| EFU Life Assurance Limited |
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
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|
| Company
Information |
|
| Management |
|
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Revenue
Account |
|
| Balance Sheet |
|
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Account |
|
| Form AA |
|
|
| Pattern
of Shareholding |
|
| Offices |
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| COMPANY
INFORMATION |
|
|
| Chairman |
|
| SAIFUDDIN
N. ZOOMKAWALA |
|
|
| Managing
Director & Chief Executive |
|
| TAHER
G. SACHAK |
|
|
| Directors |
|
| ASHRAF
W. TABANI |
|
| JAHANGIR
SIDDIQUI |
|
| RAFIQUE
R. BHIMJEE |
|
| MUNEER
R. BHIMJEE |
|
| HASANALI
ABDULLAH |
|
|
| Corporate
Secretary |
|
| SYED
MEHDI IMAM |
|
|
| Consulting
Actuary & Advisor |
|
| MICHAEL
J de H. BELL, F.I.A. |
|
|
| Consulting
Actuary |
|
| OMER
MORSHED, F.I.A., F.C.A. |
|
|
| Medical
Director |
|
| DR.
TAJUDDIN A. MANJI, F.R.C.P., M.R.C.P. |
|
|
| Legal Advisor |
|
| MUHAMMAD
ALI SAYEED, M.A.B.L. |
|
|
| Auditor |
|
| HYDER
BHIMJI & CO. |
|
| Chartered
Accountants |
|
| Karachi. |
|
|
| Registered
Office |
|
| 70-W,
A1-Malik Centre |
|
| Blue
Area - F-7/G-7 |
|
| Islamabad |
|
|
| Main Offices |
|
| 37K,
Block-6, P.E.C.H. Society |
|
| Karachi. |
|
|
| 87-B/111,
Gulberg Scheme No. 3 |
|
| Lahore |
|
|
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| MANAGEMENT |
|
|
| Managing
Director & Chief Executive |
|
| TAHER
G. SACHAK |
|
|
| Executive
Director |
|
| S.
MUNEER HUSAIN RIZVI |
|
|
| National
Sales Director |
|
| NASEEM
A. CHAUDHARI |
|
|
| General
Managers |
|
| S.A.R. ZAIDI |
|
| S.M.
BAQAR NAQVI |
|
|
| Senior
Managers |
|
| ADEEL
H. JAFRI |
|
| HASAN RIAZ |
|
| LINDSAY
D'MELLO |
|
| S.
SHAHID ABBAS |
|
| T. H. SAYYED |
|
|
| Managers |
|
| EVELYN
D. ABROGENA |
|
| FAZAL
MEHMOOD |
|
| MOHAMMAD
KASHIF NAQVI |
|
| MOHAMMAD
MUNAWAR KHAL1L |
|
| MOHAMMAD
ZUBAIR |
|
| SAIMA NAQVI |
|
| ZAHEER
ASLAM |
|
|
| Deputy
Managers |
|
| ASIM
MAQBOOL |
|
| GHAYASUDDIN
SHAIKH |
|
| NASIR
BASHIR KHAN |
|
|
| Advisors |
|
| S.A. NAQVI |
|
| ZAHURUL
HAQ BUTT |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 8th Annual General Meeting of the Shareholders of E
F U Life Assurance Ltd. |
|
| will
be held at the Registered Office of the Company on 4th Floor, 70-W AI-Malik
Centre, Blue Area, |
|
| F-7/G-7
Islamabad on Thursday June 29, 2000 at 12:30 p.m. to transact the following
business: |
|
|
| 1.
To confirm the minutes of the 7th Annual General Meeting held on June 22,
1999. |
|
| 2.
To receive and consider the Audited Accounts for the year ended December 31,
1999. |
|
| 3.
To appoint Auditors for the year 2000 and fix their remuneration. |
|
| 4.
To transact any other business with the permission of the Chair. |
|
|
|
|
By Order of the Board |
|
|
|
|
|
|
|
SYED MEHDI IMAM |
|
| May 17, 2000 |
|
Corporate Secretary |
|
|
|
| NOTES |
|
|
| 1.
