| EFU Life
Assurance Limited |
|
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|
|
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|
| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
|
| Management |
|
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
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| Revenue
Account |
|
| Balance Sheet |
|
|
| Statement
of Changes in Equity |
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| Cash
Flow Statement |
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| Notes
to the Account |
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| Form AA |
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|
| Pattern
of Shareholding |
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| Offices |
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| COMPANY
INFORMATION |
|
|
| Chairman |
|
| SAIFUDDIN
N. ZOOMKAWALA |
|
|
| Managing
Director & Chief Executive |
|
| TAHER
G. SACHAK |
|
|
| Directors |
|
| ASHRAF
W. TABANI |
|
| JAHANGIR
SIDDIQUI |
|
| RAFIQUE
R. BHIMJEE |
|
| MUNEER
R. BHIMJEE |
|
| HASANALI
ABDULLAH |
|
|
| Corporate
Secretary |
|
| SYED
MEHDI IMAM |
|
|
| Appointed
Actuary |
|
| OMER
MORSHED, F.I.A., F.C.A. |
|
|
| Consulting
Actuary & Advisor |
|
| MICHAEL
J de H. BELL, F.I.A. |
|
|
| Medical
Director |
|
| DR.
TAJUDDIN A. MANJI, F.R.C.P., M.R.C.P. |
|
|
| Legal Advisor |
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| MUHAMMAD
ALI SAYEED, M.A.B.L. |
|
|
| Auditor |
|
| HYDER
BHIMJI & CO. |
|
| Chartered
Accountants |
|
| Karachi. |
|
|
| Registered
Office |
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| 4th
Floor, A1-Malik Centre |
|
| 70W,
F-7/G Jinnah Avenue (Blue Area) |
|
| Islamabad |
|
|
| Main Offices |
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| 37K,
Block-6, P.E.C.H. Society |
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| Karachi. |
|
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| 87-B/111,
Gulberg Scheme No. 3 |
|
| Lahore |
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| MANAGEMENT |
|
|
| Managing
Director & Chief Executive |
|
| TAHER
G. SACHAK |
|
|
| Executive
Director |
|
| S.
MUNEER HUSAIN RIZVI |
|
|
| National
Sales Director |
|
| NASEEM
A. CHAUDHARI |
|
|
| General
Managers |
|
| S.
A. R. ZAIDI |
|
| S.
M. BAQAR NAQVI |
|
|
| Deputy
General Manager |
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| JAMSHAID
ISLAM |
|
|
| Assistant
General Managers |
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| LINDSAY
D'MELLO |
|
| S.
SHAHID ABBAS |
|
|
| Senior
Managers |
|
| ADEEL
H. JAFRI |
|
| HASAN
RIAZ |
|
| MOHAMMAD
KASHIF NAQVI |
|
| MOHAMMAD
MUNAWAR KHALIL |
|
| T.
H. SAYYED |
|
|
| Managers |
|
| EVELYN
D. ABROGENA |
|
| FAZAL
MEHMOOD |
|
| MOHAMMAD
ZUBAIR |
|
| ZAHEER
ASLAM |
|
|
| Deputy
Managers |
|
| ASIM
MAQBOOL |
|
| FAYYAZ
MEHMOOD TAHIR |
|
| HERMITH
MANA |
|
| ZAIN
IBRAHIM |
|
|
| Advisors |
|
| ARSHAD
ABDULLAH |
|
| S. A. NAQVI |
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|
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| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 9th Annual General Meeting of the Shareholders of E
F U Life |
|
| Assurance
Ltd. will be held at the Registered Office of the Company on 4th Floor, 70-W |
|
| A1-Malik
Centre, Blue Area, F~7/G-7 Islamabad on Tuesday June 26,2001 at 3:00 p.m. to: |
|
|
| A.
