EMCS Thai Company Limited

THREL : Submission of the Opinion of Independent Financial Advisor regarding the sale of all shares of EMCS Thai Company Limited

September 7, 2017

Subject: Submission of the Opinion of Independent Financial Advisor regarding the Connected Transaction of the Company

To: The President The Stock Exchange of Thailand

Enclosure: 1. Opinion of Independent Financial Advisor regarding the Connected Transaction of the Company

The Board of Directors Meeting No. 4/2017 of Thaire Life Assurance Public Company Limited (the “Company”), held on July 26, 2017, resolved to propose to the Shareholders Meeting to consider and approve the sale of all shares of EMCS Thai Company Limited (“EMCS”) held by the Company in the number of 1,200,000 shares, equivalent to 20 percent of the total number of shares of EMCS, at the price of Baht 50 per share, totaling Baht 60,000,000 to Thai Reinsurance Public Company Limited (“THRE”) (the “Share Sale Transaction”).

In this respect, THRE is a major shareholder of the Company, as at August 10, 2017 (the latest book closing date of the Company) THRE holds 17.45 percent of the issued shares of the Company. Therefore, the Share Sale Transaction is considered as a connected transaction under the Notification of the Capital Market Supervisory Board No. TorChor.21/2551 Re: Rules on Connected Transactions and the Notification of the Board of Governor of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies concerning Connected Transactions B.E. 2546 (2003) (as amended) (the “Connected Transaction Notifications”). The transaction size is equivalent to 4.5205 percent of the net tangible assets of the Company based on the consolidated financial statement of the Company as at March 31, 2017. In respect of the Share Sale transaction, the Company shall proceed as follows:

1) Disclose the information memorandum on the Share Sale Transaction to the Stock Exchange of Thailand (the “SET”) according to the Connected Transaction Notifications;

2) Convene the shareholder meeting of the Company to consider and approve the Share Sale Transaction with a vote of not less than three-fourths of the total votes of the shareholders attending the meeting and having the right to vote; and

3) Appoint an Independent Financial Advisor to provide the opinion on the Share Sale Transaction; the opinion shall be sent to the Securities and Exchange Commission (the “SEC”), the SET, and the Shareholders of the Company.

In this regard, the Company would like to submit the copies of Opinion of Independent Financial Advisor regarding the Connected Transaction of the Company to the Office of the Securities and Exchange Commission, the Stock Exchange of Thailand and shareholders of the Company for your consideration.

OPINION OF THE INDEPENDENT FINANCIAL ADVISOR page 2

Please be informed accordingly

Yours sincerely,

(Mr. Sutti Rajitrangson)

President


- Translation -

Opinion of the Independent Financial Advisor regarding Disposition of Assets and Connected Transactions

of

Thaire Life Assurance Public Company Limited

Presented to the Shareholders of Thaire Life Assurance Public Company Limited

Prepared by

Wealthiest BCA Company Limited

29 August 2017

THAIRE LIFE ASSURANCE PUBLIC COMPANY LIMITED


DISCLAIMERS

1) The results of the study conducted by Wealthiest BCA Company Limited (“WBCA” or “Independent Financial Advisor” or “IFA”) are based on information and assumptions provided by the management of Thaire Life Assurance Public Company Limited and the information disclosed to the public on the websites of the Securities and Exchange Commission (www.sec.or.th) and the Stock Exchange of Thailand (www.set.or.th).

2) IFA conducted the study with knowledge, skills, and reasonable professional care. 3) IFA shall not be responsible for the profits or the losses and any impacts resulting from this

transaction. 4) IFA considered and provided opinion based on prevailing conditions and information as perceived at

the time of the study. If market conditions change significantly in the future, the results of the study in this report may be affected. The shareholders shall then be careful in acknowledging the said information for further making decision.

5) The opinion provided by IFA is based on the assumptions that the information and documents received are true and correct without any essential changes; and that the economic conditions and information considered are only at the time of the study. If such factors are changed significantly from that present situation; the Company may be affected from the said changes and may consequently affect this transaction. Hence, the IFA opinion provided shall not assure future significant impact on the Company.

http://www.set.or.th/



Table of Contents ABBREVIATION ................................................................................................................................................. 4

Executive Summary ............................................................................................................................................. 11

1. NATURE AND DETAILS OF THE TRANSACTION ................................................................................. 14

1.1. Transaction Date ............................................................................................................................. 14

1.2. Contractual Parties and relationship with the Company ................................................................. 14

1.3. General Characteristics of the Transaction ..................................................................................... 14

1.4. Transaction Size ............................................................................................................................... 15

1.4.1. The Transaction Size Calculation under the Acquisition and Disposition Notifications ...... 15

1.4.2. The Transaction Size Calculation under the Connected Transaction Notifications ............ 16

1.5. Payment Terms and Conditions of the Transaction ........................................................................ 16

1.6. Details of the Relevant Assets ......................................................................................................... 17

1.6.1. Details of EMCS Thai Company Limited .............................................................................. 17

1.6.2. Background and Significant Changes and Development ..................................................... 17

1.6.3. Overview of Business Operation .......................................................................................... 17

1.6.4. Industry and Competitions .................................................................................................... 21

1.6.5. Market and Competition ........................................................................................................ 23

1.6.6. The Shareholding Structure .................................................................................................. 26

1.6.7. List of Shareholders of EMCS as at 31 March 2017 ........................................................... 27

1.6.8. List of Shareholders of EMCS after the Transaction ........................................................... 27

1.6.9. List of the Board of Directors of EMCS as at 31March 2017 .............................................. 27

1.6.10. List of the Board of Directors of EMCS after the Transaction ............................................. 27

1.6.11. Financial Summary ................................................................................................................ 28

1.7. Value of the Disposed Assets .......................................................................................................... 30

1.8. Basis Used to Determine the Value of Consideration ..................................................................... 30

1.9. Terms and Conditions of the Transactions ...................................................................................... 30

1.10. Characteristics and Scope of Interests of Connected Persons ...................................................... 31

1.11. Plans for utilizing Proceeds received from the Transaction ............................................................ 32

1.12. Directors Who have Interest and/or are Connected Persons in this Transaction .......................... 32

1.13. Opinion of the Board of Directors and the Audit Committee regarding the Transaction ............... 32

1.14. Opinion of the Audit Committee and/or the Director which is Different from the Board of Directors’ Opinion ............................................................................................................................................... 32



2. RATIONALE AND REASONABLENESS OF THE TRANSACTION ........................................................ 34

2.1. Objectives and Necessity of entering into the Transaction ............................................................. 34

2.1.1. Objectives and Necessity of THRE ...................................................................................... 34

2.1.2. Objectives and Necessity of THREL .................................................................................... 37

2.2. Advantages and Disadvantages of the entering and non-entering into the Transaction ............... 38

2.2.1. Advantages of the entering and Disadvantages of non-entering ........................................ 38

2.2.2. Disadvantages of the entering and advantages of non-entering ......................................... 40

2.3. Comparison of advantages and disadvantages of entering into the Transaction with connected person and with third person .................................................................................................................... 41

2.3.1. Advantages from entering the Transaction with connected person..................................... 41

2.3.2. Disadvantages from entering the Transaction with connected person ................................ 41

2.4. Risk factors from entering / not-entering / unable to entering the Transaction ............................. 43

3. REASONABLENESS OF THE OFFERING PRICE AND CONDITIONS OF THE TRANSACTION ...... 44

3.1. Book Value Approach....................................................................................................................... 44

3.2. Adjusted Book Value Approach ....................................................................................................... 45

3.3. Price to Book Value Ratio Approach or P/BV Ratio ....................................................................... 45

3.4. Price-to-Earnings Ratio Approach or P/E Ratio .............................................................................. 48

3.5. Discounted Cash Flow Approach ..................................................................................................... 49

3.6. Summary of the Appropriateness of the EMCS’s Ordinary Shares Offering Price ........................ 83

4. SUMMARY OF THE INDEPENDENT FINANCIAL ADVISOR OPINION ................................................ 85

Attachment 1 Investment plan of EMCS ............................................................................... Attachment 1 page 1

Attachment 2 Internal (unaudited) Financial statement of EMCS as of 30 June 2017 ....... Attachment 2 page 1



ABBREVIATION

Abbreviation Meaning Office or SEC The Office of the Securities and Exchange Commission Exchange or SET The Stock Exchange of Thailand MAI The Market for Alternative Investment OIC Office of Insurance Commission the Company or THREL or the Seller Thaire Life Assurance Public Company Limited THRE or the Major Shareholder or the Buyer

Thai Reinsurance Public Company Limited

EMCS or the Target EMCS Thai Company Limited THRES Thaire Services Company Limited THRET Thaire Training Company Limited BKI Bangkok Insurance Public Company Limited TP Mr. Thongchai Phanumaporn NW Mrs. Nawarat Wongthitirat Merimen Merimen Group and/or Merimen Technologies (Thailand) Company

Limited Independent Financial Advisor: IFA or WBCA

Wealthiest BCA Company Limited

The Group of Companies or the Group Thai Reinsurance Public Company Limited together with its subsidiaries, associated companies, and connected person, which including but not limited to THREL, EMCS, THRES, THRET, etc.

EGM Extraordinary General Meeting Connected person or Connected persons Thaire Life Assurance Public Company Limited and Thai

Reinsurance Public Company Limited as the Buyer and EMCS Thai Company Limited as the Target

Other shareholders Bangkok Insurance Public Company Limited, Mr. Thongchai Phanumaporn and Mrs. Nawarat Wongthitirat

Notification of Connected Transaction Rules

The Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions and

Notification of Connected Transaction Disclosure

The Notification of the Board of Governor of the Stock Exchange of Thailand No. BorChor/Por 22-01 Re: Disclosure of Information and Other Acts of Listed Companies concerning Connected Transactions B.E. 2546 (2003)

IM 1 Information Memorandum on the Disposal of Assets and Connected Transaction of THREL dated 26th July 2017.

IM 2 Information Memorandum on the Disposal of Assets and Connected Transaction of THREL dated 29th August 2017.

Information Memorandum Both two issues of Information Memorandum on the Disposal of Assets and Connected Transaction of THREL.

SPA Share Purchase Agreement dated 26 July 2017 between Thai Reinsurance Public Company Limited as the Buyer and Thaire Life Assurance Public Company Limited as the Seller



Abbreviation Meaning The Selling Shares Common shares of EMCS Thai Company Limited (“EMCS”), a

company limited registered under Thai law with registration number 0105543108248, on the Transaction Date OF 1,200,000 shares, equivalent to 20 percent of the total shares of EMCS according to SPA.

Condition Precedent(s) Condition Precedents according to terms & conditions of SPA No. 3 The Completed Transaction Date The Comp Transaction Date according to terms & conditions of SPA

No. 4 BKI share purchase agreement Share Purchase Agreement dated 25 June 2017 between Thai

Reinsurance Public Company Limited as the Buyer and Bangkok Insurance Public Company Limited as the Seller

TP share purchase agreement Share Purchase Agreement dated 25 June 2017 between Thai Reinsurance Public Company Limited as the Buyer and Mr. Thongchai Phanumaporn as the Seller

NW share purchase agreement Share Purchase Agreement dated 25 June 2017 between Thai Reinsurance Public Company Limited as the Buyer and Mrs. Nawarat Wongthitirat as the Seller

BKI shares transfer forms Shares Transfer Forms dated 7 August 2017 between Thai Reinsurance Public Company Limited as the Transferee and Bangkok Insurance Public Company Limited as the Transferor

TP shares transfer forms Shares Transfer Forms dated 7 August 2017 between Thai Reinsurance Public Company Limited as the Transferee and Mr. Thongchai Phanumaporn as the Transferor

NW shares transfer forms Shares Transfer Forms dated 7 August 2017 between Thai Reinsurance Public Company Limited as the Transferee and Mrs. Nawarat Wongthitirat as the Transferor

Letter No. 1 Letter from THRE to THREL dated 26 April 2017, the offering letter to acquire shares of EMCS at Baht 40 per share with request of response from THREL within 31 May 2017

Letter No. 2 Letter from THRE to THREL dated 25 May 2017, to extend response date of the Transaction to 30 June 2017

Letter No. 3 Letter from THRE to THREL dated 28 June 2017, to inform THREL that other third parties agreed to sell shares to THRE at Baht 50 per share, as a result, THRE become super majority control at 80 percent shares

Letter No. 4

Letter from THRE to THREL dated 29 June 2017, to 2nd extend response date of the Transaction to 31 July 2017

Letter No. 5 Letter from THREL to THRE dated 19 July 2017, to response to the offer with the counter offer to sell shares at Baht 54 per share with request of response on 21 July 2017

Letter No. 6 Letter from THRE to THREL dated 20 July 2017, to confirm pricing at Bath 50 per share as appropriated price because THRE had already entered into same transactions other third parties



Abbreviation Meaning Letter No. 7 Letter from WBCA to THRE dated 1 August 2017, to request for

corporate restructuring plan after acquisition of EMCS shares Letter No. 8 Letter from THRE to WBCA dated 3 August 2017, regarding

corporate restructuring plan after acquisition of EMCS shares Letter No. 9 Letter from WBCA to THREL dated 4 August 2017, to confirm

relationship among the Group of Companies, together with response from THREL

Business Plan (1) Market Situations, Competition Abilities, Strategic Planning, and Business Plan of EMCS; and (2) Updated data on additional Business Plan and Strategic Plan as of 15th August 2017



29 August 2017 To: Board of Directors and Shareholders of Thaire Life Assurance Public Company Limited Subject: Opinion of the Independent Financial Advisor regarding Disposition of Assets and Connected

Transactions of Thaire Life Assurance Public Company Limited Reference:

1. Resolution of the Board of Directors Meeting of Thaire Life Assurance Public Company Limited No. 4/25017 on 26 July 2017

2. Information Memorandum on the Disposal of Assets and Connected Transaction of Thaire Life Assurance Public Company Limited

3. Financial Advisor Opinion regarding Share Valuation of EMCS Thai Company Limited (“EMCS”) presented to the Board of Directors Meeting of Thaire Life Assurance Public Company Limited No. 4/25017 on 26 July 2017

4. Share Purchase Agreement dated 26 July 2017 between Thai Reinsurance Public Company Limited and Thaire Life Assurance Public Company Limited

5. Letter from THRE to THREL dated 26 April 2017, the offering letter to acquire shares of EMCS at Baht 40 per share with request of response from THREL within 31 May 2017

6. Letter from THRE to THREL dated 25 May 2017, to extend response date of the Transaction to 30 June 2017

7. Letter from THRE to THREL dated 28 June 2017, to inform THREL that other third parties agreed to sell shares to THRE at Baht 50 per share, as a result, THRE become super majority control at 80 percent shares

8. Letter from THRE to THREL dated 29 June 2017, to 2nd extend response date of the Transaction to 31 July 2017

9. Letter from THREL to THRE dated 19 July 2017, to response to the offer with the counter offer to sell shares at Baht 54 per share with request of response on 21 July 2017

10. Letter from THRE to THREL dated 20 July 2017, to confirm pricing at Bath 50 per share as appropriated price because THRE had already entered into same transactions other third parties

11. Letter from WBCA to THRE dated 1 August 2017, to request for corporate restructuring plan after acquisition of EMCS shares

12. Letter from THRE to WBCA dated 3 August 2017, regarding corporate restructuring plan after acquisition of EMCS shares

13. Letter from WBCA to THREL dated 4 August 2017, to confirm relationship among the Group of Companies, together with response from THREL

14. Business Plan by Management of EMCS and THRE which had manament signature to confirm the accruracy of information provided.

15. Internal (unaudited) Financial Statements as of 30 June 2017.



The Resolution of the Board of Directors Meeting of Thaire Life Assurance Public Company Limited (the “Company” or “THREL”) No. 4/2017, held on 26 July 2017 at 14.00 hours approved to propose to the Shareholders’ Meeting to consider the approval of the sale of all EMCS Thai Company Limited (“EMCS”) shares, held by the Company, to Thai Reinsurance Public Company Limited (“THRE”) in the amount of 1,200,000 shares, equivalent to 20 percent of the total shares of EMCS, at Baht 50 per share, totaling Baht 60,000,000 (the “Transaction”) according to the offer from THRE whose objectives were to restructure the group of companies under supervision of THRE as well as to increase its investment to improve business efficiency to cope with changes of technology during the past five years and in the future. Besides, EMCS especially requires modern technology and business model to better meet the demand of the market. As a result, THRE offered to buy shares from all shareholders of EMCS.

EMCS was founded on 22nd November 2000 to undertake key business as the leader in providing information technology services, as supplemental services, to manage motor claims for motor insurance, a part of Non-Life Insurance business, for key customers of THRE, which is a Group of Non-Life Insurance Companies. Hence, the customer who uses EMCS service shall benefit from saving the cost of claim, which shall have indirect impact on THRE, a reinsurance company, in reducing its cost of services. However, the Company is a Re-Life Insurance company with a group of Life Insurance Companies, who have no relationship with EMCS business, as customers. Therefore, the investment in EMCS is mainly for financial returns.

The major reason the Board of Directors agreed with the above proposal is that it is the disposal of non-core investment that has no relation with the core business of the Company, which shall not be affected by such disposal. In addition, the Board of Directors is also worried about future market uncertainty caused by International Competitors who show intentions to expand regionally.

In addition to the necessity to restructure the group of companies under supervision of THRE with higher investments and costs to maintain market shares and competitive edges in the future; the risk occurred as a result of the Company’s inability to participate in management decision since THRE has Super Majority Control (comprehensive control)1 over shares of EMCS. Hence, to further hold EMCS shares, the Company may face the risks resulted from (1) Continuous Capital Increase, which shall cause the Company to not be able to maintain benefits that used to receive in the past due to Dilution Effect; (2) Restructuring the group of companies under supervision of THRE might be for the maximum benefit of THRE rather than maintaining maximum benefit of each subsidiary company, which mainly cause THRE to acquire all shares from the shareholders for the flexibility of such restructuring processes.

1 Referred to Letter No. 3: Progress Notification Letter to inform THREL that other third parties agreed to sell shares to

THRE, as a result, THRE become super majority shareholder with 80 percent shares and comprehensive control over EMCS



In this respect, THRE is a major shareholder and a connected person of the Company, as THRE holds 17.47 percent of the issued shares of the Company on 2 May 2017 (the latest book closing date of the Company). Therefore, this Transaction is considered a connected transaction under the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions and the Notification of the Board of Governor of the Stock Exchange of Thailand No. BorChor/Por 22-01 Re: Disclosure of Information and Other Acts of Listed Companies concerning Connected Transactions B.E. 2546 (2003) (as amended) (the “Connected Transaction Notifications”). The Transaction Size is equivalent to 4.5205 percent of the net tangible assets (NTA) of the Company based on the consolidated financial statement of the Company as at 31 March 2017. In respect of the Transaction, the Company shall proceed as follows:

1) Disclose the Information Memorandum on the Transaction to the Stock Exchange of Thailand (the “SET”) according to the Connected Transaction Notifications of which the details are appeared in the Information Memorandum on the Disposal of Assets and Connected Transaction of Thaire Life Assurance Public Company Limited.

2) Organize the Shareholders’ Meeting to seek approval for a decision to enter into a connected transaction hereunder must consist of at least three-fourths of the total votes of shareholders attending the meeting and having voting right. But THRE, who is the shareholder with interest, shall not have voting right in the agendas relating to the Transaction. Besides, the Board of Directors of the Company also approved to hold the Extraordinary General Meeting of Shareholders No. 1/2017 on 22nd September 2017 at 14.00 hours at Victor Club, 8th Floor, Sathorn Square Office Tower, North Sathorn Road, Silom District, Bangkok 10500 with the following agendas: Agenda 1 To consider and adopt the Minutes of the Annual General Meeting of Shareholders

No. 6 Agenda 2 To consider and approve the sale of EMCS Thai Company Limited shares, which

is regarded as a connected transaction. Agenda 3 To consider other issues (if any)

3) Appoint an Independent Financial Advisor (IFA) to provide the IFA Opinion on the Transaction, including the delivery of such opinion to SEC, SET, and the Shareholders of the Company. In this regard, the Company had appointed Wealthiest BCA Company Limited as the Independent Financial Advisor to provide the IFA Opinion on, and conduct any matter relating to the Transaction as specified in the Connected Transaction Notifications.