A member entitled to attend and vote at the General Meeting is entitled to
appoint another member as a |
|
| proxy
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, 2000 to
June 29, 2000 (both days |
|
| inclusive). |
|
|
|
|
|
|
|
| REPORT
OF THE DIRECTORS TO MEMBERS |
|
|
| The
Directors of your Company are pleased. to present to you the Eighth Annual
Report of the |
|
| Company
for the year ended December 31, 1999. |
|
|
| The
year 1999 was the first year when we missed our dear Founder Chairman Mr.
Roshen Ali Bhimjee |
|
| who
expired on December 10, 1998. |
|
|
| Although
the country continues to face serious economic difficulties, your company has
continued it's |
|
| growth,
total premiums increasing from Rs. 296 million in 1998 to Rs. 401 million in
1999. Despite |
|
| intense
competition the company has maintained its position as a clear leader amongst
the private |
|
| sector
life insurance companies. |
|
|
| The
Group Life business was Rs. 169 million showing a growth of 16.5 % over the
previous year. The |
|
| Company
has 750 policies on its books covering 343,800 insured lives. Group Life
claims incurred |
|
| during
1999 were significantly higher at Rs. 129.2 million compared to Rs. 82.7
million in 1998 |
|
| consequently
effecting the profitability of the Group Life business. |
|
|
| Individual
life business, which is main stay of a life insurance company, registered an
increase of 61% |
|
| during
the year, with new annual premiums written during 1999 amounting to Rs. 124
million as |
|
| against
Rs. 77 million in 1998. This exponential growth in new business, while being
an indication of |
|
| the
success of the company's marketing and sales strategy, also gives rise to new
business strain, a |
|
| phenomenon
inherent in development of a new life company. In view of this high growth
rate your |
|
| company
is presently experiencing, the Board has decided to modify the accounting
policy for |
|
| absorbing
and deferring acquisition costs of writing new individual life business as
certified by the |
|
| Consulting
Actuary. |
|
|
| Renewal
premiums continued to build up with persistency registering an improvement
during the year. |
|
| Efforts
continue to improve persistency even further, as this will have a significant
effect on long term |
|
| profitability
of the portfolio. Your Company has sound investment strategies for
Policyholders' Fund |
|
| and
therefore the Unit Price of the Fund continued to appreciate throughout the
year. |
|
|
| Your
Company continues to carry out an annual actuarial valuation and set up full
actuarial reserves at |
|
| the
end of each year. As the business matures, reserves [Balance of Life Fund]
are increasing steadily |
|
| being
Rs. 338.7 million as at December 31, 1999 as compared to Rs. 206.8 million at
the end of 1998. |
|
| The
Company has provided Rs. 1.8 million for taxation being the Turn-over tax
under section 80-D of |
|
| the
Income Tax Ordinance 1979 for 1999. This is being contested by your Company.
The Company |
|
| has
appealed in the High Court of Sindh against the order of the Income Tax
Appellate Tribunal. |
|
|
| The
administrative infrastructure of the Company continued to be strengthened
with the continued |
|
| enhancement
of the life insurance administration software, which was also tested as being
Year 2000 |
|
| compliant.
Your Company continues to apply the high quality service requirements which
come from |
|
| being
ISO-9002 certified and completed a satisfactory audit of its quality
management procedures |
|
| during 1999. |
|
|
| The
Company continues to receive valuable guidance from Mr. Michael J. de H Bell,
an actuary of |
|
| international
fame who acts as an advisor to the Board. We wish to record our grateful
appreciation for |
|
| the
expert guidance provided by him to your Company. We further wish to recognize
and place on |
|
| record
our appreciation of the contribution made by our Consulting Actuary Mr. Omer
Morshed for his |
|
| invaluable
advice on actuarial, administrative and marketing policies of the Company. |
|
|
| We
would also like to record our appreciation and gratitude to Munchener
Ruckversicherungs |
|
| Gesellschaft
(Munich Re) of Germany who are your Company's main reinsurers, and who, apart
from |
|
| providing
reinsurance cover, continue. to provide useful technical support to the
Company with regard |
|
| to
improvements in the design of existing products and development of new
products. Munich Re is |
|
| the
largest reinsurance company in the World with assets exceeding Rs. 1,978
billion. |
|
|
| Our
thanks are also due to EFU General Insurance Ltd. for their continuous
support and guidance |
|
| which
has enabled the Company to establish a strong presence in the market within a
short span |
|
| of time. |
|
|
| Messrs.
