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Adamjee Insurance Company Limited
Annual Report 1999
BOA RD OF DIRECTORS
MOHAMED HANIF ADAMJEE Chairman
ABDUL HAMID ADAMJEE Director
ABDUL RAZAK ADAMJEE Director
IQBAL ADAMJEE Director
I.A. RAFIQUI Director
AKHTAR  K. ALAVI Director
MIAN ASIF SAID Director
SAAD M. ALI Director
MOHAMMED CHOUDHURY Managing Director & Chief Executive
Secretary/General Manager A. AZIZ CHASHMWALA B.Com.,  LL.B.
Executive Director (Finance) SYED ZIAUDIN AHMED, M.Com.,
General Manager l. A, RAFIQUI
AKHTAR K. ALAVI,  A.C.I.I. (London)
M. U. MOHAMMADI
MOIEZ M. SHAIKHALI
SULTAN A. SIDDIQI, B.A.
MOHAMMED NASEEM, A.C.I.I. (London)
JABBAR AKHTAR, M.A., LL.B., F.C.I.I. (London)
MIRZA ALI MAHMOOD., B.E. (Mech. & Elec.)
SAL1M RAFIK SIDIKI, B.A. (Hons.), M.A. (Eco.)
KHAWAJA KHALID MUSTAFA, M.A.
CAPT. MAHMOOD SULTAN, Master Mariner, F.I.C.S. (London), F.C.I.I. (London),
Chattered Ship Broker Chattered Insurer
ABDUL RAZAK RAHIMTULLAH BRAMCHARI
MOHAMMED ANWAR ABDULLA, A.C.I.I. (London), Chartered Insurer
SYED BASIT HUSSAN, B. Corn.
TAHIR AHMED, B.E. (Met.), M.B.A., A.C.I.I. (London), Chattered Insurer
JAMEEL KHAN, M.A., LL.B.
General Manager (Car Clinic) MOHAMMED SALEEM
General Managers (Development) ABDUL AZIZ KHADELI, B.Com.
SHAMSUL ARFEEN QURESHI, B. Corn.
Joint General Managers AHSAN MAHMOOD ALVI, F.C.A. (England & Wales)
M. JAHANGIR CHUGHTAI, M.A.
ABDUL HAMID, B. Com., F.C.I.I. (London), Chattered Insurer
IQBAL MOHAMMAD, B.A.
SHAMSUL HAQUE, A.C.I.I. (London)
M. IQBAL VAKIL., B.Com.
S.M.M. RIZVI, B.A.
T.A. ABBASI, B.Com.
AUSTEN B. FREITAS
MOHAMMED EUSOPH JAMAL, M.B.A.
TINKU 1. JOHNSON, B.E. (Mech.), M.B.A.
Jt. General Managers MAHMOOD A. WAHAB, B.A.
(development MAZHAR SALEEM
ZERSIS RUSTOM BIRDIE
ALTAF A. KARIM, B.A.
AUDITORS FORD, RHODES, ROBSON, MORROW
Chartered Accountants, Karachi.
HEAD OFFICE Adamjee House
R O. Box No.4850
I. I. Chundrigar Road, Karachi
Phone :PABX 2412623 (4 Lines)
Fax : (92-21) 2412627
Telex :21594 & 29719 AIC PK
Gable : ADAMJINSUR
E-mail : info@adamjeeinsurance.com
Website: www. Adamjeeinsurance.com
DEPUTY GENERAL MANAGERS SYED KHADIM ALI, B.Com., LL.B.
M. QASIM KAZMI, B.A.
EDRIS H.M. GOAWALA, B.Com., A.C.I.I. (London), Chartered Insurer
SAEED JAN AWAN, M.Com.
SYED AGHA HAIDER, M.A.
MOHD YOUSUF, B.Com
SYED ABDUL KHALIQUE, M.A. (Eco.)
RAMESH MULRAJ BHERWANI, B.A.
SALEEM TARIQ AHMED
NAQI ZAMIN ALI, B.Sc. (Hons)
ATEEQ AHMED KHAN, M.Sc. (Agri. Eco.)