Moreover, IFA is under the approved lists of SEC and having no relationship with the Company and other related parties on the Transaction.



In preparing this report, IFA had studied and reviewed the documents received from (1) the Company; (2) the Entity whose shares should be sold in the Transaction; and (3) the Entities who should acquire such shares (altogether called “Related Parties”); as well as disclosed information and public information, including other data from public sources and the interviews of the management of the parties involved in the related transaction. However, to give opinion in this report, IFA could neither confirm the accuracy nor the completeness of the Information provided by the parties and/or the management of the parties involved in the related transaction. Besides, this report was developed to provide the opinion on this Transaction only and was based on existing data, at the time of the study, including various assumptions determined in consideration of the possibility of the situation based on actual event. Therefore, any significant changes in the future may affect the Company and its shareholders.

The IFA Opinion contained in this report is developed to provide the opinion on reasonableness of the Transaction to the shareholders. However, the approval of this Transaction is based primarily on each shareholder’s discretion. The shareholders, therefore, have to study all information appeared in this IFA report together with all documents attached with the Notice of EGM and make decision with prudence. In addition, the IFA Opinion may be summarized as follows:



Executive Summary

According to The Resolution of the Board of Directors Meeting of Thaire Life Assurance Public Company Limited (the “Company” or “THREL”) No. 4/2017, held on 26 July 2017 at 14.00 hours approved to propose to the Extraordinary General Meeting of Shareholders No. 1/2017 to consider the approval of the sale of all EMCS Thai Company Limited (“EMCS”) shares, held by the Company, in the amount of 1,200,000 shares, equivalent to 20 percent of the total shares of EMCS, at Baht 50 per share, totaling Baht 60,000,000 to Thai Reinsurance Public Company Limited (“THRE”).

However, THRE is the major shareholder and a connected party of the Company, as of 2 May 2017 (Latest Book Closing Date) on which THRE held 17.47 percent of the issued shares of the Company, therefore, the Transaction is considered as a connected transaction under the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions and the Notification of the Board of Governor of the Stock Exchange of Thailand No. BorChor/Por 22-01 Re: Disclosure of Information and Other Acts of Listed Companies concerning Connected Transactions B.E. 2546 (2003) (as amended) (the “Connected Transaction Notifications”) with the Transaction size equivalent to 4.5205 percent of the Net Tangible Assets (NTA) of the Company appeared in Consolidated Financial Statements as of 31 March 2017.

After consideration of the Transaction Size, it is found out that the Transaction Size is over Baht 20 Million and is over 3 percent of NTA, according to Consolidated Financial Statements of the Company; therefore, the Transaction is considered as a connected transaction of a listed company. Thus, the Company shall have the duty on Information Disclosure to SET, to which the Company already disclosed via ELCID on 26 July 2017. Besides, the Company shall seek approval from the shareholders’ meeting and must consist of at least three-fourths of the total votes of shareholders attending the meeting and having voting right, excluding interested shareholders’ equity.

The Board of Directors Meeting No. 4/2017 on 26th July 2017 granted resolution to call for EGM for the year 2017 to consider the approval of the sale of all EMCS shares, held by the Company to THRE as abovementioned and the approval of appointing Wealthiest BCA Company Limited to be IFA to provide the IFA Opinion on the Transaction to the Company’s shareholders regarding reasonableness and fairness of price and conditions of the connected transaction.

Furthermore, selling EMCS’s common shares, held by the Company, on Transaction Date shall reduce the risk as well as uncertainty that may arise from EMCS’ performance due to future market uncertainty caused by International Competitors who may take significant market shares from EMCS. Only if the Company sells all common shares of EMCS, there shall be no liability to realize the changing in performance of EMCS and no burden to increase capital when EMCS invests into new technology to increase its competitiveness.

However, to enter into the Transaction may cause the Company to lose opportunity to realize future profits from EMCS as related company; if, in the future, EMCS would be able to perform well and maintain profits as in the past and/or gain more profit after restructuring. But when compared



to the uncertainty on growth and performance, such weakness of opportunity loss shall not lower significant effect to the Company. In addition, EMCS Businesses have no relation to the Company’s core business. Under norm of a financial investor, the Company shall decide to exit when such investment had met target return and at an appropriate timing; especially when risk profile of such investment had changed. Besides, a financial investor shall consider to protect downside risk rather than holding such investment for uncertain upside gain. Nevertheless, offering price is considered to be a Market Price as THRE formally informed the Company that THRE had bought shares from third parties (non-related parties) at the same price. As a result, IFA has the opinion that entering into the Transaction is reasonable and shall protect the Company from uncertainty risk that may arise in the future.

IFA had evaluated the fairness of EMCS’s share price by using five approaches: 1) Book Value Approach 2) Adjusted Book Value Approach 3) Price to Book Value Ratio Approach or P/BV Ratio 4) Price-to-Earnings Ratio Approach and 5) Discounted Cash Flow Approach as per following table on the share prices valuation.

(Unit: Baht / Share)

Valuation Approach Price Offering

Price Higher (Lower) than the Offering Price

Higher (Lower) than the Offering Price as

% 1) Book Value 18.52 - 19.17 50.00 (31.48) - (30.83) (62.96) - (61.66) 2) Adjusted Book Value 18.52 - 19.17 50.00 (31.48) - (30.83) (62.96) - (61.66) 3) Price to Book Value Ratio

3.1) As of 30 June 2017 99.09 - 113.03 50.00 49.09 - 63.03 98.18 - 126.07 3.2) As of 31 December 2016 102.56 - 117.00 50.00 52.56 - 67.00 105.13 - 133.99

4) Price to Earnings Ratio 4.1) As of 30 June 2017 69.27 - 73.48 50.00 19.27 - 23.48 38.55 - 46.96 4.2) As of 31 December 2016 73.75 - 78.23 50.00 23.75 - 28.23 47.51 - 56.47

5) Discounted Cash flow* 46.69 - 50.47 50.00 (3.31) - 0.47 (6.63) - 0.94 Remark: *Share value of the EMCS calculated using WACC between (20.16% – 22.16%)

In valuing EMCS’s share, IFA is of an opinion that the valuation by using the

Discounted Cash Flow Approach (“DCF”) is the most appropriate. The value derived by using DCF falls in a range of Baht 46.69 – 50.47 per share. Therefore, the Offering price at Baht 50.00 per share is appropriate and fair because it is in between such range.

In addition, with reference of key terms and conditions in entering into the Transaction, IFA has an opinion that key conditions of entering into the Transaction are under general terms and conditions, and consistent with the rules and regulations of SEC and market price2. As a result, IFA has opinion that terms and conditions of the Transaction are also appropriate.

2 Market price means acquisition price from third person/corporate, not considered as connected as person.



From the above considerations, which may have effects to the shareholders, the IFA is of an opinion that the shareholders should approve to enter into the Transaction. However, in considering the approval or disapproval of the transaction, the shareholders should also study the information and opinions provided in this report together with other information and documents attached to the invitation letter for the shareholders meeting before making a decision. The decision to approve or disapprove the Transaction is at the discretion of the shareholders.



1. NATURE AND DETAILS OF THE TRANSACTION 1.1. Transaction Date 3

The Transaction is expected to be made within the 4th Quarter of 2017, after the approval from the Shareholders’ Extraordinary General Meeting No. 1/2017, to be held on 22 September 2017, under the condition that the Company will sell all of EMCS’ shares to THRE at 9.00 a.m. on the 10th business day after all condition precedents have been met, which is called “Completed Transaction Date,” according to the SPA. This date is expected to happen in late October 2017, under the following processes of Condition Precedents: September 2017 The Shareholders of THRE at the Sharehoders’ Extraordinary General

Meeting grant approval of entering into the Transaction as per Condition Precedents 3(kor) under SPA, which states that “The Seller receives approval from its Sharehoders’ Meeting to sell shares under terms and conditions specified in this SPA.”

October 2017 THRE obtains approval form Office of Insurance Commission (“OIC”) to buy EMCS shares from THREL as per Condition Precedents 3(ngor) under SPA, which states that “The Buyer receives approval from OIC to buy shares under terms and conditions specified in this SPA.”

However, in case the Buyer or Seller has been waived by the other authorized party(ies) at the Buyer’s venue or at any other date, time or the venue that both parties agree upon under such above condition precedents; it might affect the “Completed Transaction Date” to be postponed. 1.2. Contractual Parties and relationship with the Company Seller : Thaire Life Assurance Public Company Limited Purchaser : Thai Reinsurance Public Company Limited Relationship Between the Parties

THRE is a major shareholder of the Company, as at 2 May 2017 (the latest book closing date of the Company), THRE holds 104,790,630 shares, which is 17.47 percent of the issued shares and voting rights of the Company. However, there were no common board members and/or common management and/or common control between both parties, and policies are independent. 1.3. General Characteristics of the Transaction

The Resolution of the Board of Directors Meeting of Thaire Life Assurance Public Company Limited (the “Company” or “THREL”) No. 4/2017, held on 26th July 2017 approved to propose to the Extraordinary General Meeting of Shareholders No. 1/2017 to consider the approval of the sale of all shares of EMCS Thai Company Limited (“EMCS”), a company limited registered under Thai law with registration number 0105543108248, on the Transaction Date. The Company shall sale 1,200,000 shares, equivalent to 20 percent of the total shares of EMCS, at Baht 50 per

3 Data from SPA No. 3 and No. 4



share, totaling Baht 60,000,000, to Thai Reinsurance Public Company Limited (“THRE”); (the “Transaction”) according to offers from THRE who has an anobjective to acquire all common shares from all shareholders of EMCS. Besides, THRE and other shareholders comprise Bangkok Insurance Public Company Limited, Mr. Thongchai Phanumaporn and Mrs. Nawarat Wongthitirat had already signed the Shares Transfer Form on 7 August 2017. As a result, such abovementioned transaction, after completed all actions per condition precedents4 and shares payment, shall be regarded as Completed Transaction.5

However, THRE is the major shareholder and a connected party of the Company, therefore, the Transaction is considered as a connected transaction under the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions and the Notification of the Board of Governor of the Stock Exchange of Thailand No. BorChor/Por 22-01 Re: Disclosure of Information and Other Acts of Listed Companies concerning Connected Transactions B.E. 2546 (2003) (as amended) (the “Connected Transaction Notifications”) with the Transaction size equivalent to 4.5205 percent of NTA of the Company appeared in Consolidated Financial Statements as of 31 March 2017. 1.4. Transaction Size

The entering into this Transaction is the sale of common shares of EMCS to THRE, the connected person, with the Transaction Size of Baht 60 Million calculated from selling price of Baht 50 per share as of 31 March 2017.

1.4.1. The Transaction Size Calculation under the Acquisition and Disposition Notifications The Transaction Size calculation can be summarized as follows:

Calculation Criteria Calculation formula Transaction

Size

1. Net tangible asset (NTA) value NTA of EMCS x % of investment / NTA of the Company = (107,353,447.51 x 20%) / 1,327,280,313.00

1.6176%

2. Net profit from operating results net profit of EMCS x % of investment / net profit of the Company =(44,779,648.16 x 20%) / 327,986,445.00

2.7306%

3. Total value of consideration value of consideration received or paid / total assets of the Company =60,000,000.00 / 2,196,638,727.00

2.7314%

4. Value of equity issued as number of shares issued for payment / number of issued and paid-up shares Not applicable as no new share is issued for payment

4 In this context, the condition precedents indicated that “the Buyer obtains approval from Office of Insurance Commission

(OIC) to buy shares according to terms and conditions of this SPA.” 5 IFA has no document that clearly identified, at the date on which IFA issued this report, that the aforementioned

transaction was completed. However, as the parties already signed the SPA, it could be assured that the said transaction might really happened at the appropriate time, which might be before, at the time of, or after the Completed Transaction Date, according to the SPA between THRE and THREL (following the probability of the process, it should rather be before the Completed Transaction Date.)



Total Consideration Received

NTA of the Company1

60,000,000

1,327,280,313.00

Calculation Criteria Calculation formula Transaction

Size consideration for the assets

Remark: Based on the reviewed consolidated financial statements of the Company ended March 31, 2017 and the unaudited financial statements of EMCS ended March 31, 2017 .

The Transaction Size calculated based on the Total value of consideration criterion, which gives the highest Transaction Size, is equivalent to 2.7314 percent (based on the reviewed consolidated financial statements of the Company ended March 31, 2017). Since the Transaction Size is lower than 15 percent, the Company, therefore, has no obligations under the Acquisition and Disposition Notifications.

1.4.2. The Transaction Size Calculation under the Connected Transaction Notifications The Transaction is also considered as a connected transaction with the Transaction

Size exceeding 3 percent of NTA of the Company; the Transaction Size calculation of the connected transaction can be summarized as follows: The calculation of the net tangible assets NTA = total assets – total liabilities – net intangible assets – deferred tax assets – net deferred commission expenses = 2,196,638,727.00 – 748,244,871.00 – 25,575,841.00 – 33,348,341.00 – 62,189,361.00 = Baht 1,327,280,313.00

Transaction size = = = 4.5205 % Remark: 1The Net tangible assets of the Company (NTA) based on the reviewed consolidated financial statements of the Company ended March 31, 2017.

The transaction size calculated based on the total consideration received criterion, which gives the highest value, is equivalent to 4.5205 percent of the net tangible assets of the Company based on the reviewed consolidated financial statements of the Company ended 31 March 2017.

In this regard, the Company shall disclose the information memorandum on the Transaction to the SET and convene the shareholders’ meeting of the Company to consider and approve the Transaction with a vote of at least three-fourths of the total votes of the shareholders attending the meeting and having voting right, excluding the shareholders with interest. The notice of the shareholder meeting together with the opinion of the Independent Financial Advisor shall be sent to the shareholders not less than 14 days prior to the shareholders’ meeting. 1.5. Payment Terms and Conditions of the Transaction

THRE will make a full payment of Baht 60,000,000 in cash to the Company and the Company will transfer the shares of EMCS to THRE on the same day (“Completed Transaction Date”) 6.

6 The details appeared in Part 1, No. 1.1 of this report.



1.6. Details of the Relevant Assets 1.6.1. Details of EMCS Thai Company Limited

Registration Number 0105543108248 Address 48/21 Soi Rajchadapisek 20, Rajchadapisek Road, Samsen Nok Sub-District,

Huaykwang District Bangkok Registered Capital Baht 30,000,000 Number of shares 6,000,000 shares Par value (per share) Baht 5 Paid-up capital Baht 30,000,000

1.6.2. Background and Significant Changes and Development EMCS Thai Company Limited (“EMCS”) was founded on 22nd November 2000 with

initial capital of Baht 20 Million to provide information technology products and services as tools to manage motor claims for motor insurance related businesses. EMCS was a joint venture between (1) Thai Reinsurance Public Company Limited with approximately 25 percent shares; (2) Thaire Life Assurance Public Company Limited with approximately 20 percent shares; (3) PAC Total Solutions Sdn. Bhd., an International Information Technological Company from Malaysia with approximately 45 percent shares; and (4) Mr. Thongchai Phanumaporn with approximately 10 percent shares. 2002 PAC Total Solutions Sdn. Bhd. sold half of its shares to Bangkok Insurance Public

Company Limited (“BKI”), thus, BKI became shareholder with 22.50 percent shares of EMCS

2003 EMCS capital increased to Baht 27 Million and increased again to Baht 30 Million with the same group of shareholders but different structure;

2004 EMCS capital increased to Baht 40 Million with new shareholder, Mr. Chai Sophonpanich

2009 EMCS capital reduced to Baht 30 Million whereas PAC Total Solutions Sdn. Bhd. exited from EMCS and at the end of year 2009, Mr. Chai Sophonpanich sold shares to Mrs. Nawarat Wongthitirat

2017 The Board of Directors of THRE resolved to buy shares of EMCS from other shareholders at Baht 50 per share.

1.6.3. Overview of Business Operation EMCS is the leader in Information Technology for Motor Claim Solutions for the Non-

Life Insurance Industry in Thailand who provides additional services to Non-Life Insurance Companies, core customers of THRE, who shall receive benefits from Claim Management Cost Saving, which used to be based upon lots of man-power. In addition, EMCS also has other clients including (1) Garage Repair Shops; (2) Authorized Car Dealers; (3) Parts Suppliers; (4) Windscreen Service Shops; (5) Survey Companies; and (6) Car Owners; whereas EMCS shall receive Service Fee Per Transaction or Other Services’ Fees.

Business Structure and Group of Customers



THRE’s main business is the reinsurance of all types of non-life insurance of which the key group of customers consists of 55 insurance companies. In order to provide integrated services, THRE had set up EMCS to provide services for the said key group of customers. At present, the total number of EMCS’ customers is 39 companies whose customers are insurers or car owners and authorized car dealers. When there are claims after car accidents, the customers of those non-life insurance companies have to use the services of survey companies, garage repair shops, windscreen service shops and part suppliers. However, EMCS’ IT Claim System covers all customer groups as shown in the following diagram.



EMCS Business Model

*The total 39 key customers of EMCS, which are primary sources of revenue of the Company, are the customers of THRE.

Car Reparing BusinessCar Owners / Dealers (377)

The total 39 key customers of EMCS*

Non-Life Reinsurer Business Non-Life Insurer Business

80% of Car Insurer are EMCS’s customers

THREInternational

Insurers

Subsidiaries of

Banks

Others

Garage Repair 1,670 Shops

Parts Suppliers127 Shops

Windscreen Services171 Shops

Survey Companies

369 Shops



Vision “To formulate an industry standard of motor claim solutions in Thailand” Standard Systems for vehicle crash repair sphere include setting standard charges for

crash repairs that are accepted by all Garage Repair Shop Members for time saving in claim costs evaluation processes and also setting standard cost for Parts Supplies that are acceptable by both Insurance Companies and Garage Repair Shop Members as well as ensuring same quality and safety of repair by Garage Repair Shop Members. Besides, the standard of repair quality is also set to increase the standard level of the garage repair shop and the standard of Electronic Motor Claim Solutions for car insurance including related statistics preparation. Mission “To be the pioneer service provider of the electronic motor claim solutions to

insurer and repairers” The Mission is for achieving the major objectives of minimizing the cost of claims by

non-life insurance companies, including garage repair shops, with accepted standard costs agreed in advance; increasing the quality level and the efficiency of garage repair shops to maximum effectiveness by organizing correct cost data of labor and spare parts to ensure quick and accurate claim.

To accomplish such mission, EMCS was the first and only organization to develop E-Claim Solutions in Thailand and provide services for Non-Life Insurance Companies. (Other E-Claim Systems in Thailand might have been developed but for the use within large Non-Life Insurance Companies only, not for outside service.) E-Claim Systems shall enable fast, easy and accurate evaluation of damages and submission of repair price for approval. In addition, E-Claim Systems would help decrease the amount of unnecessary jobs and increase the accuracy as well as efficiency, resulting in less time consuming and lower costs.

E-Claim System Processing starts with Computerized Evaluating System which is the linkage between Non-Life Insurance Companies and Garage Repair Shop Members in Claims communication through internet. Under this system, the digital pictures of the damage that are sent shall be evaluated for repairing costs, using the set-in-advance standard costs that are developed from the cost of standard Garage Repair Shops. Moreover, most of the evaluation of spare parts cost in the market can be processed at once via the system; due to parts databases classifying car data by Types / Brand, which enable easy search. The system then is the center for collection of data and claim statistics. With said statistics, the system is able to not only calculate costs of labor and spare parts but also send claims at once via the internet for repair approval.