Hyder Bhimji & Co., Chartered Accountants, retire and being willing to
continue are |
|
| recommended
for reappointment as Auditors of the Company for the year 2000. |
|
|
| The
Directors wish to record their appreciation for the tremendous contribution
made by the able and |
|
| eminent
officers, staff and field force of the Company towards its development and
growth. Their |
|
| continuous
commitment to high ethical standards, client service and hard work has helped
your |
|
| Company
emerge as a clear market leader amongst private sector life insurers. |
|
|
| Finally
we would like to thank our clients for the confidence expressed in us and
also to the |
|
| Department
of Insurance, Government of Pakistan for the co-operation extended to us
throughout |
|
| the year. |
|
|
|
MUNEER R. BHIMJEE |
|
TAHER G. SACHAK |
|
SAIFUDDIN N. ZOOMKAWALA |
|
|
Director |
|
Managing Director |
|
Chairman |
|
|
|
|
& Chief Executive |
|
|
|
| Karachi
May 17, 2000. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of E F U LIFE ASSURANCE LIMITED as at |
|
| December
31, 1999, and the related Revenue Account and 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 and the Revenue Account together with the notes thereon,
have been |
|
| drawn
up in conformity with the provisions of the Insurance Act, 1938 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 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, the Revenue Account and
Appropriation |
|
| Account
and the Cash Flow Statement, together with the notes thereto give the
information required |
|
| by
the Insurance Act 1938, in the manner so required and the Balance Sheet, the
Revenue Account |
|
| and
Cash Flow Statement give, respectively, a true and fair' view of the state of
the Company's |
|
| affairs
as at December 31, 1999 and of the loss for the year then ended. |
|
|
| (d)
we have verified the cash and bank balances and investments by actual
inspection or by the |
|
| production
of certificates; |
|
|
|
|
| (e)
as per Section 40B (2) of the Insurance Act, 1938 as amended, we certify that
all expenses of |
|
| management
in respect of Life Insurance business transacted by the Company in Pakistan
have been |
|
| fully
debited to the Revenue Account as expenses; |
|
|
|
| (f)
as per Regulation 11 Part 1 in Third Schedule of the Insurance Act 1938 as
amended we certify that |
|
| the
Company has not paid to any person any commission in any form outside
Pakistan in respect of |
|
| Life
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 |
|
| abroad; and |
|
|
|
|
| (g)
no part of the Assets of the Life Assurance Fund has been directly or
indirectly applied in |
|
| contravention
of the Insurance Act. 1938 relating to application and investment of Life
Assurance |
|
| Fund; and |
|
|
| (h)
in our opinion Zakat deductible at source, under the Zakat and Ushr
Ordinance, 1980, was deducted |
|
| by
the Company and deposited in the Central Zakat Fund established under Section
7 of that |
|
| Ordinance. |
|
|
|
|
|
|
|
|
HYDER BHIMJI & CO. |
|
| Karachi
May 17, 2000 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| REVENUE
ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Claims
less reinsurances |
|
|
79,344,305 |
48,423,169 |
