| National Security Insurance Company Limited |
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 37th annual general meeting of the members of
National Security |
|
| Insurance
Company Limited will be held on Friday, June 30, 2000, at 10.00 a.m. at the
registered |
|
| office
at Ismail Aiwan-i-Science, Shahrah-i-Roomi, Lahore-54600, to transact the
following |
|
| business:- |
|
|
| 1.
To confirm minutes of the 36th annual general meeting. |
|
|
| 2.
To receive, consider and adopt the Directors Report and the audited accounts
for the |
|
| year
1999 - annexed. |
|
|
| 3.
To appoint auditors for the year 2000 and to fix their remuneration. |
|
|
| 4.
Any other business with the permission of the Chairman. |
|
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| A
member entitled to attend and vote at this meeting may appoint another member
as his proxy to |
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| attend
and vote. The form of proxy is annexed, which, duly completed, should reach
the registered |
|
| office
of the company at least 48 hours before the time of the meeting. |
|
|
| Lahore: |
|
By order of the Board of
Directors |
|
| June 07, 2000 |
|
Muhammad Saeed |
|
|
Company Secretary |
|
|
|
| BOARD OF DIRECTOR |
MR. AHMED H. SHAIKH
(Chairman/Chief Executive) |
|
|
MR. SHABBIR AHMAD |
|
|
MR. MUKHTAR AHMAD |
|
|
MR. MUHAMMAD SAEED |
|
|
MR. NAEEM YOUSAF QURESHI |
|
|
MRS. NASREEN H. SHAIKH |
|
|
MRS. SHAFQAT MUMTAZ |
|
|
| COMPANY
SECRETARY |
MR. MUHAMMAD SAEED |
|
|
| AUDITORS |
|
MAZHAR ALl KHAN &
CO., |
|
|
CHARTERED ACCOUNTANTS |
|
|
| REGISTERED
OFFICE |
Ismail Aiwan-i-Science |
|
|
Shahrah-i-Roomi |
|
|
Lahore - 54600 |
|
|
Phone: 5756751 |
|
|
|
| DIRECTORS
REPORT |
|
|
| This
is the 37th annual report of your Directors which they present to the members
of the company |
|
| along
with the auditors report and the audited accounts for the year ended December
31, 1999, |
|
| which
have been prepared on a 'going concern' basis and are reflective of the state
of affairs of your |
|
| company. |
|
|
| It
is reiterated that the company suspended its operations on April 16, 1991, as
a consequence of |
|
| the
socio-political situation then prevalent in Sindh in general and Karachi,
Hyderabad and Sukkur |
|
| in
particular, and its licence to carry on the insurance business was cancelled
w.e.f. September 25, |
|
| 1991,
as reported in the earlier Directors Reports. Your company is still
continuing with its best |
|
| efforts
to mend the matters which had resulted from the said situation, when, it is
hopefully believed, |
|
| the
company may be in a position to also meet all the requirements of No. 1,2 and
3 of the Auditors. |
|
|
| Messrs.
Mazhar All Khan & Co., Chartered Accountants, will be retiring on the
forthcoming annual |
|
| general
meeting. They have given their consent to act as auditors of your company for
the next term |
|
| upto
the next annual general meeting, covering audit of accounts for the year
ending December 31, |
|
| 2000,
for which they are recommended to be appointed as auditors of the company. |
|
|
| As
disclosed in the accounts, the (loss) per share is (Rs. 1.62). |
|
|
| Pattern
of holding of the shares held by the shareholders of the company as at
December 31, 1999, |
|
| in
the prescribed Form 34 is annexed. |
|
|
| Lahore |
|
On behalf of the Board of
Directors |
|
| June 07, 2000 |
|
Ahmed H. Shaikh |
|
|
Chairman / Chief
Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS OF |
|
| NATIONAL
SECURITY INSURANCE COMPANY LIMITED |
|
|
| We
have audited the annexed balance sheet of NATIONAL SECURITY INSURANCE COMPANY |
|
| LIMITED
as at 31 December, 1999, and the 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: |
|
|
| 1.
These accounts have been prepared on a 'going concern' basis although the
company |
|
| suspended
its operations due to financial crises arisen as a result of operational
losses and its |
|
| license
to carry on the Insurance Business was cancelled w.e.f. 25 September, 1991.