Such processes enable E-Claim Systems to increase efficiency and accuracy of motor insurance damages and claims, speed up repair approval system, reduce steps in price examined and eliminate the delay in waiting for the survey officers from the insurance companies to reexamine the damages at the repair garage. Hence, claims evaluation that are standardized shall eliminate issues on wrong parts supplied with easy cost estimation and control to reduce the costs and expenses of related corporations and increase customers’ satisfaction and trustworthiness.



1.6.4. Industry and Competitions The Thai government is working hard to promote “Thailand 4.0” as a new gimmick

and economic model aimed at pulling Thailand out of (1) a middle-income trap; (2) an inequality trap; (3) an imbalanced trap as well as country revolution to gain sustainable wealth whereas Insurance Industry, which is a finance industry, shall have to adapt both organization strategies and embedded technological innovation called Fintech. The survey of PwC7 indicated that Thailand is the top social media shoppers who use more than 51 percent internet shopping, through which insurance industry has been one of the highest growth. Thus, as a result of industry analysis, there shall be several factors that affect EMCS businesses, which are as follows:

1) The New Standards issued by Office of Insurance Commission In order to increase confident and safety for consumers in purchasing insurance

policy through online channels, the Office of Insurance Commission (OIC) in Thailand announced that it had approved, in principle, notifications that set out the criteria, procedures, and conditions for issuing and offering for sale of both life and general insurance products through online channels B.E. 2560, which insurance companies and brokers shall have to improve their database standards as well as sharing systems or disclosure through electronic transactions or regulations or other standards according to OIC announcement.

Consequently, EMCS who is the leader in Information Technology for Motor Claim Solutions for Non-Life Insurance Industry in Thailand and having connecting systems as well as providing efficiency services to manage claims of Non-Life Insurance Companies, Survey Companies, Authorized Car Dealers, Garage Repair Shops, Windscreen Service Shops, and Parts Suppliers, shall require higher standard development of IT Systems especially IT Safety Systems according to OIC. EMCS then plans to develop Safety Systems including but not limited to ISO27001: Information Security Management System (ISMS); ISO20000: Information Technology Service Management Systems (SMS); and CMMI: Capability Maturity Model Integration.

2) Claims per Policy Trends As the Royal Thai Government explores ways to bolster political commitment on road

safety, improves effectiveness of road safety law enforcement, increases penalties, promotes safety drive using information technology to reduce accidents; the ratio of claims per insurance policy, therefore, continues to decrease of which the data from year B.E. 2549-2558 are shown in following table and graph, with 3.00 percent per annum in average. This is the key revenue driver of EMCS.

7 PwC indicated that Thais are top online shopper of the world in “Millennium Era”, the Leader of Mobile Shopping

https://thaipublica.org/2016/04/pwc-18-4-2559/

https://thaipublica.org/2016/04/pwc-18-4-2559/



Table: Annual Claims per Policy

3) International Competitors

In 2017, in addition to Government Policy Challenge, there shall be challenges from International Competitors who enter into this region. One of the scariest for EMCS is Merimen Technology (Thailand) Company Limited, registered on 10th February 2017 and is a subsidiary company of Merimen Group (“Merimen”) who is the Marketing leader of Integrating System Platform that exchanges data through the same system for Insurance Industry and initiated the provision of software service for Motor Industry Insurance via website application (SaaS). Major Clients are Global Non-Life Insurance Companies who use Merimen systems that have more modules than those of EMCS, which are shown in the following picture:

59.41 55.65 54.06 52.23

48.69 48.43 48.68 48.09 45.42 44.06

2549 2550 2551 2552 2553 2554 2555 2556 2557 2558

Year Policy Count Claim Count Claim Count/Policy Count (%) % Change YoY 2549 3,463,197 2,057,336 59.41 2550 4,036,625 2,246,253 55.65 -6.33% 2551 4,229,538 2,286,627 54.06 -2.85% 2552 4,279,208 2,234,953 52.23 -3.39% 2553 5,127,698 2,496,891 48.69 -6.77% 2554 5,686,441 2,754,211 48.43 -0.53% 2555 6,824,608 3,322,403 48.68 0.51% 2556 7,361,708 3,540,237 48.09 -1.22% 2557 7,681,346 3,489,091 45.42 -5.55% 2558 8,171,249 3,600,431 44.06 -3.00%

Average Changes YoY -3.23%



In addition to numbers of modules, Merimen has very strong Clients’ Base, not only Global Non-Life Insurance Companies which are Merimen Group’s Clients, but also Finance Institutions (especially banks), who are clients base of Silverlake, the mother company of Merimen who has more than 25 years experiences with several industries including but not limited to banks, insurance, retails, and logistics. Currently, clients of Merimen have already used Merimen Systems overseas, while EMCS has only one module of Non-Life Insurance Systems. As a result, EMCS is required to adapt its system to International Standard or otherwise losing its clients to Merimen. Example There is a case of a non-life insurance company which has overseas mother company using GuideWire System of Merimen, and the mother company required its subsidiaries to change their systems to the same systems of GuideWire within the 4th Quarter of 2016. But Merimen Thailand is not yet ready to implement E-Claim System for Motor Industry, which is only 1 Module out of 5 Modules to be implemented in Thailand, whereas the other 4 are successfully adjusted to GuideWire. The Clients, therefore, requested EMCS to adjust its system with GuideWire in order to be able to continue using EMCS services, while EMCS had an opinion that without such system development, Merimen shall try harder to quickly set up its system in Thailand.

1.6.5. Market and Competition

1) Charateristics of Clients and Target Group EMCS’s Target Clients are (1) Non-Life Insurance Companies (2) Garage Repair

Shops; (3) Authorized Car Dealers; (4) Parts Suppliers; (5) Windscreen Service Shops; (6) Survey Companies; and (7) Car Owners.

Key Group of Clients are Non-Life Insurance Companies that received licenses from Minister of Finance to undertake Non-Life Insurance Businesses to reinsure various damages, such as damages from fire, car accident, marine and logistics. The latest data during January – December 2016,8 indicated that there are 55 Non-Life Insurance companies in total with 8,626,006 voluntary non-life insurance policies, of which 6,907,017 policies accounted for 80 percent of total insurance policies belonged to 39 companies, who are EMCS’s Clients. The 16 remaining companies with 1,718,989 insurance policies or 20 percent of the total policies may have used their own developed systems.

8 The data of all Non-Life Insurers, THRE’s clients in re-insurace business, from THRE base data that are sent to OIC via

electronic channel.



The 39 key company clients of EMCS can be divided into (1) International Insurers - 11 companies; (2) Top 5 Local Insurers; and (3) Others local insurers. The ratio of revenue based on claims in the year 2016 is shown as follows:

2) The Company’s Competitiveness

For more than a decade, although EMCS has no definite competitor, there has been several losses of the customers due to its weak internal management system. Key issues are lack of implementing International Standards for IT systems: ISO 27001 - Information Security Management System (ISMS), IS O20000 - Information Technology Service Management Systems (SMS) and Capability Maturity Model Integration Promotion Project (CMMI) to develop, improve and maintain its IT systems. As a result, in the year 2010, the international non-life insurance companies with Thailand branches, who are the largest international insurer clients of the Company, decided to develop their own system causing total revenue loss of more than Baht 26 Million.

From the growth rate of the Company’s main product, E-Claim, from B.E. 2551-2559 (2008-2016), according to the chart, it is clearly shown that there is no growth in E-Claim resulted from the largest international insurers, with Thailand branches, issued the policy for Thailand branch insurers to use overseas systems, the same that are used by their parent company, to manage car claims.

International Insurers

27%

Sub-Banks 39%

Others 34%



Effects on Growth of E-Claim

In case there is a strong competitor to take market shares, it is possible that the

Company shall lose its major clients to international competitors, especially Merimen who has major overseas clients as per following table:

Thus, if Merimen fully enters into Thai market and is successful; EMCS shall lose at

least 27 percent of its based clients, who are international insurers that have already used Merimen System. Besides, with the support of Silverlake, the parent company of the clients, the insurers who are subsidiaries of banks to Merimen (most of them using Silverlake systems) may have to use Merimen System. This group of 5 company clients’ accounts for approximately 40 percent of the client base. Hence, if EMCS does not change its strategy to compete with the competitor, it may lose 67 percent of its total base revenue from the past.



1.6.6. The Shareholding Structure

Ad of 31 December 2016, the Shareholding Structure of THRE had 5 subsidiaries whose businesses were related to Insurance Business, having THREL as connected person in the Group as follows:

100% 51% 49%

100% 100% 17.47%

20% 31%

Thai Reinsurance Plc.

Thaire Actuarial Consulting Co., Ltd.

EMCS Thai Co., Ltd.

Thaire Services Co., Ltd.

Thaire Life Assurance Broker Co., Ltd.

Carpool Insurance Broker Co., Ltd.

Thaire Life Assurance Plc.Other Shareholders

(Third Person)



1.6.7. List of Shareholders of EMCS as at 31 March 2017 Name As at March 31, 2017

Number of Shares held

percentage

1. Thai Reinsurance Public Co., Ltd. 2,940,000 49.00% 2. Thaire Life Assurance Public Co., Ltd. 1,200,000 20.00% 3. Bangkok Insurance Public Co., Ltd. 1,159,950 19.33% 4. Mr. Thongchai Phanumaporn 660,000 11.00% 5 Mrs. Nawarat Wongthitirat 40,050 0.67%

Total 6,000,000 100.00%

1.6.8. List of Shareholders of EMCS after the Transaction Name After the Transaction9 After the Transaction 10

Number of

Shares held percentage Number of

Shares held percentage

1. Thai Reinsurance Public Co., Ltd. 4,140,000 69.00% 6,000,000 100.00% 2. Thaire Life Assurance Public Co., Ltd. - 0.00% - 0.00% 3. Bangkok Insurance Public Co., Ltd. 1,159,950 19.33% - 0.00% 4. Mr. Thongchai Phanumaporn 660,000 11.00% - 0.00% 5 Mrs. Nawarat Wongthitirat 40,050 0.67% - 0.00%

Total 6,000,000 100.00% 6,000,000 100.00%

1.6.9. List of the Board of Directors of EMCS as at 31March 2017 Name Position

1. Mr. Surachai Sirivallop Authorized Director 2. Mr. Oran Vongsuraphichet Authorized Director 3. Mrs. Thitaporn Tarakij Authorized Director 4. Mr. Chai Sophonpanich Authorized Director 5. Mr. Thongchai Phanumaporn Authorized Director

1.6.10. List of the Board of Directors of EMCS after the Transaction Name Position

1. Mr. Surachai Sirivallop Authorized Director 2. Mr. Oran Vongsuraphichet Authorized Director 3. Mrs. Thitaporn Tarakij Authorized Director 4. Mr. Chai Sophonpanich Authorized Director 5. Mr. Thongchai Phanumaporn Authorized Director

9 Based on the assumption that the Transaction of the Company shall be the first to be completed prior to the completion

of all other shareholders’ transactions, as per Information Memorandum on the Disposal of Assets and Connected Transaction of Thaire Life Assurance Public Company Limited (IM1) dated 26th July 2017.

10 Based on the assumption that the Transaction of the Company shall be the last to be completed after the completion of all other shareholders’ transactions, as per BKI TP and NW shares transfer forms dated 7th August 2017 (after THREL issued IM1 on 26th July 2017).



1.6.11. Financial Summary

The following summary is from Financial Statement as of 2014-2016, from Audited Financial Statements of EMCS, and Unaudited Financial Statement (Internal) as of 2nd Quarter of 2017.

Income Statement Jan - Dec Jan - Jun

2014 2015 2016 2017

Revenue Revenue from service 92.06 104.47 116.26 60.52

Revenue from interest and dividends 0.99 1.00 0.93 0.49

Other income 0.24 0.13 4.24 0.32

Total revenue 93.29 105.60 121.42 61.33

Expenses Cost of service 35.64 43.78 55.26 24.96

Administrative expenses 9.66 10.07 9.60 9.65

Total expenses 45.30 53.86 64.86 34.61

Profit before income tax expense 47.98 51.75 56.56 26.72

Income tax expense 9.59 10.35 11.28 5.46

Net profit 38.39 41.39 45.28 21.26

Financial Ratio 2012 2013 2014 2015 2016 Q2 2017

Profitability ratio Operating profit margin 49.85% 56.04% 51.44% 49.00% 46.58% 43.57%

Net profit margin 38.37% 44.97% 41.15% 39.20% 37.29% 34.67%

Return on equity 62.35% 49.60% 40.91% 43.67% 39.37% 19.14%

Efficiency ratio Return on assets 48.89% 42.98% 35.24% 35.81% 33.80% 16.45%

Assets Turnover 127.42% 95.59% 85.64% 91.35% 90.64% 47.45%

Financial policy ratio Debt to equity ratio 0.28 0.15 0.16 0.22 0.16 0.16

Dividend payout ratio 1.26 0.17 0.39 0.97 0.56 1.11



(Unit: Million Baht)

Statement of Financial Position 31-Dec 30-Jun

2014 2015 2016 2017

Asset Current asset

Cash and cash equivalents 14.44 28.12 17.63 72.06

Short-term investments - net 34.77 18.45 66.52 2.68

Trade receivables - net 13.37 13.63 15.19 16.54

Other current assets 1.62 0.43 0.80 0.74

Total current assets 64.21 60.64 100.14 92.03

Non-current assets Long-term investments - - - -

Property, plant and equipment - net 37.78 43.99 17.64 19.22

Intangible assets - net 5.30 9.05 14.23 16.49

Deferred tax assets 1.17 1.38 1.43 1.50

Other non-current assets 0.47 0.54 0.54 -

Total non-current assets 44.73 54.96 33.83 37.22

Total asset 108.93 115.60 133.97 129.25

Liabilities and shareholders' equity Total current liabilities

Accounts payable and other payables 1.13 0.79 1.13 1.29

Income tax payable 4.70 4.32 4.63 4.72

Accrued bonus - 6.44 2.16 -

Other current liabilities 4.38 3.63 5.08 5.63

Total current liabilities 10.20 15.18 13.00 11.64

Non-current liabilities Provision for long-term employee benefits 4.89 5.64 5.96 6.50

Total Non-Current Liabilities 4.89 5.64 5.96 6.50

Total Liabilities 15.09 20.82 18.96 18.14

Shareholders' Equity Share capital Registered and Paid up Capital 6,000,000 ordinary shares at 5 Baht 30.00 30.00 30.00 30.00

Retained earnings Allocated - Legal Reserve 3.00 3.00 3.00 3.00

Unallocated 61.09 62.28 82.36 78.42

Other components of shareholders' equity Loss on measurement of available-for-sale investments - net of income tax (0.24) (0.50) (0.35) (0.31)

Total Shareholders' Equity 93.85 94.78 115.00 111.11

Total liabilities and shareholders' equity 108.93 115.60 133.97 129.25



1.7. Value of the Disposed Assets The investment of Baht 24 ,833,497 in EMCS (the equity method investment as at

March 31, 2017) which consists of 1,200,000 ordinary shares at a par value of Baht 5 each, equivalent to 20 percent of the paid-up capital of EMCS. 1.8. Basis Used to Determine the Value of Consideration

The Company received a letter from THRE indicated that other third parties agreed to sell shares to THRE at Baht 50 per share, as a result, THRE become super majority Shareholder at 80 percent shares with comprehensive control over EMCS. Besides, THRE offered to acquire all EMCS shares held by the Company at Baht 50 per share (same as third person).

The Company, therefore, appointed a Financial Advisor11 to determine the fair value of the share sale price for the Board of Directors. Such report use the Discount Cash Flow basis calculated from the future cash flow of EMCS which is the Free Cash Flow to Equity assessment in order to find the fair value of EMCS. 1.9. Terms and Conditions of the Transactions

To enter into the Transaction with THRE, who is a major shareholder and a connected person of the Company, it is considered as a connected transaction under the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions and the Notification of the Board of Governor of the Stock Exchange of Thailand No. BorChor/Por 22-01 Re: Disclosure of Information and Other Acts of Listed Companies concerning Connected Transactions B.E. 2546 (2003) (as amended) (the “Connected Transaction Notifications”). The Transaction Size is equivalent to 4.5205 percent of the net tangible assets (NTA) of the Company based on the consolidated financial statement of the Company as at 31 March 2017. In respect of the Transaction, the Company shall proceed as follows:

1) Disclose the Information Memorandum on the Transaction to the Stock Exchange of Thailand (the “SET”) according to the Connected Transaction Notifications of which the details are appeared in the Information Memorandum on the Disposal of Assets and Connected Transaction of Thaire Life Assurance Public Company Limited.

2) Organize the Shareholders’ Meeting to seek approval for a decision to enter into a connected transaction hereunder, which must consist of at least three-fourths of the total votes of shareholders attending the meeting and having voting right. But THRE, who is the shareholder with interest, shall not have voting right in the agendas relating to the Transaction. Besides, the Board of Directors of the Company also approved to hold the Extraordinary General Meeting of Shareholders No. 1/2017 on 22nd September 2017 at 14.00 hours at Victor Club, 8th Floor, Sathorn Square Office Tower, North Sathorn Road, Silom District, Bangkok 10500 with the following agendas:

11 The Financial Advisor: FA is the financial advisor approved by the Office of the Securities and Exchange Commission.



Agenda 1 To consider and adopt the Minutes of the Annual General Meeting of Shareholders No. 6 Agenda 2 To consider and approve the sale of EMCS Thai Company Limited shares, which is

regarded as a connected transaction. Agenda 3 To consider other issues (if any)

3) Appoint an Independent Financial Advisor (IFA) to provide the IFA Opinion on the Transaction, including the delivery of such opinion to SEC, SET, and the Shareholders of the Company. In this regard, the Company had appointed Wealthiest BCA Company Limited as the Independent Financial Advisor to provide the IFA Opinion on, and conduct any matter relating to the Transaction as specified in the Connected Transaction Notifications.

The Company will sell all shares of EMCS held by the Company by executing the Share Sale and Purchase Agreement on 26 July 2017, which contains significant condition precedents (“Condition Precedents”) as follows:

(A) Confirmation from the Buyer and the Seller are accurate and true on the date of SPA and still accurate and true until the Completed Transaction Date

(B) No change or event has occurred which may have a material adverse effect on EMCS; (C) The Seller received approval from its Shareholder Meeting to enter into the Transaction with

terms and conditions stated in SPA (according to the approval of Board of Directors of the Company, the Extraordinary General Meeting of Shareholders No. 1/2017 shall be held on 22nd September 2017 at 14.00 hours at Victor Club, 8th Floor, Sathorn Square Office Tower, North Sathorn Road, Silom District, Bangkok 10500)

(D) The Buyer obtained approval from the Office of Insurance Commission to purchase the shares of EMCS from the Company;

(E) The Seller and the Buyer obtained necessary approval for the acquisition or disposal of shares of EMCS (as the case may be) or to complete the transaction as agreed in SPA, and;

(F) There shall be no legal proceedings, claims, or any actions brought by the governmental authority or any persons to terminate the Transaction.

(G) There shall be no rules regulations and/or authorities which announce or become effective after the date of SPA that prevent and/or causing the Transaction to be illegal.

Hence, according to the conditions of Completed Transaction, it is indicated that the purchase and transfer of shares shall take place at 9.00 a.m. on the 10th business day after the condition precedents are completed or are waived by the authorized Party who has the right to waive (“Completed Transaction Date”). 1.10. Characteristics and Scope of Interests of Connected Persons

THRE is a major shareholder of the Company, holding 104,690,630 shares equivalent to 17.45 of the issued shares of the Company as at 2 May 2017 (the latest book closing date of the Company). Therefore, THRE is a connected person under the Connected Transaction Notifications. As a result, THRE will not have a voting right in the Extraordinary General Meeting of Shareholders No. 1/2017 in the agendas relating to the Transaction.