SYED KAISER ABBAS
ABDUL HAMEED BHURI
M. BASHIR SEJA, B. Com.
A. SATTAR MOHAMMAD, B.A.
GHULAM ABBAS
JALALUDDIN ALVI, M.A.
CAPT. SALEEM AHMED, Master Mariner,  M.I.C.S. (London),
M.C.I.T. (London), A.C.I.I. (London)
A. RAHIM A. GHANI, B.Com.
A. G. NAWAZ
PARVAIZ SIDDIQ, M.B.A., F.C.I.I. (London), Chattered Insurer
IMTIAZ AHMED PIRACHA, B.Sc.
DEPUTY GENERAL MANAGERS ALI MOHD. DADA
(DEVELOPMENT) ABDULLAH HAMID
A, W. KARIM
ASST. GENERAL MANAGERS NADEEM AHMED
SHAHID A. ZAIDI
SYED YOUSUF HUSSAIN, B. Corn.
SHAHEEN H. SUMAR (Mrs.), MA. (Eco.)
KHALID M. MIRZA, B.Com.
MOHD. IBRHIM KAPADIA, M.B.A. (USA), A.C.I.1. (London)
IRFAN CHOUDHURY B.Sc. Hon. (England)
CAPT. AZHAR EHTESHAM AHMED, Master Mariner
KHALID HAMID, B.E. (Elec.), A.C.I.I. (London), Chartered Insurer
SALIM RAZAK BRAMCHARI, B.Com., A.C.I.I. (London)
QAMAR AHMED, B.A.
JAWAD AHMED JAFRI, M.A. (Eco.), A.C.I.1. (London), Chartered Insurer
MOHAMMAD IQBAL DADA. MA. (Eco.), A.C.I.I. (London)
MOHAMMAD AMIN GHANI
AKBAR ALI RAJAN
JAVED ASLAM A. REHMAN, B.A.
MUHAMMAD MAZHAR SHAH, B.A.
MIAN FAISAL USMAN, M.B.A., A.C.I.I. (London)
ASS. GENERAL MANAGERS SYED ALI JAFFERY
(DEVELOPMENT) ABDUL KARM WAQAR, B.Com.
ARSHAD HUSSAIN
ABDUL SATTAR A. ABDULLAH
MOHAMMAD UMER MEMON
ALI MOHD. SHEKHA, B.A.
MOHAMMAD IBRAHIM
MOHD. SALEEM KHAN
SULEMAN LAKHANI
JAWAD USMANI
ASGHAR JALIL
ALI MOHD. HAJI RAHIMTULLAH
TABASSUM ELAHI
MOHD YOUNUS, B. Com.
ABDUL WAHID
ANJUM SALEEM, B. Com.
NAJMA NAEEM (Mrs.)
NOTICE OF THE THIRTY-NINTH ANNUAL GENERAL MEETING
NOTICE is hereby given that the Thirty-ninth Annual General Meeting of the Company will be held at the Raffia Choudri Memorial
Centre, Sidco Avenue Centre (Ground Floor), Stratchen Road, 264 - R.A. Lines, Karachi on Wednesday the June 28, 2000 at 11.00 a.m..
to transact the following business:-
1. To receive and adopt Directors' and Auditors' Reports and Statement of Account for the year ended December 31, 1999.
2. To approve the final dividend recommended by the Directors.
3. To consider and if thought fit to pass the following resolution as Ordinary Resolution:
RESOLVED:-
i) "That a sum of Rs. 42,940,890 out of the Company's Reserve for issue of Bonus Shares be capitalised and applied in paying
up in full to issue at par 4,294,089 fully paid Ordinary Shares of Rs. 10 each to be allotted as Bonus Shares to and 
amongst the holders of the Ordinary Shares of the Company whose names appear in the Register of Members of the Company
at the close of business on June 12, 2000 in the proportion of one Ordinary Shares for every ten Ordinary Shares held
and that  such new shares shall rank pari passu as regards future dividends and in all other respects with the existing
Ordinary shares of the company."
ii) "That all fractions of Bonus Shares arising on such allotment be consolidated and sold through the Company's broker and
that the net proceeds thereof be distributed pro-rata to the members entitled thereto."
iii) "That for the purpose of giving effect to the foregoing, the directors be and are hereby authorized to give such directions
as may be necessary  and to settle any questions or difficulties that may arise in regard to the distribution of the Bonus
Shared or the sale proceeds of the fractions as the directors in their discretion shall deem fit."
