| Prime Insurance Company Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Auditors'
Report |
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| Pattern
of Share Holding |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Consolidated
Revenue Account |
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| Fire
Revenue Account |
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| Marine
Revenue Account |
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| Motor
Revenue Account |
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| Miscellaneous
Revenue Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| Classified
Summary of Assets in Pakistan-Form AA |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
|
Rashidullah Yacoob |
Chairman |
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|
Mrs. Sanober Akhtar
Yacoob |
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|
Fazal Mohammad Moghal |
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|
Muhammad Nasimuddin Mirza |
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|
Mohammad Asif Dar |
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Mohammad Sadiq Shaikh |
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|
Haji Abdul Ghani |
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| CHIEF
EXECUTIVE |
|
Syed Haider Javaid |
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| MANAGING
DIRECTOR |
|
Abdul Majeed |
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| COMPANY
SECRETARY |
|
Mazhar-ul-Haque Siddiqui |
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|
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| REGISTER
ED OFFICE |
|
FAISALABAD |
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| Prudential
House, Hasan Ali Street |
Room #8, Taj Plaza,
Kotwali Road, |
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| Off:
I.I. Chundrigar Road, P.O. Box No. 1034, |
Faisalabad, Tel ·
041-612474 |
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| Karachi.
Tel: 2628833-40 |
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| Fax:
2630858 - 2630865 |
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STOCK EXCHANGE LISTING |
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| Tlx:
23984 PRUD PK |
|
Prime Insurance Company
Limited is listed on the Karachi |
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|
Stock Exchange. |
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| HEAD OFFICE |
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| Japan
Plaza 505-507, M. A. Jinnah Road, Karachi |
Daily quotations on the
Company's stock can be obtained |
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| P.O. Box 1034 |
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|
from leading newspapers.
Prime Insurance Company Limited |
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| Tel:
7770801-7725427 |
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is listed under
'Insurance'. |
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| BANKERS |
|
PUBLIC INFORMATION |
|
| Prudential
Commercial Bank Limited |
Financial analysts, stock
brokers and financial media desiring |
|
| Askari
Commercial Bank Limited |
|
information about the
company and all type of general |
|
|
|
|
insurance should contact
Mr. Abdul Majeed, Managing Director, |
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| AUDITORS |
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|
Prime Insurance Company
Limited, at Company's |
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| M/s.
M. Yousuf Adil Saleem & Company |
Head Office, Karachi. |
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| Chartered
Accountants |
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|
SHAREHOLDER INFORMATION |
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| LEGAL
ADVISER |
|
Enquiries concerning lost
share certificates, dividend |
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| S. Tahir Ali |
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|
payments, change of
address, verification of transfer deeds |
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| Advocate |
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|
and share transfer should
be directed to our Registrar, Share |
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|
& Corporate Services
(Pvt) Ltd., Mehersons Estate Block 'E' |
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| CORPORATE
BRANCH |
|
Talpur Road, Karachi.
Tel: 2429632 Fax: 2420015 |
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| 505-507,
Japan Plaza, M. A. Jinnah Road, Karachi |
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| Tel:
7770801 Mobile: 0303-7284933 |
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|
|
ANNUAL GENERAL MEETING |
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|
Thirteenth Annual General
Meeting of Prime Insurance |
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| ISLAMABAD |
|
Company Limited will be
held at RCMC, Ground floor, |
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| D-26,
1st Floor Kashmir Plaza, Blue Area, |
SIDCO Avenue Centre, 264
R.A. Lines, Karachi, |
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| Islamabad.
Tel: 051-829784 |
|
on Thursday June 29, 2000
at 9:00 a.m. |
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|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given that the 13th Annual General Meeting of Prime Insurance
Company Ltd., will be held at RCMC, |
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| Ground
floor, SIDCO Avenue Centre, 264R.A. Lines, Karachi .on June 29th, 2000 at
9:00 a.m. to transact the following |
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| business: |
|
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| 1.
To confirm the Minutes of the Annual General Meeting of the Company held on
December 31, 1999. |
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|
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| 2.
To receive, consider and adopt the audited accounts of the company for the
year ended December 31, 1999 along- |
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| with
Directors' and Auditors' Report thereon. |
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| 3.
To appoint auditors and fix their remuneration for the year ended December
31, 2000. The present Auditors M/s. M. |
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| Yousuf
Adil Saleem & Co., Chartered Accountants, retire and being eligible,
offer themselves for re-appointment. |
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| 4.