1.11. Plans for utilizing Proceeds received from the Transaction

The Company will utilize the cash of Baht 60,000,000 as working capital in its operation.

1.12. Directors Who have Interest and/or are Connected Persons in this Transaction

None

1.13. Opinion of the Board of Directors and the Audit Committee regarding the Transaction

The Board of Directors has considered the Transaction, as described above, and views that it is a disposal of assets, which are not the Company’s main business, so as to enable the Company to fully focus on its life insurance business, as well as increasing liquidity and capital of the Company, which shall consequently create opportunities for the Company to expand its investment in the future.

The Transaction will help increase the Company’s capital, which will, in part, be utilized as reserve fund for future opportunity of joint venture with relevant businesses that could help support the Company in return. In this respect, the Company will invest in the businesses that have potential, steady growth, and are in the area of the Company’s expertise.

In addition, the Board of Directors has an opinion that THRE’s offering price is in the range of enterprise’s fair value as valuated by a Financial Advisor for the consideration of the Board of Directors in making decision. Besides, as of the date of receiving the confirmation on the offered price at Baht 50 per share; the Company has not much bargaining power and there is a possibility that THRE may cancel the offer. As a result, the Company shall be the only one remaining minority shareholder of EMCS under absolute control of THRE. The Board of Directors, therefore, has an opinion that this entering into the transaction shall be submitted at the meeting of shareholders for their approval. 1.14. Opinion of the Audit Committee and/or the Director which is Different from the Board of

Directors’ Opinion

After consideration on details of the necessity in entering into the said Disposition of

Assets and Connected Transaction at the meeting; the Audit Committee has an opinion that the

transaction is reasonable and shall be able to protect future risk of the Company due to the risk of

providing information technology service for non-life insurance companies, which has neither direct nor

indirect relation to the Company’s re-life insurance business. Besides, the Company is only a minority

shareholder who has no controlling power, and consequently has no opposing right and management

participation. In addition, the Company may not gain benefits from dividend, as it used to be, due to

high capital investment plan of EMCS, which completely differs from the one in the past and may have

an impact on cash flow of EMCS resulted in the inability to pay dividend for both short and long term..



From above reasons and necessity, the Audit Committee in its meeting No. 4/2560 on 8th August 2017 had an approval resolution of selling all of EMCS’s common shares held by the Company to THRE; and proposing the said transaction to the Shareholders’ meeting to further obtaining approval.



2. RATIONALE AND REASONABLENESS OF THE TRANSACTION 2.1. Objectives and Necessity of entering into the Transaction

2.1.1. Objectives and Necessity of THRE There was the necessity to restructure the group of companies under supervision of

THRE and increasing its investment to improve business efficiency to cope with 5-Year changes of technology and prevent the international competitor(s) from taking significant market shares, especially from global/international non-life insurers’ local branches in Thailand as well as utilizing tax benefits from retained losses.12 Especially EMCS, who requires modern corporate restructuring to respond to market demand13, and other parts as follow:

(1) Corporate Restructuring of Thaire Services Company Limited (“THRES”) Thaire Services Company Limited (“THRES”) was found in April 2006 with initial

capital of Baht 5 Million to provide supporting services to Non-Life Insurance Businesses under the name of Third Party Admin Company Limited, with its core business to provide services on Health Insurance Claims and Compensations, then changing the name to Thaire Services Company Limited and adding call center business at the end of 2006.

THRES had continued to increase its registered capital from Baht 5 to 10, 20, 60, and 100 Million at the end and had corporate restructured by transferring Information Technology Department of THRE, which shall consider to be cost center, to become part of profit center in THRES in 2009.

In 2016, THRES developed the Training Department, a business unit under its direct supervision, then transferred both employees and assets from Thaire Training Company Limited (“THRET”) to THRES before dissolving THRET.

Thaire Services Company Limited (“THRES”) Profile

Headquarter Office 48/15-16 Ratchadapisek 20, Ratchadapisek Read, Samsen Nok, Huai Khwang, Bangkok, 10310

Business Insurance Claims and Compensations Registration Number 0105549052511 Registered Capital Baht 100 Million No. of shares Ordinary shares of 10,000,000 shares with par value of Baht 10

12 Data from Board of Directors Meeting Resolution No. 1/2017 of THRE on 23 February 2017 13 Data from Letter of Notification No. 1 dated 26th April 2017.



(2) Business Model of Non-Life Insurance Business

Cost Structure and Profitability of Non-Life Insurance Business

Key Issue that THRE needs to have Extra Services14 to its Non-Life Insurer Clients is

to cut its operating costs to make operations more profitable, which shall also increase profitability of reinsurer due to lower cost of claims. However, even if there is Extra Services of THRES, EMCS and other related companies could have not generated as high profit as they used to, THRE still gains indirect benefits.

On the contrary, if competitors of EMCS and THRES, we are referring to International Competitor(s), come in to replace their services, costs of reinsurers’ service of THRE might have been higher due to higher standards required higher costs and/or if EMCS could not compete and closed itself down, International Competitor(s) may become monopoly and demand higher cost of services. Thus, there is necessity to restructure the group of companies under supervision of THRE to maintain its extra services, which would have enhanced direct benefits to THRE as Non-Life Reinsurer.

(3) Lesson learned from the Past and Future Corporate Restructuring Plan of THRE (3.1) Lesson learned from an entering of International Competitor(s)

In the past, THRE had experiences in Third Party Administration: TPA Business that become independent organization played middleman role between Insurers, hospitals, and Insured in Claims and Compensations Services as well as database for health data, and provide services regarding claims and compensations for private and government insured organization. Once there were International Competitors, Medilink Group and Alliance Worldwide Partner Group (“AWP”), the TPA Clients of THRES had been significantly reduced.

(3.2) Lesson learned from Man pPower Issues and Customers’ Services Since EMCS has been one and only IT company who provides services on claims and

compensations of motor insurances and accidents, the old systems, therefore, are based primarily on internal design by EMCS’s personnel not on International Standard. EMCS programmers, therefore, had 2 main duties (1) development of new module/product and (2) solving bugs/problems; as a result, EMCS faced problem of not enough man power when compared to workload. EMCS used to evaluate

14 Extra Services means services from THRES, EMCS, and other related companies who provide Information

Technological Services and other services to provide clients’ cost saving on insurance claims and compensations.

THRE THREEMCS

THRES

Others

ClaimsCost of

Claims

THRE'S CLIENTSNON-LIFE INSURERS



and find out that there were workload 1.5 times of man power capabilities, resulting in loss of key customers in the past, clearly explainable that there were two major clients that required EMCS to provide certain services but because of not enough man power, those two major clients decided to develop their own systems that reduced income significantly. In addition, there were several clients requested EMCS to develop Mobile Application Services i.e. M-Survey to report real-time accident and M-Inspection to evaluate damages before submit to insurer, which EMCS had no ability to develop at that time. Even currently, EMCS had already developed and provided such services, but some clients had already implemented other systems available.

(3.3) Restructuring Rationale and Requirements of THRE From above lessons, THRE had resolution to perform corporate restructuring. As the

leader of non-life insurance services who has capability to increase efficiency in non-life insurance industry for the past decade, THRE had set up subsidiary companies to service its clients which had benefited THRE because in the past there were no strong competitors in the market so it was not necessary to invest in technology or high standard. Unlike current situation, there is necessity to restructure the group of companies under supervision of THRE to maintain its leadership with rationale to be summarized as follows:

A. Customers require variety of services, fast responses, with higher technology; B. Changes in rules and regulations of OIC; C. Most of major non-life insurers have already been EMCS’s clients, there shall be no

more high growth form large insurers, on the other hands, there may be strong international competitors who would be able to steel the significant market shares.

D. Large non-life insurers tend to develop their own systems; in addition, Thailand local branches of Overseas/International insurers tend to follow mother companies.

E. InsurTech Startup Businesses would also take some market shares that shall have some effect to EMCS future revenue.

(3.4) Restructuring Directions of THRE with Strategic and Investment Plans From above rationale, there is necessity to restructure the group of companies under

supervision of THRE with following strategic and investment 5-year plans: 1) To invest in enhancing standard of safety of Information Technological System for

products services and internal operating system which including ISO27001: Information Security Management System (ISMS); ISO20000: Information Technology Service Management Systems (SMS); and CMMI: Capability Maturity Model Integration

2) To invest in equipment and Modern Information Technology System to increase efficiency of group of companies’ operations, especially EMCS.

3) To increase number of manpower as well as human resources development in order to enhance higher knowledge and skill to be able to adapt to changes and strong competition.



Under above strategic planning, there shall be 3 benefits, including but not limited to, (1) maintain market/clients’ base by postponing international competitors on entering

into Thai e-claim motor services market; (2) maintain market shares by joint venture with overseas/international competitor(s); and (3) maintain some market shares, especially local clients.

2.1.2. Objectives and Necessity of THREL Under the necessity to restructure the group of companies under supervision of THRE,

THRE, therefore, offered to acquire all common shares of EMCS from EMCS’s other shareholders, including (1) Thaire Life Assurance Public Company Limited; (2) Bangkok Insurance Public Company Limited; (3) Mr. Thongchai Phanumaporn; (4) Mrs. Nawarat Wongthitirat who had been offered to sell at Baht 40 per share15. Then on 25 May 2017, the Board of Director Meeting No. 2/2017 of THRE approved to acquire 3 re-proposals from (1) Bangkok Insurance Public Company Limited; (2) Mr. Thongchai Phanumaporn; (3) Mrs. Nawarat Wongthitirat who accepted to sell 1,860,000 shares accounting for 31 percent of paid up capital at Baht 50 per share. In case THREL does not agree to sell its shares or require more than Baht 50 per share, THRE would have purchased shares from all 3 customers and restructure the group of companies as per master plan.

As a result of above activities of THRE, the Company become minority shareholder with no participation in management, especially when EMCS is not a listed company, the valuation of shares had been discounted due to (1) no controlling power while THRE had super majority absolute control; (2) no liquidity because EMCS does not listed in any stock exchange; (3) higher risk from market competitors; (4) capital increase which shall enhance dilution effect.

In addition, the group of companies’ restructurings under supervision of THRE may have changed / increased risk profile of EMCS, while businesses of EMCS does not have any relevant to core business of the Company. The Company, therefore, become only a Financial Investor, which normally have standard procedure to exit when such investment meets its required rate of return, especially when risk profile has shifted, most financial investor would have chosen to mitigate down side risk by exit and realizing profit.

From above reasons and necessity, the Board of Directors of THREL No. 4/2017, held on 26 July 2017, approved to propose to the Shareholders Meeting to consider and approve the sale of all shares of EMCS to THRE as proposed.

15 Data from the Board of Director Meeting Resolution No. 1/2017 of THRE on 23 February 2017



2.2. Advantages and Disadvantages of the entering and non-entering into the Transaction 2.2.1. Advantages of the entering and Disadvantages of non-entering

1) Benefits 10 times of initial investment The Company invested in common shares of EMCS at 1,200,000 shares with par

value of Baht 5 per share totalling Baht 6,000,000. To enter into the Transaction with disposal at Baht 50 per shares, the Company shall receive Baht 60,000,000 (approximately 10 times of initial investment), considering Baht 45 per share for capital gain, when includes dividend of Baht 36,220,000 (before taxes and relevant expenses), the benefits would be 90,220,000 form investment periods with Internal Rate of Return: IRR) 20.94 percent per annum.

2) Remove the risk from restructuring under supervision of THRE THRE corporate structure includes 5 subsidiaries, which all set up to support non-life

insurance businesses, with key objectives to share clients’ base as well as provide extra services to increase standard of claims and compensations with proper tax management structure and be able to utilize existing tax benefits. Before corporate restructuring, there were double investments especially on information technology human resources which spread everywhere, so there shall be possibility that THRE would have Re-Structure by moving manpower from cost center area to profit center area as well as moving resources from low profit companies to high profit companies in order to manage corporate income tax which shall enhance highest benefits to THRE.

However, enhancing highest benefits to the group of companies under supervision of THRE may not enhance value to the Company because THREL holds only shares of EMCS, while there shall be risks of possible resources re-allocations to EMCS that may reduce profit and return of EMCS. Thus, entering into the Transaction shall reduce uncertainty on such risk.

3) Clear direction and structure of group of companies The Company’s core business is “Life Reinsurance”, of which both assets and

liabilities had been transferred from THRE to follow Life Insurance Act, B.E. 2535 (1992) and Non-Life Insurance Act, B.E. 2535 (1992) that required separation of life insurance from non-life insurance. While EMCS is extra service businesses to promote non-life insurance, which has no relationship whatsoever with the Company’s core businesses; as a result, entering into the Transaction of selling EMCS’s shares shall make clearer structure to the group of companies (including THREL). Besides, it also follows the Group of Companies’ policy to match investment with its resources to enhance highest efficiency to compete with Overseas/International Competitor(s) who continuously plans to enter into this region.



4) Reduce investment obligation/burden Since 2008, EMCS has had continuously growth of profits because of its monopoly for

more than a decade. Until 2016, when EMCS’s non-life insurer clients reached 80 percent of market shares, the rest of 20 percent of insurers had used their own developed systems. At this point, EMCS has reached limitation of its market shares and would be difficult to grow further, while there is high potential that Overseas/International strong competitor(s) may enter into the market and steal market shares, especially Branches of Overseas/International Insurers. So, it is necessary for EMCS to adapt itself to the situation.

Although chances to protect market shares from Oversea/International Competitors is very difficult, EMCS shall have to prevent such entering as long as possible by increasing its Information Technological Safety Standard, especially ISO27001: Information Security Management System (ISMS); ISO20000: Information Technology Service Management Systems (SMS); and CMMI: Capability Maturity Model Integration.

In addition, due to the Company is one and only service provider for this business, when Overseas/International Competitor(s) enter into the local market, there shall be risk regarding hunting employees. Thus, there is necessity to improve Organization / Human Resources Structure as well as provide proper training and development to increase knowledge and skills of employees with valued career path. Besides, increase of employees and training programs shall also enhance higher future investments, costs and expenses of EMCS

Investments to restructure EMCS requires additional capital more than Baht 130 Million, far more advance from current capital within 5 years, while market shares seem to be decreased. Thus, return on investment to maintain market shares shall become obligation/burden of future shareholders of EMCS.

Therefore, disadvantages from not entering into the Transaction shall be risk to increase capital and/or realize dilution effect and/or realize loss (if the investment still not be able to maintain market shares as expected and not be able to cover increased costs and expenses), especially when EMCS’s performance has no effects whatsoever with the Company’s core business and the Company also has no management participation. Hence, after entering into the Transaction of selling common shares of EMCS, the Company shall release risk/burden on capital increase as well as no realization of future loss of EMCS operation (if any).



2.2.2. Disadvantages of the entering and advantages of non-entering 1) Opportunity loss on realizing profit from affiliates

As of 26 July 2017 (Share Purchase Agreement Date), the Company has held EMCS’s shares of 1,200,000 shares or 20 percent of issued and paid up ordinary shares of EMCS. Thus, after selling those shares, in case EMCS can maintain its business’ economics and/or perform better while the market also supports and enhance business growth and higher profit; the Company would have opportunity loss on realized higher profit from its affiliate as well as loosing opportunity to diversify risks of investment from core businesses.

However, when comparing net profits of EMCS in 2016 at Baht 9.06 Million (calculated from 20% of total net profit of Baht 45.29 Million) with the Company’s 2016 net profit of Baht 321.75 Million, the net profit of EMCS accounts for only 2.81 percent of the total net profit. Thus, even if the Company loses the opportunity to realize this profit, there shall be no effect to the big picture of the Company.

2) Opportunity loss on realizing capital gain from listing EMCS As of 30 June 2017 (end of 2nd Quarter 2017), EMCS’s performance (unaudited) had

annualized earning per share at approximately Baht 7.09 per share resulting in, according to Price-to-Earnings Ratio Approach, approximately Baht 69.27-73.48 per share value (See details of calculation in Part 3 fair value). On this regard, if THRE lists EMCS into stock market, there may be possibility that such share price would be higher than the Offering Price from THRE to THREL, which THREL would have opportunity loss on upside capital gain.

3) Opportunity loss on realizing capital gain from selling EMCS to Overseas/International Competitor(s)

Since EMCS is one and only service provider for E-Claims for Motor Insurance, there shall be opportunity for Overseas/International Competitor(s) having an interest to joint venture and/or acquire EMCS to expand their market to this region, instead of developing their own business to compete with the Company (Competitor(s) Buyout); and/or increase capital coordination to expand market together. If THRE sells shares of EMCS or Joint Venture with such competitor(s), there may be opportunity to have higher valuation of shares than those of THRE’s offer, which shall enhance opportunity loss on upside capital gain.



2.3. Comparison of advantages and disadvantages of entering into the Transaction with connected person and with third person

Since THRE, the Buyer of the Transaction, is major shareholder of the Company and the Transaction size is over Baht 20 Million and over 3% of NTA according to Consolidated Financial Statements of the Company as of 31 March 2017, the Transaction is then Connected Transaction of Listed Company, which shall have advantages and disadvantages from entering and not-entering into the Transaction with connected person as follows:

2.3.1. Advantages from entering the Transaction with connected person 1) Controlling premium from absolute control

Since the Company becomes a minority shareholder with no management participation and EMCS is not a listed company, the valuation, therefore, had Discount Lack of Control (DLOC) and Discount Lack of Marketability, thus, selling shares to third person would be required to take into account those discounts.

However, selling shares to THRE, as connected person who demands absolute control, shall have controlling premium. Thus, selling shares to THRE would have higher value compared to third person. Make a noted that there is no difference when comparing terms & conditions, including pricing, with third party who THRE shall enter into the Transaction.

2) Advantage on timeline THRE, the Offeror who shows intention to acquire investments in shares of EMCS, is

the major shareholder who has control and supervision over EMCS more than 10 years with common Board of Directors and Managements. Thus, THRE shall have well understanding of EMCS businesses. As a result, the negotiation to enter into the Transaction would consume less timing and there is no need to have full due diligence on detailed information compared to third person who may need to have timeline for full due diligence processes for type of businesses, management structure, past performance of EMCS which may prolong the Transaction’s processes and time frame.

2.3.2. Disadvantages from entering the Transaction with connected person 1) Conflicts of interests

Connected transaction is a transaction that might have conflict of interests among related parties and also might have led to siphon. Connected person may not fairly demand terms & conditions compared to the negotiation with third person. Those issues may affect minority shareholders of listed company.

However, as a listed company, the Company shall enter into connected transaction with duty to comply with rules and regulations under the Connected Transaction Notifications with the Company’s best benefits to protect minority shareholders. In addition, those connected transaction shall seek approval form the Shareholders’ Meeting to approve the Transaction with at least three-fourths of the total votes of shareholders attending the meeting and having voting right, excluding interested shareholders’ equity. As a result, such approval would not come from connected person who might have conflicts of interest.



Make a noted that the Company had issued a letter to WBCA to confirm that there were no common board members and/or common management and/or common control between the Company with EMCS or THRE, and policies were independent.