|
| Commission
to insurance agents |
|
|
39,193,024 |
36,902,816 |
|
| Expenses
of management |
|
|
| Salaries
& benefits |
|
|
59,538,347 |
50,028,182 |
|
| Travelling
expenses |
|
|
6,445,972 |
3,274,886 |
|
| Audit fee |
|
|
30,000 |
30,000 |
|
| Medical fee |
|
|
2,613,691 |
2,240,624 |
|
| Advertisement
& publicity |
|
|
1,047,732 |
1,506,616 |
|
| Printing
& stationery |
|
|
6,319,478 |
4,471,878 |
|
| Insurance
expenses |
|
|
1,308,901 |
839,293 |
|
|
|
|
| Other
Expenses of Management |
|
|
|
| Policy Stamps |
|
1,401,602 |
805,160 |
|
| Staff welfare |
|
1,653,613 |
999,490 |
|
| Telephone
& fax expenses |
|
5,987,732 |
4,550,956 |
|
| Postage
and telegram |
|
1,656,788 |
1,087,719 |
|
| Electricity & gas |
|
4,034,459 |
3,409,842 |
|
| Rent
rates & taxes |
|
7,847,527 |
5,681,975 |
|
| Repair
& maintenance |
|
2,393,116 |
1,724,682 |
|
| Computer
maintenance |
|
400,442 |
477,267 |
|
| Training
expenses |
|
1,644,746 |
1,056,570 |
|
| Entertainment |
|
1,039,126 |
633,814 |
|
| Bank charges |
|
949,480 |
618,074 |
|
| Directors' fee |
|
10,500 |
8,500 |
|
| Professional
charges |
|
1,137,757 |
1,182,711 |
|
| Miscellaneous
expenses |
|
2,582,892 |
1,779,615 |
|
|
|
------------------ |
------------------ |
|
|
|
32,739,780 |
24,016,375 |
|
|
|
|
| Depreciation |
|
|
7,738,342 |
5,372,024 |
|
| Preliminary
& deferred expenses written off |
|
1,145,012 |
1,145,012 |
|
| Provision
for taxation |
|
800,000 |
2,200,000 |
|
| Reserve
for depreciation on investments |
|
131,400 |
-- |
|
| Balance
of Life Fund at the end of the year |
|
|
|
| as
shown in the Balance Sheet |
|
338,789,000 |
206,805,482 |
|
| (Loss)/Surplus
for the year carried to Appropriation Account |
|
(13,103,939) |
3,609,721 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
564,081,045 |
390,866,078 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Balance
of Life Fund at the beginning of the year |
|
206,805,482 |
122,162,000 |
|
| Premium
less reinsurances |
|
|
|
| (i)
First year premium where the maximum premium. |
|
|
| paying
period is: |
|
|
|
| Three years |
|
3,205 |
-- |
|
| Five years |
|
37,754 |
12,032 |
|
| Seven years |
|
4,699 |
-- |
|
| Eight years |
|
35,825 |
3,511 |
|
| Ten years |
|
1,058,123 |
1,560,716 |
|
| Eleven years |
|
384,745 |
99,954 |
|
| Twelve
years or over ( including through out life ) |
|
99,426,574 |
78,470,926 |
|
|
|
------------------ |
------------------ |
|
|
|
100,950,925 |
80,147,139 |
|
|
|
|
|
|
| (ii)
Renewal premium - second year premium |
|
53,897,145 |
33,764,298 |
|
| Third
year premium and over |
|
69,305,971 |
39,952,191 |
|
|
|
|
| (iii)
Single premium |
|
12,418,308 |
3,066,819 |
|
| (iv)
Group premium |
|
80,373,388 |
83,430,966 |
|
|
|
------------------ |
------------------ |
|
|
|
316,945,737 |
240,361,413 |
|
|
|
|
| Interest,
Returns and Dividend |
|
40,648,468 |
25,093,025 |
|
| Less:
Income Tax deducted at source |
|
1,048,615 |
198,844 |
|
|
|
------------------ |
------------------ |
|
|
|
39,599,853 |
24,894,181 |
|
|
|
|
| Profit
on sale of Investments |
|
506,960 |
2,318,825 |
|
| Profit
on sale of Assets |
|
8,638 |
1,063,860 |
|
| Difference
in Exchange |
|
92,297 |
65,799 |
|
| Other income |
|
|
|
