10 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 associated companies and 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 Company’s operations.
                                                                                     Thai Reinsurance Public Company Limited
                                                                                                               Annual Report     076
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005
5.11 Due from reinsurers
Due from reinsurers is carried at its 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
experience and analysis of debtor aging.
5.12 Income tax
(a) Current tax
Income tax is provided for in the accounts based on the 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 enacted tax rate at the balance sheet date.
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 utilized.
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.
5.13 Foreign currencies
Foreign currency transactions are translated into Baht at the rates ruling on the transaction dates. Assets and
liabilities denominated in foreign currencies outstanding at the balance sheet date are translated into Baht at the
exchange rates ruling on the balance sheet date.
Gains and losses on exchange are included in determining income.
5.14 Impairment of assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, the Company makes an estimate of the asset’s recoverable amount. Where the carrying
amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. Impairment losses are recognised in the income statement. An asset’s recoverable amount is
the higher of fair value less costs to sell and value in use.
5.15 Employee benefits
Salary, wages, bonuses and contributions to the social security fund and provident fund are recognised as
expenses when incurred.
The Company issued warrants to purchase the ordinary shares to directors and employees. The transaction will be
recorded in the financial statement when the warrants are exercised.
                                                                             Thai Reinsurance Public Company Limited
                                                                                                       Annual Report   077
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005
5.16 Use of accounting estimates
Preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions in certain circumstances, affecting amounts reported in these
financial statements and related notes. Actual results could differ from these estimates.
6. INVESTMENTS IN SECURITIES
Consolidated
                                                                                               (Unit: Baht)
                                                 31 December 2006                    31 December 2005
                                            Cost / Cost                         Cost / Cost
                                                             Fair value                         Fair value
                                            amortised                           amortised
  Trading Securities
            Units trust                     50,000,000        57,264,059        30,000,000          32,918,614
            Surplus on revaluation of        7,264,059             -            2,918,614                -
  Total trading securities                  57,264,059        57,264,059        32,918,614          32,918,614
  Available-for-sale securities
            Stocks                          980,938,939      1,033,329,960      616,524,666        761,566,528
            Units trust                    1,071,763,398     1,076,930,363     1,159,733,585      1,158,638,209
            Surplus on revaluation of        57,557,986            -            143,946,486             -
  Total available-for-sale securities      2,110,260,323     2,110,260,323     1,920,204,737      1,920,204,737
  Held-to-maturity debt securities - net   1,133,361,517                       1,515,344,224
  Other investments
            Ordinary shares                  33,455,000                          33,497,000
            Less: Allowance for             (30,000,000)                        (30,119,890)
  Other investments - net                    3,455,000                           3,377,110
  Total investments in securities - net    3,304,340,899                       3,471,844,685
         Held-to-maturity debt securities as at 31 December 2006 will mature as follows:
                                                                                                    (Unit: Baht)
                                                         Period to maturity                         Total
                                           Within 1 year      1-5 years     Over 5 years
  Held-to-maturity debt securities
   Bonds                                   156,455,331        68,704,424           -            225,159,755
   Treasury bills                           9,979,537              -               -             9,979,537
   Notes                                   288,509,303             -               -            288,509,303
   Debentures – net                        253,299,982       326,412,940      30,000,000        609,712,922
  Total                                    708,244,153       395,117,364      30,000,000       1,133,361,517
                                                                             Thai Reinsurance Public Company Limited
                                                                                                       Annual Report   078
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005


The Company Only
                                                                                                   (Unit: Baht)
                                                31 December 2006                       31 December 2005
                                           Cost / Cost                            Cost / Cost
                                                            Fair value                           Fair value
                                           amortised                              amortised
 Trading Securities
  Units trust                              50,000,000         57,264,059          30,000,000      32,918,614
  Surplus on revaluation of                 7,264,059              -              2,918,614            -
 Total trading securities                  57,264,059         57,264,059          32,918,614      32,918,614
 Available-for-sale securities
           Ordinary shares                 897,130,585       925,282,694      574,135,213         696,541,328
           Units trust                    1,018,356,747     1,022,820,020     1,096,662,43       1,095,370,598
           Surplus on revaluation of        32,615,382            -           121,114,279              -
 Total available-for-sale securities      1,948,102,714     1,948,102,714     1,791,911,92       1,791,911,926
 Held-to-maturity debt securities - net    797,847,251                        1,152,330,33
 Other investments
           Ordinary shares                  33,455,000                         33,497,000
           Less: Allowance for             (30,000,000)                       (30,119,890)
 Other investments - net                    3,455,000                          3,377,110
 Total investments in securities - net    2,806,669,024                       2,980,537,98
Held-to-maturity debt securities as at 31 December 2006 will mature as follows:
                                                                                                    (Unit: Baht)
                                                        Period to maturity
                                                                                                    Total
                                          Within 1 year     1-5 years      Over 5 years
 Held-to-maturity debt securities
    Bonds                                 146,771,177        15,411,412            -            162,182,589
    Notes                                 216,000,000             -                -            216,000,000
    Debentures - net                      168,435,661       221,229,001       30,000,000        419,664,662
 Total                                    531,206,838       236,640,413       30,000,000        797,847,251
Surplus on revaluation of investments as at 31 December 2006 and 2005 consist of:
                                                                                                   (Unit: Baht)
                                                                            CONSOLIDATED
                                                                       2006                2005
 Surplus on revaluation of investments of the Company               32,615,382         121,114,279
 Surplus on revaluation of investments of subsidiary                24,942,604          22,832,207
 Total                                                              57,557,986         143,946,486
 Less: Deferred tax liabilities                                    (15,636,627)        (37,128,232)
 Surplus on revaluation of investments - net                        41,921,359         106,818,254
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report   079
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005


