| METROPOLITAN LIFE |
|
|
|
|
|
|
|
|
|
| ASSURANCE
CO. OF PAKISTAN LTD. |
|
| ANNUAL
REPORT 1997 |
|
|
|
| CONTENTS |
|
| Board
of Directors and Management |
|
| Notice
of Meeting |
|
| Chairman's
Review |
|
| Director's
Report |
|
| Auditor's
Report to the Members |
|
| Balance
Sheet |
|
| Revenue
account |
|
| Cashflow
Statement |
|
| Notes
to the Accounts |
|
| Form AA |
|
|
| Holdings
of Shares |
|
| Company,
Sector and Area Offices |
|
|
|
| Board
Of Directors And Management |
|
|
| Pervez Yunus |
|
|
Chairman |
|
|
| Nisar
Hussain |
|
Managing Director |
|
|
|
& Chief Executive |
|
|
| Javed Yunus |
|
|
Director |
|
| Naved Yunus |
|
|
Director |
|
| Maheen Yunus |
|
|
Director |
|
| Rubina
Javed Yunus |
|
Director |
|
| Samina
Pervez Yunus |
|
Director |
|
| Tahira
Unus Khan |
|
Director |
|
| Ambreen
Naved Yunus |
|
Director |
|
|
| Akhtar
& Hasan (Pvt) Ltd |
|
Consulting Actuaries |
|
| A. M Khalfe |
|
|
Consulting Actuary |
|
|
|
|
| Raja
Nazir Ahmed |
|
General Manager |
|
| Raja
Gustasab Khan |
|
General Manager |
|
| S.
A.M. Jafri |
|
Dy. General Manager |
|
| Zakir
Ali ACA.,ACMA., |
|
Asstt. General Manager
(Accounts) |
|
| Shamshad
A. Khan |
|
Asstt. General Manager
(underwriting) |
|
| Syed
Naseem Hussain Zaidi |
Asstt. General Manager
(Policy Holder Services) |
|
|
|
|
| Shabbir
Ali Kanchwala |
|
Secretary |
|
|
|
|
| Ch.
Muhammad Zakriya Khalil |
Legal Adviser |
|
|
| Taher
Moochhala & Co. |
|
| Chartered
Accountants |
|
Auditors |
|
|
| Bankers |
|
|
Bolan Bank Limited |
|
|
|
Allied Bank Of Pakistan
Ltd., |
|
|
|
Muslim Commercial Bank
Ltd., |
|
|
|
Bank of Punjab Ltd., |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 5th Annual General Meeting of the Shareholders of
the |
|
| Metropolitan
Life Assurance Co. of Pakistan Ltd., will be held at the Company's Registered
Office |
|
| 57,
Regal Plaza, M. A. Jinnah Road, Quetta at 12:45 hours on Monday 1st June,
1998 to transact |
|
| the
following business:- |
|
|
|
|
|
|
| 1.
Recitation from the Holy Quran. |
|
|
|
|
| 2.
To confirm the minutes of the last Annual General Meeting held on 31st May
1997. |
|
|
|
|
| 3.
To receive, consider and adopt the Audited Accounts for the year ended 31st
December, 1997 |
|
| alongwith
Director's and Auditor's Report thereon. |
|
|
|
|
| 4.
To appoint Auditors for the year 1998 and fix their remuneration. The
retiring auditors ~S. |
|
| Taher
Moochhala & Co. Chartered Accountants, Karachi being eligible and offered
themselves for |
|
| re-appointment. |
|
|
| 5.
To transact any business that may be placed before the meeting with the
permission of the Chair. ';~
~' ~:' |
|
|
|
| Notes |
|
|
| 1.
The Shares Transfer Books of the Company will remain closed from 1st June,
1998 to 5th June. |
|
| 1998. |
|
|
|
|
|
| 2.
Members unable to attend the Annual General Meeting may send proxy form duly
stamped and |
|
| attested
to the Company so as to reach the Company's office not less than 48 hours
before the |
|
| meeting. |
|
|
|
| 3.
Shareholders are requested to notify any change of address immediately. |
|
|
| 4.
