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Pakistan Guarantee Insurance Company Limited
Annual Report 1999
CONTENTS
Company Information
Management
Offices
Notice of Annual General Meeting
Directors' Report
Auditors' Report
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Fire Insurance Revenue Account
Marine Insurance Revenue Account
Motor & Miscellaneous Insurance Revenue Accounts
Notes to the Accounts
Classified Summary of Assets
Pattern of Shares held by Shareholders
COMPANY INFORMATION
BOARD OF DIRECTORS Mr. Said Ahmed Chairman
Mr. Shakil Raza Syed Managing Director &
Chief Executive
Mr. Mian Mohammad Hanif Esq.
Mr. Mohammad Rashid
Mr. Mohammad Tayyab
Mr. Shafiq Ahmed Shaikh
Mr. Sajjad Haider
Mr. Azher Majid Shaikh
Mr. Hunaid Husain Lakhani
Mr. Mohammad Ali
Mr. Shaikh Mohammad Munawwar
Mr. Saleem-ul-Hassan
Mr. Yousuf Jan Mohammad
COMPANY SECRETARY Mr. Mushtaque Ahmed
AUDITORS Hameed Chaudhri & Company,
Chartered Accountants.
5th Floor, Karachi Chambers,
Hasrat Mohani Road,
Karachi.
BANKERS United Bank Limited
National Bank of Pakistan
Allied Bank Limited
Habib Bank A.G. Zurich
Prime Commercial Bank
REGISTERED OFFICE 7, Bank Square, Lahore.
Telephone: 7235281, 7235442
                   : 7357748, 7358024
                   : 7356778, 7358007
Fax             : (042) 7323051
P.O. Box    : 1028
HEAD OFFICE Al-Falah Court, 3rd & 5th Floors,
I.I. Chundrigar Road, Karachi.
Telephone : 2636111--15
Fax              : (92-21) 2638740
P.O. Box     : 5436
MANAGEMENT
CHAIRMAN
Mr. Said Ahmed
MANAGING DIRECTOR &
CHIEF EXECUTIVE
Mr. Shakil Raza Syed
ASSISTANT GENERAL MANAGER
Mr. Absar Azim Burney, A.M.P.I.M.
Mr. Muhammad Ashraf Bhatti
(Chartered Insurer) A.C.I.I. & M.B.A.
Mr. M. Ilyas Malik
CHIEF MANAGER
Mr. S. Mujahid Hussain Shah
Mr. Mushtaque Ahmed
Mr. Hamid Raza Khan, F.C.I.C.
DEPUTY CHIEF MANAGER
Mr. Ahmed Saeed Hashmi
Mr. Mirza Obaidullah Baig
M.A. (Soc), B.Sc., PGD (CIS)
Mr. M. Shahabuddin
HEAD OF HEALTH DIVISION
Dr. Muhammad Shafi Ahmed
M.B.B.S.
Dr. Ghazala Rashid (Faisalabad Division)
M.B.B.S.
MANAGER
Mr. M. Fayyaz Bedaar
Mr. M. Afzel Khan
Mr. S.M. Mohsin Naqvi
OFFICES
KARACHI
Mr. S. Mujahid Hussain Shah
Chief Manager (Marketing)
3rd Floor, AI-Falah Court,
I.I. Chundrigar Road,
Karachi.
Phone: 2636111-15, Direct Ph.: 2631090
Fax: (92-21) 2638740
ZONAL OFFICE, LAHORE
Mr. Mohammad Ashraf Bhatti
(Chartered Insurer) A.C.I.I. & M.B.A.
Assistant General Manager
7, Bank Square,
Lahore.
Phone: 7356778, 7358007
             7235281, 7235442
             7357748, 7358024
Fax: (042) 7323051
P.O. Box: 1028
FAISALABAD
Mr. M. Ilyas Malik
Assistant General Manager
23, Chartered Bank Building,
Railway Road,
Faisalabad.
Phone: 634451
Fax: (041) 634452
MULTAN
Mr. Qamar Raza Zaidi
Regional Manager
United Square,
S.P. Chowk,
91-A, Musarat Road,
Multan Cantt.
Phone: 547308
LARKANA
Mr. Ahmed Ali Solangi
Area Manager
Opp. Larkana Medical Centre,
Station Road,
Larkana.
Phone: 457144
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the 35th Annual General Meeting of the Company will be held at the
Registered Office of the Company situated at 7, Bank Square, Lahore on Friday, 30th June, 2000 at
12:30 P.M. to transact the following business:-
1. To confirm the Minutes of the 34th Annual General Meeting held on 30th June, 1999.
2. To receive, consider and adopt the Audited Accounts for the year ended 31st December, 1999
together with Directors and Auditors Report thereon.
3. To appoint Auditors for the year ending December 31, 2000 and to fix their remuneration. The
present Auditors M/s. Hameed Chaudhri & Company, Chartered Accountants stand retire and offer
themselves for re-appointment.
4. To transact any other business with the permission of the Chairman.
By Order of the Board
Mushtaque Ahmed
Karachi: 8th June, 2000. (Company Secretary)
NOTES:
a) The Share Transfer Books of the Company will remain closed from June 24, 2000 to June 30,
2000 (both days inclusive).
b) A member entitled to vote at the meeting may appoint another member as his / her proxy to
attend the meeting and vote on his / her behalf. Proxies in order to be effective, must be received
by the Company at least 48 hours before the meeting.
c) Shareholders are requested to notify any change in their address immediately.
DIRECTORS REPORT TO THE SHAREHOLDERS
On behalf of the Board of Directors of your Company
and myself it gives me great pleasure to welcome
you to 35th Annual General Meeting and to present
to you Annual Report on the performance of your
Company together with the audited accounts for
the year ended 31st December, 1999.
The economic trends during the year1999 continued
to remain under pressure. G.D.P. growth showed
declining trend and hovered around 3%.
Manufacturing and agriculture sectors also recorded
reduced growth. Trading indicators were no better.
These trends had their toll on the Insurance Industry
in particular on the medium and small insurance
companies. The law and order situation particularly
in Sindh and Karachi hardly showed any tangible
improvement with the result that incidents of vehicle
snatching continued to remain at a high level. These
adverse factors had their effect on the operations
of Pakistan Guarantee Insurance Co. Ltd. Although
the underwriting operations of the Company showed
a lower trend we were able to reduce the loss
appreciably i.e. from Rs. 8,906,588/- in 1998 to
Rs. 3,445,657/- in the year under review. The decline
in losses is primarily due to better underwriting
strategy and a more selective business approach.