As at 31 December 2006 and 2005, the Company and its subsidiary company pledged                  investments in
bonds of Baht 34 million as security with the Registrar in accordance with the Life Assurance and the Insurance Act
B.E. 2535.
As at 31 December 2006, the subsidiary company pledged the investments in bonds of Baht 30 million (2005: Baht
22 million) as life assurance policy reserve with the Life Assurance Registrar in accordance with Section 24 of the
Life Assurance Act. B.E. 2535.
Additional information
The Company has the following investments in the unit trust of open-end funds:
                                                         Percentage of holding units trust
                                                            as at 31 December 2006
 Tawee-phon Fixed Income Fund                                         99.94
 Ayudhya Chaimongkol Fund                                             99.80
The Company does not treat the investments of open-end funds as above as investments in associated and
subsidiary companies because the Company has no management control over these funds and no significant
influence over their financial or operational policies. The funds are independently managed by fund managers in
accordance with the details of the fund projects and are under the supervision of the Office of Securities and
Exchange Commission (“SEC”).
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report   080
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005


7. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD
These represent investments in ordinary shares in the following subsidiary and associated companies.
Investments in subsidiary companies
                                                                                  Paid-up Capital          Percentage holding
                                                              Country of
       Company’s Name              Nature of Business                            2006       2005            2006       2005
                                                            incorporation
                                                                                 Thousand Baht                  Percent
 Investment in subsidiary companies directly held by the Company
                                 Provision of life
 Thaire Life Assurance Co., Ltd.                             Thailand          200,000       200,000       100.00       100.00
                                 reinsurance
 TR Training and Consultant      Provision of training
                                                              Thailand            500           500        100.00       100.00
 Co., Ltd.                       and consulting services
                                 Provision of computer
 EMCS Thai Co., Ltd.             services in relation to      Thailand          40,000        40,000        37.75       37.75
                                 motor losses
 Firstech Solutions Co.,Ltd.     Outsourcing service          Thailand          50,000            -         80.00         -
                                Losses claim
 Thaire Services Co., Ltd.                                   Thailand        20,000               -        100.00         -
                                management services
 Investment in subsidiary company held through Thaire Life Assurance Co., Ltd.
                                Provision of computer
 EMCS Thai Co.,Ltd.             services in relation to      Thailand        40,000           40,000        20.00       20.00
                                motor losses
                                                                            (Unit: Thousand Baht)
                                                      The Company Only
       Company’s Name                     Cost Method                 Equity Method
                                       2006          2005         2006            2005
 Subsidiary Companies
 Thaire Life Assurance Co.,           200,000       200,000         429,800             356,499
 TR Training and Consultant             500           500             789                 299
 EMCS Thai Co., Ltd.                   15,100        15,100         10,001               6,702
 Firstech Solutions Co., Ltd.          39,999           -           37,189                 -
 Thaire Services Co., Ltd.             20,000           -           17,314                 -
                                      275,599       215,600         495,093             363,500
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report    081
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

Investment in associated company
                                                                             Paid-up Capital        Percentage holding
                                      Nature of            Country of
       Company’s Name                                                       2006       2005          2006       2005
                                      Business           incorporation
                                                                            Thousand Baht                Percent
 Investments in associated company
                                Provision of
 Thai Insurer Datanet Co., Ltd.                            Thailand        30,000      30,000        39.99       39.99
                                computer services

                                                            (Unit: Thousand Baht)
                                              The Company Only
       Company’s Name                 Cost Method         Equity Method
                                    2006       2005     2006        2005
 Associated company
 Thai Insurer Datanet Co., Ltd.    11,999      11,999       24,613       24,037