To transact any other business with the permission of the Chair. |
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By Order of the Board |
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MAZHAR-UL-HAQUE SIDDIQUI |
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| Karachi:
June 06, 2000 |
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|
Company Secretary |
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| i)
The Share Transfer Books of the Company will remain closed from June 29, 2000
to July 07, 2000 (Both days inclusive). |
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|
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| ii)
A member entitled to attend and vote at this meeting is entitled to appoint
another member as his/her proxy to attend |
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| and
vote instead of him/her. Proxies, in order to be effective, must be received
at the Registered Office of the Company |
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| not
less than 48 hours before the Meeting. |
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|
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| iii)
Any individual Beneficial Owner of CDC, entitled to attend and vote at this
meeting, must bring his/her NIC to prove |
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| his/her
identity, and in case of Proxy must enclose an attested copy of his/her NIC.
Representatives of corporate |
|
| members
should bring the usual documents required for such purpose. |
|
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| iv)
Members are required to notify the change of address, if any, immediately. |
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|
| DIRECTORS'
REPORT |
|
|
| The
Board of Directors of your Company is pleased to present before you the
Thirteenth Annual Report together with the |
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| Audited
Accounts for the year ended December 31st, 1999. |
|
|
| OPERATING
RESULTS |
|
|
| As
had been reported in our last report the company had to close most of its
branches as their operation had become |
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| uneconomical
on account of non availability of sufficient amount of business from the
market due to economic recession |
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| prevailing
in the country. Consequently, company had to relieve most of the senior staff
including its Managing Director to |
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| reduce
management expenses. |
|
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| In
such a condition, company's business performance during the period under
report has therefore, been unsatisfactory. |
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| Hence,
gross premium income of Rs. 4.53 million was recorded as against Rs. 8.02
million last year. Similarly, the net |
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| premium
during the year was Rs. 1.79 million as against Rs. 5.59 million during the
corresponding period last year. |
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| Underwriting
loss of Rs. 8.19 million was recorded as against Rs. 12.94 million last year.
The management expenses of |
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| Rs.
10.13 million includes Rs. 5.92 million mark up expenses on Running Finance
facility availed from a commercial bank. |
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| Total
loss after provision for bad & doubtful debts and taxation for the year
is Rs. 23.60 million as compared to Rs. 30.91 |
|
| million
last year. The accumulated loss has increased to Rs. 70.24 million from Rs..
46.63 million last year. |
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|
| The
Auditors of your company are of the opinion that with the closure of certain
branches of the company the amounts |
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| recoverable
from agents and other persons or bodies carrying on insurance business are
doubtful of recovery and hence, |
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| adequate
provisions be made in the books of Accounts. Your Management however, did not
fully agree with the opinion |
|
| of
Auditors of the company as due to closure of branches the recovery process of
outstanding premium has been discontinued. |
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| With
the improvement of business condition these branches will again be made
operational and efforts will be made to |
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| recover
outstanding premium. However, as a matter of prudence and abundant caution
the Management has agreed on |
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| the
recommendation of the Auditors and thereby made a further provision of Rs. 15