The operating results in the current year and last
year and appropriations also are summarized below:
1999 1998
Profit/(Loss) for the year ended
31st December, 1999 (3,445,657) (8,906,588)
Add: Balance Profit/(Loss)
brought forward from
previous year (10,081,785) (279,390)
Sum available for
appropriation (13,527,442) (9,185,978)
Add/(Less):
Provision of Taxation 93,084 (895,807)
Unappropriated Profit/
(Loss) carried forward (13,434,358) (10,081,785)
UNDERWRITING RESULTS
The Company's earning of gross premium
amounted to Rs. 31,102,361/- during the year under
review as compared to Rs. 37,651,214/- during the
year 1998. The decline is primarily due to the
economic scenario in the country described in the
introductory remarks in this report. Net premium
income amounted to Rs. 17,368,174/- at the end
of the year as against Rs. 21,713,761/- in the
previous year resulting in a decline of 20%. We
would like to emphasis here that the new
management acquired control of the Company
towards the middle of the year and had thus about
six months within which to reflect the impact of
their policy strategies. The basic priority of the new
management was to go for quality business rather
than a quantitative approach. The new management
has also introduced two new underwriting products,
namely students' insurance and medical health
schemes. These have had considerable and
extensive acceptance. The effects of these trends
will hopefully be reflected in future operational results.
The details of the various accounts are set out below:-
1999 1998
Gross Premium 31,102,361 (17%) 37,651,214
Net Premium 17,368,174 (20%) 21,713,761
Fire Revenue Account
Net Premium 5,029,889 (50%) 10,157,303
Profit/(Loss) 2,298,635 (1,080,637)
Marine Revenue
Account
Net Premium  3,027,303 (49%) 5,974,097
Profit 1,951,960 170,310
Miscellaneous Revenue
Account
Net Premium 9,310,982 (67%) 5,582,361
Profit/(Loss) (2,908,865) (6,446,658)
CLAIMS PAYMENT
The claims payment on Company's own account
amounted to Rs. 6,955,692/- for the year 1999 as
against Rs. 9,299,329/- during the previous year
registering a decrease of 25%. The largest
contributory factor on this account has been heavy
claims on account of motor cars including motor
bike thefts as has already been mentioned above.
MANAGEMENT EXPENSES
The Company's Management expenses amounted
to Rs. 17,216,502/- during the year under review
as against Rs. 21,636,845/- during the previous
year registering a decline of 21%. The decline is
primarily due to the action taken by your Company
to a right sizing of the staff resulting in retrenchment
of staff and closure of 15 non-productive branches
and sub-branches out of 19 branches. The cost
of this exercise amounted to Rs. 1,526,721/- The
results of this exercise will be further reflected in
the management expenses in the next year and
years after.
INVESTMENT AND TERM DEPOSITS
The Company's investments and term deposits with
banks and financial institutions are shown below:-
1999 1998 1997 1996
TDR 1,494,052 3,586,257 5,888,224 8,689,343
Investments 2,037,700 4,486,601 5,078,190 6,057,835
------------------ ------------------ ------------------ ------------------
3,531,752 8,072,858 10,966,414 14,747,178
========== ========== ========== ==========
The deposits of the Company declined principally
due to the timely servicing of the heavy motor and
other claims of previous years which were
outstanding and lower premium income.
The decline in investment portfolio is due primarily
to sale of Orient Rice Mills' shares of the value
of Rs. 2 Million under a Buy Back Arrangement
as also partly to a few disinvestments to finance
expenses of right sizing of staff mentioned above
as also to some operative expenses.
PROSPECTS
Political changes in October, 1999 and some
economic and commercial initiatives taken by the
new Govt. have generated some hopes but the
country's economy still remains in recession.
However, the policies announced by the new Govt.
hold hopes of a turn around in the economy.
The new management of the Company has taken
several measures for the reconstruction of the
Company's operations which are steadily having
a palliative effect on the Company's business. With
the improvement in the country's economic scenario
and the initiatives taken by the new management
a better future is hopefully expected in near future.
The proposal referred to in the last Annual Report
in regard to the issue of right shares continues to
receive the serious attention of the new
management. No headway could be made in this
regard due to the prevailing economic recession
and the volatility of the country's Stock Exchange.
Consequently the investment climate in the country
was abysmally at its lowest ebb. These factors
compelled the management to delay the issue of
right shares. However, the Board continues to focus
its attention to this operation as the minimum share
capital has to be raised to the level of Rs. 50 million
by the year 2002. The Company is now considering
achieving this objective by staggering the right share
operation in stages.
BOARD OF DIRECTORS
As a result of elections of Directors held on 30th
June, 1999 a new Board was constituted. The
names of new Directors are:-
1) Mr. Said Ahmed
2) Mian Muhammad Hanif Esq.
3) Mr. Muhammad Rashid
4) Mr. Muhammad Tayyab
5) Mr. Shafiq Ahmed Shaikh
6) Mr. Sajjad Haider
7) Mr. Azher Majid Shaikh
8) Mr. Hunaid Hussain Lakhani
9) Mr. Muhammad Ali (PIC)
10) Mr. Shaikh Muhammad Munawwar
11) Mr. Saleem-ul-Hassan
12) Mr. Yousuf Janmohammad
13) Mr. Shakil Raza Syed
The Board extends its warm welcome to the new
Directors as well as thanks to the retiring Directors
for their valuable contribution.
ACKNOWLEDGMENT
We wish to express our thanks to the Controller
of Insurance, Pakistan Insurance Corporation,
Insurance Association of Pakistan, the State Bank
of Pakistan, the Bankers, Development Finance
Institutions and our Reinsurers in particular for the
valuable co-operation and support extended by them.
We also extend our profound thanks to our valued
clients who continue to entrust their business to
us and sincerely trust that the confidence reposed
by them in the Company will not only encourage
the Company to maintain these relations but also
to expand and strengthen them in the years to come.
We also express our grateful thanks to our
shareholders for reposing confidence in the
Company and it will be our endeavour to ensure
that their interests remain protected.
We also look forward to welcoming new customers
to our ever-widening client-base.
We thank all our staff for their loyal and conscien-
tious co-operation which is an important factor
contributing to the success of the Company.
For and on behalf of the Board
(SAID AHMED)
Faisalabad: 7th June, 2000 Chairman
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed Balance Sheet of Pakistan Guarantee Insurance Company Limited as
at 31st December, 1999 and related Fire, Marine and Miscellaneous Insurance Revenue Accounts, Profit
and Loss Account, Profit and Loss Appropriation Account, 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 purposes of
our audit and, after due verification thereof, we report that:
(a) in our opinion proper books of account have been kept by the Company as required by the Companies
Ordinance, 1984;
(b) in our opinion:
(i) the Balance Sheet, Revenue Accounts, Profit and Loss Account and Profit and Loss Appropriation
Account have been drawn up in conformity with the law and are in agreement with the books
of account and are further in accordance with the accounting policies consistently applied;
(ii) the expenditure incurred during the year was for the purpose of Company's business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were
in accordance with the objects of the Company;
(iv) in our opinion, no Zakat was deductible at source, under Zakat and Ushr Ordinance, 1980.
