| STANDARD INSURANCE COMPANY LIMITED |
|
|
|
|
|
|
|
| Annual
Report 1997 |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Inam-ur-Rehman (Chairman) |
|
| Mr.
Iftikhar M. Soomro |
|
| Mr.
Shamim-ur-Rehman |
|
| Mr.
Muhammed Aslam |
|
| Mr.
Asadullah Khan |
|
| Mr.
Anwar-ur-Rehman |
|
| Mr.
Mansoor Munir Ahmed, F.C.A. |
|
| Mr.
Saeed-ur-Rehman (Managing Director & |
|
| Chief
Executive) |
|
|
| MANAGEMENT |
|
|
| Managing
Director & |
|
| Chief
Executive |
|
| Mr.
Saeed-ur-Rehman |
|
|
| Secretary
& Manager Finance |
|
| Mr.
Muhammed Ishtiaq Khan |
|
|
| Chief
Manager |
|
| Mr.
Muhammed Ilyas |
|
|
| Auditors |
|
| Messrs
Hafizullah, Siddiqui & Co. |
|
| Chartered
Accountants |
|
|
| Head
Office: |
|
| 9th
Floor, Muhammadi House, |
|
| I.
I. Chundrigar Road, |
|
| Karachi. |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the Thirtieth Annual General Meeting of Share Holders of
the Company will be |
|
| held
at the Registered Office of the Company at 9th Floor, Muhammadi House,
I.I.Chundrigar Road, Karachi |
|
| on
Tuesday the 30th June, 1998, at 10:30 a.m. to transact the following
business: |
|
|
| 1.
To confirm the minutes of the Twenty Ninth Annual General Meeting. |
|
|
| 2.
To receive and adopt the Audited Accounts for the year ended 31 st December
1997 and reports |
|
| of
Directors and Auditors thereon. |
|
|
| 3.
To appoint auditors for the year 1998 and to fix their remuneration. |
|
|
| 4.
To transact any other business with prior permission of the Chairman. |
|
|
| NOTE: |
|
|
| The
Share Transfer Book of the Company will remain closed from 21st June to 30th
June 1998 (both days |
|
| inclusive). |
|
|
| A
Member entitled to attend and vote at this meeting may appoint another member
as his/her proxy to attend |
|
| and
vote instead of him/her. Instrument of proxy, in order to be effective, must
be received by the Company |
|
| not
later than 72 hours before the meeting. |
|
|
| Share
Holders are requested to immediately notify any change of address. |
|
|
|
| DIRECTORS
REPORT |
|
|
| The
Directors of Company are pleased to present the 30th Annual Report, together
with the audited Balance |
|
| Sheet,
and Profit and Loss Appropriation Account for the year 1997. |
|
|
| As
you are perhaps aware that 1997 proved to be a very difficult year not just
for us but for business and |
|
| trade
as a whole. The banks were more concerned with recovering outstanding debts
than lending to existing |
|
| and
new businesses. In fact, businesses were finding it difficult to maintain
their existing lines of credit from |
|
| their
banks. Because of this slow down particularly in 3rd & 4th Quarter of
1997, we were unable to meet |
|
| our
premium targets under report. Therefore, our gross premium fell from 19.57
million in 1996 to 15.65 million |
|
| in
1997, However, in spite of the fall in our premium income we were able to
maintain our profitability. |
|
|
| Despite
the difficulties faced by the Company during the y6ar, we are confident that
in the event the economic |
|
| situation
in the country takes a turn for the better, we shall also be able to improve
our performance significantly. |
|
|
| The
management has also decided to raise both its authorised Capital from 10
million to 40 million and the |
|
| paid
up Capital by further 2.5 million during the year 1998. This is being done to
meet the growing demand |
|
| of
the financial institutions to raise both the authorised and paid up Capital
of the Company. |
|
|
| Following
are the business results of each department '- |
|
|
| FIRE
DEPARTMENT |
|
|
| The
gross premium written during the year 1997, amounted to Rs. 4.26 million as
against Rs. 6.09 million |
|
| in
the preceding year. The Losses paid by the Company during the year amounted
to Rs.. 1.75 million as |
|
| against
Rs. 2.82 million paid during the previous year. |
|
|
| MARINE
DEPARTMENT |
|
|
| The
gross premium written during the year 1997, was Rs. 3.91 million as against
Rs. 5.60 million in the |
|
| previous
year. Gross Losses paid by the Company in 1997 amounted to Rs. 2.74 million
as against |
|
| Rs.
