| Business & Industrial Insurance Company
Limited |
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
| COMPANY
INFORMATION |
|
| BRANCH
OFFICES |
|
|
| DIRECTORS' REPORT TO THE
SHAREHOLDERS |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
|
| PROFIT AND LOSS ACCOUNT |
|
| STATEMENT
OF CASH FLOWS |
|
| NOTES TO THE ACCOUNTS |
|
| CONSOLIDATED
REVENUE ACCOUNT |
|
| FIRE
REVENUE ACCOUNT |
|
| MARINE
REVENUE ACCOUNT |
|
| MOTOR REVENUE ACCOUNT |
|
| MISCELLANEOUS REVENUE ACCOUNT |
|
| FORM AA |
|
|
|
| PATTERN OF SHARE HOLDINGS |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 6th Annual General Meeting of Business and
Industrial Insurance Company |
|
| Limited
will be held on Monday June 25, 2001 at 10:30 a.m. at the Registered Office
of the Company First Floor, |
|
| 65-
East Pak Pavilion, Blue Area, Islamabad to transact the following business: |
|
|
| ORDINARY
BUSINESS |
|
| 1)
To confirm Draft Minutes of 5th Annual General Meeting held on June 28, 2000 |
|
| 2)
To receive, consider and adopt the Audited Accounts of the Company together
with Directors' and Auditors' |
|
| Report
thereon for the period ended December 31, 2000. |
|
| 3)
To appoint Auditors and fix their Remuneration. The present Auditors M/s
Avais Hyder Zaman, Rizwani |
|
| Chartered
Accountants are retiring and being eligible offer themselves for
re-appointment. |
|
| 4)
To transact any other business with the permission of the Chair. |
|
|
|
By Order of the Board |
|
|
|
|
| June
2, 2001 |
|
Shahid Maqbool |
|
| Islamabad. |
|
Company Secretary |
|
|
| NOTES |
|
| 1)
The Share Transfer Book of the Company will remain closed from June 18 to
June 25, 2001. (both days |
|
| inclusive). |
|
|
| 2)
A member entitled to attend and vote at the meeting may appoint a proxy m
writing to attend the meeting |
|
| and
vote on a member's behalf A proxy need not be a member of the Company. |
|
|
| 3)
Duly completed forms of proxy must be deposited with the Company Secretary at
the Head Office of the |
|
| Company
not later than 48 hours before the time appointed for the meeting. |
|
|
| 4)
Shareholders are requested to notify any change in their addresses
immediately. |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
MANAGEMENT |
|
| Mian
Mumtaz Abdullah |
|
CORPORATE OFFICE: |
|
| (Chairman
& Chief Executive) |
|
Chairman and Chief
Executive |
|
|
Mian Mumtaz Abdullah |
|
| Inam-ul-Haq |
|
FCMA |
|
| Sajid
All Abbasi |
|
| Parveen
Akhtar Malik |
|
Executive Director |
|
| Arsalan
Bashir Nawaz |
|
Mian Aamir Mumtaz |
|
| Ghulam
All Raja |
|
ACA, ACMA |
|
| Shahzad
Chamdia |
|
| Shafiq
A Khan |
|
Executive Director
(Marketing) |
|
|
Mohammad Rafi |
|
| Auditors |
|
| Avais
Hyder Zaman Rizwani |
|
Company Secretary |
|
| Chartered
Accountants, |
|
Shahid Maqbool |
|
| Islamabad |
|