As at 13 March 2006, the Company invested in the 399,993 ordinary shares of a newly established company,
Firstech Solutions Company Limited, with a par value of Baht 100 each, at a price of Baht 39,999,300. This
represents 80% of the paid-up share capital of that company.
As at 11 April 2006, the Company invested in the 499,993 ordinary shares of a newly established company, Thaire
Services Company Limited, with a par value of Baht 10 each, at a price of Baht 4,999,930. This represents 100% of
the paid-up share capital of that company.
As at 7 July 2006, the Company invested in the 499,993 additional ordinary shares of Thaire Services Company
Limited, with a par value of Baht 10 each, at a price of Baht 4,999,930. This represents 100% of the paid-up share
capital of that company.
As at 25 December 2006, the Company invested in the 999,986 additional ordinary shares of Thaire Services
Company Limited, with a par value of Baht 10 each, at a price of Baht 9,999,860. This represents 100% of the paid-
up share capital of that company.
During the period, the Company received cash dividend of Baht 1.2 million from an associated company.
As at 31 December 2006, the value of the Company’s investment in an associated company was determined under
the equity method. The figures for these associated company was based on information provided by the associated
company’s management, which were unaudited by the external auditor as, due to time constraints, the associated
companies’ management were unable to arrange for its financial statements to be audited.
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report   082
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

8. RELATED PARTY TRANSACTIONS
During the years, the Company and its subsidiaries had significant business transactions with related parties, which
have been concluded on commercial terms and bases specified in the agreements between the Company and
those companies, and in the ordinary course of their businesses, are summarised below.
                                                                                          (Unit: Thousand Baht)
                                                                    Cost Method             Company’s Name
                                                                       For the years ended 31 December
                                                                  2006          2005        2006       2005
 Transactions with related parties
          Premium written                                      1,697,995     1,570,719     1,689,842 1,559,907
          Dividend received                                      14,763        20,697        12,256    18,904
          Premium ceded                                         446,120       455,734       445,186   454,660

The pricing policy for premium written and premium ceded is made with reference to the normal ceded rates, which
depends on the type of insurance and the reinsurance contract. Dividend income is the declared amount.
The relationships between the Company and its related parties are summarised below:
             Name of related parties                        Relationship with the Company
 The Siam Industrial Credit Plc.                Related by way of common directors and shareholding
 Bangkok Insurance Plc.                         Related by way of common directors and shareholding
 Phatra Insurance Plc.                          Related by way of common directors and shareholding
 The Ayudhaya Insurance Plc.                    Related by way of common directors and shareholding
 Bamrungraj Hospital Plc.                       Related by way of common directors
 The Siam Commercial Samaggi Insurance          Related by way of common directors and shareholding
 Dhipaya Insurance Plc.                         Related by way of common directors and shareholding
 The Navakij Insurance Plc.                     Related by way of common directors and shareholding
 Thaivivat Insurance Plc.                       Related by way of common directors and shareholding
 Krungthai Panich Insurance Co., Ltd.           Related by way of common directors and shareholding
 Road Accident Victims Protection Co., Ltd.     Related by way of common directors
 MSIG Insurance (Thai) Co., Ltd.                Related by way of common directors and shareholding
 Thai Life Insurance Co., Ltd.                  Related by way of common directors and shareholding
 Bangkok Aviation Fuel Services Plc.            Related by way of common directors
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report       083
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

The Company had the following significant balances of assets and liabilities with its related companies:
                                                                                                        (Unit: Baht)
                                                                   CONSOLIDATED                   THE COMPANY ONLY
                                                                 2006        2005                  2006           2005
 Investments in securities - Notes
         The Siam Industrial Credit Pcl.                      12,509,303       10,000,000            -                  -
                                                              12,509,303       10,000,000            -                  -
 Investments in securities - Stocks
         Bangkok Insurance Pcl.                              262,880,412      139,091,084      221,423,022       101,454,784
         Phatra Insurance Pcl.                                31,780,800       28,911,700       31,780,800        28,911,700
         The Ayudhaya Insurance Pcl.                               -          29,700,800             -           29,700,800
         Bamrungraj Hospital Pcl.                             27,239,400       28,172,500       27,239,400        28,172,500
         The Siam Commercial Samaggi Insurance Pcl.           26,492,176       22,635,720       26,492,176        22,635,720
         Bangkok Aviation Fuel Services Plc.                  7,875,000             -                -                 -
         Others                                               3,123,150        2,247,750        3,123,150         2,247,750
                                                             359,390,938      250,759,554      310,058,548       213,123,254
 Amounts deposited on reinsurance treaties
         Dhipaya Insurance Pcl.                               46,738,503       46,455,393       46,738,503        46,455,393
         The Deves Insurance Pcl.                                  -           23,071,528            -            23,071,528
         The Siam Commercial Samaggi
         The Navakij Insurance Pcl.                           15,699,635       13,661,074       15,699,635        13,661,074
         Road Accident Victims Protection Co., Ltd.           5,439,553        9,420,262        5,439,553         9,420,262
         Bangkok Insurance Pcl.                               15,614,320       10,695,163       15,614,320        10,695,163
         Phatra Insurance Pcl.                                10,208,396       10,048,818       10,208,396        10,048,818
         Thaivivat Insurance Pcl.                             10,142,210       5,144,473        10,142,210        5,144,473
         Krung Thai Panich Insurance Co., Ltd.                4,013,234        5,024,428        4,013,234         5,024,428
         The Thai Commercial Insurance Pcl.                        -           1,494,122             -            1,494,122
         The Ayudhaya Insurance Pcl.                          3,585,831        3,391,076        3,585,831         3,391,076
                                                             121,840,119      135,104,598      121,840,119       135,104,598
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report     084
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