Further, |
|
| different
claimants have filed claim suits against the company which are pending in
different |
|
| courts.
These suits also include a winding-up petition against the company. The
'going |
|
| concern'
basis on which these accounts have been drawn up is not valid and provisions
are |
|
| required
to be made for difference between realiseable value and book value of assets. |
|
| Assets
and liabilities also require reclassification. |
|
|
| 2.
In the absence of underlying documents, balance confirmation certificates,
statements of |
|
| accounts
and non-receipt/payment of monies in the post balance sheet period, we have
been |
|
| unable
to substantiate the accuracy and correctness of agents balances and
outstanding |
|
| premium,
premium deposits, amounts due to/from other persons or bodies carrying on |
|
| insurance
business, advances, sundry debtors/creditors and liability in respect of
outstanding |
|
| claims. |
|
|
| 3.
In the absence of relevant underlying documentation for assessing the
valuation of securities |
|
| in
respect of loan of Rs. 500,000 against pledge of shares and non-adjustment of
the account |
|
| since
1987, we were unable to verify the recoverability of this loan. |
|
| |
|
| Except
for the effect, if any, of the adjustments which might be determined or
considered to be |
|
| necessary
as a result of the matters referred to above and the contents of note-4.2, we
have |
|
| obtained
all the information and explanations which to the best o 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, the Fire, Marine and Miscellaneous Insurance Revenue
Accounts, |
|
| Profit
and Loss Account and Profit and Loss Appropriation Accounts 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 the Company's |
|
| business. |
|
|
| iii.
The business conducted, investments made and the 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 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,
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 31 |
|
| December,
1999, and of the loss and cash flows for the year then ended. |
|
|
| d.
In our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| e.
We further report that: |
|
| i.
we could not verify the cash and bank balances aggregating Rs. 515,910 in the |
|
| absence
of balance confirmation certificates. |
|
|
| ii.
in accordance with Section 40c(2) of the Insurance Act, 1938, we certify that
to the best |
|
| of
our knowledge and explanations provided to us and as it appears from our |
|
| examination
of the company's books of account, all expenses of management, |
|
| wherever
incurred have been fully debited to the Profit and Loss Account and no such |
|
| expenses
were allocable to any Insurance Revenue Accounts. |
|
|
| iii.
as per Regulation 11 part-I in the 3rd schedule of the Insurance Act, 1938,
we certify |
|
| that
the company, to the best of our knowledge and belief, 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. that the company has not received outside |
|
| Pakistan
from any person any commission' in any form in respect of any business |
|
| reinsured
abroad. |
|
|
| Lahore |
|
Mazhar Ali Khan & Coo |
|
| June 07, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 SEPTEMBER, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVE |
|
| Authorised' |
|
| 2,000,000
ordinary shares of Rs. 10 each |
|
20,000,000 |
20,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up: |
|
| 200,000
ordinary shares of Rs. 10 each |
|
| fully
paid in cash |