4.23 million in the year 1996. |
|
|
| MOTOR
& MISCELLANEOUS DEPARTMENT |
|
|
| The
gross premium written during the year 1997 was Rs. 7.49 million as against
Rs. 7.88 million in the previous |
|
| year.
The Losses paid during the year amounted to Rs. 2.78 million as compared with
Rs. 3.56 million in |
|
| 1996. |
|
| PROFIT
& LOSS ACCOUNT |
|
|
| We
are pleased to report that your Company earned a pre tax profit of Rs.
1,402,770/- during the year compared |
|
| to
Rs. 1,418,431/- in the previous year. In view of loss of Rs. 414,417/-
brought forwarded form last year, |
|
| your
Directors recommended to adjust the available profit as under:- |
|
|
| Profit
for the year |
|
Rs. |
1,402,770 |
|
| Less
Provision for taxation |
|
Rs. |
421,000 |
|
|
|
---------------------------- |
|
|
|
Rs. |
981,770 |
|
| Less
Loss brought forwarded |
|
Rs. |
414,417 |
|
|
|
---------------------------- |
---------------------------- |
|
| Net
Profit carried forwarded to Balance Sheet |
Rs. |
567,353 |
|
|
|
================= |
|
|
|
|
|
| Messers
Hafizullah, Siddiqui & Co. Chartered Accountants, retire and being
eligible, offer themselves for re- |
|
| election
as the auditors of the Company for the year 1998. |
|
|
| Your
directors place on record their deep appreciation for the dedicated services
rendered by the staff during |
|
| the
year. Your Directors feel confident that with the continued dedication of the
staff to their work, the Company |
|
| will
make progress during the succeeding years. |
|
|
| We
would also like to express our sincere thanks to the Controller of Insurance,
Pakistan Insurance Corporation |
|
| and
our Foreign Reinsurers particularly M/s. MUNCHENER RUCKVERSICHERUNGS -
GESELLSCHAFT, |
|
| Germany
and M/s. KOREAN REINSURANCE COMPANY, for the whole-hearted co-operation
extended to |
|
| us
throughout the year. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of the STANDARD INSURANCE COMPANY
LIMITED as at |
|
| 31st
December 1997 and the related Fire, Marine, Motor Car and Miscellaneous
Insurance Revenue Accounts, |
|
| the
Profit and Loss appropriation Account and the Statement of Changes in
Financial position (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 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, the Profit & Loss Account and Profit
& Loss Appropriation |
|
| Account
together with the notes thereon have been drawn up in conformity with the law |
|
| and
are in agreement with the books of account and are further in accordance with
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, |
|
| the
Balance Sheet, Fire, Marine, Motor Car and Miscellaneous Insurance Revenue
Accounts, the |
|
| Profit
and Loss Account and the Profit and Loss Appropriation Account together with
the notes |
|
| forming
part thereof, give the information as required by the Companies Ordinance,
1984, 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 1997 and of the Profit and the Changes in Financial Position
for the year |
|
| then
ended; and |
|
|
| (d)
in our opinion no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| 2.
We have verified the cash and bank balances of the company by actual
inspection or by the production |
|
| of
certificates. |
|
|
| 3.
We have verified the investments by actual inspection of certificates. |
|
|
| 4.
As per Section 40-C (2) of the Insurance Act, 1938, as amended, all expenses
of Management wherever |
|
| incurred
whether directly or indirectly in respect of Fire, Marine, Motor Car and
Miscellaneous 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 apad from |
|
| commission
arising out of Re-insurance Treaties. |
|
|
| 5.