million during the year. |
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| Your
Auditors were also of opinion that the provision of the Rs. 8.20 million be
also made for diminution in market value |
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| of
shares. The Management however, did not agree as this investment being on
long term basis should appear at book |
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| value
in the balance sheet. |
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|
| FINANCIAL
RESULTS |
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| The
financial results are briefly summarized as follows: |
|
Rupees |
|
| Loss before tax |
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|
23,146,628 |
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| Add:
Provision for taxation |
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|
460,451 |
|
|
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|
------------------ |
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| Loss
for the year carried to appropriation account |
|
23,607,079 |
|
|
|
|
|
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| Add:
Loss brought forward from previous year |
|
46,636,303 |
|
|
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|
------------------ |
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| Loss
carried forward |
|
|
70,243,382 |
|
|
========== |
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|
| AUDITORS |
|
| The
retiring Auditors, Messrs. M. Yousuf Adil Saleem & Co. Chartered
Accountants being eligible offer themselves for |
|
| reappointment. |
|
|
| FUTURE
PROSPECTS |
|
| As
has been reported in previous report also your company has not been able to
come out of crises due to various factors |
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| as
already elaborated under "Operating Results" above. |
|
|
| However,
your management is making every effort to turn around the company and in this
context your management has |
|
| now
appointed Mr. Abdul Majeed as Managing Director of the company who is a
seasoned insurance campaigner. Under |
|
| his
supervision closed branches will again be made operational and re-structuring
of marketing net work will be done. Your |
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| management
is therefore, hopeful to reap better results in the period to come. |
|
|
| THANKS
AND APPRECIATION |
|
| We
would like to thank for the courtesy and co-operation extended by the
Controller of Insurance, Pakistan Insurance |
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| Corporation,
Reinsurers, Stock Exchanges and the Securities and Exchange Commission of
Pakistan. |
|
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| Our
thanks are also due to our Members of Staff for their hard work and
dedication to the Management. |
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|
For and on behalf of the |
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|
|
BOARD OF DIRECTORS |
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| Karachi:
Dated June 06, 2000 |
|
RASHIDULLAH YACOOB |
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|
CHAIRMAN |
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|
| AUDITORS'
REPORT TO THE MEMBERS |
|
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| We
have audited the annexed balance sheet of PRIME INSURANCE COMPANY LIMITED as
at December 31, 1999 and the annexed |
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| Fire,
Marine, Motor and Miscellaneous Insurance Revenue Accounts, the Profit and
Loss Account, 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 ended on that date 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 purposes of our audit and, after due
verification thereof, we report that: |
|
|
| (a)
The company has incurred a net loss of Rs. 23,607,079/- during the year ended
December 31, 1999 and accumulated |
|
| loss
as at that date is Rs. 70,243,382/- which has eroded the equity which is now
showing a adverse balance of |
|
| Rs.
45,243,382/-. The current liabilities exceed current assets by Rs.
70,115,119/- .Therefore, doubt is created that the |
|
| company
will be able to continue as a going concern. These financial statements have
been prepared on a going concern |
|
| basis
and no adjustment has been made to record assets at realisable values and
classification of its liabilities. |
|
|
|
|
| (b)
Diminution in market value of investment has been short provided by Rs.
8,203,929/- (Refer Note No. 4.1) |
|
|
| (c)
In our opinion, proper books of account have been kept by the Company as
required by the Companies Ordinance, 1984; |
|
|
| (d)
The annexed balance sheet, revenue accounts, the profit and loss account and
the profit and loss appropriation account |
|
| have