|
2,000,000 |
2,000,000 |
|
|
| 1,550,000
ordinary shares of Rs. 10 each · |
|
| issued
as fully paid bonus shares |
|
15,500,000 |
15,500,000 |
|
|
---------- |
---------- |
|
|
17,500,000 |
17,500,000 |
|
| RESERVE
FOR EXCEPTIONAL LOSSES |
|
7,600,000 |
7,600,000 |
|
|
| Estimated
liability in respect of |
|
| outstanding
claims whether due or intimated |
2.3 |
37,490,797 |
37,490,797 |
|
|
| Amounts
due to other persons or |
|
| bodies
carrying on insurance business |
|
9 |
13,436,265 |
13,436,265 |
|
|
| Sundry
Creditors (including outstanding |
|
| and
accrued expenses) |
|
2,490,549 |
1,004,432 |
|
|
| Premium
deposits |
|
4,139,708 |
4,139,708 |
|
| Unclaimed
dividend |
|
95,773 |
95,773 |
|
|
---------- |
---------- |
|
|
57,653,092 |
56,166,975 |
|
|
---------- |
---------- |
|
|
82,753,092 |
81,266,975 |
|
|
========== |
========== |
|
|
| LOANS |
|
| On
shares security |
|
500,000 |
500,000 |
|
| On
personal security |
|
-- |
840,007 |
|
|
---------- |
---------- |
|
|
500,000 |
1,340,007 |
|
|
| INVESTMENTS |
|
|
|
| Ordinary
shares of companies |
|
2.7 & |
|
| incorporated
in Pakistan |
|
4 |
26,951,564 |
26,951,564 |
|
|
|
|
| FREEHOLD
LAND -At cost |
|
931,950 |
931,950 |
|
|
| FURNITURE,
OFFICE EQUIPMENT AND VEHICLES |
|
| At cost less accumulated
depreciation |
2.8 |
336,806 |
342,072 |
|
|
| CURRENT
ASSETS |
|
| Agents'
balances and outstanding premiums |
5 |
236,622 |
280,910 |
|
| Amounts
due from other persons or |
|
|
|
| bodies
carrying on insurance business |
|
9 |
13,316,912 |
13,316,912 |
|
| Advances,
deposits, prepayments and other receivables |
624,197 |
1,096,263 |
|
| Advance
tax net of payments and provisions |
|
2,546,578 |
2,542,628 |
|
|
|
|
| Cash
with banks: |
|
|
|
| On
fixed and call deposit accounts |
|
6 |
194,667 |
194,667 |
|
| On
current accounts |
|
625,559 |
598,371 |
|
| On
savings account |
|
-- |
21,887 |
|
|
---------- |
---------- |
|
|
820,226 |
814,925 |
|
|
---------- |
---------- |
|
|
17,544,535 |
18,051,638 |
|
| ACCUMULATED
LOSS |
|
36,488,237 |
33,649,744 |
|
|
---------- |
---------- |
|
|
82,753,092 |
81,266,975 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
| As
per our report annexed. |
|
|
| DIRECTORS'
CERTIFICATE |
|
| We
certify that: |
|
| 1)
Investments have been stated in the balance sheet at cost. The market value
of quoted investments has been |
|
| ascertained
from Stock Exchange quotations of 31 December, 1999, and unquoted investments
have been |
|
| stated
at cost. |
|
|
| 2)
The value of all the assets has been reviewed as on the date of Balance Sheet
and in our belief, the assets set |
|
| forth
in the Balance Sheet are shown in aggregate at amounts not exceeding their
realisable or market value |
|
| under
the several headings enumerated therein. |
|
|
|
MAZHAR ALl KHAN & CO. |
|
AHMED H. SHAIKH |
|
MUKHTAR AHMAD - Director |
|
|
CHARTERED ACCOUNTANTS |
|
Chairman/Chief Executive |
|
NAEEM YOUSAF QURESHI - Director |
|
|
|
| PROFIT
& LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Expenses
of management |
|
| (Not
applicable to any particular Fund or Account) |
|
2,772,173 |
2,069,522 |
|
|
|
|
| Depreciation |
|
40,005 |
41,238 |
|
|
|
|
| Loss
on sale of Fixed Assets |
|
-- |
151,812 |
|
| Provision
for Taxation |
|
-- |
896,394 |
|
| (Profit)/Loss
transferred from: |
|
|
|
| Marine
Revenue Account |
|
-- |
11,071 |
|
| Miscellaneous
Revenue Account |
|
26,315 |
(175,910) |
|
|
----------- |
----------- |
|
|
26,315 |
(164,8.39) |
|
|
| Profit