(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 Accounts,
Profit and Loss Account, Profit and Loss Appropriation Account and the Cash Flow Statement,
together with notes forming part thereof, give the information required by the law in the manner
so required and respectively give a true and fair view of the state of the Company's affairs as at
31st December, 1999 and of the loss and Cash Flow for the year then ended; and
(d) we have verified cash and bank balances and the securities relating to Company's investments
by actual inspection or production of certificates or other documents.
(e) as per section 40C (2) of the Insurance Act 1938, we certify that all expenses of management
wherever incurred whether directly or indirectly in respect of Fire, Marine and Miscellaneous business
transacted in Pakistan have been fully debited in the respective revenue accounts as expenses;
(f) as per regulation 11, Part 1 of the Third Schedule of the Insurance Act 1938, 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 the Company has not received outside Pakistan
from any person any commission in respect of any business reinsured abroad.
HAMEED CHAUDHRI & CO.
Karachi: 8th June, 2000 CHARTERED ACCOUNTANTS
BALANCE SHEET AS AT 31ST DECEMBER, 1999
Note 1999 1998
RUPEES RUPEES
SHARE CAPITAL AUTHORIZED
Authorised
5,000,000 Ordinary Shares
of Rs. 10/- each 50,000,000 50,000,000
========== ==========
ISSUED, SUBSCRIBED & PAID UP
2,516,456 Ordinary Shares
of Rs. 10/- each 3 25,164,560 25,164,560
RESERVES
General Reserve 5,000,000 5,000,000
Reserve for Exceptional Losses 589,190 589,190
Profit & Loss Appropriation Account (13,434,358) (10,081,785)
------------------ ------------------
4 (7,845,168) (4,492,595)
------------------ ------------------
Shareholders' Equity 17,319,392 20,671,965
SURPLUS ON REVALUATION OF
OFFICE PREMISES 5 5,409,949 --
BALANCE OF ACCOUNTS
Fire Insurance Account 2,011,956 4,062,921
Marine Insurance Account 1,210,921 2,389,639
Miscellaneous Insurance Account 3,724,392 2,232,944
------------------ ------------------
6,947,269 8,685,504
CURRENT LIABILITIES
Estimated liability in respect of outstanding
claims whether due or intimated 8,623,063 9,301,474
Amounts due to other persons or bodies
carrying on insurance business 6 8,694,601 5,094,827
Sundry creditors (including outstanding
expenses and provident fund) 1,259,365 1,019,725
Provision for taxation 1,218,717 1,570,652
Unclaimed dividend 61,642 61,642
------------------ ------------------
19,857,388 17,048,320
COMMITMENTS 7 -- --
------------------ ------------------
49,533,998 46,405,790
========== ==========
INVESTMENTS
Deposited with State Bank of Pakistan
Federal Investment Bonds 350,000 350,000
HELD BY THE COMPANY
Ordinary Shares of Joint Stock Companies 8 1,514,733 3,311,783
NIT Units (Market Value Rs. 65,325/-)
(1998 -- Rs. 42,900/-) 65,325 75,400
Term Finance Certificates (I.C.I. Pak) 52,642 94,419
Market Value Rs. 137,970/- (1998 -- Rs. 137,970/-)
Certificates of Deposit (P.I.C.I.C.) 55,000 655,000
------------------ ------------------
1,687,700 4,136,602
OFFICE PREMISES
(At revalued amount less depreciation) 9 6,630,335 1,569,351
FURNITURE, OFFICE EQUIPMENT & VEHICLES
(At cost less depreciation) 13 5,481,340 5,180,629
CURRENT ASSETS
Outstanding premium & agents balances 6 20,717,034 20,463,323
Profit / Interest accrued 40,992 179,772
Amount due from other persons or bodies
carrying on insurance business 6 8,693,102 7,763,573
Advances, deposits & prepayments 919,860 708,764
CASH
With banks on deposit accounts 1,494,052 3,586,257
With banks on current accounts 3,417,791 2,259,335
Cash and stamps in hand 101,792 208,184
------------------ ------------------
35,384,623 35,169,208
------------------ ------------------
49,533,998 46,405,790
========== ==========
AUDITORS' REPORT TO THE MEMBERS:
Please see our annexed report of date
Karachi: 8th June, 2000.
DIRECTORS' CERTIFICATE
We certify that: The investments shown in the balance sheet have been valued at cost or book value and the
market value has been ascertained wherever applicable from the published quotation as at 31st December, 1999.
The value of all other assets have been reviewed as at 31st December, 1999 and in our belief, such assets, set
forth in the balance sheet are shown in aggregate, at the amounts not exceeding their realizable or market value
under several headings.
HAMEED CHAUDHRI & CO. Said Ahmed Shakil Raza Syed Mushtaque Ahmed
CHARTERED ACCOUNTANTS Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 1999
Note 1999 1998
RUPEES RUPEES
EXPENSES OF MANAGEMENT
(Not applicable to any particular fund or account) 1,939,164 --
Director's remuneration 11 605,666 280,146
Director's meeting fees 12 3,500 4,000
Bonus to staff -- 453,018
Employee's severance cost incurred
during the year 1,526,721 --
Company's contribution to Provident Fund 333,312 513,196
------------------ ------------------
4,408,363 1,250,360
DE PRECIATION 1,521,303 1,138,171
ZAKAT 20,780 30,625
PROVISION FOR DIMINUTION IN INVESTMENT 10 -- 606,008
PROVISION FOR TAXATION
Current Year 85,000 --
Prior Years (178,084) 895,807
------------------ ------------------
(93,084) 895,807
Loss for the year carried to
Profit & Loss Appropriation Account (3,352,573) (9,802,395)
------------------ ------------------
2,504,789 (5,881,424)
========== ==========
LOSS PER SHARE 14 (1.33) (3.90)
========== ==========
PROFIT / INTEREST & DIVIDEND 315,942 1,189,901
Less: Income tax deducted 42,704 43,453
------------------ ------------------
273,238 1,146,448
PROFIT / (LOSS) TRANSFERRED FROM
REVENUE ACCOUNTS
Fire Insurance 2,298,635 (1,080,637)
Marine Insurance 1,951,960 170,310
Miscellaneous Insurance (2,908,665) (6,446,658)
------------------ ------------------
(1,341,730) (7,356,985)
EXCESS PROVISION FOR DIMINUTION IN
VALUE OF INVESTMENTS WRITTEN BACK       192,875 --
PROFIT ON SALE OF ASSETS 654,946 181,828
MISCELLANEOUS INCOME 42,000 147,285
------------------ ------------------
2,504,789 (5,881,424)
========== ==========
PROFIT AND LOSS APPROPRIATION ACCOUNT
Balance Carried to the Balance Sheet (13,434,358) (10,081,785)
------------------ ------------------
(13,434,358) (10,081,785)
========== ==========
Balance Brought Forward (10,081,785) (279,390)
Loss for the year Brought Down (3,352,573) (9,802,395)
------------------ ------------------
(13,434,358) (10,081,785)
========== ==========
AUDITORS' REPORT TO THE MEMBERS:
Please see our annexed report of date
Karachi: 8th June, 2000. HAMEED CHAUDHRI & CO.
