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EFU General Insurance Limited
Annual Report 2000
Contents
Company Information
Management
Notice of Meeting
Report of the Directors
Summarised Accounts
Auditors' Report
Fire Insurance Revenue Account
Marine Insurance Revenue Account
Miscellaneous Insurance Revenue Account
Profit & Loss Account
Balance Sheet
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
Form AA
Pattern of Shareholding
Offices
Company Information
Chairman
RAFIQUE R. BHIMJEE
Managing Director & Chief Executive
SAIFUDDIN N. ZOOMKAWALA
Directors
SULTAN AHMAD
ABDUL REHMAN HAJI HABIB
JAHANGIR SIDDIQUI
WOLFRAM W. KARNOWSKI
MUNEER R. BHIMJEE
HASANALI ABDULLAH
TAHER G. SACHAK
Corporate Secretary
HASANALI ABDULLAH
Legal Advisor
MOHAMMAD ALI SAYEED
Advisor
S.C. (HAMID) SUBJALLY
Auditors
HYDER BHIMJI & CO.
Chartered Accountants
Karachi
TASEER HADI KHALID & CO.
Chartered Accountants
Karachi
Registered Office
11/4, Shahrah-e-Pehlavi, Peshawar
Main Offices
Qamar House, M.A. Jinnah Road
Karachi.
Co-operative Insurance Building
2 3-Shahrah-e-Qua id-e-Azam, Lahore.
Overseas Office
Jeddah (Saudi Arabia)
Management
Managing Director & President
SAIFUDDIN N. ZOOMKAWALA
Deputy Managing Directors
M. FASIHUDDIN, M.A. L.L.B., F.C.I.I.
HASANALI ABDULLAH, F.C.A.
Senior Executive Director
MAHMOOD LOTIA, A.C.I.I.
Executive Directors
A. RAZZAK POLANI
QAMBER HAMEED, L.L.B., LL.M
Deputy Executive Directors
A. REHMAN KHANDIA, A.C.I.I.
AFAQ AHMAD, A.C.I.I.
JAFFER DOSSA
JAVID NIAZ KHAN, M.A., A.C.I.I.
MIRZA FAIZ AHMED
Senior Executive Vice Presidents
AKBAR AWAN
KIFAYAT H. MALICK, M.A., A.M.A (U.S.A.)
MAHBOOB PARVEZ
SHAUKAT SAEED AHMAD
SYED AHMAD A. HAQ, M.Sc.
SYED MEHDI IMAM, M.A.
Executive Vice Presidents
ALTAF QAMRUDDIN GOKAL, A.C.A.
DARIUS H. SIDHWA, F.C.I.I
GHULAM RASOOL IMTIAZ, A.C.I.I.
IQBAL LODHIA
KHALID ALIM, M.S. (I.A.)
MUBASHIRULLAH KHAN
MAQBOOL SAEED
NUDRAT ALI
S.M. HAIDER, M.Sc.
SALMAN RASHID
Senior Vice Presidents
ABDUL HAMEED QURESHI, M.Sc.
ABDUL WAHID
AFTAB FAKHRUDDIN, B.E.
AFTAB HUSSAIN ZAIDI, M.A.
JEHANZEB KARAMAT
KHURRAM ALI KHAN, B.E.
M. SHEHZAD HABIB
MAHMOOD ALI KHAN, M.A.
MAHMOOD JAFRI
MOHAMMAD OSMAN RAJKOTI
MUHAMMAD ILYAS KHAN, A.C.I.I.
SALEEMULLAH TAHIR
THOMAS LEO FERNANDEZ
ZARRAR IBN ZAHOOR BANDEY
Vice Presidents
A. R. RIAZ
ALI KAUSAR
AMJAD ZAHOOR
AMIR NAYAB AHMED
ANJUM KAMAL KHAN
ASLAM A. GHOLE, F.C.I.S.
ATTA-UL-HAQ KHAN
AZHARUL HASSAN CHISHTY
BABAR A. SHEIKH
IRSHAD MEHMOOD RYAZ, A.C.I.I.
JAVED AKHTAR SHEIKH, B.B.A.
JAWED IQBAL BARRY M.B.A., L.L.B., F.C.I.I.
JAWAHAR ALI KASSIM
KAUSAR ALI ZUBERI
KHALID USMAN
KHOZEMA T. HAIDER MOTA
MIR BABAR ALI
MOHAMMAD ARIF BHATTI
MOHAMMAD ASIF
MOHAMMAD HUSSAIN
MOHAMMAD SOHAIL
MOHAMMAD YOUNUS
MUHAMMAD RAZZAQ CHAUDHRY
NAEEM MUHAMMED HANIF
NAJAM IRSHAD
NASEERUDDIN AHMED
QASIM ALI MOHAMMAD
RASHID AKMAL, M.B.A.