No application for transfer of shares will be entertained during the above
mentioned period. |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| I
take this opportunity to present to our shareholders the 5th Annual Report
alongwith the Audited |
|
| Accounts
of Metropolitan Life Assurance Co. of Pakistan Ltd. for the year ending 31st
December, 1997. |
|
|
| During
the year under review the Management and the Consulting Actuaries carried out
a comprehen- |
|
| sive
review of the operation of the Company and undertook some crucial decisions
to strengthen the foot- |
|
| ing
of the Company so that operations could be more profitable keeping in view
the market conditions. |
|
| The
exercise was carried out successfully and it is being reflected in the
revised insurance plans for mar- |
|
| keting
by our field force. For the first time we have introduced a major surgical
benefit with our two most |
|
| popular
plans. |
|
|
| We
have also taken some major decisions regarding the future development of
market and the restruc- |
|
| turing
of our field force. The effect of these changes will be realized in the years
ahead. A major retrain- |
|
| ing
programme of our field is now under way and we hope to achieve satisfactory
performance from our |
|
| field
workers in future. The review of insurance plans and restructuring of field
force had become neces- |
|
| sary
keeping in view the-market conditions. |
|
|
| The
year 1997 has been a difficult one on account of severe economic conditions
prevailing in the coun- |
|
| try.
The saving ability of middle class has been eroded and the ability to save
for long term investment |
|
| has
been considerably reduced. This affected our new as well as renewal premiums. |
|
|
| However,
we are confident that with the changes now introduced the situation will
improve. Our empha- |
|
| sis
in future will be on quality underwriting rather than on quantity of
business. |
|
|
| I
like to take this opportunity to thank Ministry of Commerce, Government of
Pakistan and the |
|
| Department
of Insurance for the valued guidance provided by them all along. |
|
|
| My
special thanks to the field staff of the Company, whose hardwork is inspiring
a brighter future to the |
|
| Company
with an advise that the Company needs their hardwork, effective planning and
determination |
|
| to
pull through this difficult time. My thanks to field managers, executives and
office staffs of the |
|
| Company,
without whose untiring efforts achieving the remarkable results would not
have been possible. |
|
| I
also like to thank our policyholders for their confidence in our Company. |
|
|
| Lastly,
my thanks to our thousands of shareholders, whose commitment and support for
this Company is |
|
| a
source of encouragement for us to make Metropolitan Life Assurance Company a
strong and depend- |
|
| able
financial institution and a symbol of security for generations to come. |
|
|
|
| DIRECTOR'S
REPORTS |
|
|
| Your
Directors are pleased to present their report together with Accounts and
Auditors Report for the year |
|
| ending
31st December, 1997 |
|
|
| The
result of the Company for year 1997 are as under: |
|
|
| Net
Loss for the year |
|
Rs. |
4,571,584 |
|
| Add:
Balance brought forward from previous year |
Rs. |
6,678,726 |
|
|
|
---------- |
|
| Balance
carried forward |
|
|
Rs. |
11,250,310 |
|
|
|
========== |
|
|
| AUDITORS |
|
| The
retiring auditors M/S Taher Moochhala & Co. Chartered Accountants being
eligible, offered them- |
|
| selves
for re-appointment. |
|
|
| PATTERN
OF SHARE HOLDING |
|
| A
statement showing the pattern of share holding of the Company as at December 31, 1997 is annexed |
i~ |
|
| with
the report. |
|
|
| THANKS |
|
| The
Board thanks all executives, officers and staff of our Company for their
loyalty and dedicated ser- |
|
| vices. |
|
|
|
| AUDITOR'S
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of Metropolitan Life Assurance Company
of Pakistan |
|
| Limited