CHARTERED ACCOUNTANTS
Said Ahmed Shakil Raza Syed Mushtaque Ahmed
Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST DECEMBER, 1999
Note 1999 1998
RUPEES RUPEES
Net Cash used in operating activities A (2,824,461) 5,847,045
------------------ ------------------
Return on investments
Profit/ interest & Dividend received 454,722 1,407,592
------------------ ------------------
Net Cash inflow from return on investments 454,722 1,407,592
Taxation
Taxes paid (including deducted at source) (494,075) (590,213)
Investing activities
Acquisition of investments -- (55,000)
Investment sale proceeds 2,641,776 40,582
Purchase of administrative fixed assets (2,424,603) (615,283)
Administrative fixed assets sale proceeds 1,606,500 1,238,600
------------------ ------------------
Net cash inflow from investing activities 1,823,673 608,899
------------------ ------------------
Net cash outflow before financing activities (1,040,141) (4,420,767)
Financing activities -- --
------------------ ------------------
Decrease in cash & cash equivalents B (1,040,141) (4,420,767)
========== ==========
A. Cash flow from operating activities
Net Loss before taxation (3,402,953) (8,863,135)
Adjustments for:
Depreciation on administrative fixed assets 1,521,303 1,138,171
Gain on disposal on administrative fixed assets (654,946) (181,828)
Profit / Interest & Dividend income (315,942) (1,189,901)
Decrease in reserve for unexpired risk (1,738,235) (2,294,054)
Diminution in value of investments
(written back) / provided (192,875) 606,008
------------------ ------------------
(4,783,648) (10,784,739)
(Increase) / Decrease in operating assets
Outstanding Premiums and Agents Balances (253,711) 244,303
Amounts due from other persons or bodies
carrying on insurance business (929,529) 1,950,036
Advances, deposits & sundry debtors (18,576) 1,075,286
------------------ ------------------
(1,201,816) 3,269,625
Increase / (Decrease) in operating liabilities
Outstanding claims (678,411) (881,307)
Sundry creditors 239,640 (207,492)
Amounts due to other persons or bodies
carrying on insurance business 3,599,774 2,756,868
------------------ ------------------
3,161,003 1,668,069
------------------ ------------------
Net cash outflow from operating activities (2,824,461) (5,847,045)
========== ==========
B. Changes in cash & cash equivalents
Balance as at 1 January 6,053,776 10,474,543
Decrease in cash & cash equivalents (1,040,141) (4,420,767)
------------------ ------------------
Balance as at 31 December C 5,013,635 6,053,776
========== ==========
C. Analysis of cash & cash equivalents
CASH
With banks on deposit accounts 1,494,052 3,586,257
With banks on current accounts 3,417,791 2,259,335
Cash & stamps in hand 101,792 208,184
------------------ ------------------
5,013,635 6,053,776
========== ==========
HAMEED CHAUDHRI & CO.
Karachi: 8th June, 2000. CHARTERED ACCOUNTANTS
Said Ahmed Shakil Raza Syed Mushtaque Ahmed
Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
FIRE INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 1999
1999 1998
RUPEES RUPEES
CLAIMS PAID UNDER POLICIES LESS REINSURANCES
Paid during the year 2,104,362 1,417,937
Estimated liability in respect of outstanding
claims whether due or intimated 1,377,769 1,546,248
------------------ ------------------
3,482,131 2,964,185
Less: Outstanding at the end of previous year 1,546,248 1,294,440
------------------ ------------------
1,935,883 1,669,745
COMMISSION (416,357) 1,429,323
EXPENSES OF MANAGEMENT 3,262,693 8,706,206
PROFIT / (LOSS) TRANSFERRED TO
PROFIT & LOSS ACCOUNT 2,298,635 (1,080,637)
BALANCE OF ACCOUNT AT THE END OF THE YEAR
Reserve for unexpired risks being 40%
of net premium income for the year 2,011,956 4,062,921
------------------ ------------------
9,092,810 14,787,559
========== ==========
BALANCE OF ACCOUNT AT
THE BEGINNING OF THE YEAR
Reserve for unexpired risks 4,062,921 4,630,256
PREMIUM LESS RE-INSURANCES 5,029,889 10,157,303
------------------ ------------------
9,092,810 14,787,559
========== ==========
AUDITORS' REPORT TO THE MEMBERS:
Please see our annexed report of date
HAMEED CHAUDHRI & CO.
Karachi: 8th June, 2000. CHARTERED ACCOUNTANTS
We certify that all expenses of management wherever incurred, whether directly or indirectly and all
charges in respect of Fire Insurance Business have been fully debited in the above revenue account
as expenses.
Said Ahmed Shakil Raza Syed Mushtaque Ahmed
Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
MARINE INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 1999
1999 1998
RUPEES RUPEES
CLAIMS UNDER POLICIES LESS REINSURANCES
Paid during the year 923,682 826,275
Estimated liability in respect of outstanding
claims whether due or intimated 1,889,053 1,890,312
------------------ ------------------
2,812,735 2,716,587
Less: Outstanding at the end of previous year 1,890,312 1,942,335
------------------ ------------------
922,423 774,252
COMMISSION (632,055) 856,525
EXPENSES OF MANAGEMENT 1,963,693 5,120,623
PROFIT TRANSFERRED TO
PROFIT & LOSS ACCOUNT 1,951,960 170,310
BALANCE OF ACCOUNT AT THE END OF THE YEAR
Reserve for unexpired risks being 40%
of net premium income for the year 1,210,921 2,389,639
------------------ ------------------
5,416,942 9,311,349
========== ==========
BALANCE OF ACCOUNT AT
THE BEGINNING OF THE YEAR
Reserve for unexpired risks 2,389,639 3,337,252
PREMIUM LESS RE-INSURANCES 3,027,303 5,974,097
------------------ ------------------
5,416,942 9,311,349
========== ==========
AUDITORS' REPORT TO THE MEMBERS:
Please see our annexed report of date
HAMEED CHAUDHRI & CO.