ORDINARY BUSINESS: |
|
| 1.
confirm the minutes of the 8th Annual General Meeting held on June 29, 2000. |
|
| 2.
receive and consider the Audited Accounts for the year ended December 31,
2000. |
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| 3.
appoint Auditors for the year 2001 and fix their remuneration. |
|
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| B.
SPECIAL BUSINESS: |
|
| 4.
consider and if thought fit to pass the following resolutions with or without |
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| modification(s)
as Special Resolution. |
|
|
| Resolved
that the Directors be and are hereby authorized to further issue 5,000,000 |
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| ordinary
shares of the face value of Rs. 10 each by way of a rights issue in |
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| accordance
with Article 33 of the Articles of Association of the Company through |
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| offers
to the registered holders of shares of the Company as at June 15, 2001 in the |
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| proportion
of one new share for every two shares held. |
|
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| Further
resolved that the Directors of the Company be and are hereby authorized to |
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| take
such steps as may be necessary in connection with making the Rights Issue. |
|
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| Further
resolved that the unsubscribed right shares, if any, may be offered by the |
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| Directors
at par as per the Companies Ordinance, 1984. |
|
|
| 5.
transact any other business with the permission of the Chair. |
|
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|
By Order of the Board |
|
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|
SYED MEHDI IMAM |
|
| May 19, 2001 |
|
Corporate Secretary |
|
|
| NOTES |
|
|
| 1.
A member entitled to attend and vote at the General Meeting is entitled to
appoint another |
|
| member
as a proxy and vote in respect of hi/n. Forms of proxy must be deposited at
the |
|
| Company's
Registered Office not later than 48 hours before the time appointed for the |
|
| meeting. |
|
|
| 2.
CDC Account Holders are advised to follow the following guidelines of the
Securities and |
|
| Exchange
Commission of Pakistan: |
|
|
| a.
For Attending the Meeting: |
|
| i)
In case of individuals, the account holder or sub-account holder and/or the
person |
|
| whose
securities are in group account and their registration details are uploaded
as |
|
| per
the Regulations, shall authenticate his identity by showing his original
National |
|
| Identity
Card (NIC) or original passport at the time of attending the meeting. |
|
|
| ii).
In case of corporate entity, the Board of Directors' resolution/power of
attorney with |
|
| specimen
signature of the nominee shall be produced (unless it has been provided |
|
| earlier)
at the time of the meeting. |
|
|
| b.
For Appointing Proxies: |
|
| i).
In case of individuals, the account holder or sub-account holder and/or the
person |
|
| whose
securities are in group account and their registration details are uploaded
as |
|
| per
the Regulations, shall submit the proxy form as per the above requirement. |
|
|
| ii).
The proxy form shall be witnessed by two persons whose names, addresses and
NIC |
|
| numbers
shall be mentioned on the form. |
|
|
| iii).
Attested copies of NIC or the passport of the beneficial owners and the proxy
shall be |
|
| furnished
with the proxy form. |
|
|
| iv).
The Proxy shall produce his original NIC or original passport at the time of
the |
|
| meeting. |
|
|
| v).
In case of corporate entity, the Board of Directors' resolution/power of
attorney with |
|
| specimen
signature shall be submitted (unless it has been provided earlier) alongwith |
|
| proxy
form to the Company. |
|
|
| 3.