As per regulation 11 of part 1 of the 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
apart from commission arising out of Re-insurance Treaties. |
|
|
|
|
HAFIZULLAH, SlDDIQUI
& CO |
|
| Karachi
· Dated 28th May, 1998. |
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 31ST DECEMBER, 1997 |
|
|
| CAPITAL
& LIABILITIES |
|
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Authorised
Capital |
|
10,000,000 |
10,000,000 |
|
| 1,000,000
Ordinary Shares of Rs. 10/- each |
|
====== |
====== |
|
|
| Issued,
Subscribed & Paid up Capital: |
|
|
|
| 750,000
Ordinary Shares of Rs. 10/- each |
|
7,500,000 |
7,500,000 |
|
| Advance
for Right Shares |
|
|
2,500,000 |
1,650,000 |
|
| RESERVES
:- |
|
|
| Reinsurance
Ceded Reserve |
|
|
261,798 |
261,798 |
|
| Profit
& Loss Appropriation Account |
|
|
567,353 |
(414,417) |
|
|
|
|
-------- |
-------- |
|
|
|
|
829,151 |
(152,619) |
|
| BALANCE
OF FUNDS & ACCOUNT :- |
|
|
| Fire
Insurance |
|
|
708,289 |
1,754,952 |
|
| Marine
Insurance |
|
|
641,881 |
1,322,418 |
|
| Misc.
Insurance |
|
|
2,097,471 |
2,176,179 |
|
|
|
|
-------- |
-------- |
|
|
|
|
3,447,641 |
5,253,549 |
|
| PROVISIONS
:- |
|
|
| For
Staff Gratuity |
|
|
605,635 |
605,635 |
|
| For
Taxation |
|
|
954,000 |
533,000 |
|
|
|
|
-------- |
-------- |
|
|
|
|
1,559,635 |
1,138,635 |
|
| CURRENT
LIABILITIES :- |
|
|
| Estimated
Liability in respect of outstanding |
|
| claims
whether due or intimated |
|
|
1,672,073 |
1,538,861 |
|
| Amount
due to other persons or bodies |
|
| carrying
on Insurance Business |
|
|
2,808,146 |
1,725,466 |
|
| Sundry
Creditors (including outstanding |
|
|
and accrued expenses) |
|
|
6,809,950 |
6,539,032 |
|
| Security
Deposit (Estate) |
|
|
942,533 |
942,533 |
|
| Unclaimed
Dividend |
|
|
627,199 |
543,236 |
|
|
-------- |
-------- |
|
|
|
|
|
|
12,859,901 |
11,289,128 |
|
| Proposed
Dividend: |
|
|
|
-- |
937,500 |
|
|
-------- |
-------- |
|
|
|
|
28,696,328 |
27,616,193 |
|
|
====== |
====== |
|
| These
accounts should be read in |
|
Please see auditor's
report of even date. |
|
| conjunction
with the annexed notes. |
|
|
|
|
|
| PROPERTY
& ASSETS |
|
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Investment-at
Cost: |
|
| i)
Deposited with State Bank of Pakistan |
|
| a)
10.5% Pak Loan 1997 |
|
-- |
250,000 |
|
| b)
16% Punjab Loan 2004 |
|
300 |
300 |
|
| c)
15% Federal Investment Bonds |
|
350,000 |
100,000 |
|
| ii)
Debentures of Companies Incorporated in Pakistan |
5,000 |
8,000 |
|
| iii)
Shares of Companies Incorporated in Pakistan |
|
3,563,550 |
2,046,550 |
|
|
|
|
3,918,850 |
2,404,850 |
|
| BUILDING |
|
|
4,972,396 |
4,972,396 |
|
| BUILDING
ADVANCE |
|
3,000,000 |
3,000,000 |
|
| OPERATING
FIXED ASSETS - at cost less |
|
| accumulated
depreciation:- |
|
|
| Motor
Vehicles |
|
|
1,404,808 |
1,600,976 |
|
| Office
Machines & Equipments |
|
560,762 |
605,070 |
|
| Furniture
& Fixtures |
|
|
384,976 |
427,751 |
|
|
|
--------- |
--------- |
|
|
|
2,350,546 |
2,633,797 |
|
| LOAN |
|
|
|
| On
personal Security |
|
|
100,000 |
100,000 |
|
| CURRENT
ASSETS |
|
|
|
| Stock
of Stationery |
|
|
355,037 |
315,037 |
|
| Outstanding
Premium and Agents Balances |
|
565,662 |
183,347 |
|
| Interest
and Rent Accrued & Outstanding |
|
2,598,571 |
2,583,396 |
|
| Amount
due from other persons or bodies |
|
| carrying
on Insurance Business |
|
1,318,027 |
1,816,801 |
|
| Sundry
Debtors |
|
|
785,025 |
907,890 |
|
| Advances,
Deposits and Prepayments |
|
296,212 |
311,372 |
|
| Other
Receiveable |
|
|
162,487 |
958,230 |
|
| Advance
Income Tax |
|
|
701,169 |
593,584 |
|
|
|
|
|
|
|
| Cash
and Bank Balances: |
|
|
| With
Banks On Deposit Accounts |
|
6,900,000 |
6,500,000 |
|
| With
Banks on Current Accounts |
|
387,761 |
137,529 |
|
| Cash
and Stamps in hand |
|
237,937 |
151,316 |
|
|
--------- |
--------- |
|
|
|
14,307,888 |
14,458,502 |
|
| Reserve
On Reinsurance Accepted |
|
46,648 |
46,648 |
|
|
|
--------- |
--------- |
|
|
|
28,696,328 |
27,616,193 |
|
|
====== |
====== |
|
|
| We
certify that: |
|
| 1)
The investments shown in the Balance Sheet have been shown as indicated
therein at cost and the market value of the investments have been ascertained |
| from published quotations as on 31st Dec.