Karachi: 8th June, 2000. CHARTERED ACCOUNTANTS
We certify that all expenses of management wherever incurred, whether directly or indirectly and all
charges in respect of Marine Insurance Business have been fully debited in the above revenue account
as expenses.
Said Ahmed Shakil Raza Syed Mushtaque Ahmed
Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
MOTOR & MISCELLANEOUS INSURANCE REVENUE ACCOUNTS FOR THE YEAR ENDED 31ST DECEMBER, 1999
MOTOR MISCELLANEOUS 1999 1998
Rupees Rupees Rupees Rupees
CLAIMS PAID UNDER POLICIES
LESS REINSURANCES
Paid during the year 3,999,882 606,177 4,606,059 7,936,424
Estimated liability in respect
of outstanding claims whether
due or intimated 4,440,347 915,894 5,356,241 5,864,914
------------------ ------------------ ------------------ ------------------
8,440,229 1,522,071 9,962,300 13,801,338
Less: Outstanding at the end
of previous year 5,054,260 810,654 5,864,914 6,946,006
------------------ ------------------ ------------------ ------------------
3,385,969 711,417 4,097,386 6,855,332
COMMISSION 488,013 103,330 591,343 1,167,941
EXPENSES OF MANAGEMENT 2,898,354 3,141,316 6,039,670 4,784,852
LOSS TRANSFERRED TO
PROFIT & LOSS ACCOUNT (2,246,361) (662,504) (2,908,865) (6,446,658)
BALANCE OF ACCOUNT AT
THE END OF THE YEAR
Reserve for unexpired risks
being 40% of net premium
income for the year 1,787,284 1,937,108 3,724,392 2,232,944
------------------ ------------------ ------------------ ------------------
6,313,259 5,230,667 11,543,926 8,594,411
========== ========== ========== ==========
BALANCE OF ACCOUNT AT
THE BEGINNING OF THE YEAR
Reserve for unexpired risks 1,845,048 387,896 2,232,944 3,012,050
PREMIUM LESS RE-INSURANCES 4,468,211 4,842,771 9,310,982 5,582,361
------------------ ------------------ ------------------ ------------------
6,313,259 5,230,667 11,543,926 8,594,411
========== ========== ========== ==========
AUDITORS' REPORT TO THE MEMBERS:
Please see our annexed report of date
HAMEED CHAUDHRI & CO.
Karachi: 8th June, 2000. CHARTERED ACCOUNTANTS
We certify that all expenses of management wherever incurred, whether directly or indirectly and all
charges in respect of Motor and Miscellaneous Insurance Business have been fully debited in the above
revenue account as expenses.
Said Ahmed Shakil Raza Syed Mushtaque Ahmed
Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 31ST DECEMBER, 1999
1. THE COMPANY AND ITS OPERATION
The Company was incorporated as a Public Limited Company on 20th April, 1965 and its shares
are quoted on Karachi Stock Exchange. The Company is carrying on general insurance business.
2. ACCOUNTING POLICIES
2.1 Accounting Convention
These accounts have been prepared under historical cost convention, as modified by the
revaluation of office premises indicated in note 10.
2.2 Employees' benefits
On introduction of Provident Fund in 1984, employees are entitled to gratuity up to the date
of introduction of Provident Fund. The Company also operates approved contributory provident
fund for all its confirmed employees.
Encashable leave is charged as and when availed / disbursed.
2.3 Insurance Revenue Accounts
The Premium earned on Fire, Marine and Miscellaneous (including Motor) insurance business,
net of reinsurance, after providing outstanding claims, commission and allocable management
expenses and adjustment of reserve for unexpired risks, is transferred to Profit and Loss
Account.
2.4 Retrocession business
Pakistan Insurance Corporation retrocession business have been accounted for on the basis
of quarterly statements received upto 30 September, 1999.
2.5 Estimated liability in respect of outstanding claims
The liability in respect of outstanding claims represents estimates of claims intimated or assessed
before the end of the financial year less anticipated recoveries.
2.6 Reserve for unexpired risks
The Company maintains its reserve for unexpired risks at the end of the year at 40% of the
premium income of the year, net of reinsurance.
2.7 Investments
These are stated at cost, provision for diminution in value of investment if required, is made
on portfolio basis at the Balance Sheet date. Gain or loss on sale of investment is included
in Profit and Loss Account.
2.8 Office Premises, Furniture, Office Equipment and Vehicles
These are stated at cost or valuation less accumulated depreciation. Depreciation is calculated
on reducing balance method, at the annual rate of 5% to 20% of written down values, depending
upon the class of assets. Major repairs are capitalized whereas normal repairs and maintenance
are charged to income currently. Vehicles acquired on lease are treated as operating lease
and rentals paid are charged to income currently. The full year's depreciation is charged on
fixed assets capitalized during the year while no depreciation is charged in the year of disposal.
Profit or loss on disposal of fixed assets is included in the Profit and Loss Account.
2.9 Taxation
Provision for current taxation is made on the taxable income if any.
2.10 Expenses of the Management
Expenses of the management are allocated to various Revenue accounts on the basis of
net premium income of the year.
Expenses of management have been charged after deducting therefrom Administrative Surcharge
recovered with premium.
2.11 Presentation
Figures in these accounts have been rounded off to the nearest rupee.
Corresponding figures have been rearranged, wherever necessary, for the purpose of
comparison.
3. ISSUED, SUBSCRIBED & PAID UP CAPITAL
1999 1998
RUPEES RUPEES
2,270,728 Ordinary Shares of Rs. 10 each
Fully Paid up in cash 22,707,280 22,707,280
245,728 Issued as fully paid Bonus
Shares 2,457,280 2,457,280
------------------ ------------------ ------------------
2,516,456 25,164,560 25,164,560
========== ========== ==========
4. STATEMENT OF CHANGES IN EQUITY
Share General Reserve for Profit & Loss
Capital Reserve Exceptional Appropriation Total
Losses Account
Rupees
Balance as at 01-01-1998 25,164,560 5,000,000 589,190 (279,390) 30,474,360
Loss for the year -- -- -- (9,802,395) (9,802,395)
------------------ ------------------ ------------------ ------------------ ------------------
Balance as at 31-12-1998 25,164,560 5,000,000 589,190 (10,081,785) 20,671,965
Loss for the year -- -- -- (3,352,573) (3,352,573)
------------------ ------------------ ------------------ ------------------ ------------------
Balance as at 31-12-1999 25,164,560 5,000,000 589,190 (13,434,358) 17,319,392
========== ========== ========== ========== ==========
5. SURPLUS ON REVALUATION OF OFFICE PREMISES
This surplus has arisen on account of revaluation of office premises of the Company during the year.