been drawn up in conformity with the provision 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; |
|
|
|
|
| (e)
The expenditure incurred during the year was for the purpose of the Company's
business. |
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|
|
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| (f)
The business conducted, investments made and the expenditure incurred during
the year were in accordance with the |
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| objects
of the company; and |
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|
|
|
| (g)
No zakat was deductible at source under the Zakat and Ushr Ordinance, 1980. |
|
|
| In
our opinion and to the best of our information and according to the
explanations given to us, the Balance Sheet, Fire, Marine, Motor |
|
| and
Miscellaneous Insurance Revenue Accounts, the Profit and Loss Account, the
Profit and Loss Appropriation Account and the |
|
| Statement
of Changes in Financial Position (Cash Flow Statement), together with the
notes forming part thereof, give the information |
|
| required
by the Companies Ordinance, 1984 and Insurance Act, 1938 in the manner so
required and except for para (a) and (b) above |
|
| and
the adjustments these may require, these respectively give a true and fair
view of the state of the Company's affairs as at December |
|
| 31,
1999 and of the loss and the changes in financial position for the year then
ended; |
|
|
| We
further report that: |
|
|
| (a)
We have verified the cash in hand and bank balances, and the Company's
investments by actual inspection or by the |
|
| production
of certificates or other documents; |
|
|
|
|
| (b)
As per Section 40C (2) of the Insurance Act, 1938, all expenses of management
wherever incurred whether directly or |
|
| indirectly,
in respect of Fire, Marine, Motor and Miscellaneous Insurance business
transacted in Pakistan have been fully |
|
| debited
in the respective revenue accounts as expenses; |
|
|
| (c)
As per Regulation 11 of Part 1 of the Third Schedule of the Insurance Act,
1938, 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. |
|
|
|
|
| Karachi: |
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|
M. YOUSUF ADIL SALEEM & CO. |
|
| Dated:
June 06, 2000 |
|
|
Chartered Accountants |
|
|
|
|
| PATTERN
Of SHARE HOLDING AS AT |
|
| DECEMBER
31, 1999 |
|
|
| No. of |
|
Share Holding |
|
Total |
|
| Shareholders |
|
|
Shares held |
|
|
| 300 |
1 |
to |
100 |
30,000 |
|
| 293 |
101 |
to |
500 |
113,100 |
|
| 78 |
501 |
to |
1000 |
74,200 |
|
| 98 |
1001 |
to |
5000 |
304,400 |
|
| 44 |
5001 |
to |
10000 |
407,000 |
|
| 9 |
10001 |
to |
15000 |
111,100 |
|
| 6 |
15001 |
to |
20000 |
116,800 |
|
| 3 |
20001 |
to |
25000 |
75,000 |
|
| 2 |
25001 |
to |
30000 |
54,800 |
|
| 1 |
30001 |
to |
35000 |
33,100 |
|
| 4 |
35001 |
to |
40000 |
154,500 |
|
| 2 |
65001 |
to |
70000 |
135,000 |
|
| 1 |
75001 |
to |
80000 |
80,000 |
|
| 1 |
95001 |
to |
100000 |
100,000 |
|
| 1 |
710001 |
to |
715000 |
711,000 |
|
| ------------------ |
|
|
------------------ |
|
| 843 |
|
|
2,500,000 |
|
| ========== |
|
|
========== |
|
|
| Categories of |
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| Share Holders |
|
Number |
Shares held |
Percentage |
|
|
| Individuals |
|
833 |
1,622,100 |
64.89 |
|
| Investment
Company |
|
1 |
800 |
0.03 |
|
| Insurance
Company |
|
2 |
69,800 |
2.79 |
|
| Joint
Stock Company |
|
4 |
93,500 |
3.74 |
|
| Financial
Institutions |
|
2 |
712,000 |
28.48 |
|
| Modaraba
Company |
|
1 |
1,800 |
0.07 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
843 |
2,500,000 |
100.00 |
|
|
|
|
========== |
========== |
========== |
|
|
|
| BALANCE
SHEET AS AT DECEMBER 31, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL & RESERVE |
|
|
|
| Authorised |
|
|
|
| 5,000,000
Ordinary shares of |
|
|
|
| Rs. 10/= each |
|
|
50,000,000 |
50,000,000 |
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up |
|
|
| 2,500,000
Ordinary shares of |
|
|
| Rs.
10/= each fully paid in cash |
|
25,000,000 |
25,000,000 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss |
|
(70,243,382) |
(46,636,303) |
|
|
|
------------------ |
------------------ |
|
|
|
(45,243,382) |
(21,636,303) |
|
|
|
|
| BALANCE
OF ACCOUNTS |
|
|
|
| Fire Insurance |
|
|
|
|
418,208 |
1,089,078 |
|
| Marine
Insurance |
|
|
|
83,608 |
35,257 |
|
| Motor
Insurance |
|
|
|
151,803 |
465,046 |
|
| Miscellaneous
Insurance |
|
|
|
65,816 |
649,331 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
719,435 |
223,871 |
|
|
|
|
|
|
| LIABILITIES
ANB PROVISIONS |
|
|
| Short
term bank finances |
|
3 |
39,871,828 |
33,165,642 |
|
| Estimated
liability in respect of outstanding |
|
|
| claims,
whether due or intimated |
|
|
7,651,312 |
6,993,090 |
|
| Amounts
due to other persons or |
|
|
| bodies
carrying on insurance business |
|
|
10,131,654 |
10,451,363 |