                                                                                                    (Unit: Baht)
                                                              CONSOLIDATED                   THE COMPANY ONLY
                                                            2006        2005                  2006          2005
 Due from (to) reinsurers
         The Deves Insurance Pcl.                              -          23,950,336             -           23,950,336
         The Siam Commercial Samaggi
         Dhipaya Insurance Pcl.                          32,742,300       33,485,856       32,742,300        33,485,856
         Phatra Insurance Pcl.                           19,587,057        (159,496)       19,587,057         (159,496)
         MSIG Insurance (Thai) Co., Ltd.                  7,540,275       5,461,337         7,540,275        5,461,337
         The Ayudhaya Insurance Pcl.                      9,842,420       1,682,273         9,842,420        1,682,273
         Krung Thai Panich Insurance Co., Ltd.            2,477,005       4,215,519         2,477,005        4,215,519
         The Navakij Insurance Pcl.                       4,601,809       2,470,576         4,601,809        2,470,576
         Bangkok Insurance Pcl.                          30,689,896       9,176,489        30,689,896        9,176,489
         Road Accident Victims Protection Co., Ltd.      (6,437,962)        288,428        (6,437,962)         288,428
         The Thai Commercial Insurance Pcl.                    -            774,236              -             774,236
         Thaivivat Insurance Pcl.                          (19,107)         423,487          (19,107)          423,487
         Thai Life Insurance Co., Ltd.                       3,070        (1,730,458)            -                -
         Muang Thai Life Assurance Co., Ltd.                   -            307,631              -                -
                                                         105,977,645      81,902,203      105,974,575        83,325,030

Transactions with subsidiary companies and associated companies are not significant, and therefore no disclosure
of such transactions is made.
Amounts deposited and due from (to) reinsurer of The Deves Insurance Plc. were related party transactions by way
of the Company and that company sharing common directors and Muang Thai Life Assurance Co.,Ltd. were related
party transactions by way of the Company and that company sharing common directors and shareholding. In this
year, the Company did not have such a relationship with that company and so there is no presentation of the
outstanding balance as at 31 December 2006.
Directors and management’s remuneration
In 2006 the Company and its subsidiaries paid salaries, meeting allowances and gratuities to their directors and
management totaling Baht 44.5 million (The Company only: Baht 41.1 million) (2005: Baht 41.8 million, The
Company only: Baht 39.7 million).
                                                                      Thai Reinsurance Public Company Limited
                                                                                                Annual Report     085
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005
9. EQUIPMENT
CONSOLIDATED
                                                                                                  (Unit: Baht)
                                    Leasehold       Motor       Office equipment
                                                                                     Computer             Total
                                   improvement     vehicles      and furniture
Cost
31 December 2005                     24,126,142   13,795,820      21,219,951         21,453,944        80,595,857
Purchases                            1,097,895         -           1,719,012         3,165,008          5,981,915
Disposals                                 -       (4,192,681)      (749,000)          (404,850)        (5,346,531)
31 December 2006                     25,224,037    9,603,139      22,189,963         24,214,102        81,231,241
Accumulated depreciation
31 December 2005                     21,490,551   10,155,187      12,862,643         17,079,543        61,587,924
Depreciation for the year             432,601      2,157,550       2,852,170          3,259,456         8,701,777
Depreciation of disposals                 -       (3,868,783)      (269,953)          (266,089)        (4,404,825)
31 December 2006                     21,923,152    8,443,954      15,444,860         20,072,910        65,884,876
Net Book Value
31 December 2005                     2,635,591     3,640,633      8,357,308          4,374,401         19,007,933
31 December 2006                     3,300,885     1,159,185      6,745,103          4,141,192         15,346,365
Depreciation charges in income statements
2005                                                                                                   11,046,869
2006                                                                                                   8,701,777
The Company Only
                                                                                                   (Unit: Baht)
                                    Leasehold       Motor       Office equipment
                                                                                      Computer            Total
                                   improvement     Vehicles      and furniture
Cost
31 December 2005                     24,126,142   13,404,093      19,112,748         17,897,436        74,540,419
Purchases                            1,097,895         -           1,129,139         1,016,450          3,243,484
Disposals                                 -       (4,192,681)      (700,903)          (293,750)        (5,187,334)
31 December 2006                     25,224,037    9,211,412      19,540,984         18,620,136        72,596,569
Accumulated depreciation
31 December 2005                     21,490,551   10,109,039      11,067,056         14,727,071        57,393,717
Depreciation for the year             432,601      2,079,133       2,586,978          2,265,566         7,364,278
Depreciation for disposals                -       (3,868,784)      (264,491)          (244,929)        (4,378,204)
31 December 2006                     21,923,152    8,319,388      13,389,543         16,747,708        60,379,791
Net Book Value
31 December 2005                     2,635,591    3,295,054       8,045,692           3,170,365        17,146,702
31 December 2006                     3,300,885     892,024        6,151,441           1,872,428        12,216,778
Depreciation charges in income statements
2005                                                                                                    9,904,371
2006                                                                                                    7,364,278
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   086
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