6. OUTSTANDING PREMIUM & AGENTS' BALANCES AND AMOUNTS DUE TO /
FROM OTHER PERSONS OR BODIES CARRYING ON INSURANCE BUSINESS
These outstanding premium, agents' balances and amounts due to and from other persons / bodies
carrying on insurance business are not confirmed. In the opinion of the Management these are
considered to be accurately stated.
7. COMMITMENTS
The future commitments in respect of operating leases rentals are Rs. 1,983,504/- (1998
-- Rs. 1,233,597/-).
8. INVESTMENT IN ORDINARY SHARES/CERTIFICATES OF JOINT STOCK COMPANIES/MODARABAS
No. of Shares Face Value Book Value
1998 1999 Rupees 1999 in Rupees 1998 in Rupees
ASSOCIATED UNDERTAKING - LISTED
2,952 2,952 BABA FARID SUGAR MILLS LTD. 10 16,670 16,670
88,804 88,804 GOLDEN ARROW SELECTED STOCK FUND LTD. 5 402,147 402,147
9,000 9,000 FEROZ SONS LABORATORIES LTD. 10 111,812 111,812
LISTED COMPANIES AND MODARABAS
MODARABAS
17,801 17,801 B.R.R INTERNATIONAL MODARABA 10 161,975 161,975
2,000 2,000 EQUITY INTERNATIONAL MODARABA 10 20,225 20,225
100 100 FIRST GRINDLAYS MODARABA 10 1,168 1,168
37,960 37,960 FIRST HABIB MODARABA 5 181,105 181,105
60 60 FIRST IBRAHIM MODARABA 10 559 559
6,000 6,000 L.T.V. CAPITAL MODARABA 5 37,800 37,800
225 225 L.T.V. REDEEMABLE CERTIFICATES 100 22,500 22,500
4,200 4,200 UDL MODARABA 10 55,640 55,640
LEASING
250 250 CAPITAL ASSETS LEASING CO. LTD. 10 2,633 2,633
3,000 3,000 PARAMOUNT LEASING CO. LTD. 10 30,375 30,375
8250.00 8250.00 SAUDI PAK. LEASING CO. LTD. 10 94,620 94,620
SECURITIES CO./BANKS
2,137 2,137 CRESCENT INVESTMENT BANK LTD. 10 43,210 43,210
312 312 MUSLIM COMMERCIAL BANK LTD. 10 7,305 7,305
500 500 TRUST SECURITIES & BROKERAGE 10 5,075 5,075
2,531 2,531 UNION BANK LTD. 10 43,800 43,800
500 500 PLATINUM COMMERCIAL BANK LTD. 10 5,075 5,075
TEXTILE SPINNING
5,000 5,000 ACCORD TEXTILE MILLS LTD. 10 50,000 50,000
625 625 AZAM TEXTILE MILLS LTD. 10 6,225 6,225
1,000 1,000 DATA TEXTILE MILLS LTD. 10 14,400 14,400
3,000 3,000 IDRESS TEXTILE MILLS LTD. 10 30,450 30,450
1,000 1,000 ISHTIAQ TEXTILE MILLS LTD. 10 11,750 11,750
500 500 J.K. SPINNING MILLS LTD. 10 5,000 5,000
220 220 NISHAT (CHUNAIN) LTD. 10 1,835 1,835
500 500 I TATA TEXTILE MILLS LTD. 10 5,000 5,000
2,990 2,990 UMER FABRICS LTD. 10 48,500 48,500
TEXTILE WEAVING
500 500 KOHINOOR WEAVING 10 5,000 5,000
4,100 4,100 PEARL FABRICS LTD. 10 26,240 26,240
TEXTILE COMPOSITE
3,000 3,000 MIAN TEXTILE INDUSTRIES LTD. 10 26,325 26,325
503 503 NISHAT MILLS LTD. (NISHAT TEK. LTD./ 10 11,620 11,620
SYNTHETIC & RAYON
750 750 PAKISTAN SYNTHETIC LTD. 10 4,750 4,750
1,000 1,000 SUNSHINE CLOTH LTD. 10 10,100 10,100
SUGAR & ALLIED
1,000 1,000 SANCHAR SUGAR MILLS LTD. 10 16,100 16,100
CEMENT
1,107 1,107 D.G. KHAN CEMENT CO. LTD. 10 34,090 34,090
4,077 4,077 PIONEER CEMENT LTD. 10 41,070 41,070
500 500 LUCKY CEMENT CO. LTD. 10 10,500 10,500
FUEL & ENERGY
900 900 HAROON OILS LTD. 10 16,110 16,110
1,000 1,000 HUB POWER CO. LTD. 10 13,335 13,335
4,348 5000.00 SUI NORTHERN GAS PIPELINES LTD. 10 90,905 90,905
3,801 4,181 SUI SOUTHERN GAS CO. LTD. 10 73,500 73,500
ENGINEERING
5,000 5,000 MULTIPOLE INDUSTRIES LTD. 10 50,750 50,750
AUTO & ALLIED ENGINEERING
166 166 ALLIED MOTORS 10 581 581
525 525 HONDA ATLAS CARS PAKISTAN LTD. 10 10,075 10,075
2,000 2,000 INDUS MOTOR CO. LTD. 10 60,150 60,150
3,000 3,000 SUZUKI MOTOR CYCLES LTD. 10 31,050 31,050
CHEMICALS & PHARMACEUTICALS
500 500 FAUJI FERTILIZER CO. LTD. 10 7,500 7,500
1,000 1,000 F.F.C. JORDAN FERTILIZERS CO. LTD. 10 15,075 15,075
28,080 28,080 ICI PAKISTAN LTD. 10 445,250 445,250
LEATHERS & TANNERIES
145 145 SERVICES SHOES LTD. 10 3,980 3,980
FOODS & ALLIEDS
1,500 1,500 SUNFLO CIR-RUSS LTD. 10 12,550 12,550
GLASS & CERAMICS
132 132 MEDI GLASS LTD. 10 705 705
TRANSPORT & COMMUNICATION
100 100 PAKISTAN TELECOMMUNICATION CO. LTD. 10 3,000 3,000
MISCELLANEOUS
2,000 2,000 TRI PACK FILMS LTD. 10 50,600 50,600
COST 2,487,765 2,487,765
LESS: PROVISION OF DIMINUTION OF INVESTMENT 973,252 1,176,202
MARKET VALUE 1,514,513 1,311,563
OTHERS
100 100 NISHAT INDUSTRIES LTD. 10 220 220
ASSOCIATED UNDERTAKING - UNLISTED
200,000 -- ORIENT RICE MILLS LTD. 10 -- 2,000,000
220 2,000,220
------------------ ------------------ ------------------ ------------------
472,251 273,646 1,514,733 3,311,783
========== ========== ========== ==========
9. OFFICE PREMISES
The Company's office premises were revalued on 20 December, 1999 on fair market value basis
by Mr. Yousuf Ali Mirza of 'Meerza Surveyors', Karachi. This revaluation showed a surplus of
Rs. 5,409,949/- over the net book value of these assets on that date.