|
| Sundry
creditors (including outstanding |
|
|
|
|
| and
accrued expenses) |
|
|
|
22,447,467 |
16,684,524 |
|
| Taxation |
|
|
|
468,032 |
219,400 |
|
| Unclaimed
dividend |
|
|
|
50,755 |
50,755 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
80,621,048 |
67,564,774 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
36,097,101 |
48,167,183 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| INVESTMENTS |
|
|
|
|
|
|
| Defence
Saving Certificate- |
|
|
| (Statutory
deposit with State Bank of Pakistan) |
|
|
350,000 |
350,000 |
|
| Shares
(including NIT units) |
|
4 |
17,942,584 |
19,159,369 |
|
| House property |
|
|
5,519,590 |
5,519,590 |
|
|
|
------------------ |
------------------ |
|
|
|
23,812,174 |
25,028,959 |
|
|
|
|
| LONG
TERM DEPOSITS |
|
394,000 |
284,704 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Agents
balances and outstanding |
|
|
|
| premiums-
net of provision |
|
|
1,424,245 |
9,370,667 |
|
| Amount
due from other persons or |
|
|
| bodies
carrying on insurance |
|
|
| business-net
of provision |
|
|
346,758 |
1,375,406 |
|
| Interest,
return on deposits |
|
|
|
| Dividend
and under writing commission |
|
|
| accrued
or receivable |
|
|
78,021 |
142,401 |
|
| Advance
income tax |
|
|
|
162,726 |
318,980 |
|
| Advances,
prepayments and other |
|
|
| receivables |
|
|
995,906 |
790,974 |
|
| Cash at banks |
|
|
|
|
| On
deposit account |
|
|
6,880,622 |
6,474,059 |
|
| On
current account |
|
|
604,063 |
2,749,997 |
|
| Cash
and cash in transit |
|
|
|
13,588 |
3,857 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
10,505,929 |
21,226,341 |
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Operating
assets-at cost less |
|
|
|
| depreciation |
|
|
|
| Furniture,
fixture, office equipment |
|
|
| and vehicles |
|
|
5 |
1,384,998 |
1,627,179 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
36,097,101 |
48,167,183 |
|
|
|
========== |
========== |
|
|
| We certify that: |
|
|
|
|
|
| a)
The investments shown in the balance sheet have been valued as indicated
therein at cost or at book value and the market value |
|
| of
the investments have been ascertained, wherever applicable, from published
quotations as on December 31, 1999. The market |
|
| value
of house property have been taken at cost. |
|
|
| b)
The values of all the assets have been reviewed at December 31, 1999 and in
our belief the assets set forth in the balance sheet |
|
| and
investment in shares are shown in the aggregate at amounts not exceeding
their realisable values under the several headings |
|
| given
therein, except investment against which provision for diminution in value
has not been made in view of reasons stated in |
|
| Note No. 4.1. |
|
|
|
|
|
|
| The
annexed notes from 1 to 15 form an integral part of these accounts. |
|
|
|
RASHIDULLAH YACOOB |
|
MOHAMMAD SADIQ SHAIKH |
|
FAZAL MOHAMMAD MOGHAL |
|
|
Chairman |
|
Director |
|
Director |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED DECEMBER 31, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
|
| Expenses
of management |
|
|
|
|
|
| (not
applicable to any |
|
|
|
|
|
| particular
fund or account) |
|
|
315,810 |
318,159 |
|
| Meeting fees |
|
|
4,000 |
6,000 |
|
| Depreciation |
|
|
207,980 |
256,921 |
|
| Zakat
deducted at source |
|
|
81,588 |
97,500 |
|
| Professional tax |
|
|
25,000 |
-- |
|
| Provisions- net |
|
9 |
15,000,000 |
18,444,828 |
|
| Provision
for taxation |
|
|
|
|
|
| Current |
|
|
48,944 |
45,000 |
|
| Prior years |
|
|
411,507 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
16,094,829 |
68,408 |
|
| Earning
per share |
|
10 |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return/interest
and dividend |
|
|
|
| on investments |
|
|
777,728 |
1,228,380 |
|
| Less
income tax thereon |
|
|
-- |
929,700) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
777,728 |
1,198,680 |
|
| Gain
on sale of fixed assets |
|
|
176,174 |
-- |
|
| Capital
loss on sale of investments |
|
|
(912,715) |
-- |
|
| Rent income |
|
|
645,000 |
-- |
|
| Loss
transferred from |
|
|
|
| revenue
accounts |
|
|
|
| Fire insurance |
|
|
(6,267,906) |
(7,756,676) |
|
| Marine
insurance |
|
|
(912,833) |
(18,193) |
|
| Motor
insurance |
|
|
(1,527,063) |
(1,965,200) |
|
| Miscellaneous
insurance |
|
|
509,365 |
(3,204,078) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(8,198,437) |
(12,944,147) |
|
|
|
|
|
|
| Balance
for the year carried down |
|
|
23,607,079 |
30,913,875 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
16,094,829 |
19,168,408 |
|
|
|
|
========== |
========== |
|
|
|
|
(9.44) |
(12.37) |
|
|
|
|
| PROFIT
AND LOSS APPROPRIATION ACCOUNT |
|
| FOR
THE YEAR ENDED DECEMBER 31, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Balance
at the end of the year |
|
|
|
| as
shown in the balance sheet |
|
(70,243,382) |
(46,636,303) |
|
|
|
------------------ |