The Share Transfer Books of the Company will be closed from June 16, 2001 to
June 26, |
|
| 2001
(both days inclusive). |
|
|
| Statement
under section 160 of the Companies Ordinance, 1984 pertaining to the Special
business: |
|
|
| This
statement sets out the material facts pertaining to the special business to
be transacted at |
|
| the
Annual General Meeting of the Company to be held on June 26, 2001. |
|
|
| EFU
Life Assurance Ltd. has Paid up capital of Rs. 100,000,000 as on December 31,
2000. |
|
| The
Board of Directors at its Meeting held on May 19, 2001 has decided to issue
one Right |
|
| Share
of Rs. 10 for every two shares held i.e. 50% at par (Rs. 10). The Right
Issue, in |
|
| accordance
with Article 33 of the Article of Association of the Company, is being made
to raise |
|
| the
paid up capital in order to meet the requirement of Insurance Ordinance 2000. |
|
|
| The
Directors are interested in this business to the extent of their entitlement
to right shares as |
|
| shareholders |
|
|
|
| REPORT
OF THE DIRECTORS TO THE MEMBERS |
|
|
| The
Directors of your Company are pleased to present to you the Ninth Annual
Report of |
|
| the
Company for the year ended December 31, 2000. |
|
|
| Although
the country continues to face serious economic difficulties, your Company has |
|
| continued
it's growth, total premiums increasing to Rs. 553 million in year 2000 from |
|
| Rs.
395 million in 1999. Despite intense competition the Company has maintained
its |
|
| position
as a clear leader amongst the private sector life insurance companies
operating in |
|
| Pakistan. |
|
|
| The
Group Life business was Rs. 186 million showing a growth of 10% over the
previous |
|
| year,
the Company having 797 policies on its books. The Group Life claims were |
|
| Rs.
129.2 million showing an improvement during 2000 compared with 1999. This is
one |
|
| of
the major factors resulting in improvement in the profitability of the Group
Life |
|
| business. |
|
|
| Individual
Life business, which is the main stay of a life insurance company, registered
an |
|
| increase
of 40 % during the year, with new annualized premium issued during year 2000 |
|
| amounting
to Rs. 157 million. This continuing exponential growth in new business, while |
|
| being
an indication of the success of the Company's marketing and sales strategy,
also |
|
| gives
rise to new business strain, a phenomenon inherent in development of a new
life |
|
| company. |
|
|
| Renewal
premiums continued to build up with persistency registering an improvement |
|
| during
the year. Efforts continue to improve persistency even further, as this will
have a |
|
| significant
effect on long term profitability of the portfolio. Your Company has sound |
|
| investment
strategies for Policyholders' Fund and therefore the Unit Price of the Fund |
|
| continued
to appreciate throughout the year. |
|
|
| Your
Company continues to carry out an annual actuarial valuation and set up full
actuarial |
|
| reserves
at the end of each year. As the business matures, reserves [Balance of Life
Fund] |
|
| continues
to increase steadily being Rs. 523 million as at December 31, 2000 as
compared |
|
| to
Rs. 339 million at the end of 1999. The Company has provided Rs. 1.7 million
for |
|
| taxation
being the Turn-over tax under section 80-D of the Income Tax Ordinance 1979. |
|
| This
is being contested by your Company. The Company has appealed in the High
Court of |
|
| Sindh
at Karachi against the order of the Income Tax Appellate Tribunal. |
|
|
| The
actuarial valuation report indicates that the initial gestation period of
your Company is |
|
| over.