The amount of revaluation surplus included in the net book value of office premises as at
31 December, 1999 is given below.
Office
Premises
Rupees
Cost before current revaluation 2,557,242
Accumulated depreciation 987,891
Net book value 1,569,351
Revaluation 6,979,300
------------------
Revaluation surplus 5,409,949
==========
1999 1998
RUPEES RUPEES
10. AUDITOR'S REMUNERATION
Audit Fee 18,500 18,500
Certificate of Returns 9,000 9,000
Consultancy Charges 12,500 --
------------------ ------------------
40,000 27,500
========== ==========
11. EXECUTIVES' REMUNERATION
Chief Executive Executive
1999 1998 1999 1998
Rupees Rupees
Managerial remuneration
and allowances 382,258 127,700 1,004,761 768,600
House rent & utilities 180,883 141,805 496,650 493,223
Reimbursement of medical
expenses         9,992 -- 304,100 --
Other expenses 32,533 10,641 16,406 45,852
------------------ ------------------ ------------------ ------------------
605,666 280,146 1,821,917 1,307,675
------------------ ------------------ ------------------ ------------------
Number of persons 1 1 4 4
========== ========== ========== ==========
The Chief Executive and Four (1998 -- Four) Executives are provided with the Company maintained
cars and telephones at residence.
12. DIRECTORS' MEETING FEE
Meeting Fee 3,500 4,000
------------------ ------------------
Number 7 4
========== ==========
13. DISPOSAL OF FIXED ASSETS
Original Accumulated Written Down Sale Profit /
Particulars Cost Depreciation Value Proceeds (Loss) Remarks
a) Suzuki Swift 300,000 281,545 18,455 80,000 61,545 Negotiation
b) Suzuki Swift 315,000 287,254 27,746 160,000 132,254 Negotiation
c) Suzuki Swift 325,000 272,493 52,507 150,000 97,493 Negotiation
d) Mitsubishi Lancer 450,000 358,250 91,750 160,000 68,250 Negotiation
e) Toyota Corolla 615,000 384,600 230,400 425,000 194,600 Negotiation
f) Toyota Corolla 525,000 361,819 163,181 250,000 86,819 Negotiation
g) Honda CD-70 45,000 15,312 29,688 21,000 (8,688) Negotiation
h) Yamaha YB-100 45,000 42,651 2,349 19,000 16,651 Negotiation
i) Yamaha YB-100 55,000 32,600 22,400 15,500 (6,900) Negotiation
j) Honda CD-70 40,000 29,614 10,486 21,000 10,514 Negotiation
k) Nissan Sunny 450,000 419,310 30,690 190,000 159,310 Negotiation
l) Furniture & Fixture 1,283,772 1,011,870 271,902 115,000 (156,902) Negotiation
------------------ ------------------ ------------------ ------------------ ------------------
4,448,772 3,497,318 951,554 1,606,500 654,946
========== ========== ========== ========== ==========
PARTICULARS OF PURCHASERS
a) Mr. D.M. Qureshi House No. A-134, Block No. A, North Nazimabad, Karachi.
b) Mr. M. Iqbal Butt 1595/14, Dastagir Society, Karachi-38.
c) Mr. M. Abdul Sattar 1595/14, Dastagir Society, Karachi-38.
d) Mr. M. Asif 1595/14, Dastagir Society, Karachi-38.
e) Mr. Nusrat Ali Hassan Autos, Abdullah Haroon Road, Saddar, Karachi.
f) Lt. Azad Iqbal House No. A-192, Sector 11-A, Gulshan-e-Usman, North Karachi.
g) Mr. Shahid Parvez House No. 1/54, Shah Faisal Colony, Karachi.
h) Mr. Ahmed Nadeem M-l, Ruqayya Square, Karachi.
i) Mr. Ahmed Nadeem M-l, Ruqayya Square, Karachi.
j) Mr. M. Akram House No. 59, Sector No. 13-G, Orangi Town, Karachi.
k) Mr. Rehan Fareed A-349, Block L, North Nazimabad, Karachi.
l) M/s. Quality Furnitures Saddar, Karachi.