as at December 31, 1997 and the related Revenue Account, Profit and Loss
Appropriation |
|
| Account
and Cashflow 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 knowl- |
|
| edge
and belief were necessary for the purpose of the audit 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 law; |
|
|
| (b)
in our opinion: |
|
|
| i)
the Balance Sheet, Revenue Account and Profit and Loss Appropriation Account
together |
|
| with
the notes thereon, have been drawn up in conformity with law and are in
agreement |
|
| with
the books of account and are further in accordance with the accounting
policies con- |
|
| sistently
applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; |
|
| 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 Balance Sheet, Revenue Account,
Profit and Loss |
|
| Appropriation
Account and Cashflow Statement together with the notes forming part thereof
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 affair as at December
31,1997 and of the |
|
| loss
and the cashflow for the year then ended; |
|
|
| (d)
we have verified the cash and the bank balances and the securities related to
the Company's loans |
|
| and
investments by actual inspection or by the production of certificates from
custodians of |
|
| investment
and the Company's bankers; |
|
|
|
|
| (e)
as required by Regulation 11 of part I in Third Schedule of the Insurance
Act, 1938, we certify |
|
| that
the Company has not paid to any person any commission in any form outside
Pakistan in |
|
| respect
of the 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
reinsured abroad; |
|
|
|
|
| (f)
Pursuant to clause (a) of sub-section (2) of Section 40-B of the Insurance
Act, 1938 we certify that |
|
| all
expenses of management in respect of Life Insurance Business transacted by
the Company in |
|
| Pakistan
have been fully debited in the Revenue Account as expenses; |
|
|
| (g)
No part of the assets of the Life Insurance Fund has been directly or
indirectly applied in con- |
|
| travention
of the provisions of the Insurance Act relating to the application and
investment of Life |
|
| Insurance
funds; |
|
|
|
|
| (h)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
| Karachi |
|
|
TAHER MOOCHHALA & CO. |
|
| Dated:
May 5, 1998 |
|
Chartered Accountants |
|
|
|
|
|
|
|
| BALANCE
SHEET AS AT DECEMBER 31, 1997 |
|
|
|
|
|
|
|
|
NOTE |
1997 |
1996 |
|
|
|
|
|
|
RUPEES |
RUPEES |
|
| SHARE
CAPITAL |
|
|
|
| Authorised |
|
|
|
|
| 10.000,000
ordinary shares of |
|
|
| Rs. 10 each |
|
|
|
|
100,000,000 |
100,000,000 |
|
|
|
|
|
|
========== |
========== |
|
| Issued
subscribed and paid-up |
|
|
| 6,000,000
(1995:6,000,000) ordinary shares |
|
| of
Rs. 10 each, fully paid in cash |
|
|
60,000,000 |
60,000,000 |
|
| PROFIT
AND LOSS APPROPRIATION ACCOUNT |
|
|
(46,198,670) |
- |
|
| BALANCE
OF LIFE ASSURANCE FUND |
|
|
34,948,360 |
(6,678,726) |
|
| PROVISION
FOR STAFF GRATUITY |
|
|
484,472 |
303,173 |
|
| ESTIMATED
LIABILITY IN |
|
|
|
| RESPECT
OF OUTSTANDING |
|
|
|
| CLAIMS,
WHETHER DUE |
|
|
|
| OR INTIMATED |
|
|
|
|
6,920,232 |
4,837,000 |
|
| DUE
TO DIRECTORS |
|
|
3 |
3,431,124 |
115,647 |
|
| AMOUNT
DUE TO OTHER PERSONS |
|
|
| OR
BODIES CARRYING ON |
|
|
|
| INSURANCE
BUSINESS |
|
4 |
320,331 |
263,650 |
|
| SUNDRY
CREDITORS (including |
|
|
|
| Outstanding
and accruing expenses) |
|
|
2,489,136 |
3,476,148 |
|
| PREMIUM
AND OTHER DEPOSITS |
|
4 |
3,555,002 |
3,689,284 |
|
| AGENTS
BALANCE |
|
4 |
1,832,079 |
1,200,990 |
|
| CONTINGENT
LIABILITY |
|
5 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
67,782,066 |
67,207,166 |
|
|
|
========== |
========== |
|
|
|
|
| CERTIFICATE
UNDER REGULATION 7 OF THE FIRST SCHEDULE TO THE INSURANCE ACT, 1938 WE
CERTIFY THAT |
|
| a)
The investments shown in the Balance Sheet has been valued as indicated
therein at cost or book value, and the market |
|
| value
of the investments are ascertained from public market report and quotations
of 31st December, 1997. |
|
|
|
|
| b)