RIZWANUL HAQ
ROSS MASOOD, M.B.E.
S. M. SHAMIM
SYED ATHAR ABBAS
SHAHARYAR JALEES, M.A.
SYED WAQAR AZEEM, M.A.
TAYYAB HUSSAIN GARDEZI, M.Sc.
ZAFAR ALI KHOKHAR, M.A.
ZAKARIA SULEMAN
Assistant Vice Presidents
ABDUL SATTAR BALOCH
ABDUL HAFEEZ
ABDUL RAZZAK A. SATTAR
ADAM DUR MOHD. BALOCH
ALTAF AHMED SIDDIQUI
ASLAM KHALIQ, M.A.
EJAZ AHMED
HAJI MOHAMMAD AYUB
IFTIKHAR UDDIN
IMRAN AHMED
IMRAN-UL-HAQ
IRSHAD ZAMIR HASHMI
M.A.U. LAKHANI
MAZHAR H. QURESHI
MOHAMMAD KAMIL KHAN
MOHAMMAD NASIR
MOHD. SULEMAN KASSAM
MUHAMMAD ASHRAF TAHIR
N.D. MALIK
SAGHIRUL HASAN
SYED RAYAZ MEHDI, B.E.
SYED SALAHUDDIN, A.C.I.I
SYED SHAHID HUSSAIN
Chief Medical Officer
DR. MOHBAT ALI KHOWAJA
MARKETING EXECUTIVES
Deputy Executive Director
JAHANGIR ANWAR SHAIKH
Senior Executive Vice Presidents
ABDUL WAHAB POLANI
MRS. NARGIS MEHMOOD
HAROON HAJI SATTAR DADA
Executive Vice Presidents
ALAMGIR ANWAR SHAIKH
MOHD. KHALID SALEEM, M.A.
SYED JAWEED ENVOR
Senior Vice Presidents
AGHA S. U. KHAN
ALI SAFDAR
ANIS MEHMOOD
KAMRAN RASHID
QAMAR SALEEM
RIZWAN HUSSAIN
SHEIKH IRSHAD AHMED
Vice Presidents
ABDUL WAHAB
HUMAYUN SHAHZADA
K.M. IQBAL
MUHAMMAD LATIF BHATTI
MIAN IKRAM ELLAHI
MOHAMMAD UMER, M.A.
RIZWAN SIDDIQUI
SYED SHAHID RAZA
SIDDIQUE GODIL
SYED ANSARULLAH
YAWAR AMINUDDIN
Assistant Vice Presidents
AMIR ALI KHAN
AMIR HASSAN
ASIM IQBAL
ASHAD H. RIZVI
ATIQUE H. PATEL
AZAM RAFIQUE
FAISAL FASIH
FARID KHAN
JAVED ABDUL SATTAR
M. AFZAL PANAWALA
MUHAMMAD FAROOQ
MUHAMMAD SALIM MALIK
MUHAMMAD TAYYAB NAZIR
QAMER-UL-HASSAN ANSARI
RANA KHALID MANZOOR
SYED ASEEM AHMED
SYED BAQAR HASAN, M.A.
WASIM AHMED
Notice Of Meeting
Notice is hereby given that the 68th Annual General Meeting of the Shareholders of E F U General Insurance Lid. will be held
at the Registered Office of the Company at 11/4 Shahrah-e-Pehlavi, Peshawar on Monday June 25, 2001 at 11:30 a.m. to:
A. ORDINARY BUSINESS:
1. confirm the minutes of the 67th Annual General Meeting held on June 28, 2000.
2. receive and consider the Audited Accounts for the year ended December 31, 2000.
3. consider and if thought fit to approve the payment of Dividend for the year ended December 31, 2000.
4. appoint Auditors for the year 2001 and fix their remuneration.
B. SPECIAL BUSINESS:
5. consider and if thought fit to pass the following resolutions with or without modification(s) as:
(i) Ordinary Resolution:
"RESOLVED that a sum of Rs. 20,000,000 out of the Company's Reserve for the issue of Bonus Shares be
capitalised and applied to the issue of 2,000,000 Ordinary Shares of Rs. 10 each and allotted as fully paid up
Bonus Shares to the Members who are registered in the Books of the Company on June 15, 2001 in the
proportion of two new shares for every fifteen existing Ordinary Shares held and that such new shares shall rank
pari passu with the existing Ordinary Shares of the Company.
Further resolved that the Members' fractional entitlement to Bonus Shares may be consolidated and sold in the
stock market and the net sale proceeds of such fractional entitlements when realized be paid to the Members
entitled to the same.