As at 31 December 2006 and 2005, the Company and its subsidiaries have certain equipment, with original costs of
Baht 68.7 million and 68.7 million, respectively (Baht 13.6 million and 13.6 million, respectively, for the Company
only), which have already been fully depreciated but still utilised in their operations.

10. INTANGIBLE ASSET
                                                                                                   (Unit: Baht)
                                                          Consolidated                      The Company Only
                                                     2006              2005                2006             2005
Computer software                                 15,556,171       11,340,349          11,179,241       11,340,349
Surplus during acquisition of subsidiary               -            6,973,431                -                -
Additions                                         18,963,341        1,379,660           1,019,000        1,379,660
Amortisations                                     (2,212,660)      (4,137,269)         (1,535,835)      (1,540,768)
Net                                               32,306,852       15,556,171          10,662,406       11,179,241
Amortisation expenses included in
 the income statements for the year               2,243,969          2,238,110         1,535,835          1,540,768


11. DUE FROM REINSURERS
Due from reinsurers are aged, based on due dates, as follows:
                                                                                                   (Unit: Baht)
                                                     Consolidated                       The Company Only
Not yet due                                  222,120,317     170,836,790           220,199,942    164,100,417
Overdue
          1 - 3 months                        34,591,189         26,017,148         31,685,271          25,567,561
          Over 3 months                       21,887,671         28,944,816         17,583,416          28,792,557
Total due from reinsurers                    278,599,177        225,798,754        269,468,629         218,460,535
Less : Major loss                            (27,438,166)       (30,305,311)       (27,438,166)        (30,305,311)
       Allowance for doubtful accounts        (7,137,591)        (9,371,838)        (7,137,591)         (9,371,838)
Total due from reinsurers - net              244,023,420        186,121,605        234,892,872         178,783,386
                                                                                        Thai Reinsurance Public Company Limited
                                                                                                                  Annual Report       087
       Note to Consolidated Financial Statements
       AS AT 31 DECEMBER 2006 AND 2005

       12. LOSS RESERVES AND OUTSTANDING CLAIMS/LOSSES INCURRED DURING THE YEAR
       Consolidated
                                                                                                              (Unit: Thousand Baht)
                                                                                 Non-life
                                                  Life                Marine and                                                  Total
                                                              Fire                     Motor             Miscellaneous
                                                                    transportation
Outstanding claims as at 31 December 2006        7,359      465,919     45,480         21,787               188,942           729,487
Loss reserves
          Balance as at 1 January 2006           6,834      115,026         14,988            3,115          28,587           168,550
          Increase (decrease) during the year
                   Loss fluctuation reserve        -        (23,551)        (2,843)             -           (3,606)          (30,000)
                   IBNR loss reserve              541         (632)          (182)            (517)          2,945            2,155
          Balance as at 31 December 2006         7,375       90,843         11,963            2,598          27,926          140,705
Total loss reserves and outstanding claims      14,734      556,762         57,443           24,385         216,868          870,192
Losses incurred during the year                 116,055     613,242         55,398           44,226         332,600         1,161,521
Increase (decrease) in loss reserves
          during the year                         541       (24,183)        (3,025)           (517)          (661)           (27,845)
Total losses incurred in Income statements      116,596     589,059         52,373           43,709         331,939         1,133,676
       The Company Only
                                                                                                            (Unit: Thousand Baht)
                                                                         Marine and
                                                            Fire                            Motor      Miscellaneous         Total
                                                                       transportation
 Outstanding claims as at 31 December 2006                465,919          45,480          21,787         188,942           722,128
 Loss reserves
    Balance as at 1 January 2006                          115,026         14,988            3,115          28,587           161,716
    Increase (decrease) during the year
           Loss fluctuation reserve                       (23,551)        (2,843)             -           (3,606)           (30,000)
           IBNR loss reserve                                (632)          (182)            (517)          2,945             1,614
    Balance as at 31 December 2006                         90,843         11,963            2,598          27,926           133,330
 Total loss reserves and outstanding claims               556,762         57,443           24,385         216,868           855,458
 Losses incurred during the year                          613,242         55,398           44,226         332,600          1,045,466
 Increase (decrease) in loss reserves during the year     (24,183)        (3,025)           (517)           (661)           (28,386)
 Total losses incurred in income statements               589,059         52,373           43,709         331,939          1,017,080
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   088
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

13. SHARE CAPITAL AND WARRANT
During the current year the warrant holders exercised 5.84 million warrants, and the Company has already
registered the additional share capital with the Commerce Ministry. As at 31 December 2006 there are 0.3 million
outstanding warrants held by existing shareholders (2005: 5.08 million outstanding warrants) and 0.11 million
outstanding warrants held by senior employees which have not been exercised (2005: 1.18 million outstanding
warrants). These remaining warrants expired on 6 November 2006 and 11 June 2006 and can no longer be
exercised to purchase ordinary shares.