The value of the assets have been reviewed as at the date of the Balance
Sheet and that in our belief, the assets set-forth in |
| the
Balance Sheet are shown in the aggregate at amounts not exceeding their
realisable or market value under the several headings. |
|
|
|
| c)
No part of the Life Insurance Fund has been directly or indirectly applied in
contravention of the provisions of the Act relat- |
| ing
to the application and investment of Life Insurance Fund. |
|
|
|
|
|
|
|
|
|
|
1997 |
1996 |
|
|
|
NOTE |
RUPEES |
RUPEES |
|
| PRELIMINARY
AND DEFERRED |
|
|
|
| EXPENDITURE |
|
|
|
6 |
353,376 |
985,958 |
|
| LOANS
ON INSURERS' POLICIES WITHIN |
|
|
| THEIR
SURRENDER VALUE |
|
|
7 |
4,586,300 |
2,463,356 |
|
|
|
|
|
| INVESTMENT |
|
|
|
| Deposit
with State Bank of Pakistan |
|
|
---------- |
---------- |
|
| (Federal
Investment Bonds) |
|
|
6,100,000 |
6,100,000 |
|
| Federal
Investment Bonds |
|
|
|
10,000,000 |
10,000,000 |
|
| National
Investment Trust Units |
|
|
- |
12,026,836 |
|
| Ordinary
Shares of Companies |
|
|
| Incorporated
in Pakistan |
|
8 |
21,418,870 |
7,118,870 |
|
| [Market
value Rs. 26,590,250 |
|
|
---------- |
---------- |
|
| (1996:
Rs. 7,000,175)] |
|
|
|
37,518,870 |
35,245,706 |
|
| OUTSTANDING
PREMIUM |
|
|
|
1,207,599 |
2,162,566 |
|
| INTEREST,
RETURN ON DEPOSITS |
|
|
| AND
DIVIDENDS ACCRUED OR OUTSTANDING |
|
|
723,872 |
671,734 |
|
| SUNDRY
DEBTORS, ADVANCES, DEPOSITS, |
|
|
| PREPAYMENTS
AND OTHERS RECEIVABLES |
|
|
3,507,739 |
2,975,125 |
|
| CASH |
|
|
|
|
|
|
|
| on
current accounts with banks and in hand |
|
8,336,513 |
9,509,040 |
|
|
|
|
|
| STOCK
OF STATIONERY AND PRINTED MATERIAL |
|
200,134 |
254,540 |
|
|
|
|
|
| FURNITURES,
FIXTURES, FITTINGS |
|
|
| AND
OFFICE EQUIPMENT |
|
|
|
| Cost |
|
|
|
|
---------- |
---------- |
|
| At
the beginning of the year |
|
|
14,338,247 |
9,931,340 |
|
|
| Additions
during the year |
|
|
29,550 |
4,406,907 |
|
|
|
|
---------- |
---------- |
|
|
|
|
14,367,797 |
14,338,247 |
|
|
| Less:
Depreciation to date |
|
|
4,138,846 |
3,002,296 |
|
|
|
|
---------- |
---------- |
|
|
|
|
10,228,951 |
11,335,951 |
|
| VEHICLES |
|
|
|
| Cost |
|
|
|
|
|
|
|
| At
the beginning of the year |
|
|
2,929,026 |
2,334,126 |
|
| Additions
during the year |
|
|
- |
704,900 |
|
| (Deletion)
during the year |
|
(400,000) |
(110,000) |
|
|
|
|
---------- |
---------- |
|
|
|
2,529,026 |
2,929,026 |
|
| Less:
Depreciation to date |
|
1,410,314 |
1,325,836 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,118,712 |
1,603,190 |
|
|
|
|
---------- |
---------- |
|
|
|
|
67,782,066 |
67,207,166 |
|
|
|
|
========== |
========== |
|
|
|
| REVENUE
ACCOUNT |
|
| FOR
THE YEAR ENDED DECEMBER 31, 1997 |
|
|
|
1997 |
1996 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| Claims
under polices (including |
|
|
| provision
for claims due or intimated less reinsurance) |
|
| By death |
|
3,243,476 |
4,139,500 |
|
| By accident |
|
54,325 |
279,338 |
|
|
|
---------- |
---------- |
|
| Total
claims under policies |
|
3,297,801 |
4,418,838 |
|
| Surrenders
less reinsurance |
|
385,856 |
46,522 |
|
|
|
---------- |
---------- |
|
| Total
payment to policy holders |
|
3,683,657 |
4,465,360 |
|
| EXPENSES
OF MANAGEMENT |
|
|
|
| 1.
(a) Commission to insurance agents |
|
|
---------- |
---------- |
|
| (less
that on reinsurance) |
|
9 |
6,771,016 |
12,857,346 |
|
| Other
allowances and commissions |
|
|
| (other
than commissions included |
|
|
| in
sub item (a) preceding) |
|
10 |
5,865,659 |
9,568,679 |
|
|
|
|
---------- |
---------- |
|
| Total
payment to field workers |
|
12,636,675 |
22,426,025 |
|
|
|
|
| 2.
Salaries etc. |
|
|
|
| (other
than to agents |
|
|
|
| and
those contained in item 1) |
|
9,458,148 |
10,090,364 |
|
|
|
|
| 3.
Travelling expenses |
|
1,968,646 |
2,159,450 |
|
| 4.
Auditors remuneration |
|
25,000 |
25,000 |
|
| 5.
Medical fees |
|
155,885 |
178,240 |
|
| 6.
Advertisements |
|
679,871 |
1,214,928 |
|
| 7.
Printing and Stationery |
|
587,901 |
1,163,477 |
|
| 8.