In addition, from correspondence letters between THRE and THREL together with the Resolution of Board of Directors of THRE regarding the Transaction, it is indicated that THRE started with sending offers to every EMCS shareholders since April 2017 and finally THRE had been successfully finalized deals with third persons prior to THREL, as connected person. In addition, after THRE sent Letter No. 3 to inform THREL that other third parties agreed to sell shares to THRE at Baht 50 per share, THREL responded by sending back Letter No. 5 to counter offer at Baht 54 per share. However, by sending response Letter No. 6, THRE confirmed that Bath 50 per share was an appropriate price because THRE had already entered into same transactions with other third parties. Therefore, if THRE provides higher benefits to THREL as connected parties, the deal would not be upon arm’s length basis. After receiving the response letter, the managegment then submitted it to the Board of Directors for approval. At their meeting, the Board of Directors had an opinion that THRE’s offered price was in the range of enterprise’s value valuated by a Financial Advisor for the Board of Directors’ making decision. However, on the date the Company was confirmed about Bath 50 per share offering price; the Company had not much bargaining power and there was a chance that THRE would cancel the offer. As a result, the Company should be the only minority shareholder of EMCS under Absolute Control of THRE. Hence, the Board of Directors considered it appropriate to submit the transaction to the shareholders, at their meeting, for approval according to abovementioned reasons.

2) Obligation on disclosure and follow the connected transaction regulations Due to connected transaction, the Company has duty to disclose the Transaction to

SET and seek approval form the Shareholders’ Meeting as well as appoint Independent Financial Advisor to provide fairness opinion to the Transaction to shareholders as per the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions as of 31 August 2008 and the Notification of the Board of Governor of the Stock Exchange of Thailand No. BorChor/Por 22-01 Re: Disclosure of Information and Other Acts of Listed Companies concerning Connected Transactions B.E. 2546 (2003) as of 19 November 2003 as amended. The above processes incurred higher costs to the Company from consideration to enter into the connected transaction.



2.4. Risk factors from entering / not-entering / unable to entering the Transaction 1) Risk from opportunity loss on higher return

The Company might have opportunity loss on gaining higher return from EMCS shares, which for the past 9 years (since first dividend in 2008), EMCS had paid dividend for 16 times totalling Baht 36.22 Million, especially in 2016, there were 2 dividend payments totalling Baht 5.04 Million (approximately 84 percent of equity or 8.4 percent of total return value being paid from entering into the Transaction).

2) Risk from THRE not-entering into the Transaction A Condition in Share Purchase Agreement (“SPA”) indicated that the settlement shall

be done only if all Condition Precedents (“CP”) were fulfilled. Thus, in case any party could not fulfil any CP, THRE might not-entering into the Transaction. However, this risk should be low because CPs are reasonable and doable.

3) Risk from shareholders of THREL not approve the Transaction A Condition in Share Purchase Agreement (“SPA”) indicated that the settlement shall

be done only if all Condition Precedents (“CP”) were fulfilled, which one of CP is the Buyer could have sought for approval form its shareholders under SPA’s terms & conditions. In case the Shareholders of THREL do not approve, the Company would have risks to be minority shareholder of EMCS without controlling power or management participation, while EMCS had been in significant restructuring processes.



3. REASONABLENESS OF THE OFFERING PRICE AND CONDITIONS OF THE TRANSACTION IFA had conducted Interviews with the management of THRE and EMCS. Besides,

aparted from the Business Plan, provided by EMCS, documents examined are reviewed audited financial statements of THRE THREL and EMCS as well as internal financial statements of EMCS, together with other information disclosed to the public and the information provided by related persons under the confidentiality agreement with the Company.

However, for the valuation of Ordinary Shares of EMCS, the IFA provided the opinion based on the assumption that the information and the above relevant documents are complete, accurate and true as they were prepared by professional consultants in various fields certified by SEC of the appropriate work standard and careful work performance without any conflict of interest. Any significant change in those factors may impact EMCS’s operation and valuation. In order to determine the fairness of the transaction price, the IFA had evaluated the EMCS’s share price valuation by using the following 5 approaches:

1. Book Value Approach

2. Adjusted Book Value Approach

3. Price to Book Value Ratio Approach or P/BV Ratio

4. Price-to-Earnings Ratio Approach or P/E Ratio

5. Discounted Cash Flow Approach

3.1. Book Value Approach This valuation approach will apply the book value of net assets 16 or the shareholders’

equities divided by the total number of shares. The result is the book value per share. In this case, the EMCS’s share valuation is based on the audited financial statement as of 31 December 2016 and the latest unaudited internal financial statements as of 30 June 2017 of which the details are as follows:

No. Details Value as of 31 December

2016 (Baht Million) Value as of 30 June 2017 (Baht Million)

1 Paid up Capital 30.00 30.00 2 Retained earnings 85.36 81.42

3 Other components of shareholders' equity (0.35) (0.31)

4 Total Shareholders' Equity 115.00 111.11

5 Number of shares issued and fully paid-up (million shares) 6.00 6.00

6 Book value per share (Baht) 19.17 18.52

The Book Value Approach considers financial position of the Company as of 31 December 2016 and 30 June 2017 only. It does not consider the current market value of the asset and Company’s ability to earn profit in the future, the competitiveness of the business, as well as

16 Total assets minus total liabilities or shareholder’s equity



economic trends and industry overview. According to the Book Value approach, the Company’s share value is Baht 19.17 and Baht 18.52 per share, which is lower than the Offering Price of Baht 50 per share. 3.2. Adjusted Book Value Approach

By this approach, the share value is derived from financial statements of EMCS adjusted by the increase and decrease in the revaluation of relevant items that have an impact on the value of the Company’s shares, including but not limited to market price and/or fair price of assets. In case of EMCS, most of assets were deposits and/or investments which shall enhance same value with Book Value Approach, as a result, this approach is inappropriate. 3.3. Price to Book Value Ratio Approach or P/BV Ratio

This valuation approach is based on the book value of the EMCS’s shares, reviewed by the EMCS’s auditor approved by SEC, from the audited financial statements as of 31 December 2016 and internal financial statement as of 30 June 2017, which is Baht 19.17 per share; and Baht 18.52 per share respectively and multiplied by moving average of 15 days, 30 days, 60 days, 90 days, 120days and 180 days of price per book value (P/BV) of listed companies with similar business in technology sector before 31 July 2017. The moving average of the closing price to book value ratio of the companies in comparison is calculated from their past period as mentioned above divided by the book value of each company according to their latest financial statements as of 31 March 2017. IFA selected only the companies that have main revenue from system setup service. After consideration, there are 4 companies that are close to the Company’s business, which are Comanche International Public Company Limited, MFEC Public Company Limited, NETBAY Public Company Limited and SKY ICT Public Company Limited. List of the representative companies is as follows:

No. Company Abbreviation Business Listed in

1 Comanche

International Public Company Limited

COMAN

COMAN conducts its core business as a developer of software for sale and installation. Software developed is registered as The Company's intellectual property under Comanche Hotel Software and Data Base with the Department of Intellectual Property. The Company offers installation services at client sites, holds training programs, and conducts after-sales services for its clients by giving advice and conducting maintenance services and other related services. Currently, The Company puts its focus on developing ready-made software in the tourism industry such as software used in hotels and serviced apartments.

MAI

2 MFEC Public

Company Limited MFEC

Development of integrated information technology. Under its six core business units, we aim to design consistent services that meet the specific needs of our customers. To help our customers create competitive advantages include :1. Digital Enterprise Solutions2. Application3. Cloud Services4. Digital Information Services5. Cyber Security Services6. Digital Transformation

SET




3 NETBAY Public Company Limited

NETBAY

e-Business services consist of: (1) e-Logistics Trading : e-Customs Paperless, Customs e-Payment and e-Manifest etc.(2) e-Business Services : Customer Due Diligence Gateway (CDD Gateway) and Electronic Transaction Reporting Gateway (ETR Gateway) (3) Projects and others.

MAI

4 SKY ICT Public

Company Limited SKY

Company composed of 3 main businesses, defined as; 1.Business Distribution and Information Technology System Integration: IT-SIwhich included system consultant, installation, training, system maintenance. The company provide services and sell covers all aspect in IT systems. 2.Computer and Equipment Rental Services as to response various customer's requirements for 1-10 years duration times 3.Telecom Installation

MAI

Source: SET

After consideration, SKY’s share price is unusually volatile. Moreover, COMAN is listed on the stock market less than 1 year. (Listed on November 11, 2016) In conclusion, there are 2 companies that are close to the Company’s business the most, which are MFEC Public Company Limited and NETBAY Public Company Limited. List of the representative companies is as follows:


1 MFEC Public

Company Limited MFEC

Development of integrated information technology. Under its six core business units, we aim to design consistent services that meet the specific needs of our customers. To help our customers create competitive advantages include :1. Digital Enterprise Solutions2. Application3. Cloud Services4. Digital Information Services5. Cyber Security Services6. Digital Transformation

SET

2 NETBAY Public Company Limited

NETBAY

e-Business services consist of: (1) e-Logistics Trading : e-Customs Paperless, Customs e-Payment and e-Manifest etc.(2) e-Business Services : Customer Due Diligence Gateway (CDD Gateway) and Electronic Transaction Reporting Gateway (ETR Gateway) (3) Projects and others.

MAI

Source: SET



The details can be summarized as follows:

Average Price to Book Value (Days) as of 30 June 2017

No. Securities 15 Days 30 Days 60 Days 90 Days 120 Days 180 Days

1 MFEC 1.13 1.15 1.15 1.19 1.21 1.22 2 NETBAY 11.07 10.88 9.74 9.52 9.76 9.86

Average P/BV Ratio 6.10 6.02 5.44 5.35 5.49 5.54

Book Value of EMCS (Baht/Share) 18.52 18.52 18.52 18.52 18.52 18.52

Value of EMCS (Baht/Share) 113.03 111.40 100.77 99.09 101.63 102.55

Source: SETSMART

According to the Price to Book Value Ratio Approach, using the book value as of 30 June 2017, the share value of the EMCS is between Baht 99.09 – 113.03 per share, which is higher than the Offering price of Baht 50.00 per share.

Average Price to Book Value (Days) as of 31 December 2016


1 MFEC 1.13 1.15 1.15 1.19 1.21 1.22 2 NETBAY 11.07 10.88 9.74 9.52 9.76 9.86

Average P/BV Ratio 6.10 6.02 5.44 5.35 5.49 5.54

Book Value of EMCS (Baht/Share) 19.17 19.17 19.17 19.17 19.17 19.17


Source: SETSMART

According to the Price to Book Value Ratio Approach, using the book value as of 31 December 2016, the share value of the EMCS is between Baht 102.56 – 117.00 per share, which is higher than the Offering price of Baht 50.00 per share.

The business of EMCS is related to 2 key businesses, i.e. Non-Life Insurance and Information Technology, with niche characteristics. At present, EMCS is the only one enterprise in Thailand who does this business; resulted in having no similar companies in the stock market to make peer comparison. Therefore, this approach is inappropriate to valuate fair value of the shares due to the Businesses in Comparison are Different from that of EMCS as well as its inability to reflect EMCS’s performance, which may be affected by changes in the future



3.4. Price-to-Earnings Ratio Approach or P/E Ratio This approach is using earnings per share for the last 2 quarters from EMCS’s internal

financial statement as of 30 June 2017 annualized by multiplying by 2 and the audited financial statements as of 31 December 2016, audited by the auditor approved by SEC, multiplied by past Moving Average of 15 days, 30 days, 60 days, 90 days, 120 days and 180 days of P/E of listed companies in the same sector of technology. After consideration, the IFA had chosen the companies with similar business to compare under the criteria as in Clause 3.3 Price to Book Value Ratio Approach.

The details can be summarized as follows:

Average Price to Earnings (Days) as of 30 June 2017


1 MFEC 9.66 9.77 9.82 10.31 10.23 9.69 2 NETBAY 11.07 10.88 9.74 9.52 9.76 9.86

Average P/E Ratio 10.37 10.33 9.78 9.91 10.00 9.77

EPS of EMCS (Baht/Share) 7.09 7.09 7.09 7.09 7.09 7.09


Source: SETSMART

According to the Price-to-Earnings Ratio Approach, using the earning per share as of 30 June 2017, the share value of the EMCS is between Baht 69.27 – 73.48 per share, which is higher than the Offering price of Baht 50.00 per share.

Average Price to Earnings (Days) as of 31 December 2016


1 MFEC 9.66 9.77 9.82 10.31 10.23 9.69 2 NETBAY 11.07 10.88 9.74 9.52 9.76 9.86

Average P/E Ratio 10.37 10.33 9.78 9.91 10.00 9.77

EPS of EMCS (Baht/Share) 7.55 7.55 7.55 7.55 7.55 7.55


Source: SETSMART

According to the Price-to-Earnings Ratio Approach, using the earning per share as of 31 December 2016, the share value of the EMCS is between Baht 73.75 – 78.23 per share, which is higher than the Offering price of Baht 50.00 per share.

The business of EMCS is related to 2 key businesses, i.e. Non-Life Insurance and Information Technology, with niche characteristics. EMCS is the only one enterprise in Thailand (at present) who does this business; resulted in having no similar companies in the stock market to make peer comparison. Therefore, the valuation of fair value of the shares using this approach is



inappropriate due to the Businesses in Comparison are different from that of EMCS as well as its inability to reflect EMCS’s performance, which may be affected by changes in the future. 3.5. Discounted Cash Flow Approach

This valuation approach calculates the value of ordinary shares from present value of estimated cash flow or revenue at any time in the future of the enterprise by calculating present value of projected future Free Cash Flows (FCF) with appropriate discounted rate.

General Assumptions

(1) Data received and used to prepare financial forecasts of EMCS

Since EMCS has been one and only company to provide Information Technology for Motor Claim Solutions for the Non-Life Insurance Industry in Thailand, so there are no competitors to compared with and there are no major events that shall reflect future operations to shift from past performance. Thus, IFA could not use only past performance to be base of financial forecast.

IFA, therefore, developed this financial forecast using due diligence and assumptions primarily based on Business Plan that was officially confirmed by management of EMCS and THRE together with management and officers’ interview to cooperate with past performance as well as other evidences that might impact MCS’s businesses and other businesses under supervision of THRE.

However, in case there shall be any material effects due to economics or external conditions including EMCS internal situations shift from our assumptions, the share value according to this method may be changed, especially, if THRE partially or wholly sales EMCS shares to International Competitor(s) and/or taking EMCS to list into stock exchange17

(2) No significant changes in Market and Technology

Under present situation that International Competitors begin to enter into market; EMCS is then having more risks from (1) significant loss of market shares to International Competitors who invest in Thailand; and (2) sudden obsolescence of systems and/or services due to new systems from overseas. For this valuation, IFA’s major assumption is that the investments and the increase in costs, according to the Business Plan, will enable EMCS to maintain its customer’s base at a certain level. But all above negative factors shall affect the growth rate of revenue in the financial forecasts.

17 As per Letter from IFA to THRE dated 1 August 2017, re: Request for Implementation Plan after acquisition of EMCS

shares, with clear questions regarding whether or not THRE had plan to sell EMCS shares to International Investor (s) and/or list EMCS into the stock exchange within the next 3 years. In response, THRE issued Letter dated 3rd August 2017, indicated that THRE might need to raise capital from other investor(s) and/or SET and/or restructure the subsidiary companies; of which THRE would consider possibilities as well as pros and cons of various fund-raising plans after completed the acquisition of EMCS shares.



The general Assumptions of the Financial Forecast are summarized as follows:

(1) Revenue from services

EMCS’s revenue comes from its core business, which is providing Information Technology for Motor Claim Solutions for Car Insurance Industry. EMCS’s revenue from services shall be separated into 8 main products/channels: (1) revenue from non-life insurers (e-claim); (2) revenue from non-life insurers (m-motor); (3) revenue from garage auto part and outsider (e-garages + e-CAT (4) revenue from garage (e-claim) (5) revenue from dealer (6) revenue from windscreen shop (e-windscreen) (7) revenue from surveyor (e-surveyor) (8) revenue from spare parts stores (e-parts)

Although EMCS has various customers but the structure of main revenue is from Customers of Non-Life Insurance Companies,18 the starting point of continuing businesses provided for other groups of customers. All 39 customers may be divided into: (1) 14 International Insurers, generated revenue from every channels (1) – (8) accounting for approximately 27% of the total revenue; (2) the group of Non-Life Insurance Companies, 5 Subsidiaries of Banks, generated revenue from every channels (1) – (8) accounting for approximately 39% of the total revenue; (3) Other 20 Local Insurers, generated revenue from every channels (1) – (8) accounting for approximately 34% of the total revenue. The assumed revenue, however, is based on following key factors:

(A) The business shall continue as in the year 2017 for 2 more years (2018 – 2019). IFA determined 2017LE or 2560LE19 as base year for establishing

assumptions and the growth rate of increasing or decreasing from latest changes20 under the assumptions that the market changes shall have impact from the year 2017

onward but there shall be no significant impact during 2018 – 2019 as it needs time for the competitors to develop business.

(B) The business shall stop growing from the year 2020 onward as a result of International Competitor21 who shall start to compete from the year 2020

onward and cause maximum decrease of revenue at 66% of the total revenue from 14 International Insurers in the group of Non-Life Insurance Companies. In addition,

there is a possibility that 5 subsidiaries of Bank, Non-Life Insurance Companiies, shall use Merimenn System. Hence, to be conservative, the growth rates are set at 0%

18 Referred to information in this Report, No. 19 LE is an abbreviation for Latest Estimation, which means 2017 information from internal financial statements of EMCS as of 30th June 2017, times by 2 to be revenue per year. 20 The growth rate of 2017L as compared to 2016 21 Referred to information in this Report, No. 1.6.5 Market and Competiion 2) the Company’s competitiveness



for number and 1.88% for price according to inflation rate of Thailand.22 Furthermore, the number of customers at present is considered reaching the saturation point,

as evidenced by the decrease of customers/some items of revenue in the year 2017 compared with the ones in 2016.

22 The inflation rate of Thailand referred to average 10-years general inflation; the data from the Bank of Thailand.



Diagram illustrated E-CLAIM Transaction



1.1) Revenue from non-life insurers (e-claim)

The IFA assumed that the base year revenue from non-life insurers (e-claim) in the year 2560LE (2017LE) was equivalent to the figures obtained from the financial statements of EMCS as of 30th June 2017 annualized by multiplication with 2 under following details of growth assumptions.

(C) The number of non-life insurers group members (key group customers)

According to data during January – December 201623, the total number of non-life insurers is 55 with 8,626,006 voluntary non-life insurance policies, of which 6,907,017 policies accounted for 80 percent of total insurance policies belonged to 39 companies, who are clients of EMCS. For the remaining 20%, most of them developed their own systems. Hence, IFA determined the assumption that the growth rate of number of insurer members should equal to 0 from the year 2017 onward.

(D) Average fee per member

IFA referred to assumptions: (A) the business shall continue as in the year 2017 for 2 more years (2018 – 2019) resulted in the growth rate of average fee per member during 2018-2019 equals to those in the year 2017, compared with the year 2016, at 6.41% per year; and (B) The business shall stop growing from the year 2020 onward resulted in 1.88% growth rate of average fee per member during 2020-2022.

Revenue from service Unit 2012A 2013A 2014A 2015A 2016A 1H 2017A 2017LE 2018F 2019F 2020F 2021F 2022F

1.1 Revenue from non-life insurers (e-claim) Service revenue from members MB 1.92 2.05 2.23 2.46 2.48 1.52 3.03 3.23 3.43 3.50 3.56 3.63

Growth Rate % 0.00% 6.40% 9.19% 10.30% 0.81% 0.00% 22.06% 6.41% 6.41% 1.88% 1.88% 1.88%

Number of members Number 30 31 33 34 34 39 39 39 39 39 39 39

Growth Rate % 0.00% 3.33% 6.45% 3.03% 0.00% 0.00% 14.71% 0.00% 0.00% 0.00% 0.00% 0.00%

Average fee per member Baht 64,100 66,000 67,697 72,471 73,059 77,744 77,744 82,729 88,034 89,689 91,375 93,093

Growth Rate % 0.00% 2.96% 2.57% 7.05% 0.81% 0.00% 6.41% 6.41% 6.41% 1.88% 1.88% 1.88%

23 Referred to data in this report under no. 1.6.5 Market and Competition 1) Characteristics of Clients and Target Group.