1997 except in case where market quotations are not available have been taken
at book value. |
|
| 2)
The value of all the assets have been reviewed as at 31st Dec,97 and 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 given therein. |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
| EXPENSES
OF MANAGEMENT |
|
|
| (Not
applicable to any particular |
|
| funds
or account) |
|
|
228,955 |
276,009 |
|
|
|
|
| Depreciation |
|
|
456,284 |
515,002 |
|
| Gratuity |
|
|
105,936 |
40,504 |
|
| Zakat |
|
|
6,264 |
162 |
|
| Provision
for Taxation |
|
|
421,000 |
468,000 |
|
|
| Balance
Being Profit Transferred |
|
| to
Profit & Loss Appropriation |
|
| Account |
|
|
981,770 |
950,431 |
|
|
-------- |
-------- |
|
|
|
|
2,200,209 |
2,250,108 |
|
|
====== |
====== |
|
|
| Interest,
Dividend and Rent |
|
|
1,950,106 |
2,235,701 |
|
| Profit/(Loss)
on sale of Fixed Assets |
|
|
-- |
210,673 |
|
| Profit/(Loss)
Transferred From :- |
|
| Fire
Insurance Revenue A/c. |
|
|
41,216 |
1,357,170 |
|
| Marine
Insurance Revenue A/C |
|
|
(146,208) |
(1,362,973) |
|
| Misc.
Insurance Revenue A/C. |
|
|
355,095 |
(190.463) |
|
|
-------- |
-------- |
|
|
|
|
2,200,209 |
2,250,108 |
|
|
====== |
====== |
|
|
|
|
|
|
|
| PROFIT
AND LOSS APPROPRIATION ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 1997 |
|
|
|
|
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
|
| Proposed
Dividend |
|
|
-- |
937,500 |
|
|
|
|
|
|
| Balance
Carried forward to |
|
|
|
| Balance
Sheet |
|
|
567,353 |
(414,417) |
|
|
-------- |
-------- |
|
|
|
|
567,353 |
523,083 |
|
|
====== |
====== |
|
|
|
|
| Balance
brought forward from last year |
|
(414,417) |
(427,348) |
|
| Profit
for the year brought down |
|
981,770 |
950,431 |
|
|
-------- |
-------- |
|
|
|
|
567,353 |
523,083 |
|
|
====== |
====== |
|
| These
accounts should be read in |
|
Please see auditor's
report of even date. |
|
| conjunction
with the annexed notes. |
|
|
|
|
|
| FIRE
INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 1997 |
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CLAIMS
UNDER POLICIES LESS REINSURANCES: |
|
| Paid
during the year |
|
|
1,146,037 |
1,044,917 |
|
| Estimated
liability in respect of outstanding |
|
| Claims
whether due or intimated |
|
437,453 |
291,993 |
|
|
|
|
|
1,583,490 |
1,336,910 |
|
| Less:
Outstanding at the end of the |
|
| previous
year |
|
|
291,993 |
181,422 |
|
|
|
|
|
1,291,497 |
1,155,488 |
|
|
| Expenses
of Management |
|
1,872,457 |
2,063,823 |
|
| Profit
transferred to Profit & Loss Account |
|
41,216 |
1,357,170 |
|
|
| Balance
of Account at the end of |
|
| the
year as shown in the Balance Sheet :- |
|
|
| Reserve
for Unexpired Risks |
|
| being
40% of premium income of the year |
|
708,289 |
1,754,952 |
|
|
-------- |
-------- |
|
|
|
3,913,459 |
6,331,433 |
|
|
======= |
======= |