4. To appoint Auditors and fix their remuneration.
5. Special Business:
To consider and, if thought fit, to pass the following resolution as Special Resolution.
RESOLVED:
i) "Thin the Authorised Share Capital of the Company be increased from Rs. 500,00,000 divided into 50,000,000 shares of
Rs. 10 each to Rs. 1,500,000,000 divided into 150,000,000 shares of Rs, 10 each."
ii) "That consequent upon the said increase in Authorized Share Capital of the Company, Clause 5 of the Memorandum of
Association' and Article 4 of the 'Articles of Association' of the Company be and are hereby amended to read as follows:
CLAUSE 5 OF THE MEMORANDUM OF ASSOCIATION
The Authorised Share Capital of the Company is Rs. 1,500,000,000 divided into 150,000,000 shares of Rs. 10 each, with
rights, privileges and conditions attaching thereto as arc provided by the regulations of the Company for the time being with
power to increase and reduce the Capital of the Company in such manner as may for the time being be provided by the reg-
ulations of the Company,
ARTICLE 4 OF THE ARTICLES OF ASSOCIATION
The Authorised Share Capital of the Company is Rs. 1,500,000,000 divided into 150,000,000 shares of Rs. 10 each."
(See annexed a statement under Section 160 of the Companies Ordinance, 1984 in respect of above mentioned Special Business)
By Order of the Board
Karachi: May 16, 2000 A. AZIZ CHASHMAWALA
Notes: (a) The Shares Transfer Books of the company will remain closed from June 13, 2000 to June 28, 2000 (both days
inclusive).
(b) A member entitled to attend and vote at the General Meetings entitled to appoint another member as a proxy to attend and vote
instead of him.
(c) The instrument appointing a proxy must be received at the Registered Office of the company not less than 48 hours
before the time appointed for the Meeting. A member shall not be entitled to appoint more than one proxy. If a member 
appoints more than one proxy and more than one instruments of proxy are deposited by member with the Company,
all such instrument of proxy shall be rendered invalid.
(d) CDC shareholders are requested to bring with them their original Passport or National Identity Card along with the 
Participant's ID number and their account number at the time of attending the Annual General Meeting in order to facilitate identification
of the respective shareholders.
STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984
 Regarding item 5 of the annexed Notice of General Meeting
The Authorised Share Capital of the Company is being increased from  Rs. 500,000,000 to Rs. 1,500,000,000 to enable 
the company to expand its capital base to facilitate the issue of further capital, commensurate with the company's business
as the directors may deem necessary from time to time.
20 YEARS' PROFIT APPROPRIATION AT A GLANCE
1980 TO 1999
(In Million of Rupees)
YEAR ENDED DIVIDEND BONUS SHARES
General Gross Retained Profit
December 31, Rate Amount Rate Amount Reserve Premium Premium After Tax
% Rs % Rs RS Rs Rs
1980 40.0 4.07 20.0 2.03 5.00 185.44 138.96 1,087
1981 50.0 6.10 25.0 3.05 5.00 223.04 150.33 14.40
1982 45.0 6.87 33.3 5.09 8.00 276.55 185.l 7 20.42
1983 40.0 8.14 40.0 8.14 7.50 317.26 222.48 23.23
1984 35.0 9.97 30.0 8.55 9.50 350.89 248.62 27.75
1985 55.0 20.38 30.0 11.12 6.00 405.46 246.03 37.50
1986 37.5 18.07 20.0 9.63 8.50 504.76 306.49 36.25
1987 37.5 21.68 20.0 11.56 16.50 65,297 377.98 50.04
1988 40.0 27.75 15.0 10.4 5.00 78,934 461.01 43.38
1989 45.0 35.90 10.0 7.97 8.00 82,251 510.37 52.05
1990 40.0 35.11 10.0 8.77 10.00 942.32 610.11 53.67
1991 50.0 48.27 15.0 14.48 39.00 1,096.03 675.25 101.65