|
Registered Office/Head
Office: |
|
| Legal
Advisors |
|
First Floor, 65 East Pak
Pavilion, |
|
| Mian
Javed Jalal |
|
Fazal-e-Haq Road, Blue
Area, |
|
| Afridi
Shah Minallah |
|
Islamabad - Pakistan, |
|
|
Te1:.051-2278957-8 - Fax
No.051-2271914 |
|
| BANKERS |
|
| Bank
of Khyber |
|
REINSURERS |
|
| Muslim
Commercial Bank Limited |
|
Korean Reinsurance
Company |
|
| Allied
Bank Limited |
|
(Seoul - Korea) |
|
| Askari
Commercial Bank Limited |
|
| United
Bank Limited |
|
Alexander Forbes Ltd. |
|
| Habib
bank Limited |
|
(Port Louis - Mauritius) |
|
| National
Bank of Pakistan |
|
| Soneri
Bank Limited |
|
Provident Capital
Indemnity Ltd. |
|
| Prime
Commercial Bank Limited |
|
(Brussels - Belgium) |
|
| Indus
Bank Limited |
|
| Bank
of Punjab |
|
|
|
| BRANCH
OFFICES |
|
|
| ISLAMABAD |
|
ISLAMABAD |
|
| Office
No. 2, 2nd Floor, 12-D, SNC Centre, |
|
1st Floor, 65- East, Pak
Pavilion, |
|
| Fazal-e-Haq
Road, Blue Area, |
|
Fazal-ul-Haq Road, Blue
Area, Islamabad. |
|
| Islamabad. |
|
Ph: 051-2278956 |
|
| Ph:
2872121, Fax: 2826264 |
|
Fax: 051-2271914 |
|
| Mob:
0300-541039 |
|
Mob: 0300-556390 |
|
|
| LAHORE
(EDEN CENTRE-I) |
|
LAHORE (EDEN CENTRE-2) |
|
| Main
Office (Punjab) |
|
Main Office (Punjab) |
|
| 325-Eden
Centre, 43-Jail Road, |
|
325-Eden Centre, 43-Jail
Road, |
|
| Lahore. |
|
Lahore. |
|
| Tel.
No, 042-7532114-15 |
|
Tel. No. 042-7570034,
7532114-15 |
|
|
| GUJRAT |
|
GUJRANWALA |
|
| Opp.
Muslim Commercial Bank, |
|
1st Floor Malik Dal
Building, |
|
| Railway
Road, Gujrat. |
|
Bank Square, Gujranwala. |
|
| Ph:
04331-513533 |
|
Ph: 0431-213017 |
|
| Mob:
0300-640644 |
|
Mob: 0300-641390,649472 |
|
|
| SIALKOT |
|
SIALKOT |
|
| Opp.
Nishat Cinema, |
|
Room No. 9, Vains Mension |
|
| Kutchary
Road, Sialkot |
|
Paris Road, Sialkot |
|
| Tel:
0432-264363 Fax: 0432-271768 |
|
Ph: 0432-267572,263753 |
|
|
| PESHAWAR |
|
QUETTA |
|
| State
Life Building ,Ground Floor |
|
No. 5/318 Ground Floor |
|
| The
Mall Peshawar Cantt. |
|
Hassan Plaza, Patel Bagh
Quetta. |
|
| Ph:
091-274752 |
|
Ph: 081-837697-8 |
|
| Fax:
091-275021 |
|
Fax: 081-837697 |
|
|
| KARACHI |
|
SAHIWAL |
|
| 2rid
Floor, Rehmani Chamber, Altaf Hussain Road, |
|
All Street, Karbala Road |
|
| New
Challi Karachi |
|
Mohallah Faizabad |
|
| Ph:
021-2626505 |
|
Sahiwal. |
|
| Fax:
021-2626505 |
|
Ph: 0441-60736, 77247 |
|
|
| SARGODHA |
|
FAISALABAD |
|
| Inyat
building, Nashtar Market, |
|
P-57/1, 1st Floor,
Arsalan Plaza |
|
| Sargodha. |
|
Kotwaly Road |
|
| Ph:
4051-740108 |
|
Faisalabad |
|
|
Mob. 0300-661126 |
|
| SAMBRIAL |
|
| Ghalla
Mandi |
|
LAHORE |
|
| Sambrial |
|
3rd Floor, Carpet
Chambers, |
|
| Ph:
04341-520358 |
|
10-Abbot Road Lahore. |
|
|
Ph:042-6364814 |
|
|
Fax: 042-6364814 |
|
|
Mob: 0300-477390 |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| 1.