Diagram illustrated M-Motor Transaction



1.2) Revenue from non-life insurers (m-motor)

The M-Motor System is a new mobile application system, created by the Company, with downloaded E-Claim system to speed up the use of E-Claim system and make it more convenient for key customers group, i.e. Non-Life Insurers Group24. It has 2 types of service: (1) On Premise, which means that the sale of software is with installation service on the customer’s server. However, it is worth for large size non-life insurers only; and (2) On Clouds, which means Service Fee per Transaction of Software usage installed on the Server of EMCS.

M-Motor Revenue Structure

(1) On Premise - 2 types of revenue from: Onetime Fee charged from each new customer, and Maintenance Service Agreement Fee: MA, charged at 15% of the paid

operating fee. For example, customer A, paid THB 2 million fee in the first year; he shall have to pay maintenance fee per year at 15%, which is equivalent to THB 300,000, in the following years.

(2) On Cloud - Transaction Fee charged from claim.

As there is neither past record of the said system nor similar business in Thailand; the IFA then determined to use financial forecast from EMCS’s Business Plan of which the management had set the assumptions for M-Motor Revenue to be divided into 3 categories, as following details:

1.2.1) Onetime or Entrance Fee, for On Premise

The assumption for base year, 2560LE, assumed that there is one new member with the service fee of Baht 2.91 million, according to the service agreement that a customer signed with EMCS. The details of the growth assumptions are as follows:

(E) Number of Non-Life Insurer members - The assumption for the years 2018 – 2022 is fixed at increasing one member per year.

24 Insurer group of customers, former key customers of EMCS, who already used E-Claim service and is the same group of customers of THRE



(F) Operating Fee - The assumption for the years 2018 – 2022 is fixed at THB 2 milliion per customer.

1.2.2) Maintenance Service Agreement Fee: MA for On Premise

The assumption for the years 2017 – 2022 is fixed at the same rate of 15% of the accumulated operating fee per year (accumulated from operating fee per member as in no. 1.2.1) of the customers, from past to present, who use M-Motor service.

1.2.3) Service revenue from claim transactions (Transaction Fee) for On Clouds System

The Transaction Fee for On Clouds system shall start recognizing revenue from the year 2018 onward because in the year 2017, the system installed on the server of EMCS was under configuration. The assumption for the years 2018 – 2022 is then set at THB 2 milliion per customer, according to the forecasts in the Business Plan of EMCS, which was figured out by the management of EMCS from claim data in the past. The number of claim transactions, I-Easy or M-Survey is forecasted as follows:

(G) Number of transactions – the number in the base year, 2018, is approximately 72,600 transactions per year.

(H) The growth rate in number of transactions is at 12-17% (details as in the table); and

(I) The average service fee per transaction is fixed at THB 30 during 5 years period with no growth rate.

In addition, the IFA has an opinion that the management of EMCS has had experiences in the business for more than 10 years. Hence, the forecast shall be reliable at a certain level. Besides, this kind of transaction has just started and has not yet significantly impact net present value of cash flow of the enterprise; the IFA then allowed this assumption, as determined by the management of EMCS, in the Business plan to be used in the forecast as shown in the table.




1.2 Revenue from non-life insurers (m-motor) Total revenue from non-life insurers (m-motor) MB - - - - 3.91 0.56 4.05 5.20 5.76 6.38 7.09 7.93

Growth Rate % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 3.58% 28.53% 10.79% 10.71% 11.18% 11.83%

Operating fee per member MB - - - - 3.91 0.56 2.91 2.00 2.00 2.00 2.00 2.00

Growth Rate % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (25.50%) (31.27%) 0.00% 0.00% 0.00% 0.00%

Number of new member Number - - - - 1 1 1 1 1 1 1 1

System maintenance fees MB - - - - - - 0.59 1.02 1.32 1.62 1.92 2.22

System maintenance fees % 0.00% 0.00% 0.00% 0.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00%

One time fee MB - - - - - - 0.55 - - - - -

Accumulated operating fee MB - - - - 3.91 4.46 6.82 8.82 10.82 12.82 14.82 16.82

Growth Rate % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 74.50% 29.34% 22.69% 18.49% 15.61% 13.50%

Total number of members number - - - - 1 2 2 3 4 5 6 7

Growth Rate % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 50.00% 33.33% 25.00% 20.00% 16.67%

Service revenue from claim transaction MB - - - - - - - 2.18 2.44 2.76 3.17 3.71

Growth Rate % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 12.00% 13.00% 15.00% 17.00%

Number of transaction Number - - - - - - - 72,600 81,312 91,883 105,665 123,628

Growth Rate % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 12.00% 13.00% 15.00% 17.00%

Average fee per transaction Baht - - - - 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00

Growth Rate % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%



1.3) Revenue from garage auto part and outsider (e-grages + e-CAT)

The e-garages system is a Front End Online system within a garage to help raise its standard to be more efficient and effective as well as increase more profit. The system consists of 4 programs, i.e. (i) Customer Data Record System, (ii) Wages and Spare Parts Evaluation System, (iii) Inspection and Genuine Spare Parts Checking System and (iv) Spare Parts Order System from the Garage’s Counterpart. The IFA assumed the base year revenue from garage auto part and outsider (e-grages + e-CAT) in 2017 is equal to the internal financial statements of EMCS, as of 30th June 2017, annualized by multiplying with 2. The details of growth assumptions are as follows:

(J) Number of garage, auto part and outsider members

The IFA referred to assumptions: (A) The business shall continue as in the year 2017 for 2 more years (2018 – 2019), resulted in the same growth rate in number of members during the years 2018 – 2019 and in the year 2017, compared to that in 2016, at 7.16% per year; and (B) The business shall stop growing from the year 2020 onward, resulted in 0% growth rate in number of members during the years 2020 – 2022.

(K) Average fee per member

The IFA referred to assumptions: (A) The business shall continue as in the year 2017 for 2 more years (2018 – 2019), resulted in the same growth rate of average fee per member during the years 2018 – 2019 and in the year 2017, compared to that in 2016, at 12.17% per year; and (B) The business shall stop growing from the year 2020 onward, resulted in 1.88% growth rate in average fee per member during the years 2020 – 2022.


1.3 Revenue from garage auto part and outsider (e-grages + e-CAT)

Service revenue from members MB 2.27 2.84 2.97 5.15 5.75 3.46 6.92 8.31 9.99 10.18 10.37 10.56

Growth Rate % 0.00% 25.13% 4.44% 73.60% 11.78% 0.00% 20.20% 20.14% 20.21% 1.88% 1.88% 1.88%

Number of members Number 967 1,027 962 566 656 703 703 753 807 807 807 807

Growth Rate % 0.00% 6.20% (6.33%) (41.16%) 15.90% 0.00% 7.16% 7.16% 7.16% 0.00% 0.00% 0.00%


Growth Rate % 0.00% 17.82% 11.49% 195.07% (3.56%) 0.00% 12.17% 12.17% 12.17% 1.88% 1.88% 1.88%



1.4) Revenue from garage (e-claim)

The IFA assumed that the base year revenue from garage (e-claim) in 2017LE is equal to the figures from internal financial statements of EMCS as of 30th June 2017 annualized by multiplying with 2; which can be divided into service revenue from members and from claim transactions of which the details of growth assumption are as follows:

1.4.1) Service revenue from members

(L) Number of members (garages)

The IFA referred to assumptions: (A) The business shall continue as in the year 2017 for 2 more years (2018 – 2019), resulted in the same growth rate in number of members during the years 2018 – 2019 and in the year 2017, compared to that in 2016, at -2.00% per year; and (B) The business shall stop growing from the year 2020 onward, resulted in 0% growth rate in number of members during the years 2020 – 2022.

(M) Average fee per member


1.4.2) Service revenue from claim transactions

(N) Number of claim transactions

The IFA referred to assumptions: (A) The business shall continue as in the year 2017 for 2 more years (2018 – 2019), resulted in the same growth rate in number of claim transactions during the years 2018 – 2019 and in the year 2017, compared to that in 2016, at 4.25% per year; and (B) The business shall stop growing from the year 2020 onward, resulted in 0% growth rate in number of claim transactions during the years 2020 – 2022.

(O) Average fee per transaction

The IFA determined the assumption that the average fee per transaction during the years 2018 – 2022 is fixed at THB 59.91 per transaction as per average figure in internal financial statements of EMCS as of 30th June 2017; under the rationale that the past record of average fee per transation is almost stable from the year 2012 onward.




1.4 Revenue from garage (e-claim) Total revenue from garage MB 45.52 48.39 56.25 63.83 67.20 34.84 69.68 72.27 74.94 75.54 76.14 76.76

Growth Rate % 0.00% 6.32% 16.24% 13.47% 5.28% 0.00% 3.68% 3.72% 3.70% 0.79% 0.80% 0.81%


Growth Rate % 0.00% 5.96% 10.13% 12.82% 5.35% 0.00% 2.98% 3.00% 2.96% 1.88% 1.88% 1.88%

Number of members Number 1,248 1,334 1,470 1,595 1,704 1,670 1,670 1,637 1,604 1,604 1,604 1,604

Growth Rate % 0.00% 6.89% 10.19% 8.50% 6.83% 0.00% (2.00%) (2.00%) (2.00%) 0.00% 0.00% 0.00%


Growth Rate % 0.00% (0.87%) (0.06%) 3.98% (1.39%) 0.00% 5.07% 5.07% 5.07% 1.88% 1.88% 1.88%

Service revenue from claim transaction MB 24.64 26.27 31.89 36.34 38.24 19.93 39.86 41.55 43.32 43.32 43.32 43.32

Growth Rate % 0.00% 6.62% 21.38% 13.97% 5.23% 0.00% 4.22% 4.25% 4.25% 0.00% 0.00% 0.00%

Number of transaction Number 410,869 438,211 532,782 606,593 638,144 332,645 665,290 693,591 723,096 723,096 723,096 723,096

Growth Rate % 0.00% 6.65% 21.58% 13.85% 5.20% 0.00% 4.25% 4.25% 4.25% 0.00% 0.00% 0.00%

Average fee per transaction Baht 59.97 59.95 59.85 59.91 59.93 59.91 59.91 59.91 59.91 59.91 59.91 59.91

Growth Rate % 0.00% (0.03%) (0.16%) 0.10% 0.03% 0.00% (0.03%) 0.00% 0.00% 0.00% 0.00% 0.00%



1.5) Revenue from dealers

The IFA assumed that the base year revenue from dealers in 2017 is equal to the figures from internal financial statements of EMCS as of 30 June 2017 annualized by multiplying with 2 of which the details of growth assumption are as follows:


(P) Number of members (dealers))


(Q) Average fee per member



(R) Number of claim transactions


(S) Average fee per transaction

The average fee per transaction of dealers has continuously decreased, which differs from other average fee per transaction of other customers; resulted in different assumption. The IFA referred to assumptions: (A) The business shall continue as in the year 2017 for 2 more years (2018 – 2019), resulted in the same growth rate of average fee per transaction during the years 2018 – 2019 and in the year 2017, compared to that in 2016, at -5.0165% per year; and (B) The business shall stop growing from the year 2020 onward, resulted in 1.88% growth rate in average fee per transaction during the years 2020 – 2022.




1.5 Revenue from dealers Total revenue from dealers MB 4.64 8.31 11.84 13.56 15.89 8.93 17.87 20.09 22.60 23.03 23.46 23.90

Growth Rate % 0.00% 79.06% 42.49% 14.52% 17.17% 0.00% 12.45% 12.45% 12.51% 1.88% 1.88% 1.88%


Growth Rate % 0.00% 8.30% 25.90% 37.75% 22.67% 0.00% 9.43% 9.30% 9.45% 1.88% 1.88% 1.88%


Growth Rate % 0.00% 53.98% 37.93% 36.67% 10.98% 0.00% 3.57% 3.57% 3.57% 0.00% 0.00% 0.00%


Growth Rate % 0.00% (29.66%) (8.72%) 0.79% 10.54% 0.00% 5.65% 5.65% 5.65% 1.88% 1.88% 1.88%


Growth Rate % 0.00% 118.52% 47.08% 9.02% 15.53% 0.00% 13.41% 13.41% 13.41% 1.88% 1.88% 1.88%


Growth Rate % 0.00% 113.74% 54.76% 11.11% 15.15% 0.00% 19.39% 19.39% 19.39% 0.00% 0.00% 0.00%


Growth Rate % 0.00% 2.24% (4.96%) (1.88%) 0.33% 0.00% (5.01%) (5.01%) (5.01%) 1.88% 1.88% 1.88%



1.6) Revenue from windscreen shop (e-windscreen)

The IFA assumed that the base year revenue from windscreen shop (e-windscreen) in 2017 is equal to the figures from internal financial statements of EMCS as of 30 June 2017 annualized by multiplying with 2 of which the details of growth assumption are as follows:


(T) Number of members (windscreen shops)


(U) Average fee per member



(V) Number of claim transactions


(W) Average fee per transaction

The IFA determined the assumption that the average fee per transaction during the years 2018 – 2022 is fixed at THB 59.34 per transaction as per average figure in internal financial statements of EMCS as of 30th June 2017; under the rationale that the past record of average fee per transation is almost stable from the year 2012 onward.




1.6 Revenue from windscreen shop (e-windscreen) Total revenue from windscreen shop MB 4.11 5.13 6.60 7.57 8.08 4.27 8.55 9.04 9.56 9.62 9.68 9.74

Growth Rate % 0.00% 24.72% 28.65% 14.63% 6.81% 0.00% 5.75% 5.75% 5.78% 0.61% 0.62% 0.63%


Growth Rate % 0.00% 18.76% 43.22% 26.21% 12.70% 0.00% 7.53% 7.73% 7.78% 1.88% 1.88% 1.88%


Growth Rate % 0.00% 31.34% 45.45% 17.19% 3.33% 0.00% 10.32% 10.32% 10.32% 0.00% 0.00% 0.00%


Growth Rate % 0.00% (9.58%) (1.53%) 7.70% 9.06% 0.00% (2.53%) (2.53%) (2.53%) 1.88% 1.88% 1.88%


Growth Rate % 0.00% 26.72% 24.06% 10.42% 4.37% 0.00% 4.95% 4.84% 4.84% 0.00% 0.00% 0.00%


Growth Rate % 0.00% 27.03% 25.15% 10.56% 4.33% 0.00% 4.84% 4.84% 4.84% 0.00% 0.00% 0.00%


Growth Rate % 0.00% (0.24%) (0.87%) (0.12%) 0.04% 0.00% 0.11% 0.00% 0.00% 0.00% 0.00% 0.00%



Diagram illustrated e-survey transaction



1.7) Revenue from surveyor (e-surveyor)

The IFA assumed that the base year revenue from surveyor (e- surveyor) in 2017 is equal to the figures from internal financial statements of EMCS as of 30 June 2017 annualized by multiplying with 2 of which the details of growth assumption are as follows:


(X) Number of members (surveyor)


(Y) Average fee per member

The IFA referred to assumptions: (A) The business shall continue as in the year 2017 for 2 more years (2018 – 2019), resulted in the same growth rate of average fee per member during the years 2018 – 2019 and in the year 2017, compared to that in 2016, at -2.90% per year; and (B) The business shall stop growing from the year 2020 onward, resulted in 1.88% growth rate in average fee per member during the years 2020 – 2022.


(Z) Number of claim transactions

The IFA referred to assumptions: (A) The business shall continue as in the year 2017 for 2 more years (2018 – 2019), resulted in the same growth rate in number of claim transactions during the years 2018 – 2019 and in the year 2017, compared to that in 2016, at -4.32% per year; and (B) The business shall stop growing from the year 2020 onward, resulted in 0% growth rate in number of claim transactions during the years 2020 – 2022.

(AA) Average fee per transaction

The IFA determined the assumption that the average fee per transaction during the years 2018 – 2022 is fixed at THB 8.00 per transaction as per average figure in internal financial statements of EMCS as of 30th June 2017; under the rationale that the past record of average fee per transation is moving up and down in a narrow frame from the year 2012 onward.




1.7 Revenue from surveyor (e-surveyor) Total revenue from surveyor MB 1.21 1.74 2.50 2.76 3.33 1.66 3.31 3.27 3.24 3.26 3.28 3.30

Growth Rate % 0.00% 44.20% 43.41% 10.58% 20.36% 0.00% (0.47%) (1.14%) (0.88%) 0.59% 0.60% 0.61%


Growth Rate % 0.00% 35.46% 49.28% 27.44% 14.32% 0.00% 7.60% 7.63% 7.55% 1.88% 1.88% 1.88%


Growth Rate % 0.00% 44.03% 44.54% 12.08% (10.24%) 0.00% 10.81% 10.81% 10.81% 0.00% 0.00% 0.00%


Growth Rate % 0.00% (5.95%) 3.28% 13.70% 27.37% 0.00% (2.90%) (2.90%) (2.90%) 1.88% 1.88% 1.88%


Growth Rate % 0.00% 46.81% 41.79% 5.69% 22.47% 0.00% (3.11%) (4.32%) (4.32%) 0.00% 0.00% 0.00%


Growth Rate % 0.00% 54.21% 36.77% 0.06% 22.06% 0.00% (4.32%) (4.32%) (4.32%) 0.00% 0.00% 0.00%


Growth Rate % 0.00% (4.80%) 3.67% 5.63% 0.34% 0.00% 1.27% 0.00% 0.00% 0.00% 0.00% 0.00%



Diagram illustrated e-parts transaction



1.8) Revenue from spare parts stores (e-parts)

The IFA assumed that the base year revenue from spare arts store (e-parts) in 2017LE is equal to the figures from internal financial statements of EMCS as of 30 June 2017 annualized by multiplying with 2 of which the details of growth assumption are as follows:


(BB) Number of members (spare parts stores)


(CC) Average fee per member


1.8.2) Service revenue from spare parts order

(DD) Value of spare parts order

The revenue from ordering spare parts differs from other revenue of EMCS in that it is based on the percentage of the value of spare parts; of which there is a continuous trend of price increase. Its value, then, does not have any relation with competition as in the other case. As a result, the IFA assumed that the base year of value of spare parts order in 2017LE is equal to the figures from internal financial statements of EMCS as of 30 June 2017 annualized by multiplying with 2, with continuous growth rate of 13.89 per year under the assumption that the price of cars and spare parts (which are mostly for pretty high-class people) shall contiuously increase.

(EE) The ratio of revenue to value of spare parts order

The IFA determined the assumption that the ratio of revenue to value of spare parts order during the years 2018 – 2022 is fixed at 0.21% of the value of spare parts ordered in each year; under the rationale that the past record starting from the year 2012 showed almost steady ratio.