122,078 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
564,081,045 |
390,866,078 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
| APPROPRIATION
ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 1999 |
|
|
|
|
| Loss
brought forward from previous year |
|
|
28,339,412 |
31,949,133 |
|
| Loss/(Surplus)
for the year transferred from Revenue Account |
|
13,103,939 |
(3,609,721) |
|
|
|
|
------------------ |
------------------ |
|
|
41,443,351 |
28,339,412 |
|
|
|
|
========== |
========== |
|
|
|
|
| YEAR
ENDED 31 DECEMBER 1999 |
|
|
| Accumulated
Loss carried to Balance Sheet |
|
|
41,443,351 |
28,339,412 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
41,443,351 |
28,339,412 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts |
|
|
|
|
HYDER BHIMJI & CO. |
|
|
|
Chartered Accountants |
|
|
|
MUNEER R. BHIMJEE |
|
TAHER G. SACHAK |
|
SAIFUDDIN N. ZOOMKAWALA |
|
|
Director |
|
Managing Director & Chief Executive |
|
Chairman |
|
|
|
| Karachi
May 17, 2000. |
|
|
|
|
| BALANCE
SHEET AS AT 31 DECEMBER 1999 |
|
|
|
|
|
| CAPITAL
& LIABILITIES |
|
|
|
1999 |
1998 |
|
|
|
|
Note |
Rupees |
Rupees |
|
| Share Capital |
|
|
|
| Authorised |
|
|
|
| 20,000,000
Ordinary Shares of Rs. 10/each |
|
|
200,000,000 |
200,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
|
|
| 10,000,000
Ordinary Shares of Rs. 10 each |
|
|
| fully
paid in cash |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
| Reserve
for Depreciation on Investments |
|
182,095 |
50,695 |
|
| Accumulated
Loss |
|
(41,443,351) |
(28,339,412) |
|
| Balance
of Life Fund |
|
2 (b) |
338,789,000 |
206,805,482 |
|
|
|
|
|
|
| Other
Liabilities |
|
|
|
| Estimated
liability in respect of outstanding |
|
|
| claims
whether intimated or not |
|
15,877,057 |
8,504,787 |
|
|
|
|
| Amounts
due to other persons or bodies |
|
|
| carrying
on Insurance business |
|
33,984,848 |
27,144,841 |
|
|
|
|
| Sundry
Creditors (including deposits, outstanding |
|
|
| and
accrued expenses) |
|
53,052,570 |
40,591,689 |
|
|
|
|
| Provision
for Taxation |
|
3 |
3,000,000 |
2,200,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
105,914,475 |
78,441,317 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
503,442,219 |
356,958,082 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| ASSETS |
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
| Investments
- at cost |
|
|
| Deposited
with State Bank of Pakistan |
|
|
| Federal
Investment Bonds |
|
|
6,100,000 |
6,100,000 |
|
| Federal
Investment Bonds |
|
|
23,408,005 |
43,333,950 |
|
| Wapda Bonds |
|
|
2,000,000 |
2,000,000 |
|
| Defence
Saving Certificates |
|
|
146,950,000 |
100,450,000 |
|
| Term
Finance Certificates |
|
|
8,970,616 |
8,041,530 |
|
| Certificates
of Investments |
|
|
500,000 |
500,000 |
|
| Regular
Income Certificates |
|
|
80,200,000 |
-- |
|
| Shares
at cost (Market value 1999 Rs. 24,192,070) |
|
4 |
33,304,664 |
38,863,344 |
|
| (Market
value 1998 Rs. 24,087,060) |
|
|
------------------ |
------------------ |
|
|
|
|
301,433,285 |
199,288,824 |
|
|
|
|
|
|
| Preliminary
and Deferred Expenses |
|
2 (c) |
-- |
1,145,012 |
|
| Deferred
Acquisition Cost |
|
2 (d) |
23,240,000 |
-- |
|
|
|
|
|
|
|
| Current Assets |
|
|
|
| Agents'
balances and outstanding prem |