The Directors of Business & Industrial Insurance Company Limited have
great pleasure in presenting to |
|
| the
shareholders the Sixth Annual Report on the operational results of the
Company for the year |
|
| ended
December 31, 2000 together with the Financial Statements and the Auditors'
Report thereon. |
|
|
| 2.
GENERAL |
|
| In
the year 2000, the economic condition of the country continued to remain
under pressure. The |
|
| position
was aggravated by strikes and closures of the business on account of the
introduction of GST |
|
| and
Government survey for Data Collection. The dispute regarding Hub project also
affected the |
|
| investment
climate of the country. The new Insurance Ordinance was promulgated in August
2000, |
|
| increasing
the paid up capital of general insurance to Rs.800 million by the year 2004
and increasing |
|
| the
statutory deposit to Rs.10.0 million. The new Ordinance has bro0ght into
existence a number of new |
|
| provisions
which are likely to affect the insurance sector. The continued discrimination
in the treatment |
|
| of
capital gain and dividend between the insurance sector and others has been
another irritant. However |
|
| with
the grace of ALLAH, our Company has shown encouraging financial results for
the last two years. |
|
| The
Company earned a net profit of Rs.3.438 million as compared to Rs.2.118
million earned last year. |
|
| Thus
it has been able to absorb substantial amount of previous losses in the year.
We are hopeful that |
|
| in
the next year the Company would not only be able to meet the new provisions
of capital requirement, |
|
| but
would also wipe out the remaining deficit. |
|
|
| 3.
COMPANY PERFORMANCE |
|
| Despite
the challenging circumstances the Company (with Allah's blessings) has made
good progress |
|
| during
the last two years as will be seen from the results given hereunder: |
|
|
| SUMMARY
RESULTS |
|
|
2000 |
1999 |
|
|
(Rupees) |
(Rupees) |
|
| Gross
premium |
|
29,797,354 |
20,911,922 |
|
| Retained
premium |
|
17,447,470 |
13,048,836 |
|
| Reserves
for un-expired risks |
|
6,978,988 |
5,219,534 |
|
| Net
claims paid |
|
660,544 |
1,134,055 |
|
| Net
claims outstanding |
|
556,433 |
664,751 |
|
| Expenses
of management |
|
12,738,259 |
12,766,809 |
|
| Underwriting
profit/ (loss) |
|
4,932,166 |
3,052,849 |
|
| Profit/(loss)
after tax |
|
3,438,622 |
2,118,468 |
|
|
| The
Gross Premium of the Company rose from Rs.20.911 million during the year 1999
to Rs.29.797 |
|
| million
during the current year thus registering an increase of 43%. Similarly profit
increased by 62% as |
|
| compared
to the previous year. This increase is due to the fact that there is no
increase in management |
|
| expenses,
prudent underwriting, low claim ratio , and selection of appropriate risk mix
i.e. increase in |
|
| Fire
and Marine business and less concentration on the motor business. |
|
|
| 4.
UNDERWRITING RESULTS |
|
| The
gross premium underwriting was Rs.29.797 million, details of which are given
below: |
|
|
|
2000 |
1999 |
|
|
(Rs. in million) |
(Rs. in million) |
|
| Fire
Insurance Account |
|
20.985 |
12.827 |
|
| Marine
Insurance Account |
|
5.600 |
4.982 |
|
| Motor
Insurance Account |
|
1.557 |
2.590 |
|
| Miscellaneous
Insurance Account |
|
1.655 |
0.512 |
|
|
----------- |
----------- |
|
| TOTAL: |
|
29.797 |
20.911 |
|
|
========== |
========== |
|
|
|
| During
the year stress was laid on increasing the business and to ensure that
business undertaken was |
|
| sound
and taken after proper scrutiny. Efforts were made to minimize loss in motor
insurance and |
|
| consequently
the gross premium underwritten for motor business was reduced to Rs.1.55
million as |
|
| compared
to Rs.2.59 million in the year 1999 and Rs.5.534 million in the year 1998. |
|
|
| 5.