1.8 Revenue from spare parts stores (e-parts) Total revenue from spare parts stores MB 2.88 3.26 3.64 4.17 4.48 2.45 4.89 5.48 6.15 6.86 7.66 8.58

Growth Rate % 0.00% 12.94% 11.81% 14.39% 7.50% 0.00% 9.23% 12.02% 12.14% 11.56% 11.77% 11.95%


Growth Rate % 0.00% 4.81% 10.92% 4.50% 2.15% 0.00% 5.25% 5.36% 5.39% 1.88% 1.88% 1.88%


Growth Rate % 0.00% 6.54% 2.63% 5.13% (4.88%) 0.00% 8.55% 8.55% 8.55% 0.00% 0.00% 0.00%


Growth Rate % 0.00% (1.63%) 8.07% (0.60%) 7.39% 0.00% (3.04%) (3.04%) (3.04%) 1.88% 1.88% 1.88%

Revenue from spare part order MB 2.06 2.40 2.69 3.17 3.46 1.91 3.82 4.35 4.95 5.64 6.43 7.32

Growth Rate % 0.00% 16.18% 12.13% 17.91% 9.18% 0.00% 10.41% 13.89% 13.89% 13.89% 13.89% 13.89%

Total value of the spare part order MB 951.03 1,136.58 1,300.70 1,483.70 1,619.87 922.46 1,844.92 2,101.22 2,393.13 2,725.60 3,104.25 3,535.51

Growth Rate % 0.00% 19.51% 14.44% 14.07% 9.18% 0.00% 13.89% 13.89% 13.89% 13.89% 13.89% 13.89%

Ratio of revenue to the value of the spare part order % 0.22% 0.21% 0.21% 0.21% 0.21% 0.21% 0.21% 0.21% 0.21% 0.21% 0.21% 0.21%

Growth Rate % 0.00% (2.78%) (2.02%) 3.36% 0.00% 0.00% (3.06%) 0.00% 0.00% 0.00% 0.00% 0.00%

(2) Other Revenue

Other revenue in the past includes revenue from Interest and dividend, which does not come from EMCS’s core business. So, the IFA assumed a fixed assumption using 2017LE as base year revenue, which is the latest data and probably close to the reality the most, with no growth in order that it shall not have any impact on the valuation of the core business of the Company.

Other Revenue Unit 2012A 2013A 2014A 2015A 2016A 1H 2017A 2017LE 2018F 2019F 2020F 2021F 2022F

Revenue from interest and dividend MB 1.73 1.46 1.04 1.07 0.93 0.48 0.99 0.99 0.99 0.99 0.99 0.99

Growth Rate % 0.00% (15.33%) (28.93%) 2.86% (13.11%) 0.00% 6.51% 0.00% 0.00% 0.00% 0.00% 0.00%

Other Revenue MB 3.71 4.40 6.21 5.03 9.37 3.17 6.34 6.34 6.34 6.34 6.34 6.34

Growth Rate % 0.00% 18.64% 41.26% (18.98%) 86.18% 0.00% (32.33%) 0.00% 0.00% 0.00% 0.00% 0.00%



(3) The service and administrative expenses

The service and administrative expenses hereby comprise employee expense and related employee development expense, system maintenance expense, travel expense, utilities expense, office rental expense, project expense and other administrative expenses including depreciation and amortization. The details are as follows.

Total expenses Unit 2012A 2013A 2014A 2015A 2016A 1H 2017A 2017LE 2018F 2019F 2020F 2021F 2022F

Total expenses MB 34.10 34.11 45.30 53.86 64.86 34.61 77.68 92.09 91.25 92.08 94.69 92.46

Growth Rate % 0.00% 0.02% 32.83% 18.88% 20.44% 0.00% 19.77% 18.54% (0.91%) 0.91% 2.83% (2.35%)

Percentage of total revenue % 50.15% 43.96% 48.56% 51.00% 53.42% 56.43% 61.84% 68.61% 63.81% 63.21% 63.73% 60.93%

3.1) Employee expense

The IF referred to General Aassumptions No. (2) identifying “the investment and increase of expenses as per Business Plan shall enable EMCS to maintain its customer base at a certain level”, which include the following expenses, i.e. A. Employment Expansion Plan for 20 more positions which A.(1) employees expenses in 2018 shall include 5 positions for ISO and 5 positions for IT Operation with average expenses of Baht 50,000 per month each, totaling Baht 6 Million per annum. A.(2) employees expenses in 2019 shall include 10 positions for IT Operation with average expenses of Baht 50,000 per month each, totaling Baht 6 Million per annum B. Growth of employees’ expenses at 6 percent per annual.

Nevertheless, IFA set assumptions25 that (1) employees expenses in 2017 shall be equal to number of employees’ expenses from Unaudited (Internal) Financial Statement as of 30 June 2017, annualized by multiplying with 2; (2) employees’ expenses in 2018-2019 are according to the assumptions of manpower increasing plan as in the Business Plan with 25 percent discount26. As the core business of EMCS is to provide IT service, employee then is the most important

25 It is probable that the figures in IFA’s assumptioms may be quite lower than the ones in reality, as there are adjustment in decreasing the expenses related to employees and their retirement in the

Business Plan. 26 The rate to adjust “increasing” and/or “decreasing”, in order to be conservative, is the judgment of the IFA based on the followings, i.e. (1) Material or most significance, which means that the

assumption in that case has significant impact on the survival of EMCS in the future and shall be adjusted by 25% “increasing” and/or “decreasing” from the business plan, (2) Effect or moderate significance, which means that the assumption in that case has significant impact on profits and/or risk management of EMCS in the future; but not on its survival or competitiveness and shall be adjusted by 50% “increasing” and/or “decreasing” from the business plan; (3) Not-Material or little significance, which means that the assumption in that case has positive effect but does not have any near-term impact on EMCS (no urgency) and shall be adjusted by 75% “increasing” and/or “decreasing” from the business plan.



factor for the survival of the enterprise. However, the IFA has an assumption that seeking for suitable special skills employees might not be as fast as planned. In addition, there may be quite high employment turnover during restructuring process as well as employees’ hunting by International Competitor(s). (3) Growth of employees’ expenses is at 1.88 percent per annum as per inflation rate of Thailand. The details are summarized as in the table.


Employee expense MB 26.86 26.00 36.41 43.20 50.01 26.19 56.88 62.45 63.63 64.82 66.04 67.28

Growth Rate % 0.00% (3.23%) 40.04% 18.66% 15.75% 0.00% 13.75% 9.79% 1.88% 1.88% 1.88% 1.88%


3.2) Employee development expense27

As per Business Plan of EMCS, the employee development expenses were determined to increase, according to the strategic plan, in order to increase additional special skills of the employees to cope with new technology development and to be able to compete internationally. The IFA then set assumptions that there shall be employee development from 2017-2022, with 50 percent decrease in value identified in the Business Plan; as employee development has moderate impact on profit and/or the risk to lose them to the competitors of EMCS. Moreover, the IFA also assumed that, at current situation, EMCS has not enough manpower when compared to workload (from a study indicated that there were workload approximately 1.5 times numbers of employees), whereas system development shall be done by external consultant and shall be able to meet target date as well as increase number of work. But seeking skilled employees might not be on schedule. As a result, employees might not have enough time to join the training program as planned. Thus, after adjusting discount according to the above assumption, the employee development expense may be summarized as in following table:

Employee development expense Unit 2017F 2018F 2019F 2020F 2021F 2022F Total

Employee development expense MB 0.75 7.00 3.35 1.76 0.92 0.48 14.27

27 Although EMCS never has this cost but after restructuring THRES, its training unit used to be under THRET, has already prepared employee development plan for the companies’ group, both

domestic and overseas.



3.3) System maintenance expense

The IFA assumed that the System maintenance expense for the period of 2017 – 2022, referred to the figures in 2017LE which is the base year of system maintenance, is equal to 1.50% of total revenues as per table below:


System maintenance expense MB 0.68 0.97 1.00 1.18 0.92 0.57 1.88 2.01 2.15 2.19 2.23 2.28

Growth Rate % 0.00% 42.64% 3.69% 17.70% (21.58%) 0.00% 103.78% 6.84% 6.55% 1.87% 1.99% 2.12%


3.4) Travel expense

The IFA assumed that the travel expense for the period of 2017 - 2022, referred to the figures in 2017LE which is the base year of travel expense, is equal to 0.50% of total revenues as per table below:


Travel expense MB 0.28 0.37 0.28 0.34 0.32 0.27 0.63 0.67 0.72 0.73 0.74 0.76

Growth Rate % 0.00% 33.54% (25.76%) 24.02% (7.36%) 0.00% 97.58% 6.84% 6.55% 1.87% 1.99% 2.12%


3.5) Utilities expense

The IFA determined that Utilities expense in the base year, which is 2017LE, is equal to the figures in financial statements of EMCS as of 30 June 2017 annualized by multiplying with 2; and that the growth rate in the period of 2018-2022 is 1.88% per year 28 as per table below:


Utilities expense MB 0.42 0.52 0.60 0.67 0.63 0.34 0.67 0.69 0.70 0.71 0.73 0.74

Growth Rate % 0.00% 21.73% 15.60% 12.99% (6.41%) 0.00% 6.60% 1.88% 1.88% 1.88% 1.88% 1.88%


28 The inflation rate of Thailand referred to average 10-years general inflation; the data from the Bank of Thailand.



3.6) Office rental expense

The IFA determined that office rental expense in the base year, which is 2017LE, is equal to the figures in the financial statements of EMCS as of 30 June 2017 annualized by multiplying with 2; and that the growth rate in the period of 2018-2022 is 1.88% per year29 as per table below:


Office rental expense MB 1.74 1.77 1.81 2.05 2.58 1.49 2.98 3.04 3.10 3.15 3.21 3.27

Growth Rate % 0.00% 1.91% 2.04% 13.02% 26.07% 0.00% 15.61% 1.88% 1.88% 1.88% 1.88% 1.88%


3.7) Project Expense

As per Business Plan of EMCS, project expenses were determined to develop and improve the standard of IT safety, following OIC’s policy, at the 5-year budget of Baht 11.05 Million. The IFA then set assumptions that the project expense to develop and improve the standard of IT safety from 2017-2022 shall be under OIC’s standard, based on above details of budget with 25 percent discount30. Due to core business of EMCS is to provide IT service, the improvement of standard of IT safety, as per OIC’s, shal lthen be the most critical fctor of the survival of the enterprise. However, the IFA has an opinion that the assumption of the above budget shall be adjusted by decreasing a little bit; in case there are employees participate in software development; instead of using full team of outside company. Thus, the Project expenses may be summarized as in following table:

29 The inflation rate of Thailand referred to average 10-years general inflation; the data from the Bank of Thailand. 30 The rate to adjust “increasing” and/or “decreasing”, in order to be conservative, is the judgment of the IFA based on the followings, i.e. (1) Material or most significance, which means that the




Project Expense Unit 2017F 2018F 2019F 2020F 2021F 2022F Total

Improving Information Security Management System (ISMS) - ISO 27001 MB 0.38 0.38 0.38 0.38 0.38 0.38 2.27

Improving Information Technology Service Management Systems (SMS) and Capability Maturity Model Integration - ISO 20000 & CMMI

MB 0.38 0.38 0.38 0.38 0.38 0.38 2.27

ISO Consultant Fee (EMCS consultant) MB 0.34 0.68 0.68 0.68 0.68 0.71 3.75

Total Project Expense MB 1.09 1.43 1.43 1.43 1.43 1.47 8.29

3.8) Other administrative expenses

The IFA determined that other administrative expenses in 2017 are equal to the figures in internal financial statements of EMCS as of 30 June 2017 annualized by multiplying with 2. But for the period of 2018-2022, the IFA did not use the figures in 2017LE as the base year; it is due to significant discrepancies when compared with past data. The IFA then sets the assumptions that other administrative expenses equal to 3.50%, with a little bit increase from base data in the past, during 2013 – 2015, which are summarized in the following table.


Other administrative expenses MB 2.10 2.64 3.18 3.63 6.97 3.60 7.20 4.70 5.01 5.10 5.20 5.31

Growth Rate % 0.00% 25.92% 20.57% 13.96% 92.05% 0.00% 3.30% (34.73%) 6.55% 1.87% 1.99% 2.12%




3.9) Depreciation and Amortization

The IFA estimated the depreciation based on the straight-line method. EMCS’s lifetime policy consists of 10 years for building renovation, 5 years for office equipment, 5 years for vehicle and 4 years computer as per table below:


Depreciation and Amortization MB 2.02 1.84 2.03 2.78 3.43 2.15 5.59 10.09 11.18 12.19 14.18 10.86

Growth Rate % 0.00% (8.81%) 10.21% 37.23% 23.44% 0.00% 62.75% 80.66% 10.78% 9.01% 16.30% (23.39%)


Depreciation and Amortization (Old) MB 2.02 1.84 2.03 2.78 3.43 2.15 3.45 3.45 3.45 3.45 3.45 3.45

Growth Rate % 0.00% (8.81%) 10.21% 37.23% 23.44% 0.00% 0.54% 0.00% 0.00% 0.00% 0.00% 0.00%


Depreciation and Amortization (New) MB - - - - - - 2.14 6.64 7.73 8.74 10.73 7.41

Growth Rate % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 211.02% 16.38% 13.03% 22.74% (30.91%)


(4) Working Capital requirement for EMCS

The IFA indicated that the EMCS shall require short-term working capital from 2017 – 2022 to be close to the internal financial statement as of 30 June 2017 with 52 Days of Receivables; and 280 days of Payables as per table below:

Requirement of working capital Unit 2012A 2013A 2014A 2015A 2016A 1H 2017A 2017LE 2018F 2019F 2020F 2021F 2022F

Account receivable MB 11.42 11.47 13.37 13.63 15.19 16.54 16.96 18.20 19.46 19.80 20.17 20.55

Number of Days Days - 58 53 50 47 52 52 52 52 52 52 52

Account payable MB 0.77 1.42 1.13 0.79 1.13 1.29 1.93 2.06 2.19 2.23 2.27 2.31

Number of Days Days - 299 364 229 282 280 280 280 280 280 280 280



(5) Capital Expenditure (CAPEX)

As per Business Plan and Investment Plan in Attachment No. 1, the Investment Plan of EMCS determined the total 5-year budget of CAPEX at Baht 76.15 million. The IFA then set assumptions that the capital expenditure during 2017 - 2022 is in accordance with the above budget, with 25% discount31. Due to core business of EMCS is to provide IT service, the investment to improve the standard of IT service shal lthen be the most critical fctor of the survival of the enterprise. However, the IFA has an opinion that the assumption of the above budget using shall be adjusted by decreasing a little bit; in case there are employees participate in software development; instead of using full team of outside company. The summarization as per assumption is shown in following table.

Capital Expenditure (CAPEX) Unit 2017F 2018F 2019F 2020F 2021F 2022F Total

Improving Information Security Management System (ISMS) - ISO 27001 MB 1.54 3.54 - - - - 5.08

Improving Information Technology Service Management Systems (SMS) and Capability Maturity Model Integration - ISO 20000 & CMMI

MB 1.90 4.63 1.68 2.81 3.09 1.68 15.80

Server Replacement -Z1 MB 0.81 6.26 2.16 0.04 8.37 2.27 19.91

Equipment for 20 manpower increasing (to support 1& 2 - ISO 27001, 20000, CMMI)

MB 0.75 0.75 - 0.75 0.75 - 3.00

SAP B1 accounting software project MB - 3.00 0.51 0.51 0.51 0.51 5.04

Total Capital Expenditure MB 5.00 18.18 4.35 4.10 12.72 4.47 48.82

31 The rate to adjust “increasing” and/or “decreasing”, in order to be conservative, is the judgment of the IFA based on the followings, i.e. (1) Material or most significance, which means that the




(6) Summary on Financial Projections of EMCS


Income Statement Jan - Dec

2017LE 2018F 2019F 2020F 2021F 2022F

Revenue Revenue from service 118.29 126.89 135.68 138.36 141.25 144.41

Revenue from interest and dividends 0.99 0.99 0.99 0.99 0.99 0.99

Other income 6.34 6.34 6.34 6.34 6.34 6.34

Total revenue 125.62 134.22 143.01 145.69 148.59 151.74

Total expenses 77.68 92.09 91.25 92.08 94.69 92.46

Profit before income tax expense 47.94 42.13 51.76 53.61 53.90 59.28

Income tax expense 9.59 8.43 10.35 10.72 10.78 11.86

Net profit 38.35 33.70 41.41 42.88 43.12 47.43

EBIT 21.97 42.13 51.76 53.61 53.90 59.28

Add: Depreciation 3.44 10.09 11.18 12.19 14.18 10.86

Less: Tax (4.13) (8.43) (10.35) (10.72) (10.78) (11.86)

Less: CAPEX 1.00 (18.18) (4.35) (4.10) (12.72) (4.47)

Less: Change in working capital 0.22 (1.10) (1.13) (0.34) (0.37) (0.40)

Free Cash Flow to Firm 22.49 24.52 47.11 50.63 44.20 53.42

Terminal Value 252.40

Financial Ratio 2017LE 2018F 2019F 2020F 2021F 2022F

Profitability ratio Operating profit margin 38.16% 31.39% 36.19% 36.79% 36.27% 39.07%

Net profit margin 30.53% 25.11% 28.95% 29.44% 29.02% 31.25%

Return on equity 29.55% 20.62% 20.21% 17.31% 14.82% 14.02%

Efficiency ratio Return on assets 25.82% 18.48% 18.49% 16.07% 13.91% 13.27%

Assets Turnover 84.56% 73.58% 63.86% 54.59% 47.93% 42.44%

Financial policy ratio Debt to equity ratio 0.14 0.12 0.09 0.08 0.07 0.06

Dividend payout ratio 0.62 - - - - -




Statement of Financial Position 31-Dec

2017LE 2018F 2019F 2020F 2021F 2022F

Asset Current asset

Cash and cash equivalents 95.39 119.91 167.02 217.65 261.85 315.27

Short-term investments - net 2.68 2.68 2.68 2.68 2.68 2.68

Trade receivables - net 16.96 18.20 19.46 19.84 20.26 20.71

Other current assets 0.74 0.74 0.74 0.74 0.74 0.74

Total current assets 115.78 141.53 189.91 240.92 285.54 339.41

Non-current assets Long-term investments - - - - - -

Property, plant and equipment - net 15.52 17.14 13.37 8.05 9.13 4.42

Intangible assets - net 15.75 22.22 19.16 16.39 13.86 12.18

Deferred tax assets 1.50 1.50 1.50 1.50 1.50 1.50

Other non-current assets - - - - - -

Total non-current assets 32.78 40.87 34.04 25.95 24.49 18.10

Total asset 148.56 182.40 223.94 266.87 310.03 357.50

Liabilities and shareholders' equity Total current liabilities

Accounts payable and other payables 1.93 2.06 2.19 2.23 2.28 2.33

Income tax payable 4.72 4.72 4.72 4.72 4.72 4.72

Accrued bonus - - - - - -

Other current liabilities 5.63 5.63 5.63 5.63 5.63 5.63

Total current liabilities 12.28 12.41 12.54 12.59 12.63 12.68

Non-current liabilities Provision for long-term employee benefits 6.50 6.50 6.50 6.50 6.50 6.50

Total Non-Current Liabilities 6.50 6.50 6.50 6.50 6.50 6.50

Total Liabilities 18.78 18.91 19.05 19.09 19.13 19.18

Shareholders' Equity Share capital Registered and Paid up Capital 6,000,000 ordinary shares at 5 Baht 30.00 30.00 30.00 30.00 30.00 30.00

Retained earnings Allocated - Legal Reserve 3.00 3.00 3.00 3.00 3.00 3.00

Unallocated 97.10 130.80 172.21 215.09 258.21 305.64

Other components of shareholders' equity Loss on available-for-sale investments - net of income tax (0.31) (0.31) (0.31) (0.31) (0.31) (0.31)

Total Shareholders' Equity 129.78 163.49 204.89 247.78 290.90 338.32

Total liabilities and shareholders' equity 148.56 182.40 223.94 266.87 310.03 357.50



(7) Discount Rate

The discount rate used in the calculation of present value of cash flow, is calculated from weighted average cost of capital (WACC) according to EMCS capital structure. The IFA had computed WACC from weighted average cost of debt (Kd) and cost of equity (Ke) of which the details of the discount rate estimation are as follows:

WACC = Ke*E/(D+E) + Kd*(1-T)*D/(D+E)

whereby; Ke = Cost of equity or Investors required rate of return (Re) Kd = Cost of debt or interest rate of EMCS T = Corporate income tax E = Total shareholders’ equity D = Interest-bearing liabilities

Cost of equity (Ke) or the required rate of return for shareholders (Re) is derived from the Capital Asset Pricing Model (CAPM) as follows:

Ke (or Re) = Rf + β (Rm - Rf)

However, since EMCS has no interest-bearing debt, the IFA used the discount rate to calculate the net present value of EMCS cash flow, which is equal to the cost of capital (Ke) or the required return on equity (Re)

Whereby Risk Free Rate (Rf) = 2.98 percent based on 15-year government bond yield (information as of 31

July 2017). Beta (β) = based on average Beta of the Comparison Company, as in Clause 3.3 Price

to Book Value Ratio Approach, for the past two years up to 31 July 2017, which, according to Bloomberg, equals to 1.61.