1992 40.0 44.41 20.0 22.2 60.00 1,399.83 788.86 126.35
1993 40.0 53.29 20.0 26.64 75.00 1,750.78 1,140.48 155.09
1994 40.0 63.95 25.0 39.97 72.00 2045.05 1,210.37 176.08
1995 35.0 69.95 25.0 49.96 67.00 2,458.22 1,536.85 186.55
1006 33.0 87.44 25.0 62.45 72.00 2,855.83 1,894.00 221.87
1997 35.0 109.3 25.0 78.07 103.00 3,123.26 2,208.49 290.50
1998 30.0 117.11 10.0 39.04 40.00 3,220.12 2,142.08 196.40
1990 22.5 96.62 10.0 42.94 44.00 3511.13 2,417.96 183.50
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total 792.5 884.38 428 462.06 661 26.840.79 17,471.89 2,007.55
Average 39.60% 44.22 21.40% 23.10 33.05 1,342.04 873.59 100.38
Appropriation over 20 years
on average profit basis 44.1% 23.0% 32.9% = 100%
THIRTY-NINTH REPORT OF THE DIRECTORS
FOR THE YEAR ENDED DECEMBER 31, 1999
THE SHAREHOLDERS
ADAMJEE INSURANCE COMPANY LIMITED
We take pleasure in presenting to you our 39th Annual
Report and Accounts for the year 1999. The country con.
tinues to suffer from economic stagnation as a result of
monetary sanctions imposed by the World Bank, IMF,
ADB etc, consequent upon the nuclear blasts in May 1998,
As such, there was no growth in 1999 in the premium
income written in Pakistan. The overseas premium
income, however, recorded some improvement. The
Company's premium income, in the aggregate, rose by 9%
over 1998.
Despite difficult conditions, your Company has been able
to produce reasonable profit which is evident from the fol-
lowing table:-
1999 1998
Rupees Rupees
Gross Direct Premium 3,511,128,226 3,220,121,720
Premium Retained 2,417,957,292 2,142,076,783
Net Claims Paid and Outstanding 1,446,996,961 1,525,285,300
Commission and Discount 142,979,012 163,095,615
Expenses of Management 552,481,998 508,600,698
Premium Reserve Strain (net charge)  112,474,445 (26,827,233)
Pre-tax Profit 260,500,377 207,398,135
UNDERWRITING PERFORMANCE
As will be noticed from the above table, there has been
some improvement in all areas, namely premium retained,
claims  paid and outstanding and commission/discount
over the previous year. The expenses of management
increased from Rs. 508 million in 1998 to Rs. 552 million
during the year, largely due to normal annual increase and
impact of inflation. The pre-tax profit increased from
Rs, 207 million in 1998 to Rs. 260 million during the year
under review.
FIRE BUSINESS
The gross direct premium increased modestly to Rs. 899
million in 1999 from Rs. 860 million in 1998. Fortunately,
the Company did not suffer any major losses, resulting in
a 1ower claims ratio of46% compared to 56% in 1998. The
underwriting profit increased from Rs. 63 million in 1998
to Rs. 99 million in 1999 or 5.7% higher than the last year.
The expenses of management together with commission
amounted to Rs. 160 million in 1999 as against Rs. 174
million in 1998.
MARINE BUSINESS
The marine cargo gross premium increased from Rs. 451
million in 1998 to Rs. 512 million in 1999. The lower
claims ratio of 36% to the retained premium enabled the
Company earn a profit of Rs. 131 million compared to
Rs. 96 million in 1998.
Because of adverse claims experience in hull business in
the preceding years, your Company wrote a lower
premium income of Rs. 81 million compared to Rs, 125
million last year. The Company suffered an underwriting
loss of Rs. 71 million in 1999 against Rs. 30 million in
1998.
The marine business, in the aggregate, therefore produced
a lower profit of Rs. 60 million in 1999 against Rs. 66
million in 1998.
MOTOR BUSINESS
The gross direct premium income increased from
RS, 1.119 billion in 1998 to Rs. 1.368 billion in 1999.