INVESTMENTS |
|
| The
total investment in the year has decreased from Rs 11 996 million (including
statutory deposit with |
|
| the
State Bank of Pakistan) in 1999 to Rs.11.863 Million in 2000. Investment in
shares has increased to |
|
| Rs.624,050
during the year as compared to Rs.5i2,575 as per book value last year. The
holding cost |
|
| per
share in some companies decreased due to issue of bonus shares. |
|
|
| 6.
APPROPRIATION |
|
| The
net profit have been appropriated as under: |
|
|
2000 |
1999 |
|
|
(Rupees) |
(Rupees) |
|
| Balance
brought forward from last year |
|
(6,885,453) |
(9,003,921) |
|
| Profit(loss)
during the year |
|
3,438,621 |
2,118,468 |
|
|
----------- |
----------- |
|
| Unappropriate
Loss carried forward |
|
(3,446,832) |
(6,885,453) |
|
|
----------- |
----------- |
|
|
|
|
| 7. FUTURE STRATEGY |
|
| A
team of highly professional marketing producers has been engaged in the
Punjab and re-insurance |
|
| department
has been re-organised. As a result of these measures we hope that premium
will further |
|
| increase
in the coming year, while the management expenses would continue to be
controlled. With |
|
| these
new arran0ement~ profitability of the company will further improve. |
|
|
| 8.
EARNING PER SHARE |
|
| The
earning per share has increased from Rs.0.52 in 1999 to Rs.0.84 during the
year 2000. |
|
|
| 9.
ACKNOWLEDGEMENT |
|
| The
Board wishes to express its deep appreciation for the dedicated work and
efforts put in by all the |
|
| officers
and staff of the company and the excellent support extended to the company by
its valued |
|
| clients
and shareholders, Securities and Exchange Commission of Pakistan, Pakistan
Re-insurance |
|
| Company
Limited and our other reinsurers during the year. |
|
|
|
On Behalf of the Board of Directors |
|
|
|
|
|
Mian Mumtaz Abdullah |
|
|
Chairman & Chief Executive Officer |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of M/S. BUSINESS & INDUSTRIAL
INSURANCE COMPANY LIMITED, |
|
| as
at December 31,2000, the Fire, the Marine, the Motor and Miscellaneous
Insurance Revenue Accounts, the Profit |
|
| and
Loss account the profit and loss Appropriation Account and the Cash Flow
Statement, together with the notes |
|
| forming
part thereof, for the year ended, and we state that we have obtained all the
information and explanations |
|
| which
to the best of our knowledge and belief were necessary for the purpose of our
audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal control, and |
|
| prepare
and present the above said statement in conformity with the approved
accounting standards and the |
|
| requirements
of the Companies Ordinance, 1984. Our responsibility is to express an opinion
on these statements |
|
| based
on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards require |
|
| that
we plan and perform the audit to obtain the reasonable assurance about
whether the above said statements are |
|
| free
of any material misstatement. An audit includes examining, on a test basis,
evidence supporting the amount and |
|
| disclosures
in the above said statements. An audit also includes assessing the accounting
policies and significant |
|
| estimates
made by the management, as well as, evaluating the overall presentation of
the above said statements. We |
|
| believe
that our audit provides a reasonable basis for our opinion and after due
verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of accounts have been kept by the Company as
required by the Companies |
|
| Ordinance,
1984. |
|
|
| (b)
In our opinion: |
|
|
| i. the Balance sheet, the Fire, the Marine,
the Motor and Miscellaneous Insurance Revenue Accounts, |
|
| Profit