Market Risk (Rm) = average returns on investment in the SET over the past 15 years during July 2002 – July 2017, which, according to Bloomberg, is equivalent to 14.24 percent per annum.

From the information, the shareholders’ required rate of return (Re) is calculated at 21.16 percent per annum.



(8) Terminal Value

The IFA evaluated the terminal value of the EMCS’s cash flow, after the projection, and determined no Terminal Growth Rate in the last year, which is equivalent to 0, under the assumptiom that EMCS shall continuously undertake its business (on going concern concept). The details of calculation are as follows:

Termianl Value = FCFF*(1+g)/(Ke-g)

Whereas

FCFF = free cash flow of EMCS in the last year (2022), equals to Baht 53.42 million

g = the growth rate of cash flow in the last year, equals to 0%

Ke = the cost of equity or shareholder’s required rate of return (Re) equals to 21.16

From data, the calculated Terminal Value of cash flow after projection period in 2020, equals to Baht 252.40 million and after discounted with the shareholdr’s required rate of return (Re) at 21.16%, the calculated present value (PV) of Terminal Value equals to Baht 87.81 million

In conclusion, the net cash flow of EMCS is as follows:


2560LE 2561F 2562F 2563F 2564F 2565F Free Cash Flow to Firm 22.49 24.52 47.11 50.63 44.20 53.42 PV of Free Cash Flow to Firm 20.43 18.39 29.15 25.86 18.63 18.58


PV of Terminal Value 87.81

Total PV of Free Cash Flow 218.85

Add: Cash and cash equivalents as of 30 June 2017 72.06

Less: Interest- bearing liabilities as of 30 June 2017 -

Net PV of Free Cash Flow 290.92

Number of paid-up shares (Share) 6.00

Net PV of Free Cash Flow per share (Baht/share) 48.49



(9) Sensitivity Analysis

As IT business is highly sensitive to change and is not a secured business. Besides, it has High Risk High Return characteristics, which is mainly caused by most of its assets that are intangible assets and easy to obsolete.

Hence, the IFA conducted the Sensitivity Analysis of the share’s value by adjusting the discount rate or WACC by ± 1.00 percent per annum, which is an adjustment of a quite wide range in order that the said range shall be able to cover the fair value of EMCS.

Discount Rate or WACC per annum

+1.00% 0% -1.00%

22.16% 21.16% 20.16%

EMCS’s share price (Baht/share) 46.69 48.49 50.47

From the Sensitivity Analysis, with adjusted discount rate, the share price of EMCS is between Baht 46.69 – 50. 47 per share, which is close to the Offering price of Baht 50.00 par share.

This share valuation of EMCS is calculated based on the assumptions provided by EMCS under prevailing economy and situation. Hence, if there are any changes in business plan and policies of EMCS or the economic situation, which caused material impact on present business operations or if there is any deviation from the financial projections and the determined factors of the Company, which may cause significant change in the projections that are based on the abovementioned assumptions and may consequently cause changes in the fair value of EMCS as well



3.6. Summary of the Appropriateness of the EMCS’s Ordinary Shares Offering Price The table below compares fair value of the EMCS’s Shares from various share

valuation approaches with the Offering Price

(Unit: Baht / Share)

Valuation Approach Price Offering

Price Higher (Lower) than the Offering Price

Higher (Lower) than the Offering Price as

% 1) Book Value 18.52 - 19.17 50.00 (31.48) - (30.83) (62.96) - (61.66) 2) Adjusted Book Value 18.52 - 19.17 50.00 (31.48) - (30.83) (62.96) - (61.66) 3) Price to Book Value Ratio

3.1) As of 30 June 2017 99.09 - 113.03 50.00 49.09 - 63.03 98.18 - 126.07 3.2) As of 31 December 2016 102.56 - 117.00 50.00 52.56 - 67.00 105.13 - 133.99

4) Price to Earnings Ratio 4.1) As of 30 June 2017 69.27 - 73.48 50.00 19.27 - 23.48 38.55 - 46.96 4.2) As of 31 December 2016 73.75 - 78.23 50.00 23.75 - 28.23 47.51 - 56.47

5) Discounted Cash flow* 46.69 - 50.47 50.00 (3.31) - 0.47 (6.63) - 0.94 Remark: *Share value of the EMCS calculated using WACC between (20.16% – 22.16%)

Each valuation approach has different pros and cons, which reflects the proper fair value

calculated from each approach. Each approach is differed as follows:

(1) Book Value Approach indicates the value of the EMCS’s shares appeared as accounting value at any one time. However, it cannot reflect marketing value of the assets at present and EMCS’s ability to earn profit in the future and the competitiveness of the business; the IFA then considered this approach inappropriate to valuate fair value of the EMCS’s shares due to its inability to reflect the true value of the Company at present.

(2) Adjusted Book Value Approach indicates the share value based on the financial statements of EMCS and then adjusted with the value of assets and liabilities based on market price and/or fair price of assets. In this case, most of EMCS’s assets are deposits and/or investments in financial assets. The high value item that has not been adjusted in the financial statements is the Brand Awareness / Value as the first operator and the one in this business as of today. However, the Brand Awareness / Value is difficult to appraise because there are no clear standards. This approach is therefore inappropriate to valuate fair value.

(3) Price to Book Value Ratio Approach is normally calculating book value of the EMCS at any one time and compared with the average ratio of the Peers Comparison companies. However, this approach is inappropriate due to the Businesses in Comparison are Different from the EMCS’s Business and its inability to reflect the EMCS’s performance in the future.



(4) Price to Earnings Ratio Approach is normally calculated earning per share of EMCS and compared with the average ratio of the Peers Comparison companies, which is a highly popular approach. However, this approach is inappropriate due to the businesses in comparison differ from that of EMCS and does not reflect future performance.

(5) Discounted Cash Flows Approach is a reflection of the ability to make profit and generate cash flow of the EMCS in the future calculated from the net present value of future estimated cash flows based on past performance and the trend of economic conditions. Hence, the IFA has an opinion that this approach is appropriate to valuate fair value of the EMCS’s shares

After the valuation of shares using various approaches, the IFA has an opinion that the most appropriate valuation approach is the Discounted Cash Flows Approach. The share value of EMCS based on this approach is Baht 46.69 – 50.47 per share. Thus, IFA has an opinion that the Offering price of Baht 50.00 per share is appropriate as the Offering price is close to the share value according to Discounted Cash Flows Approach.



4. SUMMARY OF THE INDEPENDENT FINANCIAL ADVISOR OPINION Based on our analysis and considerations of several factors as stated in the report

regarding the Sale Shares Transaction of EMCS of the Company under key objectives to prevent risk from uncertainty of restructuring the group of companies under supervision of THRE which shall benefit the competitions of Non-Life Insurance Group of Companies, while the Company is in Life Insurance Businesses, which has no benefits from such competitions. IFA, therefore, has an opinion that to entering into the Transaction shall enhance clear picture on restructuring the Grop of Companies.

In addition, the Company needs to reduce risk as minority shareholder with inability to participate in management decision that may be forced to accept the impact from increasing investment to improve business efficiency to cope with technology and prevent the international competitor(s) from taking significant market shares. If the Company sells common shares of EMCS, it would otherwise result to reducing capital increase and/or realizing changes in future performance of EMCS.

However, to enter into the Transaction may cause the Company to lose opportunity to realize future profits from EMCS as related company; if, in the future, EMCS would be able to perform well and maintain profits as in the past and/or gain more profit after restructuring. But when comparing the uncertainty on growth and performance, such weakness of opportunity loss shall have little significant effect to the Company. In addition, EMCS Businesses have no relation to the Company’s core business. Under norm of a financial investor, the Company shall decide to exit when such investment meets target return and at an appropriate timing. Especially when risk profile of such investment changes, a financial investor shall consider exit to protect downside risk rather than holding such investment for uncertain upside gain.

In valuing EMCS’s share, IFA is of an opinion that the valuation using the the Discounted Cash Flow Approach (“DCF”) is the most appropriate. The value derived by using DCF falls in a range of Baht 46.41-51.15 per share. Therefore, the Offering price at Baht 50.00 per share is appropriate and fair because it is in between such range. In addition, with reference of key terms and conditions in entering into the Transaction, IFA has an opinion that key conditions of entering into the Transaction are under general terms and conditions, and consistent with the rules and regulations of SEC and market price. As a result, IFA has an opinion that terms and conditions of the Transaction are also appropriate.

From the above considerations, which may have effects to the shareholders, the IFA is an opinion that the shareholders should approve entering into the Transaction. However, in considering the approval or disapproval of the transaction, the shareholders should also study the information and opinions provided in this report together with other information and documents attached to the invitation letter for the shareholders meeting before making a decision. The decision to approve or disapprove the Transaction is at the discretion of the shareholders.



WBCA as the Independent Financial Advisor hereby certifies that the opinions have prudently been provided in compliance with the professional standards and principles, with due regard to the shareholders’ benefits. Yours sincerely, Wealthiest BCA Company Limited (Ms. Xanxana Ratanopas) Supervisor Contact: Wealthiest BCA Company Limited Tel: 02-233-5474

Ms. Mariya Benyasut Director

รองกรรมการผูจ้ดัการ

Ms. Nanthaya Uchupalanan Director

รองกรรมการผูจ้ดัการ


OPINION OF THE INDEPENDENT FINANCIAL ADVISOR Attachment 1 page 1

Attachment 1 Investment plan of EMCS

PROJECTS

2017 2018 2019 2020 2021 2022

Operation Operating time Total

Investment (Baht)

Investment per year (Baht)

2560 2561 2562 2563 2564 2565 Improvement, Administration and Maintenance of the Standards and Security of the Company’s Information Technology System (Information Security Management System: ISMS)- ISO 27001

60 Months 9,801,600 2,563,200 5,222,400 504,000 504,000 504,000 504,000

Improvement of the Standards and Security of the Company’s Information Technology Service Management Systems (SMS) and Capability Maturity Model Integration - ISO 20000 & CMMI

66 Months 24,084,000 3,031,200 6,681,600 2,750,400 4,248,000 4,622,400 2,750,400

Development, Improvement and Administration of the Technology System Equipment (Server Replacement - Z1)

60 Months 26,541,780 1,080,000 8,341,660 2,878,000 48,000 11,166,120 3,028,000

Increase of 20 employees (to support 1& 2 - ISO 27001, 20000, CMMI)

4,000,000 1,000,000 1,000,000 - 1,000,000 1,000,000 -

ISO Consultant Fee (EMCS consultant) 12 Months 5,000,000 450,000 900,000 900,000 900,000 900,000 950,000 SAP B1 accounting software project 12 Months 6,720,000 - 4,000,000 680,000 680,000 680,000 680,000

Total Projects 76,147,380 8,124,400 26,145,660 7,712,400 7,380,000 18,872,520 7,912,400

MANPOWER

2017 2018 2019 2020 2021 2022

Operation Operating Time Total Investment

(Baht) Investment per year (Baht)

2560 2561 2562 2563 2564 2565 Increase of 5 Employees to support ISO Long-Term 3,000,000 3,000,000 Increase of 15 Employees to support operation (y1=5, y2=10) Long-Term 9,000,000 3,000,000 6,000,000 Related Employees Development Long-Term 44,377,838 1,500,000 14,000,000 6,700,000 7,035,000 7,386,750 7,756,088

Total Expenses 56,377,838 7,500,000 20,000,000 6,700,000 7,035,000 7,386,750 7,756,088



CAPEX

2017 2018 2019 2020 2021 2022

Operation Operating

time

Total Investment

(Baht)

Investment per year (Baht)

2560 2561 2562 2563 2564 2565 Developing and Improving the Standards and Security of the Information Technology System in accordance with those determined by the Office of Insurance Commission Improvement, Administration and Maintenance of the Standards and Security of the Company’s Information Technology System (Information Security Management System: ISMS)- ISO 27001

60 Months

- Consultancy Fee 2,600,000 500,000 2,100,000 - Software 4,177,600 1,559,200 2,618,400


66 Months

- Consultancy Fee 10,900,000 1,500,000 4,200,000 1,100,000 1,900,000 1,600,000 600,000

- Software 10,160,000 1,027,200 1,977,600 1,146,400 1,844,000 2,518,400 1,646,400

Development, Improvement and Administration of the Technology System Equipment (Server Replacement -Z1)

60 Months 12,058,500 2,450,380 550,000 9,058,120

- Replacement ( PC for programmers &/ officers ) 8,800,000 1,000,000 2,500,000 1,300,000 1,500,000 2,500,000 - IT Internal Improvement (Z2) 5,683,280 80,000 3,391,280 1,028,000 48,000 608,000 528,000

Equipment for 5 increased employees (to support 1& 2 - ISO 27001, 20000, CMMI) 1,000,000 500,000 500,000 Total 55,379,380 6,166,400 19,237,660 5,124,400 4,292,000 15,284,520 5,274,400

Employee Development Plan to support the competition Equipment for 15 increased employees (2017: 5 people, 2018: 10 people) 3,000,000 500,000 1,000,000 500,000 1,000,000

Total 3,000,000 500,000 1,000,000 - 500,000 1,000,000 - Accounting System Development Plan SAP B1 accounting software project 12 Months 6,720,000 - 4,000,000 680,000 680,000 680,000 680,000

Total 6,720,000 - 4,000,000 680,000 680,000 680,000 680,000 Total CAPEX 65,099,380 6,666,400 24,237,660 5,804,400 5,472,000 16,964,520 5,954,400



EXPENSES

2017 2018 2019 2020 2021 2022

Operation Operating time Total Investment

(Baht) Investment per year (Baht)

2560 2561 2562 2563 2564 2565 Developing and Improving the Standards and Security of the Information Technology System in accordance with those determined by the Office of Insurance Commission Improvement, Administration and Maintenance of the Standards and Security of the Company’s Information Technology System of the Company (Information Security Management System: ISMS) - ISO 27001

60 Months 3,024,000 504,000 504,000 504,000 504,000 504,000 504,000


66 Months 3,024,000 504,000 504,000 504,000 504,000 504,000 504,000

Development, Improvement and Administration of the Technology System Equipment (Server Replacement -Z1)

60 Months -

- Replacement (PC for programmers &/ officers) - - IT Internal Improvement (Z2) -

Equipment for 5 increased employees (to support 1& 2 - ISO 27001, 20000, CMMI)

-

ISO Consultant Fee (EMCS consultant) 12 Months 5,000,000 450,000 900,000 900,000 900,000 900,000 950,000 Total EXPENSES 11,048,000 1,458,000 1,908,000 1,908,000 1,908,000 1,908,000 1,958,000



Attachment 2 Internal (unaudited) Financial statement of EMCS as of 30 June 2017

EMCS Thai Company Limited

Statements of financial position

As of 30 June 2017 and 31 December 2016

(Unit: Baht)

30 June 2017

31 December 2016

(Unaudited)

(Audited)

Assets

Current assets

Cash and cash equivalents

72,063,159

17,627,805

Current investments - net

2,681,684

66,518,823

Trade receivables - net

16,543,153

15,187,663

Other current assets

Interest receivables

48,167

204,465

Advances paid

-

82,500

Prepaid expenses

437,871

456,746

Others

257,128

57,394

Total current assets

92,031,162

100,135,396

Non-current assets

Premises and equipment - net

19,218,061

17,637,476

Intangible assets - net

16,494,268

14,227,791

Deferred tax assets

1,504,648

1,428,574

Other non-current assets

-

538,367

Total non-current assets

37,216,977

33,832,208

Total assets

129,248,139

133,967,604



(Unit: Baht)

30 June 2017

31 December 2016

(Unaudited)

(Audited)

Liabilities and shareholders' equity

Current liabilities

Trade and other payables

1,286,077

1,133,118

Income tax payable

4,724,572

4,626,656

Other current liabilities

Unearned revenue

3,167,851

2,756,916

Undue output value added taxes

1,119,639

1,025,477

Accrued bonus

-

2,160,000

Accrued expenses

1,263,341

1,190,535

Others

76,399

109,621

Total current liabilities

11,637,879

13,002,323

Non-current liabilities

Provision for long-term employee benefits

6,503,553

5,962,486

Total non-current liabilities

6,503,553

5,962,486

Total liabilities

18,141,432

18,964,809

Shareholders' equity

Share capital

Registered, issued and paid-up

6,000,000 ordinary shares of Baht 5 each

30,000,000

30,000,000

Retained earnings

Appropriated - statutory reserve

3,000,000

3,000,000

Unappropriated

78,421,680

82,357,661

Other component of shareholders' equity

Revaluation deficit on available-for-sale investments

- net of income taxes

(314,973)

(354,866)

Total shareholders' equity

111,106,707

115,002,795

Total liabilities and shareholders' equity

129,248,139

133,967,604




Statements of income

For the 3 months and 6 months, as of 30 June 2017

(Unit: Baht)

For the 3 months, as of

For the 6 months, as of

30 June 2017

30 June 2017

2560

2559

2560

2559

Revenues

Service income

30,483,705

27,791,824

60,523,302

54,725,319

Interest and dividend income

217,700

192,104

487,542

357,113

Other income

102,365

7,945

321,377

93,465

Total revenues

30,803,770

27,991,873

61,332,221

55,175,897

Expenses

Cost of services

8,368,698

10,548,415

24,957,604

23,298,490

Administrative expenses

7,126,281

2,158,824

9,651,475

4,552,273

Total expenses

15,494,979

12,707,239

34,609,079

27,850,763

Profits before income tax expenses

15,308,791

15,284,634

26,723,142

27,325,134

Income tax expenses

(3,087,534)

(3,076,077)

(5,459,123)

(5,493,287)

Profits for the years

12,221,257

12,208,557

21,264,019

21,831,847




(Unaudited)

Statements of changes in shareholders' equity

For the 6 months, as of 30 June 2017 and 2016

(Unit: Baht)

Retained earnings

Revaluation deficit on

Issued and paid-up

Appropriated -

available-for-sale

investment -

share capital

statutory reserve

Unappropriated

net of income taxes

Total

Balance as at 1 January 2016

30,000,000

3,000,000

62,279,184

(497,485)

94,781,699 Dividends paid

-

-

(10,200,000)

-

(10,200,000)

Revaluation on available-for-sale investments during the year

-

-

-

218,137

218,137 Deferred income taxes recognised in respect of

revaluation of available-for-sale investments during the year

-

-

-

(43,627)

(43,627)

Profit for the year

-

-

21,831,847

-

21,831,847 Balance as at 31 December 2016

30,000,000

3,000,000

73,911,031

(322,975)

106,588,056

Balance as at 1 January 2017

30,000,000

3,000,000

82,357,661

(354,866)

115,002,795

Dividends paid

-

-

(25,200,000)

-

(25,200,000) Revaluation on available-for-sale investments during the year

-

-

-

49,867

49,867

Deferred income taxes recognised in respect of

revaluation of available-for-sale investments during the year

-

-

-

(9,973)

(9,973) Profit for the year

-

-

21,264,019

-

21,264,019

Balance as at 30 June 2017

30,000,000

3,000,000

78,421,680

(314,973)

111,106,707

Documents

EMCS Thai Company Limited