1999 1998
RUPEES RUPEES
14. LOSS PER SHARE
Losses attributable to Ordinary Shareholders (3,352,573) (9,802,395)
Number of Shares
Weighted average number of shares outstanding   2,516,456 2,516,456
Rupees
Loss per Share (1.33) (3.90)
========== ==========
15. NUMBER OF EMPLOYEES
Average number of persons employed during the year 68 103
========== ==========
Said Ahmed Shakil Raza Syed Mushtaque Ahmed
Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
16. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
16.1 INTEREST RATE RISK EXPOSURE
1999
RUPEES
INTEREST BEARING NON-INTEREST BEARING
Upto 1 More than Sub-total Upto 1 More than Sub-total Total
Year 1 Year Year 1 Year
FINANCIAL ASSETS
Ordinary shares -- -- -- 1,514,733 -- 1,514,733 1,514,733
N.I.T. Units -- -- -- 65,325 -- 65,325 65,325
T.F. Cs. 52,642 -- 52,642 -- -- -- 52,642
C.O.D. 55,000 -- 55,000 -- -- -- 55,000
Outstanding premium
& Agents' Balances -- -- -- 20,717,034 -- 20,717,034 20,717,034
Interest accrued -- -- -- 40,992 -- 40,992 40,992
Amount due from other
persons / bodies
carrying on insurance
business -- -- -- 8,693,102 -- 8,693,102 8,693,102
Advances, deposits
& Pre-payments -- -- -- 674,978 -- 674,978 674,978
Cash at banks 1,494,052 -- 1,494,052 3,516,156 -- 3,516,156 5,010,208
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
1,601,694 -- 1,601,694 35,222,320 -- 35,222,320 36,824,014
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
FINANCIAL LIABILITIES
Estimated liability in respect
of outstanding claims
whether due or intimated -- -- -- 8,623,063 -- 8,623,063 8,623,063
Amounts due to other
persons or bodies carrying
on insurance business -- -- -- 8,694,601 -- 8,694,601 8,694,601
Sundry creditors -- -- -- 915,774 -- 915,774 915,774
Unclaimed Dividend -- -- -- 61,642 -- 61,642 61,642
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
-- -- -- 18,295,080 -- 18,295,080 18,295,080
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
ON BALANCE SHEET GAP 1,601,694 -- 1,601,694 16,927,240 -- 16,927,240 18,528,934
========== ========== ========== ========== ========== ========== ==========
1999
RUPEES
INTEREST BEARING NON-INTEREST BEARING
Upto 1 More than Sub-total Upto 1 More than Sub-total Total
Year 1 Year Year 1 Year
FINANCIAL ASSETS
Ordinary shares -- -- -- 3,311,783 -- 3,311,783 3,311,783
N.I.T. Units -- -- -- 75,400 -- 75,400 75,400
T.F. Cs. 94,416 -- 94,416 -- -- -- 94,416
C.O.D. 655,000 -- 655,000 -- -- -- 655,000
Outstanding premium
& Agents' Balances -- -- -- 20,463,323 -- 20,463,323 20,463,323
Interest accrued -- -- -- 179,772 -- 179,772 179,772
Amount due from other
persons / bodies
carrying on insurance
business -- -- -- 7,763,573 -- 7,763,573 7,763,573
Advances, deposits
& Pre-payments -- -- -- 708,764 -- 708,764 708,764
Cash at banks 3,586,257 -- 3,586,257 2,463,317 -- 2,463,317 6,049,574
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
4,335,675 -- 4,335,675 34,965,932 -- 34,965,932 39,301,607
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
FINANCIAL LIABILITIES
Estimated liability in respect
of outstanding claims
whether due or intimated -- -- -- 9,301,474 -- 9,301,474 9,301,474
Amounts due to other
persons or bodies carrying
on insurance business -- -- -- 5,094,827 -- 5,094,827 5,094,827
Sundry creditors -- -- -- 783,326 -- 783,326 783,326
Unclaimed Dividend -- -- -- 61,642 -- 61,642 61,642
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
-- -- -- 15,241,269 -- 15,241,269 15,241,269
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
ON BALANCE SHEET GAP 4,335,675 -- 4,335,675 19,724,663 -- 19,724,663 24,060,338
========== ========== ========== ========== ========== ========== ==========
1999 1998
RUPEES RUPEES
16.2 EFFECTIVE INTEREST RATES
Deposited with State Bank of Pakistan -- F.I.Bs. 15.00% 15.00%
Term Finance Certificates (I.C.I. Pak) 18.70% 18.70%
Certificates of Deposit (P.I.C.I.C.) 14.00% 14.00%
Deposit Accounts 6.75% & 5.50% 6.75% & 5.50%
16.3 CREDIT RISK
The credit risk represents the accounting loss that would be recognised at the reporting date if
counter parties failed to perform as contracted. All financial assets of the Company, except cash
in hand, are exposed to credit risk. The Company's credit risk is concentrated in 'Outstanding
premium & Agents' balances' and 'Amounts due from other persons / bodies carrying on insurance
business i.e. 56% and 23% (1998 -- 56% and 21%) respectively.
16.4 FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of all financial instruments reflected in the financial statements approximate to their
carrying value.
Said Ahmed Shakil Raza Syed Mushtaque Ahmed
Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
CLASSIFIED SUMMARY OF ASSETS IN PAKISTAN
AS AT 31ST DECEMBER, 1999
FORM 'AA'
COST / MARKET/
CLASS OF ASSETS BOOK VALUE REALISABLE R E M A R K S
VALUE
Rupees Rupees
Federal Investment Bond 350,000 350,000 Cost
Market Value has been
Ordinary Shares of Companies ascertained from
Incorporated in Pakistan Quoted 1,514,513 1,514,513 published quotations
Trading suspended on
Stock Exchange 220 220 Book Value
N.I.T. Units 65,325 65,325 Realisable Value
Certificates of Deposit (PICIC) 55,000 55,000 Realisable Value
Term Finance Certificates 52,642 52,642 Realisable Value
Revalued amount less
Office Premises 6,630,335 6,630,335 depreciation
Furniture, Office Equipment &
Vehicles 5,481,340 5,481,340 Book Value
Agent Balances 20,717,034 20,717,034 Realisable Value
Profit / Interest Accrued 40,992 40,992 Realisable Value
Amount due from other persons or
bodies carrying on insurance
business 8,693,102 8,693,102 Realisable Value
Advances, deposits & prepayments 919,860 919,860 Realisable Value
Cash at banks on Fixed Deposits 1,494,052 1,494,052 Realisable Value
Cash at banks on Current Accounts
and in hand 3,519,583 3,519,583 Realisable Value
Said Ahmed Shakil Raza Syed Mushtaque Ahmed
Chairman Managing Director & Director Chief Manager
Chief Executive (Finance & Accounts)
PATTERN OF HOLDING OF THE SHARES BY THE SHAREHOLDERS
AS AT 31ST DECEMBER, 1999
NO. OF SHAREHOLDINGS TOTAL
SHARE FROM TO SHARES
HOLDERS
65 1 -- 100 1214
15 101 -- 500 5277
17 501 -- 1000 12272
21 1001 -- 5000 43946
3 5001 -- 10000 22829
1 10001 -- 15000 14148
0 15001 -- 20000 0
3 20001 -- 25000 64918
1 25001 -- 30000 30000
0 30001 -- 35000 0
0 35001 -- 40000 0
0 40001 -- 45000 0
1 45001 -- 50000 48631
1 50001 -- 55000 51974
1 55001 -- 100000 74142
0 100001 -- 105000 0
0 105001 -- 110000 0
1 110001 -- 200000 185840
0 200001 -- 205000 0
0 205001 -- 250000 0
2 250001 -- 2500000 1961265
------------------ ------------------
132 2516456
========== ==========
CATEGORIES OF NUMBER NUMBER OF PERCENTAGE
SHAREHOLDERS SHARES HELD
Individuals 120 413310 16.42%
Investment Companies 1 66 00.00%
Insurance Companies 1 22029 00.88%
Joint Stock Companies 9 2080959 82.70%
Administrator Abandoned Properties 1 92 00.00
------------------ ------------------ ------------------
132 2516456 100.00%
========== ========== ==========
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