and Loss Account, the Profit and Loss Appropriation Account together with the
notes thereto have |
|
| been
drawn up in conformity with the provision of the Insurance Act, 1938 and are
in agreement with the |
|
| books
of accounts and are further in accordance with the accounting policies
consistently applied; |
|
|
| ii. the expenditure incurred during the year
was for the purpose of the Company's business: arid |
|
|
| iii. the business conducted, investments made
and the expenditure incurred during the year were in |
|
| accordance
with the objects of the Company. |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to us and as shown by |
|
| the
books of the Company, the Balance Sheet, the Fire, the Marine, the Motor and
Miscellaneous insurance |
|
| Revenue
Accounts, the Profit and Loss Account and the Profit and Loss Appropriation
Account and the Cash |
|
| Flow
Statement, together with the notes thereto give the information required by
the Insurance Act, 1938, in the |
|
| manner
so required and respectively give a true and fair view of the state of the
Company's affairs as at |
|
| December
31,2000 and of the Profit and the Cash Flow for the year then ended; |
|
|
| (d)
we have verified the cash and bank balances and investment by actual
inspection or by production of certificates; |
|
|
| (e)
as per Section 40 c(2) of the Insurance Act, 1938 as amended, we certify that
all expenses of management |
|
| wherever
incurred, whether directly, indirectly and all charges incurred in respect of
Fire, Marine, Motor and |
|
| Miscellaneous
Insurance Business transacted by the Company in Pakistan have been fully
debited to the |
|
| respective
revenue accounts as expenses; |
|
|
| (f)
as per regulation II of part I of the Third Schedule of the Insurance Act,
1938 as amended we certify that the |
|
| Company
has not paid to any person any commission in any form outside Pakistan in
respect of Insurance |
|
| business
transacted by the Company in Pakistan and that the company had not received
outside Pakistan from |
|
| any
person any commission in any form in respect of any insurance business
reinsured abroad; and |
|
|
| (g)
in our opinion, no Zakat was deductible at source, under the Zakat and Ushr
Ordinance 1980. |
|
|
| 28
May, 2001 |
|
AVAIS HYDER ZAMAN RIZVVANI |
|
| Place:
Islamabad |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS ON DECEMBER 31, 2000 |
|
|
|
Notes |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
| SHARE
CAPITAL & RESERVES |
|
| Authorised
capital: |
|
| 5,000,000
Ordinary shares of Rs.10/- each |
|
50,000,000 |
50,000,000 |
|
|
========== |
========== |
|
| Issued,
Subscribed & Paid up: |
|
| 4,100,000
Ordinary shares of Rs.10/- each |
|
| fully
paid in cash |
|
41,000,000 |
41,000,000 |
|
|
| General
Reserve |
|
350,000 |
350,000 |
|
| Unappropriated
Profit/(Loss) |
|
(3,446,832) |
(6,885,453) |
|
|
---------- |
---------- |
|
|
37,903,168 |
34,464,547 |
|
| Balance
of Accounts |
|
|
|
| Fire
revenue account |
|
4,786,498 |
3,571,436 |
|
| Marine
revenue account |
|
1,447,674 |
847,609 |
|
| Motor
revenue account |
|
241,450 |
648,375 |
|
| Misc.
revenue account |
|
503,366 |
152,114 |
|
|
---------- |
---------- |
|
|
6,978,988 |
5,219,534 |
|
| Liability
Against Assets Subject to Finance Lease |
|
439,773 |
83,965 |
|
|
| Current
Liabilities |
|
| Estimated
liabilities in respect of outstanding claims |
|
| whether
due or intimated. |
|
3 |
556,433 |
664,751 |
|
| Due
to other persons or bodies carrying on |
|
| insurance
business |
|
3,547,049 |
1,160,215 |
|
| Sundry
creditors (including outstanding or accrued |
|
| commission
and expenses) |
|
3,752,908 |
2,753,656 |
|
| Over draft |
|