In future years your Company should expect to recover losses made in earlier
years. |
|
| Your
Company made an after tax profit of Rs. 15 million after providing for Rs. 11
million |
|
| for
depreciation in the value of investments. |
|
|
| The
administrative infrastructure of the Company continued to be strengthened
With the |
|
| continued
enhancement of the life insurance administration software. Your Company |
|
| continues
to apply the high quality service requirements which come from being ISO-9002 |
|
| certified. |
|
|
| The
Insurance Ordinance 2000 has increased the minimum share capital requirement
for |
|
| life
insurance companies to Rs. 150 million. As a result of this change your
company has |
|
| decided
to increase it's paid up share capital to RS. 150 million through a rights
issue. The |
|
| right
shares are being offered to existing shareholders in the ratio of one right
share for |
|
| every
two existing ordinary shares held. The share transfer books of the Company
shall |
|
| remain
closed from June 16 to June 26 2001. The shareholders whose names appear on
the |
|
| Register
of Shareholders as on June 15, 2001 shall be entitled to subscribe to the
rights |
|
| issue. |
|
|
| The
Company continues to receive valuable guidance from Mr. Michael J. de H Bell,
an |
|
| actuary
of international fame who acts as an advisor to the Board. We wish to record
our |
|
| grateful
appreciation for the expert guidance provided by him to your Company. We |
|
| further
wish to recognize and place on record our appreciation of the contribution
made by |
|
| our
Appointed Consulting Actuary Mr. Omer Morshed for his invaluable advice on |
|
| actuarial,
administrative and marketing policies of the Company. |
|
|
| We
would also like to record our appreciation and gratitude to Munchener |
|
| Ruckversicherungs
Gesellschaft (Munich Re) of Germany who are your Company's main |
|
| reinsurers,
and who, apart from providing reinsurance cover, continue to provide useful |
|
| technical
support to the Company with regards to improvement in the design of existing |
|
| products
and development of new products. Munich Re is the largest reinsurance company |
|
| in
the World with assets exceeding Rs. 4,400 billion. |
|
|
| Our
thanks are also due to EFU General Insurance Ltd. for their continuous
support and |
|
| guidance,
which has enabled the Company to establish a strong presence in the market. |
|
|
| Messrs.
Hyder Bhimji & Co., Chartered Accountants, retire and being willing to
continue |
|
| are
recommended for reappointment as Auditors of the Company for the year 2001. |
|
|
| The
Directors wish to record their appreciation for the tremendous contribution
made by |
|
| the
able and eminent officers, staff and field force of the Company towards its |
|
| development
and growth. Their continuous commitment to high ethical standards, client |
|
| service
and hard work has helped your Company emerge as a clear market leader amongst |
|
| private
sector life insurers. |
|
|
| Finally
we would like to thank our clients for the confidence expressed in us and
also to |
|
| the
Ministry of Commerce, Government of Pakistan, and to the Insurance Division
of the |
|
| Securities
Exchange Commission of Pakistan for the co-operation extended to us |
|
| throughout
the year. |
|
|
|
TAHER G. SACHAK |
|
|
ASHRAF W. TABANI |
|
Managing Director |
|
SAIFUDDIN N. ZOOMKAWALA |
|
| Karachi
May 19, 2001 |
Director |
|
& Chief Executive |
|
Chairman. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of E F U LIFE ASSURANCE LIMITED as at |
|
| December
31, 2000, and the related Revenue Account, Appropriation Account, Statement |
|
| of
Changes in Equity and Cash Flow Statement together with the notes forming
part |
|
| thereof,
for the year then 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, prepare and present the above said statements in conformity with the |
|
| requirements