for the year- carried down to |
|
| Profit
and Loss appropriation Account |
|
-- |
272,949 |
|
|
----------- |
----------- |
|
|
2,838,493 |
3,267,076 |
|
|
| interest
and profit income |
|
| (Not
applicable to any particular Fund Or Account) |
|
-- |
2,618,661 |
|
|
|
|
| Underwriting
Commission |
|
-- |
648,415 |
|
|
| Loss
for the year- carried to Profit and Loss |
|
| Appropriation
Account |
|
2,838,493 |
-- |
|
|
----------- |
----------- |
|
|
2,838,493 |
3,267,076 |
|
|
|
|
|
| PROFIT
AND LOSS APPROPRIATION ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, 1999 |
|
|
| Balance
brought forward from previous year |
|
33,649,744 |
33,922,693 |
|
|
| Loss
for the year- brought down |
|
| from
Profit and Loss Account |
|
2,838,493 |
-- |
|
|
----------- |
----------- |
|
|
36,488,237 |
33,922,693 |
|
|
========== |
========== |
|
| Profit
for the year- brought down from |
|
|
|
| Profit
and Loss Account |
|
-- |
272,949 |
|
|
|
|
| Balance
carried to Balance Sheet |
|
36,488,237 |
33,649,744 |
|
|
----------- |
----------- |
|
|
36,488,237 |
33,922,693 |
|
|
========== |
========== |
|
|
|
|
MAZHAR ALI KHAN &
CO. |
|
AHMED H. SHAIKH |
|
MUKHTAR AH MAD - Director |
|
|
CHARTERED ACCOUNTANTS |
|
Chairman/Chief Executive |
|
NAEEM YOUSAF QURESHI - Director |
|
|
|
|
| MARINE
REVENUE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Claims
under policies less |
|
| reinsurances
paid during the year |
|
-- |
11,071 |
|
|
---------- |
---------- |
|
|
-- |
11,071 |
|
|
========== |
========== |
|
| Loss
transferred to |
|
| Profit
and Loss Account |
|
-- |
11,071 |
|
|
---------- |
---------- |
|
| - |
|
-- |
11,071 |
|
|
========== |
========== |
|
| We
certify that no expenses of management were incurred during the year in
respect of Marine Insurance |
|
| Business
as the company closed down its insurance business. |
|
|
| The
annexed notes form an integral part of these accounts. |
|
| As
per our report annexed. |
|
|
|
MAZHAR ALI KHAN & CO. |
|
AHMED H. SHAIKH |
|
MUKHTAR AHMAD - Director |
|
|
CHARTERED ACCOUNTANTS |
|
Chairman/Chief Executive |
|
NAEEM YOUSAF QURESHI - Director |
|
|
|
| MISCELLANEOUS
REVENUE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Claims
under policies less |
|
| reinsurances
paid during the year |
|
26,315 |
175,910 |
|
|
| Profit
transferred to Profit & Loss Account |
|
-- |
175,910 |
|
|
---------- |
---------- |
|
|
26,315 |
-- |
|
|
========== |
========== |
|
| Loss
transferred to |
|
| Profit
and Loss Account |
|
26,315 |
-- |
|
|
---------- |
---------- |
|
|
26,315 |
-- |
|
|
========== |
========== |
|
| We
certify that no expenses of management were incurred during the year in
respect of Miscellaneous |
|
| Insurance
Business as the company closed down its insurance business. |
|
|
| The
annexed notes form an integral part of these accounts. |
|
| As
per our report annexed. |
|
|
|
MAZHAR ALI KHAN & CO. |
|
AHMED H. SHAIKH |
|
MUKHTAR AHMAD -
Director |
|
|
CHARTERED ACCOUNTANTS |
|
Chairman/Chief Executive |
|
NAEEM YOUSAF QURESHI - Director |
|
|
|
|
|
|
| FORM
"AA" |
|
| CLASSIFIED
SUMMARY OF THE ASSETS AS AT 31 DECEMBER, 1999 |
|
|
|
|
Cost/ |
|
|
|
|
Market/ |
|
|
| Class
of Assets |
|
Book Value |
Realisable/ |
Remarks |
|
|
|
Book Value |
|
|
|
|
Rupees |
|
|
| Rupees |
|
|
| Shares
of Companies |
|
| Incorporated
in Pakistan-Quoted |
26,951,564 |
13,280,115 |
Market Values have been |
|
|
ascertained from
published |
|
|
quotations on 31
December, 1999. |
|
|
| Loans
- In Pakistan |