14. STATUTORY RESERVE
Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a
statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any),
until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend
distribution.

15. DIVIDEND PAID
Dividends declared in 2006 and 2005 consisted of the following:
                                                                            Total dividends      Dividend per share
                                                   Approved by
                                                                             (Million Baht)            (Baht)
                                           Annual General Meeting of
 a) Final dividends from 2004
                                           the shareholders on 8 April           210.4                   0.18
 retained earnings
                                           2005
 b) Interim dividends on operating
                                        Board of Directors’ meeting
 results for the six-month period ended                                          212.2                   0.18
                                        on 25 August 2005
 30 June 2005
 Total dividend paid in 2005                                                     422.6                   0.36
                                           Annual General Meeting of
 a) Final dividends from 2005
                                           the shareholders on 12                212.7                   0.18
 retained earnings
                                           April 2006
 b) Interim dividends on operating
                                           Board of Directors’ meeting
 results for the six-month period                                                213.0                   0.18
                                           on 31 August 2006
 ended 30 June 2006
 Total dividend paid in 2006                                                     425.7                   0.36
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report   089
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

16. NUMBER OF EMPLOYEES AND RELATED COSTS
                                                   CONSOLIDATED              THE COMPANY ONLY
                                                  2006      2005              2006      2005
 Number of employees at the end of year           140        131               100       104
 Employee cost for the year (Million Baht)         93         85                75        76

17. PROVIDENT FUND
The Company and its employees have jointly established a provident fund in accordance with the Provident Fund
Act (B.E. 2530). The fund is contributed to by both the employees and the Company on a monthly basis, at rates
ranging from 5 to 10 percent of the employees’ basic salaries, based on the length of employment, and will be paid
to employees upon termination in accordance with the fund rules. The fund is managed by Bank of Ayudhya Public
Company Limited.
During the year 2006, the Company and its subsidiary contributed Baht 5 million to the fund (2005: Baht 4.5 million).

18. DIRECTORS’ REMUNERATION
Directors’ remuneration represents the benefits paid to the Company’s directors in accordance with Section 90 of
the Public Limited Companies Act, exclusive of salaries and related benefits payable to executive directors.

19. CORPORATE INCOME TAX / DEFERRED INCOME TAX
Corporate income tax has been calculated at the rate of 25 percent of profit before tax on profit of the Company of
up to Baht 300 million and at the rate of 30 percent on profit over Baht 300 million, after adding back certain
provisions and expenses which are disallowable for the tax computation purposes. The tax rate applied is in
compliance with the provisions of Royal Decree 387 (B.E. 2544) dated 28 August 2001, issued under the Revenue
Code, regarding the reduction of income tax rates.
Corporate income tax has been calculated at the rate of 15 percent and 30 percent for the net profit of the
subsidiary companies after adding back certain provisions and expenses which are disallowable for the tax
computation purposes.
                                                                                    (Unit: Thousand Baht)
                                                        Consolidated             The Company Only
                                                           For the years ended 31 December
                                                     2006           2005         2006            2005
 Income tax on taxable income                      159,185         168,838     126,364         153,961
 Expense (income) in deferred income tax           (10,412)       (23,774)      (5,825)        (22,623)
 Income tax as included in income statements       148,773         145,064     120,539         131,338
                                                                              Thai Reinsurance Public Company Limited
                                                                                                        Annual Report   090
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

The aggregate current and deferred tax relating to items that are charged or credited to shareholders’ equity were
as follows:
                                                                                        (Unit: Thousand Baht)
                                                                                         Consolidated
                                                                                     2006            2005
 Deferred tax relating to surplus on revaluation of investments                     15,637          37,129
Components of deferred income tax presented in balance sheets as at 31 December 2006 and 2005 are as follows:
                                                                             (Unit: Thousand Baht)
                                                      Consolidated            The Company Only
                                                   2006           2005        2006          2005
 Deferred tax assets
 Loss reserves                                   163,577        186,907     159,157       184,857
 Others                                           23,440         23,610      18,688        21,076
                                                 187,017        210,517     177,845       205,933
 Deferred tax liabilities
 Surplus on revaluation of investments            15,637         37,129       8,154        30,279
 Unearned premium reserve                         21,392         31,159      21,392        31,159
 Others                                             387             2          388            2
                                                  37,416         68,290      29,934        61,440
As at 31 December 2006 the subsidiary has unused tax losses of Baht 21 million. Deferred tax assets have not
been recognized in respect of those losses as they may not be used to offset future taxable profits.
As at 31 December 2006 the temporary differences associated with investments in subsidiaries and associates, for
which deferred tax liability has not been recognized, aggregate to Baht 65.8 million (2005: Baht 44.4 million).