of the Insurance Ordinance, 2000 and 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 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 amounts and disclosure in
the |
|
| above
said statements An audit also includes assessing the accounting policies and |
|
| significant
estimates made by 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, we report that; |
|
|
| (a)
in our opinion, proper books of account have been kept by the Company as
required |
|
| by
the Insurance Ordinance, 2000 and the Companies Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
| (i)
the Balance Sheet, Revenue Account, Appropriation Account, Statement Of |
|
| Changes
in Equity and Cash Flow Statement together with the notes |
|
| thereon,
have been drawn up in conformity with the provisions of the |
|
| repealed
Insurance Act, 1938 and are in agreement with the books and |
|
| records
of the Company 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; and |
|
|
| (iii)
the business conducted, investments made and 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 annexed Balance Sheet, |
|
| Revenue
Account, Appropriation Account, Statement of Changes in Equity and |
|
| Cash
Flow Statement, together with the notes forming part thereof conform with |
|
| the
approved accounting standards as applicable in Pakistan, and give the |
|
| information
required by the Insurance Ordinance, 2000 in the manner so required |
|
| and
receptively 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 Changes in equity and its cash flows |
|
| for
the year then ended. |
|
|
| (d)
we have verified the cash and bank balances and the securities relating to |
|
| Company's
investments by actual inspection or by the production of certificates; |
|
|
| (e)
We certify that all expenses of management in respect of Life Insurance
business |
|
| transaeted
by the Company in Pakistan have been fully debited to the Revenue |
|
| Account
as expenses; |
|
|
| (f)
We certify that the Company has not paid to any person any commission in any |
|
| form
outside Pakistan in respect of Life Insurance business transacted by the |
|
| Company
in Pakistan and that the Company has not received outside Pakistan from |
|
| any
person any commission in any form in respect of any business abroad; and |
|
|
| (g)
no part of the Assets of the Life Insurance Fund has been directly or
indirectly |
|
| applied
in contravention of the Insurance Ordinance, 2000 relating to the |
|
| application
and investments of Life Insurance Fund; and |
|
|
| (h)
in our opinion Zakat deductible at source, under the Zakat and Ushr
Ordinance, |
|
| 1980
(XVIII of 1980), was deducted by the Company and deposited in the Central |
|
| Zakat
Fund established under Section 7 of the Ordinance. |
|
|
|
HYDER BHIMJI & CO. |
|
| Karachi
May 19, 2001 |
|
Chartered Accountants |
|
|
|
| REVENUE
ACCOUNT FOR THE |
|
| YEAR
ENDED 31 DECEMBER 2000 |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| Claims
less reinsurances |
|
83,262,843 |
79,344,305 |
|
| Commission
to insurance agents |
|
71,700,808 |
39,193,024 |
|
| Expenses
of management |
|
|
| Salaries
& benefits |
|
71,384,728 |
59,538,347 |
|
| Travelling
expenses |
|
9,139,866 |
6,445,972 |
|
| Audit fee |
|
45,000 |
30,000 |
|
| Medical fee |
|
3,331,230 |
2,613,691 |
|
| Advertisement
& publicity |
|
1,378,638 |
1,047,732 |
|
| Printing
& stationery |
|
5,562,445 |
6,319,478 |
|
| Insurance
expenses |
|
1,750,259 |
1,308,901 |
|
|
| Other
Expenses of Management |
|
| Policy Stamps |
|
1,953,614 |
1,401,602 |
|
| Staff welfare |
|
1,725,118 |
1,653,613 |
|
| Telephone
& fax expenses |
|
8,320,323 |
5,987,732 |
|
| Postage
and telegram |
|
2,622,992 |
1,656,788 |
|
| Electricity
& gas |
|
5,174,692 |
4,034,459 |
|
| Rent
rates & taxes |
|
9,845,605 |
7,847,527 |
|
| Repair
& maintenance |
|
3,636,830 |
2,393,116 |
|
| Computer
maintenance |
|
769,703 |
400,442 |
|