2,004,688 |
|
| Current
portion of finance lease |
|
196,444 |
25,038 |
|
|
---------- |
---------- |
|
|
10,057,522 |
4,603,660 |
|
|
---------- |
---------- |
|
|
55,379,451 |
44,371,706 |
|
|
========== |
========== |
|
| PROPERTY
AND ASSETS |
|
| Investment
(in Pakistan) at cost: |
|
| Statutory
doposit with State Bank of Pakistan |
|
350,000 |
350,000 |
|
| Share
in corporate bodies |
|
4 |
624,050 |
512,575 |
|
|
2,300,000 |
2,300,000 |
|
|
---------- |
---------- |
|
| Long
term fixed deposits |
|
3,274,050 |
3,162,575 |
|
|
| Current
Assets |
|
| Agent
balances and outstanding premium |
|
15,695,377 |
9,347,856 |
|
| Advances,
deposits, pre-payments & other receivable |
5 |
7,947,185 |
5,243,833 |
|
| Amount
due from other persons or bodies |
|
|
|
| carrying
on insurance business |
|
12,354,080 |
9,359,195 |
|
| Short
term fixed deposits |
|
8,588,676 |
8,834,129 |
|
| Cash
on current account with banks |
|
1,133,566 |
861,121 |
|
| Cash
and stamps in hand |
|
356,877 |
274,671 |
|
|
---------- |
---------- |
|
|
46,076,367 |
33,920,805 |
|
| Fixed
Assets (at cost less depreciation) |
|
| Vehicles |
|
2,566,774 |
3,158,138 |
|
| Furniture
and fixtures |
|
1,336,333 |
1,409,811 |
|
| Office
equipment |
|
1,216,869 |
1,312,488 |
|
| Assets
subject to finance lease |
|
909,058 |
542,394 |
|
|
---------- |
---------- |
|
|
6,029,034 |
6,422,831 |
|
| Deferred Cost |
|
-- |
865,495 |
|
|
---------- |
---------- |
|
|
55,379,451 |
44,371,706 |
|
|
========== |
========== |
|
| DIRECTORS'
CERTIFICATE |
|
| We
certify that: |
|
|
| 1.
Investments have been stated in the balance sheet at cost. |
|
| 2
The values of all the assets have been reviewed as at December 31,2000 |
|
| and
in our belief such assets as set forth in the balance sheet are shown |
|
| in
the aggregate at amounts not exceeding their realisable or market values |
|
| under
the several headings. |
|
|
|
Mian Mumtaz Abdullah |
|
Inam-ul-Haq |
|
|
Chief Executive |
|
Director |
|
|
| The
annexed notes form an integral part of these accounts |
|
|
| 28 May 2001 |
|
| A210
Islamabad |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED DECEMBER 31, 2000 |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| Expenses
of Management |
|
| (Not
applicable to any head) |
|
1,152,989 |
1,036,172 |
|
| Depreciation
expenses |
|
1,134,613 |
1,205,920 |
|
| 7akat |
|
16,120 |
12,621 |
|
| Auditors'
remuneration |
|
60,000 |
80,240 |
|
| Financial
charges |
|
59,282 |
33,040 |
|
| Amortisation
of deferred cost |
|
865,495 |
865,495 |
|
| Legal,
Professional expenses |
|
131,300 |
122,342 |
|
| Provision
for taxation - current |
|
200,000 |
100,000 |
|
|
---------- |
---------- |
|
|
3,619,799 |
3,455,830 |
|
| Profit/loss
Transfer to Appropriation Account |
|
3,438,621 |
2,118,468 |
|
|
---------- |
---------- |
|
|
7,058,420 |
5,574,298 |
|
|
========== |
========== |
|
| Interest/Markup
Income |
|
| (Not
applicable to any head) |
|
1,442,517 |
2,055,339 |
|
| Gain
on sale of investments/shares |
|
405,242 |
373,630 |
|
| Profit/(Loss)
on sales of fixed assets |
|
(2,843) |
(16,642) |
|
| Gain
(Loss) on sale of vehicles |
|
281,338 |
109,122 |
|
|
---------- |
---------- |
|
|
2,126,254 |
2,521,449 |
|
| Profit/(Loss)
Transferred From |
|
|
|
| Fire
insurance revenue account |
|
4,189,595 |
534,070 |
|
| Marine
insurance revenue account |
|
602,372 |
560,970 |
|
| Motor
insurance revenue account |
|
162,302 |
2,409,839 |
|
| Misc.
insurance revenue account |
|
(22,103) |
(452,030) |
|
|
---------- |
---------- |
|
|
4,932,166 |
3,052,849 |
|
|
---------- |
---------- |
|
|
7,058,420 |
5,574,298 |
|
|
========== |
========== |
|
| Profit
and Loss Appropriation Account |