That for the purpose of giving effect to the foregoing, the Directors be and are hereby authorised to give such
directions as may be necessary and as they deem fit to settle any questions or any difficulties that may arise in
the distribution of the said new shares or in the payment of the sale proceeds of the fractions."
(ii) Special Resolution:
Resolved that consent of the Company be and is hereby accorded to further invest maximum of Rs. 25,000,000
(Rupees Twenty Five Million) in the Shares of EFU Life Assurance Limited, an associated public limited company.
The investment be made from time to time as the Managing Director and/or other Attorney(s) of the Company
may deem fit.
Further resolved that the Managing Director (Chief Executive) of the Company be and is hereby authorised to
make further investment of up to Rs. 25 Million in shares of EFU Life Assurance Limited. The shares be
purchased/subscribed at par (i.e. at Rs. 10 per share.)
Further resolved that the Managing Director (Chief Executive) of the Company be and is hereby authorised to
lake any and all actions required to purchase/subscribe shares of EFU Life Assurance Limited, as and when
deemed appropriate.
Further resolved that these special resolutions be and are hereby passed for the purpose of compliance of
Section 208 of the Companies Ordinance, 1984.
6. Transact any other mailer with the permission of the Chair.
					By Order of the Board
					HASANALI ABDULLAH
					Deputy Managing Director
May 19, 2001					& Corporate Secretary
NOTES:
1. A member entitled to attend and vote at the General Meeting is entitled to appoint another member as a proxy to attend
and vote in respect of him. Forms of proxy must be deposited at the Company's Registered Office not later than 48 hours
before the time appointed for the meeting.
2. CDC Account Holders are advised to follow the following guidelines of the Securities and Exchange Commission of
Pakistan.
A. For Attending the Meeting:
(i) In case of individuals, the account holder or sub-account holder and/or the person whose securities are in group
account and their registration details are uploaded as per the Regulations, shall authenticate his identity by
showing his original National Identity Card (NIC) or original passport at the time of attending the meeting.
(ii) In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature of the
nominee shall be produced (unless it has been provided earlier) at the time of the meeting.
B. For Appointing Proxies:
(i) In case of individuals, the account holder or sub-account holder and/or the person whose securities are in group
account and their registration details are uploaded as per the Regulations, shall submit the proxy form as per the
above requirement.
(ii) The proxy form shall be witnessed by two persons whose names, addresses and NIC numbers shall be
mentioned on the form.
(iii) Attested copies of NIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy
form.
(iv) The proxy shall produce his original NIC or original passport at the time of the meeting.
(v) In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature shall be
submitted (unless it has been provided earlier) alongwith proxy form to the Company.
3. The Share Transfer Books of the Company will be closed from June 16, 2001 to June 25, 2001 (both days inclusive).
4. Members are requested to communicate to the Company of any change in their addresses.
Statement Under Section 160 of the Companies Ordinance 1984 pertaining to the special business.
This statement sets out the material facts pertaining to the special business to be transacted at the Annual General Meeting of
the Company to be held on June 25, 2001.
1. Your Directors have recommended the issue of Bonus Shares in the proportion of two new shares for every fifteen existing
Ordinary Shares held on June 15, 2001. The Directors are interested in this business to the extent of their entitlement to
Bonus Shares as Shareholders.
2. EFU General Insurance Limited ('EFU General') is one of the leading insurance companies of Pakistan. It has an asset base
of Rs. 12.5 billion. Its after tax profit figures for the years 1998, 1999 & 2000 have been Rs. 24 million, Rs. 36 million
and Rs. 69 million respectively. EFU General as on December 31, 2000 has Paid-up Capital of Rs. 150 million, Reserve
for issue of bonus shares Rs. 20 million and General Reserve of Rs. 80 million.
The Company already holds 3,764,500 shares in EFU Life Assurance Limited as on December 31, 2000. Since
EFU Life has a good future prospect the management is of the view that further investments of up to Rs. 25 million be
made in EFU Life as and when deemed appropriate.
The shareholders are requested to consider and approve Special Resolution regarding investments in EFU Life Assurance
Limited, an associated company and pass the Ordinary Resolution regarding issuance of bonus shares as mentioned in this
notice.
The following are the material facts about the proposed special resolution:
i. Name of Investee companies or associated undertakings
EFU Life Assurance limited ('EFU Life').
ii. Nature, amount and extent of investment
Further Equity Investment of up to Rs. 25 million in ordinary shares at Rs. 10 per share.
iii. Average market price of the shares intended to be purchased during preceding six months in case of listed company
Rs. 22.50 per share (November 18, 2000-May 18, 2001).
iv. Breakup value of share intended to be purchased on the basis of last published Financial Statements
Break-up Value/Book Value Rs. 5.87 as on December 31, 1999.