20. BASIC EARNINGS PER SHARE / RECONCILIATION OF DILUTED EARNINGS PER SHARE
EARNINGS PER SHARE
Basic 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.
Diluted earnings per share is calculated by dividing net income for the year by the weighted average number of
ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to
be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the
conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued.
                                                                                     Thai Reinsurance Public Company Limited
                                                                                                               Annual Report    091
         Note to Consolidated Financial Statements
         AS AT 31 DECEMBER 2006 AND 2005

         RECONCILIATION OF DILUTED EARNINGS PER SHARE
                                                                                                                          (Unit: Baht)
                                                                                       Weighted average                    Earnings
                                                        Net earnings
                                                                                       number of shares                    per share
                                                                       For the years ended 31 December
                                                                                    2006             2005
                                                    2006            2005                                                2006     2005
                                                                                   shares           shares
Basic earnings per share
      Net income                                462,279,732     481,780,520      1,182,943,083      1,174,971,069       0.391    0.410
      Dilutive effect of warrants                    -               -             3,424,066          9,001,861
Diluted earnings per share
      Net income of ordinary shareholders
        assuming the conversion of warrants
        to ordinary shares                      462,279,732     481,780,520      1,186,367,149      1,183,972,930       0.390    0.407

         21. UA ARTHORN PERSONAL ACCIDENT INSURANCE SCHEME / COMMITMENT
         The Company was appointed the project manager for the Ua Arthorn personal accident insurance scheme
         (“Scheme”) under a syndicated agreement among 50 member non-life insurance and life assurance companies,
         whereby the member companies provide personal accident insurance on a pool basis to public, government official
         and student. Under the terms of the agreement all member companies are jointly responsible for any losses
         incurred by the Scheme, and the Company receives a management fee as compensation for its work. During the
         year, the Company recorded management fee income amounting to Baht 1.30 million (2005: Baht 1.43 million).
         During the year, the member companies of Ua Arthorn Student Accident Insurance Program approved a resolution
         to liquidate such program. The Company, as the project manager, has closed the books of the program and is in
         the process of liquidating it.
         As at 31 December 2006 the financial statements of the projects, which were prepared by the Company’s
         management and have not yet been reviewed by an auditor, present the following asset and liability balances:
                                                                                      Balance of assets and liabilities
                                                                    Commence
                                                                                        in the financial statements
             Assets & Liabilities
             Ua Arthorn Accident Insurance Program               September 2003          Baht      101.01 million
             Ua Arthorn Student Accident Insurance Program          May 2004             Baht      2.82 million
                                                                                   Thai Reinsurance Public Company Limited
                                                                                                             Annual Report    092
 Note to Consolidated Financial Statements
  AS AT 31 DECEMBER 2006 AND 2005

 22. STATEMENTS OF CASH FLOWS
 Cash and cash equivalents as reflected in the statements of cash flows consist of:
                                                                                              (Unit: Baht)
                                                               CONSOLIDATED                     THE COMPANY ONLY
                                                             2006        2005                    2006        2005
Cash and deposits of financial institutions               351,803,645 99,891,778              224,745,552 89,666,211
Deposits at other financial institutions                  288,509,303 410,500,000             216,000,000 362,000,000
Less : Amounts with maturity of more than 3 months
         - unpledged                                     (247,500,000)           -           (190,000,000)           -
Cash and cash equivalents                                 392,812,948       510,391,778       250,745,552       451,666,211

 23. FINANCIAL INFORMATION BY SEGMENT
 The Company and subsidiaries’ main business is the reinsurance business and other related services. The
 Company has only one geographical segment because the Company operates only in Thailand. No disclosure of
 financial information by segment is made because other related service business’s revenue and assets represent
 only 1% of total revenues and total assets, which are immaterial.

 24. FINANCIAL INSTRUMENTS
 Significant financial instruments carried in the balance sheet include cash and cash equivalents, deposits at
 financial institutions, investments in securities, loans, and amounts due from (to) reinsurers.
 Financial risk management policies
 The Company is exposed to risks from changes in interest rates and risks from nonperformance of contractual
 obligations by counterparties. The Company has no policy to use derivatives to manage interest rate risk because
 the Company considers that its financial assets and liabilities carry interest rates which will be fluctuated in line with
 market rates, and will reach repricing or maturity dates in the near future or are short-term in nature. In addition, the
 Company has a policy of entering into contracts with creditworthy counterparties. Therefore, it does not expect any
 material financial losses to be arisen from that the counterparties will fail to discharge their obligations as stipulated
 in the financial instruments contracts.
 The Company has no policy to hold or issue derivatives for speculative or trading purpose.
 Credit risk for the reinsurance
 Concentrations of the credit risk with respect to uncollected reinsurance premiums are insignificant as the
 Company’s prudent credit policy and the large number and diversity of the entities comprising the Company’s
 customer base, the Company does not anticipate material losses from its debt collection and the management
 believes that the maximum exposure to credit risk is the book value of asset after deduction of allowance for
 doubtful accounts as presented in balance sheet.
                                                                                   Thai Reinsurance Public Company Limited
                                                                                                             Annual Report   093
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005