Other expenses of management: |
|
|
| Policy
stamps |
|
177,944 |
231,503 |
|
| Staff
welfare |
|
662,336 |
628,647 |
|
| Postage,
telegram, and telephone |
|
1,303,331 |
1,444,354 |
|
| Electricity
and Gas |
|
1,098,719 |
1,057,915 |
|
| Entertainment |
|
379,871 |
441,402 |
|
| Bank charges |
|
130,105 |
114,809 |
|
| Vehicle
maintenance |
|
589,132 |
695,386 |
|
| Repair
and maintenance |
|
597,060 |
397,904 |
|
| Rent,
rates and taxes |
|
2,171,235 |
2,170,450 |
|
| Legal
and professional charges |
|
570,445 |
246,180 |
|
| Insurance |
|
223,433 |
244,637 |
|
| Prizes
and awards |
|
40,200 |
34,350 |
|
| Staff
gratuity |
|
181,299 |
310,467 |
|
| Zakat |
|
15,863 |
200,448 |
|
| Miscellaneous
expenses |
|
393,484 |
412,936 |
|
|
|
---------- |
---------- |
|
| Carried over |
|
|
37,730,240 |
50,354,232 |
|
|
|
|
|
|
1997 |
1996 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| BALANCE
OF FUND AT BEGINNING |
|
|
(6,678,726) |
(5,095,377) |
|
| OF THE YEAR |
|
|
|
|
|
|
|
| PREMIUM
LESS REINSURANCE |
|
|
|
|
|
|
| (i)
First year premium where the maximum premium |
|
| payment
period is: |
|
|
|
|
|
|
|
|
| Ten years |
|
318,328 |
709,088 |
|
| Eleven years |
|
43,102 |
96,058 |
|
| Twelve
years or over (including through out life) |
|
13,571,652 |
30,281,801 |
|
|
|
---------- |
---------- |
|
|
|
13,933,082 |
31,086,947 |
|
|
|
|
| (ii)
Renewal Premium |
|
|
|
---------- |
---------- |
|
| Second
year premium |
|
|
6,951,204 |
9,385,325 |
|
| Third
year premium and over |
|
10,978,007 |
6,454,336 |
|
|
|
|
---------- |
---------- |
|
|
|
17,929,211 |
15,839,661 |
|
| (iii)
Single premium |
|
|
- |
- |
|
| (iv)
Group premium |
|
|
904,869 |
692,080 |
|
| (v)
Consideration for ordinary annuities granted |
|
|
|
| less
reinsurance |
|
|
- |
- |
|
|
|
|
|
| INTEREST
AND DIVIDENDS |
|
|
2,813,099 |
3,724,890 |
|
| MISCELLANEOUS
INCOME |
|
|
- |
20 |
|
|
|
---------- |
---------- |
|
| Carried over |
|
|
28,901,535 |
46,248,221 |
|
|
| Brought
forward |
|
37,730,240 |
50,354,232 |
|
| 9.
Agency development |
|
139,470 |
279,785 |
|
| 10.
Depreciation expenses: |
|
|
|
|
|
| Furnitures,
Fixtures, Fittings and |
|
|
---------- |
---------- |
|
| office
equipments |
|
1,136,550 |
1,259,550 |
|
| Vehicles |
|
279,678 |
400,798 |
|
|
|
---------- |
---------- |
|
|
|
1,416,228 |
1,660,348 |
|
| LOSS
ON SALE OF INVESTMENT |
|
233,325 |
- |
|
| PRELIMINARY
AND DEFERRED |
|
|
|
| EXPENDITURE-WRITTEN
OFF. |
|
632,582 |
632,582 |
|
|
|
|
| PROFIT
AND LOSS APPROPRIATION ACCOUNT |
|
|
(46,198,670) |
- |
|
|
|
|
| BALANCE
OF FUND AS SHOWN |
|
|
|
| IN
THE BALANCE SHEET |
|
34,948,360 |
(6,678,726) |
|
|
|
---------- |
---------- |
|
|
|
28,901,535 |
46,248,221 |
|
|
|
========== |
========== |
|
|
|
|
| It
is hereby certified that a]l expenses of management in respect of Life
Insurance Business transacted |
|
| by
the Company in Pakistan have been fully debited to Revenue Account. |
|
|
|
|
|
|
|
| PROFIT
AND LOSS APPROPRIATION ACCOUNT |
|
|
| FOR
THE YEAR ENDED DECEMBER 31, 1997 |
|
|
|
|
|
| Balance
brought forward |
|
|
- |
- |
|
| Transfer
from Revenue Account |
|
|
46,198,670 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
46,198,670 |
- |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
1997 |
1996 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| Brought
forward |
|
|
28,901,535 |
46,248,221 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
28,901,535 |
46,248,221 |
|
|
|
|
========== |
========== |
|
| Balance
carded to Balance Sheet |
|
|
46,198,670 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
46,198,670 |
- |
|
|
|
|
========== |
========== |
|
|
|
| CASHFLOW
STATEMENT |