| Training
expenses |
|
1,224,574 |
1,644,746 |
|
| Entertainment |
|
717,262 |
1,039,126 |
|
| Bank charges |
|
1,326,987 |
949,480 |
|
| Directors' fee |
|
-- |
10,500 |
|
| Professional
charges |
|
2,493,239 |
1,137,757 |
|
| Lease Rentals |
|
441,666 |
-- |
|
| Miscellaneous
expenses |
|
3,269,241 |
2,582,892 |
|
|
43,521,846 |
32,739,780 |
|
|
| Depreciation |
|
7,322,828 |
7,738,342 |
|
| Preliminary
& deferred expenses written off |
|
-- |
1,145,012 |
|
| Loss/(Profit)
on sale of Assets |
|
2,889,965 |
(8,638) |
|
| Provision
for taxation |
|
1,700,000 |
800,000 |
|
| Reserve
for depreciation on investments |
|
11, 170,325 |
131,400 |
|
| Balance
of Life Fund at the end of the year |
|
|
|
| as
shown in the Balance Sheet |
|
523,251,538 |
338,789,000 |
|
| Surplus/(Loss)
for the year carded to Appropriation Account |
15,118,238 |
( 13,103,939) |
|
|
----------- |
----------- |
|
|
852,530,557 |
564,072,407 |
|
|
========== |
========== |
|
|
|
| Balance
of Life Fund at the beginning of the year |
|
338,789,000 |
206,805,482 |
|
| Premium
less reinsurances |
|
| (i)
First year premium where the maximum premium |
|
| paying
period is: |
|
| Three years |
|
-- |
3,205 |
|
| Five years |
|
29,933 |
37,754 |
|
| Seven years |
|
-- |
4,699 |
|
| Eight years |
|
-- |
35,825 |
|
| Ten years |
|
2,477,626 |
1,058,123 |
|
| Eleven years |
|
369,571 |
384,745 |
|
| Twelve
years or over ( including through out life ) |
|
140,081,973 |
99,426,574 |
|
|
142,959,103 |
100,950,925 |
|
| (ii)
Renewal premium - second year premium |
|
81,669,522 |
53,897,145 |
|
| Third
year premium and over |
|
99,794,627 |
69,305,971 |
|
| (iii)
Single premium |
|
30,799,527 |
12,418,308 |
|
| (iv)
Group premium |
|
95,254,802 |
80,373,388 |
|
|
----------- |
----------- |
|
|
450,477,581 |
316,945,737 |
|
| Interest,
Returns and Dividend |
|
61,109,742 |
40,648,468 |
|
| Less:
Income Tax deducted at source |
|
891,527 |
1,048,615 |
|
|
----------- |
----------- |
|
|
60,218,215 |
39,599,853 |
|
|
| Profit
on sale of Investments |
|
1,066,571 |
506,960 |
|
| Difference
in Exchange |
|
1,765,079 |
92,297 |
|
| Other Income |
|
214,111 |
122,078 |
|
|
----------- |
----------- |
|
|
852,530,557 |
564,072,407 |
|
|
========== |
========== |
|
|
|
|
|
| APPROPRIATION
ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2000 |
|
| Loss
brought forward from previous year |
|
41,443,351 |
28,339,412 |
|
|
----------- |
----------- |
|
|
41,443,351 |
28,339,412 |
|
|
========== |
========== |
|
|
|
|
| Surplus/(Loss)
for the year transferred from Revenue Account |
15,118,238 |
(13,103,939) |
|
| Accumulated
Loss carried to Balance Sheet |
|
26,325,113 |
41,443,351 |
|
|
----------- |
----------- |
|
|
41,443,351 |
28,339,412 |
|
|
========== |
========== |
|
| NOTE:
The annexed notes form an integral part of these accounts |
|
|
|
HYDER BHIMJI & CO. |
|
ASHRAF W. TABANI |
|
|
TAHER G. SACHAK |
|
|
Chartered Accountants |
|
Director |
|
|
Managing Director & Chief Executive |
|
|
|
SAIFUDDIN N. ZOOMKAWALA |
|
| Karachi
May 19, 2001 |
|
Chairman |
|
|
|
| BALANCE
SHEET AS AT 31 DECEMBER 2000 |
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| CAPITAL
& LIABILITIES |
|
| Share Capital |
|
| Authorised |
|
| 20,000,000
Ordinary Shares of Rs. 10 each |
|
200,000,000 |
200,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
|
|
| 10,000,000
Ordinary Shares of Rs. 10 each fully paid in cash |
100,000,000 |
100,000,000 |
|
|
|
|
| Accumulated
Loss |
|
(26,325,113) |
(41,443,351) |
|
|
----------- |
----------- |
|
|
73,674,887 |
58,556,649 |
|
|
| Reserve
for Depreciation on Investments |
|
11,352,420 |
182,095 |
|
| Balance of Life Fund |
2 (c) |
|
523,251,538 |
338,789,000 |
|
| Other
Liabilities |
|
| Estimated
liability in respect of outstanding claims whether intimated or not |
15,510,644 |
15,877,057 |
|
| Amounts
due to other persons or bodies carrying on Insurance business |
53,369,350 |