Because of highly adverse claims experiences in the
proceeding ycara7 abundant caution is being exercised in the
acceptance of business and claim settlements. As a
consequence, claims ratio declined to 65% from 88% last
year, After sustaining losses of Rs, 31 million and Rs, 95
million in 1997 and 1998 respectively, the Company
earned a small profit of Rs. 14  million in 1999.
MISCELLANEOUS BUSINESS
Miscellaneous business consists of engineering bonding
and surety, bankers' insurance, burglary and theft, kidnap
& ransom, medical insurance etc. The direct premium
income, in the aggregate, amounted to Ks, 650 million in
1999 compared to Rs. 664 million last year. Nevertheless,
due to improvement in the claims and management
expense ratios this year, the profit increased to Rs. 78
million compared to Rs. 57 million in 1998.
OVERSEAS OPERATIONS
The premium income from our overseas branches in U.A.E.
and Saudi Arabia aggregated to Rs. 783 million in 1999
compared to Rs. 618 million in the preceding year. Since
motor business constitutes 70% of the total business, efforts
are being made to develop other lines of business to produce
larger profits, Experience has shown motor business 
generally less profitable compared to other classes of
business.
INVESTMENT AND MONEY MANAGEMENT
The stock market which had shown declining trend in
1998 started recovering from the beginning of the current
year. The Karachi Stock Exchange Index which stood at
952.42 points on January 2, 1999 rose to 1,054.67 points
on June 30, 1999 and 1,408.91 points on December 30,
1999. This improvement in stock exchange which
occurred in the later part of the year was not quite enough
to enable your Company book adequate capital gains.
In the above backdrop, in order to avert diminution in the
value of its investments in stocks/shares, as witnessed in
1998, your Company invested during the year most of its
surplus funds in the Government Securities. Of the total
investments of Rs. 81,159,073, a sum of Rs. 60 million
alone was invested in Defence Savings Certificates, which
now stand at around Rs. 357 million. The overall invest-
merits stand at Rs. 1.586 billion in 1999 compared to
Rs. 1.505 billion in 1998.
During the year, the investment income from dividends,
bonus shares, interest, capital gains etc. aggregated to
Ks. 222 million compared to Rs. 237 million in 1998. Due
to adverse stock market conditions, capital gains of Rs. 17
million only could be realised compared to Rs. 56 million
in 1998.
PROFIT FOR THE YEAR
Due to improvement in the underwriting operations, your
Company earned a pre-tax profit of Rs. 260 million corm-
pared to Rs. 207 million in 1998. Through Finance Act,
1999, tax rate was raised from 30% to 33% in the case of   
insurance companies.
The dividend income which was subject to 5% tax only,
now attracts much higher tax rate of 33%. The tax provi-
sion for the year has thus increased considerably to Rs. 77
million against a provision of Rs. 11 million in 1998. The
after-tax profit, as a result, declined to Rs. 183 million in
1999 compared to Rs. 196 million last year. As the
Government has not so far refunded large income tax
refunds due to the Company, interest on such tax refunds
amounting to Rs. 57 million, has been included in income
as provided in the Income Tax Ordinance, 1979.
ALLOCATION OF PROFIT
The profit for the year (inclusive of the balance of profit of
Rs. 418,787 brought forward from last year) aggregated to
Rs. 183,919,164 after making all such provisions as are
required under various statutes, in particular, in respect of
income tax, depreciation, employees' old-age benefits,
staff bonus/gratuity etc. Your directors propose
appropriation of the profit in the following manner:-
Rupees
i) Interim dividend (already paid) (3 15% 64,411,329
ii) Proposed final dividend @ 7.5% 32,205,665
iii) Reserve for issue of bonus shares in the
ratio of one ordinary share for every
ten ordinary shares held (10%) 42,940,890
iv) General Reserve 44,000,000
v) Balance to be carried forward 361,280
-----------
Total: 183,919,164
==========
PAID-UP CAPITAL AND RESERVES
As you are aware, your Company all along has been a
growth-oriented Company, following a very firm policy
with regard to development of capital-base, financial and
technical reserves etc. to achieve growth in business. It
may be of interest to point out here that the paid-up
capital together with financial and technical reserves
which stood at Rs. 1,374 million in 1994 increased to
Rs. 2,669 million in 1999 or 94% increase over 5 years' period.