|
| on
shares security |
|
500,000 |
500,000 |
At book value. |
|
|
| Cash
with banks: |
|
| on
fixed and call deposits |
|
194,667 |
194,667 |
At realisable value. |
|
| on
current accounts |
|
625,559 |
625,559 |
-do- |
|
|
| Agents'
balances and |
|
| outstanding
premiums |
|
236,622 |
236,622 |
At book value. |
|
| Advance Tax/Tax deducted at
source |
2,546,578 |
2,546,578 |
-do- |
|
|
| Amount
due from other persons |
|
| or
bodies carrying on insurance |
|
| business |
|
13,316,912 |
13,316,912 |
-do- |
|
|
|
|
| Advances,
deposits, prepayments |
|
|
| and
other receivables |
|
624,197 |
624,197 |
-do- |
|
| Freehold
land |
|
931,950 |
931,950 |
At cost. |
|
|
|
|
| Furniture,
office equipment |
|
At cost less |
|
| and vehicles |
|
336,806 |
336,806 |
accumulated depreciation |
|
|
---------- |
---------- |
|
|
46,264,855 |
32,593,406 |
|
|
========== |
========== |
|
|
|
|
|
|
AHMED H. SHAIKH |
|
MUKHTAR AHMAD - Director |
|
|
Chairman/Chief Executive |
|
NAEEM YOUSAF QURESHI - Director |
|
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER, 1999 |
|
|
|
|
|
1998 |
1999 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| (Loss)/Profit
for the year |
|
(2,838,493) |
272,949 |
|
|
|
| Adjustment
for: |
|
| Depreciation |
|
40,005 |
41,238 |
|
| Loss
on disposal of fixed assets |
|
-- |
151,812 |
|
| Provision
for Taxation |
|
-- |
896,394 |
|
| Interest
and profit income |
|
-- |
(2,618,661) |
|
|
---------- |
---------- |
|
| CASH
(OUTFLOW) FROM OPERATING ACTIVITIES |
|
|
|
| -Before
working capital changes |
|
(2,798,488) |
(1,256,268) |
|
| (Increase)/Decrease
in current assets |
|
|
|
| Amount
due from other persons or |
|
|
|
| bodies
carrying on insurance business |
|
-- |
3,960 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
472,066 |
(373,593) |
|
| Agents
balances and outstanding premiums |
|
44,288 |
46,000 |
|
| Increase/(Decrease)
in current liabilities |
|
|
|
| Sundry
Creditors |
|
1,486,117 |
(109,024) |
|
|
---------- |
---------- |
|
| CASH
(OUTFLOW) FROM OPERATING ACTIVITIES |
|
|
|
| -Before
Taxation |
|
(796,017) |
(1,688,925) |
|
| Taxes paid |
|
(3,950) |
(1,650) |
|
|
---------- |
---------- |
|
| NET
CASH (OUTFLOW) FROM OPERATING ACTIVITIES |
|
|
| -After
taxation |
|
(799,967) |
(1,690,575) |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Purchase
of fixed assets |
|
(34,739) |
(53,605) |
|
| Sale
proceeds of fixed assets |
|
-- |
1,060,000 |
|
| Purchase
of investments |
|
-- |
(26,064,159) |
|
| Loan
to an Associated Undertaking |
|
840,007 |
23,916,336 |
|
| Interest
received |
|
-- |
2,618,661 |
|
|
---------- |
---------- |
|
| NET
CASH INFLOW FROM INVESTING ACTIVITIES |
|
805,268 |
1,477,233 |
|
|
========== |
========== |
|
| NET
INCREASE/(DECREASE) IN |
|
|
|
| CASH
AND CASH EQUIVALENTS |
|
5,301 |
(213,342) |
|
| CASH
AND CASH EQUIVALENTS AT THE |
|
|
|
| BEGINNING
OF THE YEAR |
|
814,925 |
1,028,267 |
|
|
---------- |
---------- |
|
| CASH
AND CASH EQUIVALENTS AT THE |
|
|
|
| END
OF THE YEAR |
|
820,226 |
814,925 |
|
|
========== |
========== |
|
|
|
AHMED H. SHAIKH |
|
MUKHTAR AHMAD - Director |
|
|
Chairman/Chief Executive |
|
NAEEM YOUSAF QURESHI - Director |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 31 DECEMBER, 1999 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| The
company was incorporated in Pakistan on 5 June, 1963 as a public limited
company and |
|
| its
shares are quoted on Karachi Stock Exchange (Guarantee) Ltd. The Principal
purpose for |
|