|
| Please
see auditor's report of even date. |
|
|
| BALANCE
OF ACCOUNT AT THE |
|
| BEGINNING
OF THE YEAR' |
|
|
| Reserve
for unexpired Risks |
|
1,754,952 |
1,846,317 |
|
| Premium
Less Reinsurances |
|
1,770,721 |
4,387,380 |
|
| Commission |
|
|
387,786 |
97,736 |
|
|
-------- |
-------- |
|
|
|
3,913,459 |
6,331,433 |
|
|
======= |
======= |
|
|
|
|
| As
per Section 40c(2) of the Insurance Act, 1938, we certify that all expenses
of management wherever incurred |
|
| whether
directly or indirectly and all charges incurred in respect of Fire Insurance
Business have been fully |
|
| debited
in the Revenue Account as Expenses. |
|
|
|
| MARINE
INSURANCE REVENUE ACCOUNT FOR THE YEAR 31ST DECEMBER, 1997 |
|
|
|
|
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
|
| CLAIMS
UNDER POLICIES LESS REINSURANCES: |
|
|
| Paid
during the year |
|
|
1,267,970 |
2,195,426 |
|
| Estimated
liability in respect of outstanding |
|
|
|
| Claims
whether due or intimated |
|
532,631 |
582,636 |
|
|
|
|
|
|
|
1,800,601 |
2,778,062 |
|
|
| Less:
Outstanding at the end of the |
|
| previous
year |
|
|
582,636 |
140,995 |
|
|
|
|
-------- |
-------- |
|
|
|
|
1,217,965 |
2,637,067 |
|
|
|
|
| Expenses
of Management |
|
1,718,887 |
1,898,584 |
|
|
| Balance
of Account at the end of |
|
| the
year as shown in the Balance Sheet:- |
|
|
| Reserve
for Unexpired Risks |
|
| being
40% of premium income of the year |
|
641,881 |
1,322,418 |
|
|
-------- |
-------- |
|
|
|
3,578,733 |
5,858,069 |
|
|
|
====== |
====== |
|
| Please
see auditor's report of even date. |
|
|
| BALANCE
OF ACCOUNT AT THE |
|
| BEGINNING
OF THE YEAR: |
|
|
| Reserve
for Unexpired Risks |
|
1,322,418 |
904,407 |
|
| Premium
Less Reinsurances |
|
1,604,703 |
3,306,045 |
|
| Commission |
|
|
505,404 |
284,644 |
|
| Loss
Transferred to Profit & Loss Account |
|
146,208 |
1,362,973 |
|
|
-------- |
-------- |
|
|
|
|
3,578,733 |
5,858,069 |
|
|
====== |
====== |
|
|
| As
per Section 40c(2) of the Insurance Act, 1938, we certify that all expenses
of management wherever |
|
| incurred
whether directly or indirectly and all charges incurred in respect of Marine
Insurance Business have |
|
| been
fully debited in the Revenue Account as Expenses. |
|
|
|
|
|
| MOTOR
& MISC. INSURANCE REVENUE ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 1997 |
|
|
|
|
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
|
| CLAIMS
UNDER POLICIES LESS REINSURANCES: |
|
| Paid
during the year |
|
|
1,853,108 |
2,610,126 |
|
| Estimated
liability in respect of outstanding |
|
| Claims
whether due or intimated |
|
701,989 |
664,232 |
|
|
|
|
|
2,555,097 |
3,274,358 |
|
|
| Less:
Outstanding at the end of the |
|
| previous
year |
|
|
664,232 |
512,557 |
|
|
|
|
|
|
|
|
|
1,890,865 |
2,761,801 |
|
|
|
|
|
|
| Expenses
of Management |
|
3,295,222 |