Interest rate risk
Interest rate risk is the risk that the value of a financial instrument and cash flow will fluctuate due to changes in
market interest rates.
Consolidated
                                                                                    (Unit: Thousand Baht)
                                                           Book Value as at 31 December 2006
                                                     Floating interest rate       Fixed interest rate
 Deposits at financial institutions                         65,804                     286,000
 Investments in securities
          Bonds                                                -                           225,160
          Treasury bills                                       -                            9,980
          Notes                                            35,500                          253,009
          Debentures - net                                  93,828                         515,885
 Total                                                     195,132                        1,290,034
The financial instruments carrying interest at fixed rates are classified below, according to the period from the
balance sheet date to the contractual reprising date or to the maturity date (whichever date is earlier):
                                                                                            (Unit: Thousand Baht)
                                                                                           Average interest rate
                                      Within 1 year Over 1 year               Total
                                                                                           (percent per annum)
 Deposits at financial institutions      286,000               -             286,000                5.16
 Investments in securities
           Bonds                         156,455            68,705           225,160                4.29
           Treasury bills                 9,980                -              9,980                 4.69
           Notes                         253,009               -             253,009                5.41
           Debentures - net              253,300           262,585           515,885                4.62
 Total                                   958,744           331,290          1,290,034
The Company Only
                                                                                   (Unit: Thousand Baht)
                                                           Book Value as at 31 December 2006
                                                     Floating interest rate       Fixed interest rate
 Deposits at financial institutions                         42,746                     182,000
 Investments in securities
          Bonds                                                -                           162,183
          Notes                                            26,000                          190,000
          Debentures - net                                  58,396                         361,269
 Total                                                     127,142                         895,452
                                                                                   Thai Reinsurance Public Company Limited
                                                                                                             Annual Report   094
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005

The financial instruments carrying interest at fixed rates are classified below, according to the period from the
balance sheet date to the contractual repricing date or to the maturity date (whichever date is earlier):
                                                                                            (Unit: Thousand Baht)
                                                                                          Average interest rate
                                     Within 1 year Over 1 year               Total
                                                                                          (percent per annum)
 Deposits at financial institutions     182,000               -             182,000                 5.22
 Investments in securities
          Bonds                         146,771            15,412           162,183                 4.76
          Notes                         190,000               -             190,000                 5.41
          Debentures - net              168,436           192,833           361,269                 4.51
 Total                                  687,207           208,245           895,452
Fair value
Fair value represents the amount for which an asset could be exchanged or a liability settled between
knowledgeable, willing parties in an arm’s length transaction.
The following methods and assumptions were used by the Company and its subsidiary companies 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 investments and the investments in subsidiaries and associates cannot be accurately
determined, and so no disclosure is made.
The fair value of deposits at financial institutions, treasury bills and notes with maturity periods of less than 90 days
is based on their carrying value. For those with maturity periods longer than 90 days, fair value is estimated using a
discounted cash flow analysis based on the current interest rate and the remaining period to maturity.
The fair value of bonds and debentures are based on quoted market prices or lowest quoted prices by The Thai
Bond Market Association or Banks.
Mortgage loans
For floating interest rate loans with no significant credit risk, fair value is based on carrying value. The fair value of
fixed interest rate loans is estimated using a discounted cash flow analysis based on the current interest rate.
Since major financial assets and financial liabilities are short-term in nature, and loans carry interest at rates which
approximate market rates, the fair values of financial assets and financial liabilities are estimated to be close to the
amounts presented in the balance sheet.
                                                                               Thai Reinsurance Public Company Limited
                                                                                                         Annual Report   095
Note to Consolidated Financial Statements
AS AT 31 DECEMBER 2006 AND 2005


25. COMMITMENT
25.1 Capital commitments
As at 31 December 2006, two subsidiary companies had capital commitments of approximately Baht 38.2 million,
relating to the development and maintenance computer software.
25.2 Operating lease commitments
The Company and its subsidiary have entered into several lease agreements in respect of the lease of office
building space and motor vehicles.
Future minimum rentals payable under these leases as at 31 December 2006 are as follows:
 Payable within :             Million Baht
 1 year                            3.8
 2 to 5 years                      4.6
                                   8.4

26. RECLASSIFICATION
Certain amounts in the financial statements for the year ended 31 December 2005 have been reclassified to
conform to the current year’s classifications, with no effect on previously reported net income or shareholders'
equity.

27. APPROVAL OF FINANCIAL STATEMENTS
These financial statements were authorised for issue by Audit Committee on 7 February 2007.

				
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