As per announced results of December 31, 2000, the Break-up Value of Shares is Rs,7.34.
v. Price at which shares will be purchased
Shares will be purchased at Rs. 10 per share (at face value).
vi. Earning/(Loss) per share of the Investee Company in the last three years
Year		EFU Life Assurance Limited
2000		Rs. 1.51
1999		Rs. (1.31)
1998		Rs. 0.36
vii. Source of Funds of Investment
From internally generated cash flow of the Company
viii. Period for which Investment will be made
Long term Investment.
ix. Purpose of Investment and reason why to disinvest a portion or whole of such Investment
The primary purpose of Investment is to earn a return on invested monies in the form at Dividends and Capital appreciation.
The disinvestment can be made for diversification in Investment, and to earn Capital gains.
x. Benefits likely to accrue to Shareholders
(a) Increase in earning and/or Capital Appreciation in future.
(b) The Company will retain its shareholding as EFU General is the major shareholder in the Investee Company.
(c) Since its gestation period is over, EFU Life has become a viable opportunity for investment.
ix. Interest of the Directors and their relatives in the Investee Company
Six Directors of EFU General Insurance are also the Directors in EFU life Assurance Limited and the Directors and their relatives
also hold 13% shares in EFU Life.
xii. Status of approvals for investments in associated companies
As required under the SRO No. 865(I)2000 dated December 6, 2000, the position of various investments in associated
companies against approval is as under:
The approval of the Shareholders to invest up to Rs. 40 Million in the Shares of EFU Life Assurance Limited was accorded at the
Extra Ordinary General Meeting of November 12, 1994 against which Rs. 39.34 million have been invested and the balance
of Rs. 665,000 only will be invested soon. There was no major change in the financial position of the investee company other
than expected losses in early years. The Directors of EFU General Insurance Limited have no interest except that six Directors of
EFU General are Directors of EFU Life Assurance Limited.
The Directors of the Company are pleased to present before you the
Sixty Eighth Audited Accounts of the Company for the year ended
December 31, 2000.
There are no visible signs of turn around in the country's economy
although the decline in the level of activity has been arrested to
an extent. There has been no significant improvement in business
conditions and like the rest of the sectors of the economy the
insurance industry continues to suffer. We however look positively
at the economic reforms that have been introduced by the government
which we feel would yield positive results in the long term. We
are particularly encouraged by the privatisation programme and
if successfully implemented would have a beneficial impact on
premium incomes of private sector insurance companies, as business
presently in the domain of the National Insurance Co. Limited
would be available to the private sector. Your Directors are pleased
to report that despite the difficult business environment during the
year 2000, the Gross Premium increased to Rs. 1,979 M and the
Net Premium rose to Rs. 1,131 M.
The Motor underwriting results for the year were better compared
to previous year due to improved law and order situation in
Sindh and more particularly in Karachi. However the situation
has started deteriorating since the last quarter of 2000 due to
increased cases of car theft and car hijackings. We hope the
efforts of the government in curbing this situation would improve
the operational results of all the insurance companies including
ours. The Underwriting Profit of the Company in the year was
Rs. 122 M as compared to Rs. 79 M in the previous year. As a
result of increase in Premium Income there was strain on the
profitability due to increase in the provision for Un-expired Risks
to the extent of Rs. 31 M. The Reserve for Un-expired Risks increased
from Rs. 421 M to Rs. 452 M.
The Company has been receiving rental income from its Lahore
building since 1997 and this income has been increasing as
more space is let out. As mentioned in our previous report our
investment in real estate has become a stable source of income
and has reduced volatility in our investment portfolio.
The Profit after tax for the year was Rs. 69 M compared to
Rs. 36 M representing increase of 92 % over last year.
FIRE DEPARTMENT
The Net Premium of this department was Rs. 270 M as against
Rs. 230 M last year. The Claims ratio was 34.5 % compared to
38.3 % in 1999. Underwriting Profit was Rs. 54 M compared to
Rs. 31 M in 1999.
MARINE DEPARTMENT
The Net Premium of this department was Rs. 216 M as against
Rs. 244 M last year. The Claims ratio was 49.8 % compared to
47.4 % in 1999. There was Underwriting Profit of Rs. 31 M
compared to Rs. 10 M last year.
MISCELLANEOUS DEPARTMENT
The Net Premium of this department was Rs. 645 M as against
Rs. 578 M in 1999. The Claims ratio improved to 57.4 % as
against 61.5 % in 1999. There was Underwriting Profit of
Rs. 37 M compared to Rs. 38 M in 1999.
Other comments
The after tax profit for the year under report amounted to
Rs. 69 M. Your Board proposes to make the following appropriation:
				Rupees	Rupees
Profit					68 893 665
Add: Un-appropriated profit
brought forward					323 059